ACTIONABLE ADVICE FOR FINANCIAL ADVISORS: Newsletters and Commentaries Focused on Investment Strategy

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2014-11-26 The Tortoise and the ECB by Harley Bassman of PIMCO

It is curious that the ECB continues to slumber while the eurozone’s trading partners move steadily ahead. While not a certainty, it seems highly unlikely that the ECB will indefinitely allow its main trading partners to competitively devalue versus the euro. And since there is no reason to reinvent the wheel, Europe’s policymakers will likely unveil a familiar-looking and expansive QE policy designed to accelerate asset velocity and, in turn, reflate their equity market.

2014-11-26 Global Economic Perspective: November by Christopher Molumphy, Michael Materasso, Roger Bayston, Michael Hasenstab & John Beck of Franklin Templeton Investments

Steady improvements in US employment and relatively good economic growth figures mean that debate over when the US Federal Reserve (Fed) will begin to tighten policy continues to be the order of the day. US job growth increased at a fairly brisk pace in October, and numbers for the previous two months (already good) were revised higher. Since the start of 2014, US employers have added more than 220,000 workers on average each month, which should be sufficient to sustain economic momentum after an initial reading showed annualized gross domestic product (GDP) growth of 3.5% in the third quarter

2014-11-25 Why Can’t Investing Be as Simple as Going from Here to There? by Jerry Wagner of Flexible Plan Investments

After traveling more than 20,000 miles over the last month, my mind is overflowing with strong impressions gained from my travels. The richness of the culture, the beauty of the lands, and the friendliness of the people in Australia and New Zealand cannot be overstated. As Americans, we tend to think of ourselves as the youngest kid on the block with a freshness and youthfulness that puts Europe’s stodginess to shame. Yet “down under” there is a land as big as the USA with a history half as long and economies just in the earliest stages of expansion.

2014-11-25 Real Estate is Having a Moment by Christopher Gannatti of WisdomTree

Looking at equity market, one theme this year is that the U.S. has been outperforming global markets, both developed international and emerging markets. However, looking within the U.S., real estate has performed particularly well.

2014-11-25 Reflections on the 25th Anniversary of the Fall of the Berlin Wall: Part 2 by Bill O'Grady of Confluence Investment Management

Last week, we began our two-part series on the fall of the Berlin Wall with an examination of the end of Marxism. In this report, we will examine the rest of the important consequences from the fall of the Berlin Wall. These are: the Collapse of the U.S.S.R., the Onset of the U.S. Unipolar Moment, and the Impact of German Unification. We will conclude our comments with potential market ramifications.

2014-11-25 Middle East/Africa: Regional Economic Review - Q3 2014 by Team of Thomas White International

Despite continuing geopolitical tensions and subdued oil prices, the Middle East and Africa region had a largely positive third quarter. South Africa, the largest economy in this region, saw its labor problems diminish while Egypt reported a string of encouraging data, signaling that it is steadily recovering from a long phase of political and economic turbulence.

2014-11-24 Japan Dips into Recession as “Japan, Inc.” Profits Set New Highs by Jeremy Schwartz of WisdomTree

When investors buy Japanese equities, they don’t really buy a slice of that economy; they buy shares in corporations that operate both in Japan and around the world. “Japan, Inc.” (i.e., Japanese corporations) is showing a profit picture that differs dramatically from the country’s economic growth rate.

2014-11-24 When 'Buy and Hold' Works, And When It Doesn't by Urban Carmel of The Fat Pitch

Imagine if you had invested in the S&P 500 in 1984 and held through the tech bubble and crash and then through the financial crisis and its recovery. How would you have done over those 30 years? As it turns out, very well. On a real basis (meaning, inflation-adjusted), your holdings would have appreciated by over 400%. A $100,000 investment in 1984 would now be worth more than $500,000.

2014-11-24 International Equity Commentary: October 2014 by Team of Thomas White International

International equity prices saw large price swings during the month of October as fears about slower global growth led to an appreciable decline during the first two weeks. Equity prices recovered subsequently as better than expected U.S. economic data helped allay global growth fears.

2014-11-24 Global Economic Overview: October 2014 by Team of Thomas White International

Regional growth trends diverged further during the month of October as data from the U.S. and China were positive, while activity in the Euro-zone remained subdued. The U.S. economy expanded faster than expected during the third quarter, helped by higher government spending.

2014-11-24 Emerging Markets Equity Commentary: October 2014 by Team of Thomas White International

Emerging market equity prices turned volatile during October as concerns about weak global growth and the impending close of bond purchases by the U.S. Federal Reserve unnerved investors. Still, some of the large emerging markets in Asia rebounded strongly during the second half of the month.

2014-11-24 You Thought QE Was Over? by Lance Roberts of Streettalk Live

A couple of weeks ago in the weekly newsletter I discussed the series of events behind the decline of the market in October and the subsequent surge.

2014-11-22 Solar Energy Powers Record Silver Demand by Frank Holmes of U.S. Global Investors

Silver demand in the fabrication of solar panels is set to outpace photography, if it hasn’t already done so.

2014-11-21 The Implications of Easing by Mark Mobius, Michael Hasenstab of Franklin Templeton Investments

Just as the US Federal Reserve (Fed) announced the conclusion of its long-running quantitative easing (QE) program, the Bank of Japan surprised markets by announcing the expansion of its own easing regime. Mark Mobius, Executive Chairman, Templeton Emerging Markets Group, and Michael Hasenstab, Chief Investment Officer, Global Bonds, Franklin Templeton Fixed Income Group®, weigh in on the implications of these central bank actions, as well as current European Central Bank (ECB) policy, and what they could mean for investors on both the equity and fixed income side.

2014-11-20 The Abenomics Death Spiral by Peter Schiff of Euro Pacific Capital

As Japanese Prime Minster Shinzo Abe has turned his country into a petri dish of Keynesian ideas, the trajectory of Japan’s economy has much to teach us about the wisdom of those policies. And although the warning sirens are blasting at the highest volumes imaginable, few economists can hear the alarm.

2014-11-20 Will $2.50 Gasoline Catalyze U.S. Consumer Stocks? by William Smead of Smead Capital Management

A great deal has been written about how lower gasoline prices could stimulate discretionary purchases in the United States. RBOB gasoline futures peaked on June 20, 2014 at $3.12 per gallon and closed on November the 14th at $2.04. Those in the bearish camp like Randall Forsyth at Barron’s argue that lower oil and gas prices will negate and ruin the economic benefit of the oil boom.

2014-11-19 Crude Oil? by Jeffrey Saut of Raymond James

“Integrity,” Webster’s dictionary defines it as, “The quality of being honest and having strong moral principles.” Recently the voters of America sent the D.C. crowd a message that they want “integrity” back in government. Consequently, I viewed the midterm election as a “turning point.” And, a turning point approaches on December 21st of this year. That’s when the Winter Solstice arrives.

