The last few weeks have been far more than just interesting. We’ve been barraged by a number of winter storms that are taking their toll on January economic data. We’ve already heard of disappointing January car and trucks sales. We received official word this week that January housing activity was slower than expected. Given the severity of the winter weather, was any of that really a surprise to you?
I should hope not.
But as I have informed subscribers of my investment newsletter PowerTrend Profits, the stock market in 2014 is going to be very different from the stock market of 2013. Last year, it was very easy to make money in the market. As the trite saying goes, a rising tide lifts all boats. When the S&P 500 is up some 30%, most investors are making out. The 2014 version of the market will reward good stock pickers but leave other people unfulfilled. That situation means not only rolling up your sleeves to do your homework, but also understanding which industries will continue to flourish and which will start to peter out. More on that can be heard in my 2014 market outlook.
As an example, let’s take a look at the housing industry. In the last few days alone, we’ve had weaker-than-expected January housing starts and building permits, a miss on the National Association of Home Builders (NAHB)/Wells Fargo housing market index for February and figures from the Federal Reserve Bank of New York showing that household debt (mortgages, credit cards, auto loans and student loans) jumped $241 billion between October and December to $11.52 trillion. Layer in this week’s drop in the Mortgage Bankers Association weekly mortgage application survey, which showed the Purchase Index component at its lowest level since September 2011, and one would think housing stocks are pulling back across the board.
Read more about how to profit from Washingtonian regulation-caused pain points at Eagle Daily Investor.