Editor's note: Marc Leavy,CFP? is a regular financial columnist for Business Reform Magazine, the leading Christian business magazine with over 100,000 readers. Each issue features practical advice on operating successfully in business while glorifying God.
Solid economic news came in this week but traders stayed on the sidelines ahead of the long weekend. Volume was light the last few days in anticipation of the long weekend and the market will be closed Monday. Why take the chance of ruining a long weekend by losing money or staying late at the office?
The Chicago PMI rose to 58.9 in August, a 15-month high and well above economists' estimates for a reading of 54. A reading above 50 suggests expansion in the Midwestern manufacturing sector.
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Thursday also provided good news with some key economic data. The Commerce Department reported the GDP rose 3.1% beating the 2.4% estimate and Wall Street analysts' expectation of 2.9%.
Unemployment numbers from the Labor Department rose 3000 to 394,000 (Just in the comfort zone of below 400,000). However, any rise in unemployment signals that the economy is not creating jobs. The number was still far better than the 9,000 increase predicted by economists.
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Jim Glassman of J.P. Morgan estimates that an employment turnaround isn't that far off – perhaps around Thanksgiving. "The GDP growth that we're seeing right now shows that demand is pretty strong throughout the economy…But the business community is kind of being caught off guard by this. I mean, it wasn't that long ago that people were worried about deflation." stated Glassman.
The market appears to have built in a floor in the Dow 9000 to 9300 range. Now we begin to chip away at the overhead supply between 9500 and 10,000. The number of new 52-week highs versus new lows is bullish, with 185 and 203 new highs on the NYSE and the Nasdaq, respectively. The NASDAQ moved back over 1800 moving to a 16-month peak.
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Chairman Greenspan spoke at the central bank's annual conference in Jackson Hole, Wyo. equivocating and defending Fed policies.
With gas prices moving up, now is the time to blame evil corporations for extorting us. The weak-minded media loves to feed these conspiracy theories promulgated by SUV-hating environmentalists.
Gas prices have undoubtedly gone up, but is it really because the mean oil companies, cohorts of our oil-drunk President, just want to gouge you as you try to take a trip? If so, why do they think so small? Why not gouge you more often and why do they ever let gas go down to $1.19?
Labor Day travel does have something to do with it; so do Venezuela and Nigeria pumping below production, attacks on Iraqi pipelines, and a black out which still has oil refineries off-line, or at reduced capacity. But that story takes too long to tell and has no bad guy. It’s easier to say George Bush and his friends just want to stick it to you.
Historically, gas prices are not bad on an inflation-adjusted basis. (The Post Office makes this case regarding stamps and it never seems to resonate, either.) I do not like to pay nearly $2 for gas. I want cheap gas and plenty of it. I want ANWAR gas. However, I refuse to let the left manipulate me with a fake crises.
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Historical Gas Prices (adjusted for inflation):
- 1950: $1.91 per gallon
- 1955: $1.85
- 1960: $1.79
- 1965: $1.68
- 1970: $1.59
- 1975: $1.80
- 1980: $2.59
- 1985: $1.90
- 1990: $1.51
- 1995: $1.28
- 2001: $1.66
(Source: US Department of Energy)
I do not believe this is a case of opportunistic price gouging. Prices should drop back down in September. I do think this is a great opportunity for environmentalists to make you feel bad about driving a gas hog.
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We have one of the largest most topically diverse countries in the world. God bless Ike, he gave us a national highway system. Long distance travel is our birthright. And that long distance travel should be in a motor coach, or an SUV, or you should get into your F350 and tow your double-engine boat to the lake. Buy gas, have fun. Don’t let anyone scare you out of being a travel-loving, gas guzzling American. Let the Europeans save their $4 gas for their little Peugeots.
Marc Leavy, CFP? is a Certified Financial Planner. Principled Investing teaches Solomon's principles of investing and offers wisdom regarding comprehensive financial planning for a fee. You may contact Marc at [email protected] or visit www.principledinvesting.org.