2014-11-17 When Will Value Come Back Into Favor? by Will Nasgovitz, Ted Baszler, Dave Fondrie of Heartland Advisors

An investment style may be inherently biased toward one part of a market cycle. Understanding that fact can help investors stay the course when faced with superficially inferior results during an unfavorable portion of the cycle.

2014-11-15 Explore and Discover the Winners When Gas Prices Fall by Frank Holmes of U.S. Global Investors

West Texas Intermediate (WTI) oil for December delivery is currently priced at $75 per barrel, Brent for January delivery at $78 per barrel. Many investors, publications and news sources focus only on the drawbacks to falling oil and gas prices-don't get me wrong, there are many-but today we're going to give the spotlight to the biggest winners and beneficiaries.

2014-11-15 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Falling oil prices produce gain... and pain; Brazil's post-election challenges; The Fed may seek to overshoot its inflation target

2014-11-14 Contemplating Stocks without QE by Peter Schiff of Euro Pacific Capital

Some influences on the stock market are casual, subtle or open to interpretation, but the catalyst behind the current stock market rally really shouldn't be controversial. As far as stocks go, we have lived by QE. The only question now is, whether we will die without it.

2014-11-14 Mean-Reverting Profits and Other Things Worth Thinking About by Lance Roberts of Streettalk Live

Earlier this week I discussed the growing detachment between the stock market and the "real" underlying economy. One of the areas I touched on was corporate earnings that have been elevated by an immense amount of accounting gimmackry, cost cutting, and productivity increases. The problem, as I stated, is that historically earnings have grown 6% peak-to-peak before a reversion. Notice, I said peak-to-peak. The issue is that the majority of analysts now estimate that earnings will rise unabated for the next five years.

2014-11-11 Capital Raising in the MLP Sector Remains Active by David Chiaro of Eagle Global Advisors

We continue to see evidence that underpins our long term positive outlook on MLPs and midstream energy infrastructure companies. The need for new midstream infrastructure remains significant and announcements of large projects continue to be made. New export markets for U.S. hydrocarbons continue to develop and offer new profit opportunities for MLPs.

2014-11-11 The Return of the Dollar by Mohamed El-Erian of Project Syndicate

The recent dollar rally, the result of genuine economic progress and divergent policy developments, could contribute to the “rebalancing” that has long eluded the global economy. But that outcome is far from guaranteed.

2014-11-10 Eurozone 2015 Economic & Capital Market Outlook by Gregory Hahn, Marco Carvajal of Winthrop Capital Management

Five years after the financial crisis, the Eurozone is facing major challenges in restoring economic growth. The Eurozone is faced with numerous structural problems, high unemployment, excess capacity, stagnant wages, slow banking reform, declining manufacturing, low level of capital investment and the uncertainty of Russian foreign policy. The result is that member countries are struggling to comply with the original terms of the European Union and running budget deficits in order to stimulate growth within their countries.

2014-11-10 Change Is In The Air by Brian Wesbury, Robert Stein of First Trust Advisors

While many flay away, trying to figure out the meaning of last week’s GOP wave election, it seems simple. The government has tried for more than five years to turn a Plow Horse economy into a Race Horse, and failed. Yes, the economy is growing and creating jobs, but living standards are growing slowly, or not at all, for many.

2014-11-10 Do the Lessons of History No Longer Apply? by John Hussman of Hussman Funds

Without permanent changes in the way the world works, on valuation measures that are best correlated with actual subsequent market returns, stocks are wickedly overvalued here. Meanwhile, the stock market re-established overvalued, overbought, overbullish conditions last week that mirror some of the most precarious points in the historical record such as 1929, 1937, 1974, 1987, 2000 and 2007. Notably, that syndrome is now coupled with continued evidence of a subtle shift toward more risk-averse investor psychology, primarily reflected by internal dispersion and widening credit spreads.

2014-11-07 Japanese Equities Look Better and Better by Nick Niziolek of Calamos Investments

Based on an intersection of bottom-up and top-down criteria, we've become increasingly constructive on Japan's equity market over recent months. Last week, the BOJ made a surprise announcement that it would increase its monetary target by ¥80 trillion and also purchase stock assets. Also significant was the BOJ's statement that it would consider buying exchange traded funds that track the Nikkei 400 Index, which should promote higher dividends, buybacks, and/or capex spending-all positive for equity markets and potentially for Japan's economy as well.

2014-11-07 5 Things To Ponder: GOP Takes Control by Lance Roberts of Streettalk Live

This past Tuesday the conservative Republican candidates garnered a resounding victory over their Democratic challengers in even some of the "bluest" states. The message that was sent by voters was quite clear: "The real economy sucks."

2014-11-07 'Risk On' for Now by Scott Minerd of Guggenheim Partners

U.S. high-yield bonds, leveraged credit, and equities will likely outperform in the coming months, but there are obstacles ahead.

2014-11-06 Emerging Europe: Regional Economic Review - Q3 2014 by Team of Thomas White International

While Russia has been experiencing a slowdown for quite some time, the new round of sanctions imposed by the West has hit the economy even harder.

2014-11-04 Martin Wolf on the Financial Crisis: The Fire Next Time by Michael Edesess (Article)

If you think the global financial crisis of 2007-2009 was a one-time event caused by lax regulation and a financial industry run riot, then Financial Times chief economics commentator Martin Wolf has some bad news for you. Wolf, one of the world's most respected economists, says these circumstances were only part of its proximate cause and that the financial crisis was the inevitable product of the global economic system. If that system does not undergo radical change, says Wolf, financial crises may keep on recurring until the world economic order collapses.

2014-11-04 Rhyme and Reason by John Mauldin of Mauldin Economics

We’ll revisit the phenomenon of October as a month of negative market surprises. It actually has its roots in the interplay between farming and banking.

2014-11-04 Emerging Markets Equity Commentary: September 2014 by Team of Thomas White International

Emerging market equity prices corrected in September on concerns about weaker global growth even as the U.S. Federal Reserve is set to wind down its bond purchases. Signs of yet another downturn in the Euro-zone economy are likely to hurt the export outlook for the major emerging countries that had seen a modest improvement in exports in recent months.

2014-11-04 Americas: Regional Economic Review - Q3 2014 by Team of Thomas White International

The clear divergence in economic growth trends between the developed economies in North America and Latin America widened during the third quarter. The U.S. is now the fastest growing developed country in the world, and has lifted the outlook for Canada and Mexico, two of its major trading partners in the region.

