Fisher Investments MarketMinder

Fisher Investments MarketMinder: The Industrials Evolution

Originally published by Fisher Investments MarketMinder on: 4/4/2008

The 18th century’s Industrial Revolution ushered in an explosion of social change and improvements in technology, communication, transportation, and manufacturing. The Industrials sector today echoes the Industrial Revolution’s spirit, though less dramatic and more evolutionary than revolutionary.

The Industrials sector is still comprised of sub-industries facilitating communication, transportation, and distribution. We rarely “see” Industrials in action—Industrials products aren’t generally on store shelves—but they’re the driving force behind much of today’s global economic activity. In the US, trains move 70% of all domestically produced automobiles, 40% of freight transportation, 30% of the nation’s grain harvest, and 65% of coal (producing half of the nation’s energy)! Domestic freight hauled by trucks was 10.7 billion tons in 2006.* The first freight ships carried only 59 containers, stacked two-high on the deck. Today’s mega-carrier container ships are a quarter mile long and can transport 14 million cubic feet of cargo. Over the past 40 years, US maritime, railroad, and trucking industries have pursued advancements in intermodal transportation and in the movement of goods domestically and abroad . . . .

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Fisher Investments MarketMinder: The Good, the Bad, and the Not So Bad

Originally published by Fisher Investments MarketMinder on: 4/3/2008

Aggregate economic statistics are comprised of the good, the bad, and the (eh) not so bad. But in times of worry, many fixate on the bad, exaggerate its effects on the whole, and forget about the good and the “eh” entirely. This is one reason economic prognostications are typically off the mark. But rather than fall prey to misperception, we can break it all down and do some good old-fashioned sums.

For at least a year, many have forecasted impending recession. Recession mania reached a fever pitch last month with numerous comparisons between today and the Great Depression. In his testimony to Congress Wednesday, Fed chairman Ben Bernanke indicated the current economic forecast is murky at best, and the economy would likely slow, not grow at all, or contract. (How’s that for hedging your bets?) Mr. Bernanke’s speech did little to instill an already uneasy public with much confidence . . . .

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Fisher Investments MarketMinder: New Rules for the Street?

Originally published by Fisher Investments MarketMinder on: 4/1/2008

As Shakespeare said, “We must take the current when it serves.” Treasury Secretary Henry Paulson may have had a touch of the Elizabethan flu as he took advantage of the intense focus on all things financial to unveil a range of recommendations to overhaul the regulation of U.S. financial markets.

Markets responded positively Monday and there’s been a great deal of reaction to the announcement. As mentioned in our 03/28/08 story, “Goldilocks Government,” governments have attempted to fine-tune economic markets for centuries—usually with unintended negative consequences. So why the cheery response? Paulson’s selling the plan as a streamlining of regulatory burdens. Should we be going all Falstaff and knocking back some mead? (Yes, we realize we’re mixing our Shakespearean metaphors.) Nah. Though we see Paulson’s recommendations as mostly fairly rational, it’s way too early to jump to conclusions.

Part of the positive reaction could be tied to the fact this plan might distract legislators. Debating this plan could forestall some of the more rash, short-term measures that have been kicked around of late—and that in itself is indeed a positive. And Paulson’s plan is no knee-jerk reaction. It’s been long in the works—for almost a year—long before liquidity fears made constant front page headlines . . . .

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