All posts by admin

12114

Weekly Market Commentary

Can Stocks Deliver the Goods in 2015?

12.5.2014

Powerful, Nearly Six-Year-Old Bull Market
Should Continue

We believe stocks will deliver mid- to high-single-digit returns in 2015, with a focus on earnings over valuations. We believe 3% economic growth, benign global monetary policy, and a more favorable policy climate from Washington indicate that the powerful, nearly six-year-old bull market should continue.

Historically since WWII, the average annual gain on stocks has been 7–9%. Thus, our forecast is in-line with average stock market growth. We forecast a 5 – 9% gain, including dividends, for U.S. stocks in 2015 as measured by the S&P 500. This gain is derived from earnings per share (EPS) for S&P 500 companies growing 5 – 10%. Earnings gains are supported by our expectation of improved global economic growth and stable profit margins in 2015. We expect stocks, not bonds, to be the precious cargo for investors in 2015.

The coming year will be one marked by transitions. Cycles that are in transition can cause potential fluctuations and volatility even if they have historically provided solid stock market performance. The most important cycle, the economic cycle, is unlikely to reach a recession destination in 2015, positioning the stock market to potentially offer up solid gains to investors. In fact, since 1950, in years during which the U.S. economy does not enter recession, the odds of a positive year for the S&P 500 were 82%, with an average gain of 11%. Recessions do not run on a set schedule and are difficult to pinpoint in advance, but our belief, based on our favorite leading indicators for the economy, is that the probability of recession is very low and stocks could potentially send investors solid returns in the coming year [Figure 1].

Read Full Report here Weekly Market Commentary 12012014

12114

economic 1212014

Weekly Economic Commentary

U.S. Economic Growth Picks Up

Overseas, policies already in place — and those that we expect to be enacted over the course of 2015 — are likely to be big drivers of global growth. We expect the U.S. economy will expand at a rate of 3% or slightly higher in 2015, which matches the average growth rate over the past 50 years. This forecast is based on contributions from consumer spending, business capital spending, and housing, which are poised to advance at historically average or better growth rates in 2015. Net exports and the government sector should trail behind. As the economy continues to grow at a moderate pace in 2015, we expect this expansion to potentially take us into 2016, where we could likely find tightening labor market conditions and a rising fed funds rate.

The United States is in the middle stage of the economic expansion, presenting investment opportunities and risks for investors. While the U.S. economy has grown over time, the growth has not been in a straight line. The variations in the pace of growth around the long-term trend are called economic cycles. Economic cycles have four distinct stages: recession, early (recovery), middle (mature), and late (aging).

By historical standards, the economic recovery that began in mid-2009 has been by far the most tepid recovery on record, with GDP through third quarter 2014 just 11% above its 2009 trough. In all recoveries since the end of World War II (WWII), the economy expanded 24% on average in the first five years of recovery. The current recovery even lags the last three (beginning in 1982, 1991, and 2001), which we believe are the most comparable. Five years into those recoveries, the economy stood 16% above its recession lows. The pace of this recovery thus far has lagged behind those prior in each of the major GDP categories [Figure 1]. Read the Full Report here Weekly Economic Commentary 12012014

economic 1212014

 

 

 

 

 

Market image 111914

Weekly Market Commentary

Emerging Markets Opportunity
Still Emerging

The S&P 500 Index hit another set of fresh record highs last week (November 10 – 14, 2014) and has achieved the midpoint of our total return forecast (10 –15%) for the year with a 12% return year to date. While we continue to recommend keeping the majority of equity allocations in the United States, as we have for a while, we think it is a good time to look at opportunities that have lagged behind the strong U.S. stock market and may have become attractively valued, possibly setting the stage for a reversal. One such area is emerging markets (EM).

It has been another tough year for EM equities. The MSCI EM Index has returned just 1.4% year to date, far behind the S&P 500 (though MSCI EM Index has outpaced the developed foreign benchmark, the MSCI EAFE Index, which has returned -2.6% year to date) [Figure 1]. EM have struggled for many reasons, including but not limited to lackluster earnings, Federal Reserve (Fed) tapering and the subsequent end of quantitative easing (QE), related concerns about current account deficits due to trade imbalances and borrowing abroad, geopolitical unrest in Ukraine and the Middle East, the drop in commodity prices, a strong U.S. dollar, and growth fears in Europe and

Market image 111914

China. So with all of those challenges facing investors, is it time to buy EM? To answer that question, let’s look at fundamentals, valuations, and technicals.

Read Full Report here Weekly Market Commentary 11182014

Economic image 111914

Weekly Economic Commentary

Japan Check-In: Will the Weak Q3 GDP
Reading Draw a Policy Response?