2014-11-03 Worried About the Unknown? Focus on the Business Cycle Instead by John Greenwood of Invesco Blog

Lately, I’ve been fielding questions about the possible “unknowns” that could bring about the end of the current economic expansion. While I understand investors’ trepidation about the unknown, I believe this concern is misplaced. Business cycles do not generally end because of unforeseen accidents. They normally end because central banks, in an effort to bring down inflation, raise interest rates, which creates an inverted yield curve and slows money and credit growth. We are clearly a long way from this scenario at present.

2014-11-03 Losing Velocity: QE and the Massive Speculative Carry Trade by John Hussman of Hussman Funds

What central banks around the world seem to overlook is that by changing the mix of government liabilities that the public is forced to hold, away from bonds and toward currency and bank reserves, the only material outcome of QE is the distortion of financial markets, turning the global economy into one massive speculative carry trade. The monetary base, interest rates, and velocity are jointly determined, and absent some exogenous shock to velocity or interest rates, creating more base money simply results in that base money being turned over at a slower rate.

2014-11-03 Economy, Earnings and Policy Push Equities to New Heights by Robert Doll of Nuveen Asset Management

A combination of receding global growth fears, strong corporate earnings results and continued monetary policy support helped U.S. equities rise for a second week, with the S&P 500 Index climbing 2.7%.

2014-11-01 Don’t Be Spooked by Market Volatility—Opportunity Is Still Knocking! by Frank Holmes of U.S. Global Investors

One of the greatest fears this October—possibly the most volatile month of the year—has been the correlation between the S&P 500 Index’s ascent in the first three quarters of the year and the possible ramifications of the end of quantitative easing (QE).

2014-10-31 Buyer Beware: A Notable Divergence by John Del Vecchio of AdvisorShares

As a short selling portfolio manager, we constantly monitor market relationships for positive or negative divergences in the broad equity market indexes. One of the most important relationships is that between price and volume. In a bullish scenario, one would want to see volume expand as price rises.

2014-10-31 A New Breed of Robotics by Kenichi Amaki of Matthews Asia

Are “collaborative robots”—industrial robots made to better work alongside humans—likely to be well-received in the market? How feasible is a car made from a 3D printer? This week Portfolio Manager Kenichi Amaki discusses his findings from the International Manufacturing Technology Show in Chicago.

2014-10-31 5 Things To Ponder: "Spooky" Things by Lance Roberts of Streettalk Live

I love this time of year, in particular it is the festivities surrounding one of the biggest commercial shopping days of the year - Halloween. According to Wikipedia:

2014-10-31 Weekly Economic Commentary by Team of Northern Trust

Stress testing is performed in a number of arenas. Tools and parts are stressed to ensure that they will stand up to extreme conditions. Medical patients are stressed to detect heart disease. Computer systems are stressed to ensure that they can operate stably at peak times.

2014-10-30 Recovery Reality by John Canally of LPL Financial

The U.S. economy is improving, and in many cases is back to normal, but it remains stubbornly weak in some areas. “Real world” indicators that point to the health of the economy include crane rental rates and customer traffic in restaurants. Economic uncertainty -- likely a drag on economic growth in 2011, 2012, and 2013 -- has faded as a concern in 2014, consistent with the Fed’s most recent Beige Book.

2014-10-30 Stay the Course in Small Caps by Jonathan Coleman of Janus Capital Group

Small-cap stocks sold off in the third quarter, but now is not the time to abandon the market cap segment. In this article, Jonathan Coleman, Co-Portfolio Manager of the Janus Venture Fund, gives his perspective on current small-cap valuations, and why an allocation to small caps is beneficial in an environment where the U.S. economy is on stronger footing than the rest of the world.

2014-10-30 Europe Must Act Now by Scott Minerd of Guggenheim Partners

Things in Europe are bad and policymakers appear already to have fallen behind the curve. The reality is the ECB will need to purchase at least another €1.5 trillion in assets, and even that may not be enough to avert a severe slowdown.

2014-10-28 Why Consider Brazil Now? by David Nadel of The Royce Funds

We see Brazil as a country whose investment appeal appears evident based on enduring themes, including burgeoning middle-class consumption, a young and unlevered population, business acumen in fields as diverse as agriculture and manufacturing, and more.

2014-10-28 U.S. Budget: How Is Spending Trending? by Milton Ezrati of Lord Abbett

With the pivotal 2014 midterm election around the corner, here is the first of a two-part look at both sides of the U.S. budget. First up: Examining where U.S. taxpayers’ money actually goes—and whether current spending trends are sustainable.

2014-10-27 Why The Fed Will End QE On Wednesday by Lance Roberts of Streettalk Live

This week we will find out the answer to whether the Federal Reserve will end its current quantitative easing program or not. Today is the last open market operation of the current program, and my bet is that it will be the last, for now. Here are my three reasons why I believe this to be the case.

2014-10-27 Fall Quarterly Commentary by John Prichard, Miles Yourman of Knightsbridge Asset Management

Born in the city of Lemberg in the Austrian-Hungarian empire (present-day Ukraine) (future-day Russia?), Ludwig von Mises would be a familiar figure to those interested in the intellectual underpinnings of economic libertarianism. He was an important contributor to the Austrian school of economic thought, which, while ultimately losing mainstream support to the Keynesians and their followers, has still remained influential in certain circles as an alternative.

2014-10-26 A Scary Story for Emerging Markets by John Mauldin of Mauldin Economics

The all-too-predictable effects of a rising dollar on emerging markets that have been propped up by hot inflows and the dollar carry trade will spread far beyond the emerging markets themselves. This is another key aspect of the not-so-coincidental consequences that we will be exploring in our series on what I feel is a sea change in the global economic environment.

2014-10-26 Plot Twist…or a Different Book? by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab

Volatility could continue but equity investors should keep the longer-term picture in mind, which we believe is positive. The U.S. economy is improving and monetary policy remains quite loose. The international picture is more concerning but diversification is important across asset classes. We currently favor emerging markets within a diversified international portfolio.

2014-10-26 Weekly Economic Commentary by Urban Carmel of The Fat Pitch

While equities have recently become volatile, the underlying fundamentals have not changed.

2014-10-25 As the Eurozone Stalls, China Cuts the Red Tape by Frank Holmes of U.S. Global Investors

France and Germany’s industrial production has turned down recently. Their purchasing managers’ index (PMI) numbers are below the 50-mark line, indicating contraction. This trend is especially worrisome because Europe is a bigger trading partner with China than the U.S. is. So what’s the solution? The EU would do well to look east, specifically to China.

2014-10-25 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Inflation is falling, but it won't go through the floor; Income inequality is affecting consumption categories; Do new mortgage lending rules strike the right balance?

