June 7, 2015, Bob Brinker's Moneytalk:

June 7, 2015....Bob Brinker was not live on air today.  Moneytalk was unannounced re-runs of ancient monologues and calls....(comments welcome)

A CHUCKLE:  Some have asked why Brinker has never written a book. Well, maybe he has:

Bluce said:  "......"Bob Brinker's Morality and Integrity Handbook" with the "New, expanded edition including 'How to Run a Phony Radio Show'."

STOCK MARKET: There has been no change in Brinker's bullish stance on the stock market. He is still fully invested. However, for some time now, he has been warning of a needed correction. He is on record stating that he believes the next correction will not exceed the 10 - 15% range. He recommends dollar cost-averaging on weakness for new money.
 

Marketimer Stock Market Timing Model Update: 

Brinker has stated that he uses several disciplines to evaluate future stock market potential. In the June 2015 issue of Marketimer, he reviewed them.  All of the information  contained in this review is available in the public domain, and  I will summarize it here:

1: Accelerating Inflation....The year-over-year rate of inflation as measured by the consumer price index now stands at -0.2% - one of the lowest in the past 50 years - well below the average annual gain of 2.1% over the past decade.  Over the last six months, the CPI has declined at an annual rate of 1.6%.  The core CPI year-over-year inflation readings stands at 1.8%.  (This figure excludes the food and energy sectors.)

The Federal Reserve's favorite inflation gauge is the personal consumption expenditure index – PCE – and it stands at 0.3%, with a core reading of 1.3%.  The Fed's target is 2%.  They closely monitor the underemployment rate, which is elevated at 10.8%.  In the spring season of 2007, the underemployment rate was 8.2%.

2: Declining Employment.....Jobs have gained  243,000 per month since the beginning of 2014 - the largest increase in 17 years.  And the unemployment rate declined to 5.4 in April - the lowest since May 2008.  Additionally, average hourly earnings edged up 0.1% in April to 2.2% above a year ago.  Aggregate payroll income rose 4.7% over the past year ago - this relates to potential consumer spending growth going forward,  and helps to indicate a favorable employment outlook.

3:   Rising Unemployment Claims.....A rise in the number of individuals filing for unemployment insurance for the first time, suggests deteriorating labor market conditions.  The key indicator to follow on this is the four-week moving average of claims. This  smooths out sharp fluctuations.  The four-week moving average of claims is currently 271,500 – the lowest in 15 years.  If this figure remains below 300,000, the risk of a recession should remain minimal.

4:  Inverted Yield Curve.....The yield curve shows the relationship between short-term rates and long-term rates -  based on the US Treasury yields.  When short-term rates exceed long-term rates, investors think that the economy is deteriorating,  and that long-term rates will continue to decline.   But when the yield curve is not inverted, the risk of a recession is low.   Right now, the yield curve is in a clear upward slope - three-month Treasury Bills are yielding close to 0%, and the 30-year Treasury Bond is yielding close to 3%.

5:  Leading Economic Index....The Conference Board Leading Economic Index (LEI), and the Coincident Economic Index(CEI) continue to show progress, which is to the benefit of stock market investors – a combination of moderate economic growth, low inflation, and very low interest rates.  Consequently, the stock market has returned to valuation levels which are consistent with the 50-year average on a price/earnings ratio basis.

The NAHB/Wells Fargo Housing Market Index (HMI), have readings ranging from 52 to 59 over the past 10 months - and gained nine point since last May.  Builders view readings above 50 as good.  The median price for new homes rose 8.3% from a year ago, to $297,300..  Housing starts and single-family home starts are up – rising sharply.  Building permits rose 10.1% to a 1.143 million unit annual rate, the highest since June 2008.  This suggests that residential construction spending will grow into next year.  Year-over-year, housing starts rose 9.2% and building permits are up to 6.4%.

Jeffchristie's Moneytalk Final Exam Question (Honey EC: not a re-run.) 

Which radio talk show host referred to the star ship Moneytalk as the good ship moron?

A) Rush Limbaugh.

B) Glenn Beck.

C)  Mark  Levin.

D)  Rick Edlemann.

Answer

          Our thanks to the Fluffy Bunny for recording this.
 
Honey EC: Notice that recording was made in 2012, as the market was poised to make  losses never before seen in our lifetime, and the economy almost collapsed.

PODCASTING:
Los Angeles. KABC 790. Moneytalk plays two hours later in the evening and they podcast it.

CHUCKLE TIME....Some people think Brinker is a Bozo when he plays fast and loose with listeners who trust him -- pretending to be live on the air:

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