Japan reported a 1.6% annualized decline in real gross domestic product (GDP) in the third quarter of 2014 over the weekend of November 14 – 16, 2014. Policymakers in Japanese Prime Minister Shinzo Abe’s government and at the Bank of Japan (BOJ), as well as most market participants, expected a solid gain in GDP in Q3, not a decline. The consensus of economists polled by Bloomberg News was looking for a 2.2% gain in GDP in Q3, after the Japanese economy contracted more than 7% in Q2 2014 in response to a big value-added tax (VAT) increase imposed in April 2014. (We’ll discuss the VAT in more detail below.) As a result of the unexpected decline in GDP in Q3 [Figure 1], Japan’s economy has met the unofficial definition of recession (i.e., two consecutive quarters of negative GDP) and has entered its fourth recession since 2007. How long Japan’s economy remains in recession — and more importantly, the policy response to the latest recession — may help to determine the trajectory of global growth in 2015 and beyond.

Economic image 111914
Japans Economy has entered its Fourth Recession since 2007 and awaits a Policy Response

The Consumer Disappoints

Consumer spending, which accounts for 60% of Japan’s economy, rose just 1.5% in the third quarter, after the VAT increase led to a 19% drop in consumer spending in the second quarter of 2014. Most market participants — and probably the BOJ and the Abe administration — expected…

Read the Full Report here Weekly Economic Commentary 11172014

Bruce R Habitat for Humanity 1

BRUCE REDENZ RECEIVES HABITAT FOR HUMANITY AWARD

FOR IMMEDIATE RELEASE

NOV 17, 2014

WASHINGTON, D.C. – Bruce Redenz of MDNA Member firm Madison Tool Inc. Bruce Redenz and Amy Matthewsreceived the Habitat for Humanity of Dane County, Wisconsin ‘Volunteer of the Year’ 2014 Award. In October of 2014 Bruce and other award recipients were honored at a special banquet that featured keynote speaker Amy Matthews, Host, HGTV’s Renovation Raiders.

On earning this achievement Bruce stated “Habitat is a really special organization that makes a huge difference each day in the lives of the families it serves and the communities it builds. I have witnessed first-hand the stability and quality-of-life which the opportunity to own simple, affordable, livable housing brings to our Habitat homeowners. With volunteers working alongside homeowners and their future neighbors, we become a family. Receiving this award is an honor which I am humbled by, but frankly, the excitement I see when a future Habitat homeowner tells a group of volunteers, “This is going to be my family’s home” is the greatest reward I could hope for.”

The Machinery Dealers National Association congratulates Bruce on this great achievement. MDNA Executive Vice President, Mark Robinson says “I’m thankful for this kind of dedication and drive from Bruce and from all of our members. MDNA is a volunteer run non-profit and our members serve not just our association but those less fortunate, in our communities and around the world and people like Bruce Redenz are setting a great example for the future leaders of MDNA.”

About HABITAT FOR HUMANITY- WI, DC:

Habitat for Humanity of Dane County provides simple, decent, affordable housing for families who might not otherwise become homeowners. Eligible families pay monthly mortgage payments on a 0% interest loan, and contribute from 325 to 375 hours of sweat equity in the building of their homes. Habitat for Humanity has served more than 225 families in Dane County. For more information on Habitat for Humanity of Dane County, call 608-255-1549 or visit www.habitatdane.org

###

FOR PRESS RELATED INQUIRIES:

Jennifer Gray

Phone: 703.836.9300

Email: jgray@mdna.org

IMAGES BELOW 

Bruce Redenz,  HFHDC CEO Valerie Johnson (middle), Heather HFHDC office. Bruce R. with construction manager Dennis, (former) volunteer coordinator, Kristine Jansen, Habitat For Humanity Dane County, Wisconsinhabitat dc

 

testimonial pic 2 crop FROST PIC

Benchmark in member and customer support

“Recently we purchased equipment from Weld Plus, an MDNA member.  While doing IPSbusiness with them, we learned that there was going to be an MDNA regional chapter event/tour of the Bourbon Trail.  We inquired about attending and we were immediately welcomed on to the tour.  We here at IPS, were impressed with the MDNA, their services and responsiveness and I would go so far as to say that the MDNA and Weld Plus set the benchmark in member and customer support, that other organizations should strive for.  Lastly I would like to thank the MDNA for an amazing weekend adventure full of learning and networking and Bourbon!”  -IPS

Read More Testimonials 

 

Market Image 11314

Weekly Market Commentary 11/6/2014

S&P Is Not GDP

U.S. economic growth has been subpar — right around 2% — during much of the ongoing economic expansion. Yet, the S&P 500 has returned nearly 230% cumulatively since the bear market low on March 9, 2009. How did that happen and is it justified?