2014-10-24 Steady as She Goes by John Osterweis, Matt Berler of Osterweis Capital Management

For some time now we have been making the case for a long-term bull market in U.S. equities. This has rested on the prediction of a gradual economic recovery devoid of inflationary pressures, played out against a very accommodative monetary backdrop. So far, this is exactly what has occurred. But as we all know, trees don’t grow to heaven and nothing lasts forever. Therefore the relevant questions we ask ourselves every day are: (1) what could go wrong and (2) when should we start to worry? We shall devote this quarter’s Outlook to the things we worry about.

2014-10-23 When Will Rates Potentially Rise? by Team of Osterweis Capital Management

When 2014 started, some Wall Street strategists predicted a continuing rise in interest rates as U.S. economic growth accelerated and the Federal Reserve (the “Fed”) reduced its monthly stimulus. Instead, it has been a one-way street in government bond markets as they continued to deliver low yields at higher prices. In August, the yield on the benchmark U.S. 10-year Note fell to 2.3%, back down to June 2013 levels.

2014-10-23 Quarterly Review and Outlook by Team of Hoisington Investment Management

The U.S. economy continues to lose momentum despite the Federal Reserve’s use of conventional techniques and numerous experimental measures to spur growth. In the first half of the year, real GDP grew at only a 1.2% annual rate while real per capita GDP increased by a minimal 0.3% annual rate. Such increases are insufficient to raise the standard of living, which, as measured by real median household income, stands at the same level as it did seventeen years ago

2014-10-23 How Consensus Thinking Works Against Investors by Bob Andres of Andres Capital Management

Over the past several years we have used this newsletter to voice our concerns regarding the macro-economic landscape, while attempting to provide practical solutions for investors. Since our venture into financial commentary, we have questioned the veracity of consensus opinion and how it tends to be wrong, especially in regards to interest rates.

2014-10-22 The Eighth Default of Argentina by Kaisa Stucke, Bill O'Grady of Confluence Investment Management

Very few countries have seen as spectacular of a decline in its economic standing over the past 100 years as Argentina has. Argentina has been in the international headlines recently due to its sovereign debt default, the eighth default in the history of the country. This week we will look at Argentina, its long history of economic booms and busts, its political background, and its extensive chronicle of sovereign debt defaults. As always, we will conclude with market ramifications.

2014-10-22 Mr. Toad’s Wild Ride by Alan Hartley of Black Cypress Capital Management

Every time the stock market falls 3% or 4%, investors start to act like we’re staring at an oncoming locomotive. Though, each train has been the sort from Mr. Toad’s Wild Ride–not really a train at all, just bright lights and sounds meant to scare us.

2014-10-22 Despite Volatility, This Bull Is Likely to Charge Higher by John Calamos, Gary Black of Calamos Investments

As the fourth quarter begins, the market has found itself engulfed in anxiety. Volatility has surged in the equity markets while the 10-year Treasury yield has dropped to 2%-leading some to question whether this bull market is breathing its last breath. We believe: * Global GDP growth will likely be in the 2.0%-3.0% range. * The U.S. is in the 5th or 6th inning of recovery, with slow but improving growth. * Despite the surge in volatility, this bull market has more room to run. * A balance of secular and cyclical growth companies presents the most attractive portfolio for this mid-cycle phase.

2014-10-21 The Economy: October Viewpoint by Robert Cron of Bronfman E.L. Rothschild

The U.S. economy continues to move forward in its slow but steady recovery. Despite the Federal Reserve ending their bond buying program in October, demand for U.S. fixed income continues to be robust. The recent downward movement in the stock markets has some investors talking “correction” once again, and growth concerns overseas finally seem to affecting the performance of the domestic markets. We believe there is still more room for improvement for foreign economies, while the U.S. seems to be a more stable environment.

2014-10-21 The Flat Debt Society by John Mauldin of Mauldin Economics

Since at least the beginning of 2006, the most asked question I get after a speech is “Do you think we will have inflation or deflation?” In an attempt at humor, my answer has been “Yes.”

2014-10-17 Disinflation Infatuation by Anthony Valeri of LPL Financial

Inflation expectations have fallen sharply in recent weeks, driven by European disinflation, lower energy prices, and overall growth concerns. The persistence of low inflation expectations may intensify the “lower for longer” theme via lower growth expectations and delays to potential Federal Reserve (Fed) interest rate hikes.

2014-10-17 Pullback Perspective by Burt White of LPL Financial

We see the recent increase in volatility as normal within the context of an ongoing bull market. We do not believe the age of the bull market, at more than 5.5 years old, means it should end. We maintain our positive outlook for stocks for the remainder of 2014 and into 2015.

2014-10-16 Governments Need Inflation, Economies Don't by Peter Schiff of Euro Pacific Capital

In an article in the UK's Telegraph on October 10, veteran economic correspondent Ambrose Evans-Pritchard laid bare the essential truth of the nearly universal current embrace of inflation as an economic panacea. While politicians, CEOs and economists talk about demand stimulus and the avoidance of a deflationary trap, Evans-Pritchard reminds us that inflation is all, and always, about debt management.

2014-10-16 The Case for High Multiples by David Kleinberg of Universal Orbit

High P/E multiple companies, along with their near cousins N/A and NMF, display the characteristics of mid- to late-cycle reporting periods—increasing trends in cash flow, from negative to positive. The case for high multiples is initially supported by lofty valuations and low interest rates amid robust earnings in this perhaps peak cycle. Irrespective of the cycles and subcycles driving profitability, we look forward to more variable less certain comparables among changing industry-specific capital market dynamics.

2014-10-15 Dilma or No Dilma? by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

During the first round of Brazilian presidential elections on October 5, the incumbent Dilma Rousseff received 42% of the votes while Aecio Neves received 34%. Since neither candidate received more than 50% of the vote, the second round of runoff elections will be held on October 26. This week, we will look at the Brazilian presidential elections along with the country’s current political and economic environment. We will briefly describe the recent political history of the country and look at the specifics of Brazil’s economic development. As usual, we will conclude with market ra

2014-10-14 High Quality Mid Caps Enjoy Performance Advantage by Sponsored Content from ClearBridge Investments (Article)

Since 1965, high-quality midcap stocks have outperformed their low-quality peers by a meaningful margin-a premium that has been most pronounced during periods of market transition. As we approach an inflection point in the current market and economy, investors should consider high-quality mid-cap stocks, which appear poised to thrive.

2014-10-13 Inconceivable by Lance Roberts of Streettalk Live

The point is that there are many risks investors should not ignore. Making up losses is much harder than reinvesting stored capital once a clearer picture emerges. While the current belief that a correction of magnitude in the markets is "inconceivable," I am not sure that word means what they think it means.

