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 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 monthly 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 inmy 2014 market outlook.
As an example, let’s take a look at the housing industry. In recent days, 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 last 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.
Chris Versace is the editor of PowerTrend Brief — a FREE, weekly electronic newsletter. He also writes PowerTrend Profits, a paid monthly newsletter that helps individual investors profit through buying shares of companies poised to win big in the 8 PowerTrends, as well as writes the PowerTrader trading service that seeks to deliver short-term gains using stocks, ETFs and options. Chris has been ranked an All Star Analyst by Zacks Investment Research.