To learn about what personal information Personal Capital collects and how we use it, click here.

Markets Rise with Love in the Air

Market Digest – Week Ending 2/14

The global equity markets were full of love this week. In a “clean” bill, Congress increased the debt ceiling, allowing the government to run until at least March, 2015. Stocks also rallied on testimony by new Fed Chairwoman Yellen indicating the Fed intends to stay the course with measured reduction of bond purchases. The global stock market is now down less than 1% for the year. Bond prices were down modestly for the week. Gold rose, and is quietly up almost 10% for the year.

Weekly Returns:

S&P 500: 1,839 (+2.3%)
FTSE All-World ex-US: (+2.1%)
US 10 Year Treasury Yield: 2.74% (+0.06%)
Gold: $1,318 (+4.0%)
USD/EUR: $1.370 (+0.4%)

Major Events:   

  • Monday – The Treasury department said employers with 50-99 employees won’t have to comply with the Affordable Care Act until 2016.
  • Monday – Billionaire activist investor Carl Icahn has backed off from his campaign urging Apple to increase its stock buybacks.
  • Tuesday – The House voted to lift the debt ceiling until well into 2015. The bill was viewed as a victory for Obama and a sign that Congress is returning to a more functional status.
  • Thursday – Time Warner Cable accepted a $45 billion merger offer from Comcast. The merger is expected to face heavy anti-trust scrutiny.
  • Friday – The European Union announced Eurozone Q4 GDP increased at 1.1%, marking another step in the regions fragile recovery.

Our Take:

Stocks were up this week, and for good reason. There was plenty to be encouraged about. First, Congress managed to pass a straightforward and needed bill. That may not sound like much, but it wouldn’t have happened six months ago. Second, the Eurozone posted a slow but reasonable growth rate for Q4. Europe remains a concern and any signs of momentum are welcome.

On Thursday, the $2.2 billion Ivanpah solar thermal power plant opened. If you’ve driven from LA to Vegas, it is just off the freeway about 10 miles before you get to Buffalo Bill’s and Whiskey Pete’s on the Nevada border. Partly owned by Google, it uses about 350,000 mirrors to aim sunlight at three 459 foot high towers. Water in the towers is heated, creating steam which drives turbines. It covers about 5 miles and only pictures can do it justice – just search for Ivanpah.

Unfortunately, the massive heat is killing birds that either crash into the mirrors or are simply incinerated by the heat. Also, the energy generated costs about five times more than a natural gas power plant and relies on government subsidies.  I’m no scientist, but it is hard to see how creating a giant oven in the desert is the ideal green way to get away from fossil fuels. Either way, all signs point to decreasing reliance on traditional energy sources. Other direct and indirect investors in the project include NRG Energy, Goldman Sachs, Chevron Technology Ventures, and BP Ventures. When the leaders of Technology, Financial Services, Utilities, and Energy are coming together to push for change, you can be fairly sure it will come.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Personal Capital Logo

Like what you're reading?

Get tips, tricks, and tools sent right to your inbox.