2014-10-11 Warning: Market Correction This Week? Did You See the Opportunity? by Frank Holmes of U.S. Global Investors

While stocks fell around the world this week amid growing concerns over global economic growth, Europe’s slowdown can’t stop emerging market population growth that drives long-term commodity demand. If the short-term market volatility concerns you, a solution is short-term tax-free municipal bonds. Check out the 5 Reasons Why.

2014-10-10 Japan Strategist Roundtable: Jesper Koll—What Is Different This Time? by Jeremy Schwartz of WisdomTree

When I spoke with Jesper Koll from J.P. Morgan Securities, one particular theme appeared in our conversation: Prime minister Shinzo Abe is an important catalyst—but not necessarily the primary factor—for what is different this time in Japan.

2014-10-09 Can Anything Go Wrong for the Markets??? by Vineer Bhansali of PIMCO

?Risk management in proper portfolio construction consists of a combination of dynamic risk balancing, diversified beta sources, explicit options-based tail hedging and a minimum amount of liquidity. Faced with a long and expanding list of things that could go wrong, uncertainties about the likelihood of each shock and the lack of dependable precursory indicators, it seems that a structurally sound portfolio construction methodology that uses all these tools is essential.

2014-10-05 Weighing the Week Ahead: Will global weakness drag down the US economy? by Jeff Miller of New Arc Investments

Last week was all about data. This week will be the opposite. The calendar already dished up the big news, and the major earnings reports are still a week away. Meanwhile, we have more conferences and speeches than I can remember seeing for many months. For those of us who think of data as the signal and politicians and pundits as noise, we must get ready for a low ratio! This week will emphasize commentary rather than data, with world leaders, Fed types, and pundits all joining in.

2014-10-04 600 Million Reasons to Keep Your Eyes on India by Frank Holmes of U.S. Global Investors

In the wake of his rock star reception at Madison Square Garden on Sunday, Prime Minister Narendra Modi has emphatically announced to our nation's top corporate and political leaders that India is now open for business. Between September 26 and 30, he met with not only President Barack Obama and other high-profile politicians but also the CEOs of some of our nation's largest and most successful companies.

2014-10-04 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

What is a good monthly U.S. payroll number?; The September U.S. job data were strong but may not move the Fed's needle; Falling inflation and inflation expectations will keep central banks from tightening

2014-10-02 Will Risk Parity Performance Persist? by Chris Maxey, Brian Payne of Fortigent

With risk parity portfolios on the whole having outperformed traditional 60/40 allocations since the trough of the financial crisis, one must be mindful of the risks that lie ahead when determining the efficacy of such an approach.

2014-10-02 Six Months of Nothing by Niels Jensen of Absolute Return Partners

Political problems have escalated over the past seven months. Russia has been aggressive and so have extremists in certain Muslim countries. Having said that, financial markets seem to care about nothing but QE. Despite a growing disconnect in some markets between equity valuations and economic fundamentals, we expect the low interest rate environment to carry the equity bull market for a little longer, but eventually it will end in tears.

2014-10-01 Looking Back, Looking Ahead by Scott Brown of Raymond James

Real GDP is now estimated to have risen at a 4.6% annual rate in 2Q14. However, the second quarter’s strength must be balanced against the first quarter’s weakness (a -2.1% pace). As the third quarter ends, we still don’t have a complete picture. However, figures are likely to suggest a moderately strong pace of growth and a gradual taking up of economic slack.

2014-09-30 Asset Allocation in a Time of Complacency by Dimitri Balatsos of Tesseract Partners

Complacency is a dangerous mindset, especially for investors. Having been generously rewarded beyond their expectations, investors were coddled in the arms of complacency as 2013 drew to a close.

2014-09-30 How Might Stocks Take a Hike? by Milton Ezrati of Lord Abbett

Here's a look at what happened to equities during past periods when the Fed raised rates.

2014-09-29 The Ingredients of a Market Crash by John Hussman of Hussman Funds

Market peaks often go through several months of top formation, so the near-term remains uncertain. Still, it has become urgent for investors to carefully examine all risk exposures. When extreme valuations on historically reliable measures, lopsided bullishness, and compressed risk premiums are joined by deteriorating market internals, widening credit spreads, and a breakdown in trend uniformity, it’s advisable to make certain that the long position you have is the long position you want over the remainder of the market cycle.

2014-09-28 The End of Monetary Policy by John Mauldin of Mauldin Economics

Let’s explore the limits of monetary policy and think about the evolution and then the endgame of economic history. Not the end of monetary policy per se, but its emasculation.

2014-09-27 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The Federal Reserve begins looking toward the door; China's policymakers should be clearer about their intentions; Dissents at central banks are rising

2014-09-26 Many Investors Still Fear Stocks: Good News for Markets? by Russ Koesterich of BlackRock

The economy and the stock market are no longer depressed, yet the share of U.S. adults who own stocks remains at multi-year lows. Russ explains why investors haven’t yet fully embraced equities and what this could mean for longer-term stock market performance.

2014-09-25 Awakening Japan Inc. by Yu Zhang of Matthews Asia

Japanese Prime Minister Shinzo Abe's first two "arrows" of his expansionary fiscal policies have done well to curb deflation. Now, investors are concerned about Japan's so called "third arrow"—the country's growth strategy. Can credible structural reform be implemented to remove impediments to its growth?

2014-09-25 Three Reasons to Consider EM Asia by Russ Koesterich of BlackRock

Though EM stocks have been struggling of late, Russ still believes investors should have emerging market exposure, particularly in emerging Asia. He provides three reasons why.

2014-09-25 China Defies Analysts’ Predictions with an Encouraging PMI by Frank Holmes of U.S. Global Investors

HSBC announced Tuesday that the preliminary purchasing managers’ index (PMI) for China rose to 50.5, a modest improvement from August’s 50.2. Analysts were expecting the index to decline to a neutral 50.0, based on softening factory employment, but this is a case when you’re relieved others were off the mark.

2014-09-24 Equities: Finding the Path to Value? by Virginie Maisonneuve, Anne Gudefin of PIMCO

Going forward, earnings growth and stock selection - more than multiple expansion and beta - will likely play a bigger role in driving positive returns. Our research has uncovered numerous examples of stocks trading below our estimate of intrinsic value - notably in Europe and various special situations. Investors with the capacity for deep, fundamental research and a long-term unconstrained equity strategy may be positioned to capitalize on these opportunities.

2014-09-24 Fed Forecasts Sub-3% Economy for the Next Three Years by Gary Halbert of Halbert Wealth Management

The Fed’s policy committee announced last Wednesday that it will end its massive QE bond buying program at the end of next month, thus paving the way for the first Fed funds rate increase sometime next year. This was not a surprise. The Fed’s gargantuan balance sheet will peak near $4.5 trillion in Treasury and mortgage-backed bonds at the end of October.

