The Dog Days of Summer and Employment Reports

Well so much for a few days of a reasonable tone to the stock and bond markets–or actually just the stock markets and the interest rate arena has been fairly well behaved for quite a few weeks now.

With us now in the very deep dog days of summer with folks worried more about the coming holiday weekend than their investments I guess it should be expected that the equity markets will take pieces of news totally out of context and use it as a reason to move stocks either sharply higher or sharply lower.  Honestly it is a joke that folks are fixated on the potential FED funds hike. We realize that everyone wants free money forever–but a small hike still leaves us at virtually free money.  BUT if the thieves and crooks are going to move markets sharply up and down we have to pay attention.

Today we got the eagerly awaited employment numbers and the job creation number was soft, while the wage increase was pretty big at a plus .3%.  This leaves the rate hike (or no hike) in 2 weeks up in the air.  While we have predicted a September rate hike it is obvious that the FED could go either way which only serves to leave the markets in a state of uncertainty. As we have always said we simply have to manage through whatever hand we are dealt and we will do just that–our crystal ball is simply too cloudy (or non-existant) to do anything else.

Today we will add a small (100 shares) position in Realty Income (ticker:O) as it has moved to a current yield of 5.22% and we had mentioned previously that we want a yield above 5% on O.