Welcome
to the April 1, 2009 issue
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The market started off today in the April Fool’s Day spirit as it sold
off over 100 Dow points before turning around and posting a solid gain for
the day. What turned the market around was the flow of economic news that turned
out to be better than expected. Mind you, the news continued to point down
but the downward path is apparently becoming less steep. And the market voted
its approval.
The market is doing its usual thing. It is looking ahead and saying the outlook
is less dark than before. We expect the news flow, taken as a whole, will continue
to show improvement. The dark element in the flow will be the employment numbers.
The earnings season will be upon us over the next 10 days, and that will add
a great deal of volatility to the daily results, trumping the economic numbers
for some weeks. Expectations for earnings are so low that there is a fair chance
we may get a repeat of what we have experienced with regard to the economy;
poor but better than expected numbers. Despite the decelerating trend Wall
Street continues to be bearish, believing that the bear market is intact. We
believe that the economic fundamentals argue against that view. Still this
is no time for unguarded bullishness. We are now cautiously optimistic about
the next six months, with some stress on caution.
There is no change in our recommended allocations
New Fund Ratings – For domestic stock funds, there are four new
Buys: FBR Focus, Vanguard Prime Cap Core, T. Rowe Price New America and Powershares
QQQ (ETF). There are three new Sells: American Century Value, Champlain Small
Company and Fidelity Focused Stock. For international stock funds, three funds
are now rated Buy: FTSE/Xinhua China 25 (ETF), Matthews Pacific Tiger and MSCI
Japan (ETF). Fidelity Southeast Asia is now rated Hold. Tweedy, Browne Global
Value is now rated Sell.
Fidelity Focused is in all three Fidelity family portfolios. We will exchange
the fund for Fidelity Capital Appreciation in all three portfolios. Tweedy
Browne Global Value is in the Moneyletter Venturesome and Moderate portfolios.
We will exchange the fund for Matthews China in the Venturesome portfolio.
In the Moderate portfolio the exchange will be for Fidelity China Region.
The Stock Market – As our new fund choices indicate we are tilting
our international focus to Asian funds. The funds are performing relatively
well, responding to the stimulus efforts not only of China but also other countries
in the region. We expect Asia to shine as the global economy recovers.
The Bond Market –
The Select Portfolio – There is no change for this portfolio.
The next Hotline is scheduled for Wednesday, April 8.