2014-09-24 U.S. Budget: The Good, the Bad, and the Ugly by Milton Ezrati of Lord Abbett

A report from the Congressional Budget Office forecasts shrinking deficits through 2015. After that, fiscal strains begin to emerge.

2014-09-23 Why "Healthspan" Trumps "Lifespan" for Clients by Dan Richards (Article)

Advisors spend a great deal of their time with clients who ask, "Will I run out of money?" As a result, few issues get more attention than the sustainable withdrawal rate in today's environment. But new research shows that an equally pressing question is, "How can I enjoy life in my 60s, before health issues creep in?"

2014-09-22 The Ponzi Economy by John Hussman of Hussman Funds

When the most persistent, most aggressive, and most sizeable actions of policymakers are those that discourage saving, promote debt-financed consumption, and encourage the diversion of scarce savings to yield-seeking speculation rather than productive investment, the backbone that supports a rising standard of living is broken.

2014-09-22 It’s Time for Your Portfolio to Break from Tradition by Kathleen Gaffney, Kevin Dachille of Eaton Vance

Given the current low-yield environment and with rising interest rates looming, now may be the right time to consider new strategies for generating favorable returns in your fixed-income portfolio.

2014-09-21 Where’s the Growth? by John Mauldin of Mauldin Economics

Call me a heretic, but I take a different view than the economists in charge. To my mind, the sluggish recovery is a sign that central banks, governments, and, quite frankly, the “textbook” economists (despite their best intentions) are part of the problem. As Detlev Schlichter commented in his latest blog post (“Keynes was a failure in Japan – No need to embrace him in Europe”), “To the true Keynesian, no interest rate is ever low enough, no ‘quantitative easing’ program ever ambitious enough, and no fiscal deficit ever large enough.” It&r

2014-09-18 Room to Run by Marie Schofield of Columbia Management

The U.S. economy passed a milestone of sorts in August, in that the current business cycle has now surpassed the last one in length. The prior business cycle started in 2001 and continued until the December 2007 peak, lasting 6.8 years. This is longer than the post-war average of 5.6 years, but shorter than the business cycles in the 1980s and 1990s which lasted 9 to 10 years.

2014-09-17 America in the Driver’s Seat – Enjoy the Ride by Doug MacKay, Bill Hoover of Broadleaf Partners

Like clockwork, earnings season has drawn to a close, creating an information vacuum for the stock market, one in which the media spends more time "making" the news than perhaps reporting it. The marginal dollar at trade - or the price maker in a high frequency dominated trading world - is one more likely to be concerned about the Fed's words over the next two days than the stream of earnings produced by corporate America over the next few quarters.

2014-09-16 Economic Update by Team of Cambridge Advisors

After a rocky month in July, stocks resumed their march higher in August. The S&P 500 was up 4.0% for the month and is up 9.9% year-to-date. The small cap Russell 2000 index also performed well for the month, up 5.0%. Year-to-date, small cap stocks have lagged and are up only 1.75% as of the end of August. International stocks continued to struggle in August and year-to-date with performance of -0.4% and +2.93% respectively.

2014-09-15 Bulls Charge Despite Weak Data by Scott Minerd of Guggenheim Partners

As the U.S. Federal Reserve debates withdrawing accommodation the doves have the upper hand, but that does not mean they won’t make a concession to hawks and hike sooner than the market expects.

2014-09-15 General Electric’s Business Strategy by Erik Kobayashi-Solomon of YCharts, Inc.

Despite the many products and services provided by GE, its business strategy is actually startlingly simple. In short, GE is betting on the continued flourishing of the human race. The company is divesting consumer-facing assets and acquiring or boosting commercial-facing ones in what we term the PIT Strategy. An analysis of the company’s valuation drivers suggests an upside potential of the 40% range for GE.

2014-09-15 Emphasize Barriers to Entry? by Mark Kiesel of PIMCO

We see many bottom-up investment opportunities in the global credit markets, particularly in industries with high barriers to entry. We view healthcare, lodging, Asian gaming, master limited partnerships/pipelines, energy, wireless telecom, cell towers, cable, satellite, media and U.S. banks as attractive industries. Companies’ unique patents, licenses, brands, content and intellectual property, among other advantages, can help support investment returns in both bull and bear markets.

2014-09-15 The Economy: September Viewpoint by Bruce Laning of Bronfman E.L. Rothschild

The U.S. economy experienced a robust summer for economic expansion and job growth, however recent consumer data is casting doubt as to whether the current level of activity can be sustained. Our position is to maintain an emphasis on higher-quality bonds and be prepared for short-term rate increase(s) in the months to come. The road ahead for stocks continues to look positive, but it would be prudent to keep in mind the inevitable speed bumps that will likely present themselves down the road, as we have not had a meaningful pullback since 2011.

2014-09-15 The U.S. Is Diverging From Other Developed Markets by Robert Doll of Nuveen Asset Management

U.S. equities fell amid a relatively quiet week, with the S&P 500 Index dropping 1.1%. The upcoming Federal Open Market Committee (FOMC) meeting drew quite a bit of attention amid increased speculation that the Federal Reserve may start signaling its long-awaited move to increase rates.

2014-09-14 What’s on Your Radar Screen? by John Mauldin of Mauldin Economics

So let’s look at what’s on my radar screen today. First up (but probably not the most important in the long term), I would have to say, is Scotland. What has not been widely discussed is that the voting age was changed in Scotland just a few years ago. For this election, anyone in Scotland over 16 years old is eligible. Think about that for a second. Have you ever asked 16-year-olds whether they would like to be more free and independent and gotten a “no” answer? They don’t think with their economic brains, or at least most of them don’t.

2014-09-13 Will the Russia-Ukraine Crisis Chill Europe’s Recovery? by Philippe Brugere-Trelat of Franklin Templeton Investments

As the crisis in Ukraine and resulting geopolitical tensions between Russia and the West continues with no durable solution yet, many investors have responded by exiting European companies with exposure to the Russian economy. But even as evidence mounts that the Ukraine crisis is taking a toll on many European economies, it would be imprudent for long-term investors to give up on investing in Europe. Strong corporate earnings momentum, high dividend yields and the possibility of additional support from the European Central Bank (ECB) are just some of the reasons why he remains confident that,

2014-09-12 U.S. rates — The Draghi floor by Zach Pandl of Columbia Management

In typical fashion, last week’s European Central Bank (ECB) announcements found a way to bury the lede. The deposit rate cut to -20 basis points from -10 basis points was characterized as a “technical adjustment,” and the asset purchase program, while important, lacked a specific quantitative target—forcing investors to infer a rough figure from Mario Draghi’s comments in the press conference.