Before trying to answer to those questions, it is worth pointing out that this situation is not all that unusual. In fact, since 1950, the S&P 500 median return is 13% (average is 12%) when real gross domestic product (GDP) grows less than 3%, with the S&P generating a positive return 68% of the time. However, a good portion of those returns come during recessions — historically, the best time to buy stocks is at recession troughs. But even if we take those periods in and around recessions out of the equation and look at annual returns when GDP growth is between 1–3%, the median (and average) S&P 500 return is a respectable 7–8%. Stocks tend to like average (or slightly below average) growth, which is not strong enough to generate worrisome inflation.Market Image 11314

Now back to the question of what has driven this stock market to far outperform economic growth. Some might say quantitative easing (QE), which ended at the end of October 2014 in the United States (the Bank of Japan expanded its QE program last week on Halloween). While QE has benefitted U.S. stocks (how much is up for debate) by helping keep interest rates low and encouraging investors to buy riskier assets (see this…

Read Full Report here Weekly Market Commentary 11032014

Economic image 11314

Weekly Economic Commentary 11/6/14

QE Ended, Now What?Economic image 11314

The Federal Reserve’s (Fed) policymaking arm, the Federal Open Market Committee (FOMC) met last week (October 27 – 31, 2014) and decided, as was widely expected, to end its bond purchase program known as quantitative easing, or QE. While the FOMC retained its promise to keep rates low for a “considerable time” after QE ends, it set the bar fairly high for restarting another round of QE. At the end of this week’s commentary, we’ll present some metrics to help answer the question many are asking in the wake of last week’s announcement: Did QE work? Our view is that it is probably too soon make the final call as to whether QE “worked,” and we’ll leave it to the economic historians, pundits, and politicians to debate that in the years and decades to come. One thing we know for sure is that no one can ever know what would have happened to the United States and global economies had the Fed (and other central banks) not embarked on QE during the uncertainty generated by the collapse of Lehman Brothers and its aftermath in late 2008 and early 2009.

QE Is Still Needed in Japan and the Eurozone QE was also in the news in Japan last week, as that nation’s central bank, the Bank of Japan (BOJ), ramped up its QE program, surprising markets, which had mostly expected the BOJ to wait until early 2015 to dial up its QE program. Late this week, November 3 – 7, 2014, the Eurozone’s central bank, the European Central Bank (ECB), will hold its monthly policy meeting. We continue to expect the Eurozone to expand its QE program, but in our view, that expansion is not likely to be announced this week. Although the results of the bank stress tests conducted by the ECB (which will take over this week, for the first time, as the bank regulator across the Eurozone) were released last week, the ECB is likely to wait to see some progress on the fiscal front (i.e., more government spending and tax cuts to help support the Eurozone economy) before it proceeds with the expansion of its QE program. We acknowledge, however, that the earlier than expected action from the BOJ to expand QE puts additional pressure on the ECB to do more — and sooner rather than later. As we noted in our recent (September 25, 2014) Weekly Economic Commentary, “Central Bankapalooza”:…..

Read Full Report here Weekly Economic Commentary 11032014

Jerry Blumberg

Q&A With Jerry Blumberg

Member Spotlight Interview
Jerry Blumberg
Jerry Blumberg, President of Blumberg Machinery Co.

Get To Know Your Fellow Members 

Jerry Blumberg is the President of Blumberg Machinery Corporation, a family owned and operated stocking dealer located in the small town (est. population of 1,583, 2010 census) of Bannockburn, Illinois which is just under an hour’s drive from the city of Chicago. Some of you may also know Jerry as the father of Ryan Blumberg, CEA, (MDNA Director at Large/ Locator Services, Inc. Past President). Jerry Blumberg has been a member of MDNA since 1972.

To help us get to know the man behind the Blumberg name MDNA Member, John A. Josko, CEA, Industrial Asset Appraisals & Consulting, Inc. caught up with Jerry as part of his assignment on the MDNA PR Committee and asked him questions like how he started out in the biz, advice he would like to pass on, what challenges he faces in the industry today and what he likes to do for fun…

What was your first Job with the company and how did you get it?

“I started as a salesman in the used machinery business for Adams Machinery Company.” (Adams Machinery Company- An MDNA Founding Member Firm)

What is the biggest challenge for your company in the next 5 years and do you have any tips on how you will conquer it?

“Staying up to date with the technological changes to both business and the Machine Tool Industry. You must keep an open mind and always be looking at the future.”

What is one thing you would you pass on to MDNA’s younger next generation leaders about this business or industry?

“Get involved, develop good communication skills with old and new association members, learn your job and your industry, try to improve your skills every day.”

What’s your favorite thing to do in your spare time?

“Spending time with my family, playing a little golf and interacting with people.”

What would be your best achievement to date?

“My family and the interaction and time spent with my fellow dealers.”

What is your favorite type of machinery or machine tool and why?

“Large CNC Machine Tools. I love all aspects of the buying and selling of the big machinery.”

What do you like about your job?

Blumberg Family
Blumberg Family

“Working with my son Ryan. The diversity & interaction with my fellow MDNA Members…and I love the thrill of the chase in this industry.”

What is the most useful thing you have participated in or attended that you can apply to your job or has helped your career?

“During the MDNA Weekend with the Pros, seeing the interaction with the other dealers, their warehouses, touring the manufacturing facilities and networking.”

If you were on an island and could only bring three things, what would you bring?

“Cell Phone, MDNA Directory, Food.”

What’s your first thought upon waking up?

“What do I have to do today?”

 

IMAGE COVER MDNA NEWS

MDNA News Fall 2014 Edition

Read the latest copy of the MDNA News here! This new digital magazine allows you to click on elements within the magazine for more information online.

Read the latest copy of the MDNA News here! This new digital magazine allows you to click on elements within the magazine for more information online.