Fagan Associates Archive for June, 2008

Good Morning!

Here’s hoping for at least some stability here today given the 300+ point drubbing the Dow took yesterday. Please read our commentary yesterday for a more detailed look at our market outlook. Bottom line, we believe that our U.S. stock market will have a lot of trouble making any substantive headway until oil prices break.

Dennis Fagan
Chris Fagan

Good Afternoon! I dare say “good” afternoon despite the fact that as we write this update the Dow Jones Industrial Average is down 263 points.

As noted above the stock market is selling off on several factors, namely the downgrading to sell by Goldman Sachs of three market bellwethers over the last two days, Boeing, Citigroup and General Motors. Citigroup is now at its lowest point in a decade and GM has not traded at these levels since 1975. The market is also suffering from either lackluster earnings reports or lackluster outlooks from Oracle Corporation and Research In Motion, the manufacturer of the Blackberry smartphone. All of this begs the question, what have you done about it? We continue to remain cautious regarding the market over the short haul and have adequate cash that we will ultimately put to work. However, we FIRMLY believe that investors who put money to work at or near these levels will be amply rewarded over the next twelve to twenty-four months.

Any questions or for a portfolio review, please call.

Dennis Fagan
Chris Fagan

Good morning!

We continue to remain on the defensive and for good reason as after the closing bell yesterday, UPS projected that second quarter earnings would be well below estimates due to high fuel costs and reduced demand. That said, as the market moves lower we will continue pick away at energy, global industrials, technology and consumer staples.

Dennis Fagan
Chris Fagan

Good morning!

Stocks in the United States look to be under a bit of pressure this morning as investors and consumers continue to wrestle with the impact of $4.00/gallon gas prices on their respective wallets. As noted within our “Weekly Recap of the Financial Markets,” we believe that upward movements in oil/gas prices will have a negative impact on stocks. Conversely, downward movements should be beneficial for stock investors. Our best estimate is a continuance of the trading range that we have been in for quite some time until we get some more definitive resolution on the energy crisis.

On the fixed income front, we recommend caution as it appears that the higher energy prices have begun to spill over into other parts of the economy. Furthermore, several Officials of the Federal Reserve Bank have indicated that interest rates are at appropriate level, suggesting that, absent an unforeseen event, further rate cuts are unlikely.

Dennis Fagan
Chris Fagan