2014-09-12 Schwab Market Perspective: Diverging Paths…Growing Risks? by Liz Ann Sonders of Charles Schwab

The U.S. stock market continues to reach new highs but sentiment is extended and we are entering a period that has historically seen weakness. We believe the ultimate trend is higher, but bumps could get more pronounced in the near future. The U.S. economy is improving, with data suggesting self-supporting expansion is taking hold. Whether this means accelerated Fed interest rate hikes is being closely watched, while midterm elections often inject some more uncertainty into the market. The European Central Bank (ECB) finally acted, but structural issues and lack of demand remain problems.

2014-09-11 Doubling Down on Inflation by Peter Schiff of Euro Pacific Capital

Friday's release of disappointing August payroll numbers should have been a jarring wake-up call warning Wall Street that the economy has been treading on thin ice. Instead the alarm clock was stuffed under the pillow and Wall Street kept sleeping.

2014-09-11 The Leapfrog: The Role of Technology in Accelerating Emerging Markets’ Growth by Mark Mobius of Franklin Templeton Investments

The potential for emerging and frontier markets to realize accelerated economic growth as a result of new technology transfer comes up regularly in our research findings. We have been increasingly excited about a new development—the capacity for new technology, particularly related to data over the Internet, to completely bypass swathes of older technology and business activity. We think this could lead to even more dramatic economic progress. In effect, the emerging markets are leapfrogging over the old technology and taking advantage of the newest technology today.

2014-09-11 Why Growth Stocks Now? by John Calamos of Calamos Investments

After five years of a strong bull market, I believe there’s still room for stocks to advance. Growth stocks look especially attractive. At 1.23, the premium for growth over value remains lower than the historical average of 1.44. Even when we omit the tech bubble from the long-term average, the 1.23 premium for growth is lower than that 1.37 average.

2014-09-10 Labor Force Participation Lowest in 36 Years - Why? by Gary Halbert of Halbert Wealth Management

Last Friday’s unemployment report for August was significantly weaker than expected. While the headline unemployment rate dipped back to 6.1% (same as it was for June), the number of new jobs created last month was substantially below expectations and marked the lowest number of the year.

2014-09-10 A Global Growth Slowdown? by Russ Koesterich of BlackRock

As 2014 is shaping up to be another year of below-trend economic growth, many investors are wondering: Is economic growth once again slowing? Russ explains why his answer is no.

2014-09-09 Market Perspective by The CCR Wealth Management Investment Committee of CCR Wealth Management

In our office we frequently make sport of the countless headlines we encounter on a daily basis from various media outlets across the web. These headlines are often splashed across the “home” pages of market or financial sites—though often across mainstream “news” outlets, or the business sections of Sunday newspapers as well.

2014-09-09 Divergence by Kristina Hooper of Allianz Global Investors

A widening gap in monetary policy in the United States and Europe reveals the disparity in economic growth that exists. Kristina Hooper explains the implications for investors and what history reveals about periods of Fed tightening.

2014-09-09 Xi’s Purge by Bill O'Grady of Confluence Investment Management

Since taking power, Chinese President Xi Jinping has implemented a strong program to punish corruption. A large number of the Communist Party of China (CPC) have been under investigation or punished for their failings. We believe these purges are being implemented for reasons beyond the simple exercise in political power. This report will discuss the purge in detail, introduce the concepts of environmental and social capital, and discuss China’s four stages of growth. We will conclude, as always, with market ramifications.

2014-09-09 Escape Fandango? by Paul McCulley of PIMCO

When I entered the Fed-watching business over three decades ago, a clichéd phrase of advice from graybeards was: “Watch what they do, not what they say.” Thinking back, there was not actually much Fed rhetoric to either watch or hear.

2014-09-09 Is it Time to Take the Euro Out of Europe? by Jeremy Schwartz of WisdomTree

On September 4, the European Central Bank (ECB) took further accommodation to support the economic growth environment in Europe. As a result, the euro collapsed about 1% immediately after the news, while European stocks rose on prospects for more monetary policy easing. This reaction mirrors what we saw in Japan in 2013, and it strengthens the case for taking the euro out of Europe.

2014-09-09 Back to School With the Three Rs: Revenues, Reinvestment, and Renaissance by Burt White, Jeffrey Buchbinder of LPL Financial

We believe the “three Rs” are keys to the outlook for the stock market: revenues (and profits), reinvestment, and the renaissance in manufacturing. We expect stocks to garner support from these three Rs in the form of continued growth in revenues and profits, more corporate reinvestment, and continued steady gains for the U.S. manufacturing sector.

2014-09-07 Europe Takes the QE Baton by John Mauldin of Mauldin Economics

This week we’ll look at what is happening across the pond in Europe, where the above-mentioned negative rates are only one ingredient in a big pot of Bizarro soup. And we’ll think about what it means for the US Federal Reserve to be so close to the end of its quantitative easing, even as the ECB takes the baton to add €1 trillion to the world’s liquidity. And meanwhile, Japan just keeps plugging away.

2014-09-06 The New Challenges of Price Discovery by Frank Holmes of U.S. Global Investors

In the past few years, price discovery—or the act of finding the “right” price for a security—has become much more challenging because of falling stock volume and widening bid-ask spreads. These challenges are directly attributable to the infiltration of high-frequency traders into the market, not to mention the expansion of dark pools and non-exchange trading.

2014-09-06 Are US Stocks Reacting Rationally? by Grant Bowers of Franklin Templeton Investments

When major market indexes reach new heights, some investors may become wary. Given that the US stock market has enjoyed robust total returns over the past five years (2009–2013), it’s only natural to question the sustainability of rising stock prices.Grant Bowers, portfolio manager of Franklin Growth Opportunities Fund, believes many of the same drivers of stock market performance over the past few years remain in place, including low inflation, healthy corporate profits and accommodative monetary policy. However, he also cautions that volatility is likely to pick up, particularly

2014-09-06 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Can the eurozone avoid “Japanification?”; U.S. employment: Less rosy than expected; The U.S. capital spending outlook is promising

2014-09-05 Will Russia Derail the Eurozone Recovery? by Nicola Mai of PIMCO

Geopolitical tensions from Ukraine and the evolving trade war with Russia are threatening what is already a weak recovery in Europe, and could shave approximately 0.3%–0.4% off eurozone growth. Should the situation escalate, we could expect an even greater drag with potential to push the eurozone back into recession. Looking ahead, we see attractive opportunities in peripheral bonds and favour an underweight currency position in the euro.

