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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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    Jan 11, 2013 1:32 PM

    By Carlos Guillen

    Perhaps on a negative note, the U.S. trade deficit increased more than expected in November, as imports increased at a faster pace than exports, but this growth in both components is serving to give an indication that overall demand may be beginning to make a turn to the upside. According to the U.S. Department of Commerce, the trade deficit increased 15.9 percent to $48.7 billion in November from the $42.1 billion reached in the prior month, landing above the Street's consensus estimate of $47.8 billion. It was rather encouraging to see that both imports and exports expanded, and we should note that exports had fallen significantly in the prior month, so the exports reversal is a clear positive.

    In terms of the two main components, exports increased 1.0 percent to $182.6 billion, as overseas demand ramped higher mainly for capital goods; automotive vehicles, parts, and engines; industrial supplies and materials; and consumer goods. Imports climbed 3.8 percent to $231.3 billion, mainly as domestic demand increased for consumer goods; automotive vehicles, parts, and engines; and industrial supplies and materials. With respect to consumer goods, it should be noted that increased shipments of cell phones and related goods alone accounted for a fifth of the overall gain.

    (click to enlarge)

    While rising demand around the world is certainly encouraging, the fact that our imports are outpacing our exports does not bode well for fourth quarter GDP growth here at home. We should also note that the rise in imports was attenuated by slowing demand for crude oil as the average price of imported crude oil fell by $2.30 to $97.45 a barrel during November and crude-oil import volumes fell to 243.01 million barrels from 259.66 million. Perhaps one encouraging aspect of this is that it is apparent that increased domestic fuel production and the proliferation of fuel efficient vehicles is beginning to reduce our dependency on foreign oil.

    Stocks Back in Style?
    By David Urani

    It's been a good start to the year, and now some data from Lipper seems to put somewhat of an explanation behind it. According to them, $22.2 billion was invested into equity funds in the week ended January 9, and that was the second-largest inflow of all time! Included in that increase was the single largest flow into emerging market funds ever.

    And much of this seems to be driven by the retail investor regaining confidence. Investments into long-only mutual funds were $8.9 billion for the week, the biggest since the tech bubble in 2000 and the fourth-largest of all time.

    (click to enlarge)

    If true, that would be an impressive and encouraging change in sentiment, because over the past several years investments into equities have been on a steady decline. For so long, the narrative has been that Wall Street wronged the average investor/homeowner, and to some extent it's been with good reason that the retail investor has shied away from the market given the housing bubble, the flash crash and other events like the Facebook IPO debacle. Perhaps it was a new outlook to begin 2013 that is bringing folks back to the market, although the Fiscal Cliff resolution certainly had something to do with it.

    Lipper isn't the only company to track this data, so we'll be interested to see if the likes of ICI echo this result. If this holds up, it could be a great signal that investors are confident enough to put skin back into the game, and that momentum is here to carry stocks to some more healthy gains in 2013.


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