Sold SLTM/More Glum News Today: I am In a Holding Pattern-Need a Lot Better News about the Economy to Sustain An Upward Move

1. Industrial Production & Capacity Utilization: Capacity utilization fell to a record low of 68.3% in May which is over 12% below its long term average.  Industrial output fell 1.1%.  

Industrial Production and Capacity Utilization

Manufacturing output was 15% below its level in May 2008.   "Anemic economic recovery" is an exaggerated and incorrect description of  those kind of statistics.    WSJ.com  Recovery is no where to be found in them. While this news throws cold water on the Stock Jock side of me, it is reassuring to the emerging bond investor side. There is certainly a lot of slack in the economy which will dampened inflationary pressures, at least for now.   Some of my fixed coupon long term corporate bonds will be the most sensitive of all of my bonds to changes in inflation and inflation expectations.   

2. Microsoft/IBM Target Prices Raised:  Jefferies became the latest firm to upgrade its target for Microsoft, raising it to $26, apparently coming to the realization that Windows 7 would be released in the Fall and that could be a positive event for MSFT.  Thomas Weisel raised its target on IBM to $140 from $120. 

3. Another Brokerage Downgrade for U.S. Telecoms: Barclays downgraded the U.S. telecom sector to neutral from positive.  A T & T, which is owned by me, was downgraded to neutral from overweight.   R  The analyst kept the rating on VZ at overweight but cut the price target to $34. 

4.  Housing Starts-Not Really Impressive:  While housing starts rose in May, they are still down 45.2% from a year ago.   The gain in starts in May was due primarily to starts of multifamily units which rose 61.7% after falling  49.4% in April.  April starts were revised lower to the lowest level since the late 1940s.   

There is nothing positive about today's news.  I am inclined to sit back, wait, and see if the economy can show more signs of life before committing more money to buy stocks.  It is hard to see how the market could sustain and maintain an upward move from current levels unless much better news about the economy starts to appear relatively soon, as within a few weeks.    

5.. Sold Lottery Ticket Solta Medical:  I read last night a article in Newsweek, just before tossing the magazine, that had a negative feature on the Thermage procedure from Solta Medical. This is a citation to the article at Newsweek's internet site.  News  I previously noted that the company had terrible results for the first quarter after the merger with Reliant. GOP & the Stimulus Plan/More on Thain/ING debt downgrade/Solta Medical earnings/SBUX The Newsweek article was sort of the last straw for this lottery ticket, so I sold the shares bought at $1.35 in my IRA this morning for $1.51.     Fishing at the Bottom of the Barrel: Buy of 100 Solta Medical   

DISCLAIMER

  I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will.  In these posts, I am acting as an unpaid financial journalist and an occasional political commentator.   I am also aggregating financial news stories that I view as important and providing readers of these posts with links to those articles, sort of a filtered, somewhat intelligent, free search engine.  Any discussion made by me of particular securities  is not a recommendation to buy or to sell.  Trade at your own risk.  Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons.  The sale may before or after the post.  Before buying or selling any stock, even one recommended by a trusted financial advisor,  please research it and make up your own mind which is what I always try to do.  Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news.  In this post, and all others by me, I am merely describing my reasons for purchasing  or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale.  The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile.  By way of example, it is unlikely that I will ever need the funds contained in my retirement accounts. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments.  Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed.  It is always important to follow the investment process. the investment process/links to further information on canadian energy or royalty trustsInvestment Process Part II: Bonds and Bond Like Investments   NOT A RESEARCH SERVICE/Add of PWE Last Week   These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities.   All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me.   Opinions are subject to change and they certainly evolve over time as information is assessed and analyzed for compatibility with prior opinions, the only process for a serious investor, and a topic of frequent discussion in this post.  Everyone is responsible for their own investment decisions, and no one should ever make any decision unless they are willing to accept full personal responsibility for it.