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Nasdaq a
little toppy?....There is some discussion in the financial press, notably
Barron’s, that Nasdaq may be in the process of a correction. The Nasdaq is up
27% in the past year compared to 19% for the S&P500. There has been notable
speculative froth in certain pockets of the market, namely social media, biotech
and IPOs, most of which is centered on the Nasdaq. A “cooling off” of the
Nasdaq “froth” should be viewed as healthy, but we note a full-blown correction
in the Nasdaq could result in heightened market volatility in other sectors of
the market. Link: http://online.barrons.com/news/articles/SB50001424053111904703704579501592502883378
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Conference
Board survey up again….Conference Board economist survey shows its leading
indicators for the economy rose a healthy 0.8% in March. Survey indicates both
hiring and consumer confidence improved. This is more in a string of recent
data showing the U.S. economy is accelerating following the weather-induced
slowdown in the first quarter. Link: http://money.msn.com/business-news/article.aspx?feed=AP&date=20140421&id=17539650
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Some
concern over earnings…….There is buzz in financial media this morning that
some investors are concerned about pace of first quarter earnings. With only 15-20
companies having reported so far, it is way too few to be statistically
significant. While Q1 earnings may have been impacted by the winter weather, we
think accelerating economy should support stronger earnings later this year,
which is positive for stocks. Link: http://money.msn.com/top-stocks/post--take-the-long-view-in-weak-earnings-season
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Margin
pressure? ……..National Association of Business Economics survey out this
morning with report that businesses are seeing some increased pressure on
material costs and labor input costs. The increase does not appear to be
dramatic. It would be normal to see some upward pressure in these costs as the
economic recovery matures. We are not overly concerned about margin pressures
as we believe big companies still have multiple options for controlling costs,
particularly technology investments and overseas sourcing. So far this cycle, increases
in labor input costs have been mild, running around 1%. Link: http://money.msn.com/business-news/article.aspx?feed=AP&date=20140421&id=17538461
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