This is The Wall Street Digest Hotline Update for Friday, November 2, 2007, at 6:00 p.m. EST.
Wall Street is worried about Citibank and the financial sector. At the close, the Dow gained 27 points, closing at 13,595, while the Nasdaq rose over 15 points, closing at 2,810. Oil closed up $2.44 to 95.93 per barrel, and gold closed up $14.80 at $808.50 an ounce.
GDP growth of 3.8 percent in the second quarter and 3.9 percent in the third quarter muted numerous forecasts of a U.S. recession. So did October’s Job Creation of 166,000 new jobs. That figure is nearly double what economists were expecting. The unemployment rate held steady at 4.7 percent.
The housing slump was more than offset by surging U.S. exports thanks to the declining U.S. dollar, which enhanced the competitive position of U.S. manufacturers. However, the American consumer suffers from a loss of purchasing power when the dollar declines. Oil and gold prices are rising because of the falling dollar. There is still rising consumer pain in the housing sector. Third quarter residential foreclosure filings nearly doubled to 635,159 year over year. California, Florida, Ohio, and Nevada have the most foreclosure problems.
Stay fully invested! Stock prices in China, India, Asia and the emerging markets will outperform the U.S. stock market because of the falling dollar, which fell to a new low today. Global/international investments will enhance your investment returns as the dollar declines against other currencies. Stay close to our telephone/e-mail/website Hotline Updates.
I have reorganized our portfolio recommendations into just two groups. Allocate no more than 25 percent of your portfolio to Group One: U.S. stock market recommendations, which offer no protection against the falling dollar. Allocate at least 75 percent of your portfolio to Group Two: Global/International investments which enhance your investment returns as the dollar declines against other countries.
The next Hotline Update will be on Tuesday, November 6, 2007, at 6:00 p.m. EST.