In the last week, we’ve seen some of the healthiest market gains in recent history. Despite the shaky macroeconomic climate, buying volume has been intense, and the market has displayed remarkable strength and little-to-no volatility. Next week, the Bureau of Labor Statistics releases unemployment and consumer confidence data for January 2013. The expert consensus is that the economy should add around 200,000 jobs and the unemployment rate fall slightly. If the reports come in at or above expectations, the market rally will continue — otherwise, expect some swings.
A note on the update format — we’ve decided that it is more cohesive to include “What We’re Doing” within the short term and intermediate forecasts, rather than its own section, so look for that starting today!
Short-Term: Holding looks like the best option here, or bulking up on some of the most diversified ETFs we recommend; for example, the Vanguard S&P 500 or Emerging Markets. With across the board market bullishness, these are solid options with little downside.
Intermediate-Term: We will continue to watch the market, especially for cues on Apple and tech. Apple’s earnings were solid and showed good growth — investors are getting skittish that they’re hitting a saturation point, especially with iOS devices, but international headroom provides plenty of room for future growth opportunities. With the market overreaction to that report, we may further bulk up on that position in the coming weeks — with a 10 P/E, it’s a bargain. We’ll put it this way: if Apple had Amazon’s P/E, its market cap would be $126 trillion. Yes — almost twice the size of the global economy.