2014-09-04 International Equity Commentary: July, 2014 by Team of Thomas White International

International equity prices saw a modest correction in July as geopolitical tensions worsened in Ukraine and the Middle East. The risk of these conflicts spreading to wider areas and pulling in more countries unnerved the markets.

2014-09-04 Emerging Markets Equity Commentary: July, 2014 by Team of Thomas White International

Emerging market equity prices continued to outperform the developed markets in July and ended the month with moderate gains. Markets in Asia significantly outperformed during the month, helped by signs of stabilizing economic growth in major markets such as China.

2014-09-04 Midterms May Mean More Gains for Stocks by Burt White, Jeffrey Buchbinder of LPL Financial

With the midterm elections now just two months away and campaigning starting to heat up, we thought we would share our current views on the political landscape and what it may mean for U.S equities. In our two Outlook 2014 publications for this year, we posited that the U.S. economy and corporate profits may drive the stock market higher and investors could turn their attention away from policymakers in Washington, who were such a distraction in 2013 and earlier in the current economic expansion.

2014-09-03 S&P Hits the 2,000 Mark by Ryan Davis of Fortigent

Equity markets moved modestly higher last week, with the S&P 500 closing above the 2,000 level for the first time. The S&P 500 added 80 bps on the week and now stands up 9.9% on the year following a 4% gain in August. Bonds also rallied last week, rising in tandem with European sovereigns. The rate on the 10-year Treasury fell to 2.33% by week’s end.

2014-09-03 State and Local Governments Outpace the Feds by Milton Ezrati of Lord Abbett

The fiscal health of state and local governments appears robust when compared with that of the federal government.

2014-09-03 For Wonks Only??? by William Gross of PIMCO

A credit-based financial economy (as opposed to pure cash) depends on an ever-expanding outstanding level of credit for its survival. Without additional credit, interest on previously issued liabilities cannot be paid absent the sale of existing assets, which in turn would lead to a vicious cycle of debt deflation, recession and ultimately depression.

2014-09-02 Stronger Growth Should Push Equities Higher by Robert Doll of Nuveen Asset Management

A rash of positive news propelled stock prices higher for the fourth consecutive week, marking the longest winning streak for equities since last November. The S&P 500 Index pushed above the 2,000 level for the first time as it gained 0.8% for the week.

2014-08-31 Abenomics, European Style by Nouriel Roubini of Project Syndicate

Two years ago, Shinzo Abe’s election as Japan’s prime minister led to the advent of “Abenomics,” a three-part plan to rescue the economy from a treadmill of stagnation and deflation. It now appears that the European Central Bank has a similar plan in store for the eurozone.

2014-08-28 I Can’t Save Europe Alone – Mario Draghi at Jackson Hole by Bob Andres of Andres Capital Management

Janet Yellen began her prepared speech on monetary policy and the labor markets in Jackson Hole at 10:00am on Friday. Within minutes, analysts were offering insights into future interest rate policy. The equity markets dipped slightly only to recover quickly to pre-speech levels. The consensus view, which emerged after sifting through the release, was that Ms. Yellen’s view on interest rates may be a tad less dovish than previously expressed. With no video feeds emanating from the conference and with tepid market reaction, we asked ourselves, “Is she whispering or is she Yellen?&rd

2014-08-27 EM Growth Provides Tailwind for Automation Companies by Nick Niziolek, Paul Ryndak of Calamos Investments

The pullback in Japanese equities earlier this year brought the valuations of select automation companies to attractive levels that do not fully reflect the long-term growth potential we see. The days of Henry Ford's assembly line are long gone, replaced by automated conveyor systems and robots that do much of the heavy lifting. Chinese labor costs are rising quickly, providing incentive for manufacturers to be more productive and contain costs. Also, the technical and quality requirements for manufacturing cars, phones and other electronics is increasing, requiring more precision.

2014-08-27 From the Alps to the Tetons by Brian Andrew of Cleary Gull

Central bankers seem to be the focus once again. If the global economy were strong enough to stand on its own, we wouldn’t spend every waking moment worrying about what Fed Reserve Chair Janet Yellen and her European Central Bank counterpart Mario Draghi are going to do next. The fact that these bankers are front and center again in investors’ minds, is a function of both how sluggish the global economy is and how persistent the hangover from the mid-2000’s real estate party continues to be.

2014-08-26 Global Economic Overview: July 2014 by Team of Thomas White International

Recent economic data from the developed world have shown divergent trends while growth in the emerging economies appears to be stabilizing. The U.S. economy expanded at a faster than expected pace during the second quarter, more than offsetting the first quarter decline, which revised estimates show was not as severe as thought earlier.

2014-08-25 Broken Links: Fed Policy and the Growing Gap Betweeen Wall Street and Main Street by John Hussman of Hussman Funds

The issue is not whether the U.S. economy does or does not need “life support.” The issue is that QE is not life support in the first place. How can policy makers help to build the economy from the middle-out, and slow the both the unproductive diversion and the lopsided distribution of resources in our economic system? We should begin by stopping the harm.

2014-08-23 Managing Expectations by Frank Holmes of U.S. Global Investors

The third part of this series on managing expectations is devoted to fundamental resource stock evaluation. I’ll discuss some of the statistical tools we use to pick quality stocks during a treacherous bear market, such as what we’ve seen in gold stocks the last three years

2014-08-23 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The View from Jackson Hole; U.S. Auto Sales: Tailwinds Will Prevail; The Mystery of Long-Term Bond Yields

2014-08-22 Our Take on the Fed Minutes by Doug MacKay, Bill Hoover of Broadleaf Partners

Usually, I don't have anything intelligent to say more than once every month or so and since I'm not a journalist, I'm never forced to make stuff up just to sell papers. I do believe, however, that the release of the Fed Minutes was worth a few of my minutes and perhaps yours. Even if you're yawning right now, please know that putting my thoughts in writing helps me to better manage your investments. As a money manager, we pick your investments, not your money managers. The buck starts and stops with us.

2014-08-21 Lucid Dreaming! by Jeffrey Saut of Raymond James

Evidentially, the “lucid dreamers” on Wall Street practiced their skills two weeks ago as professional traders were sneaking large “buy orders” into the equity markets on the closing bell. Simultaneously, the Commitment of Traders’ Report showed those same traders were dramatically reducing their “short sale” bets.

2014-08-21 A Roadmap, Not a Timetable by Scott Brown of Raymond James

On Friday morning, Fed Chair Janet Yellen will deliver the keynote address at the Kansas City Fed’s annual monetary policy symposium in Jackson Hole, Wyoming. Those looking for clues on the timing of the first Fed rate hike are likely to be disappointed.

2014-08-21 Hospitals: No Longer in the ICU by Kyle Schneider of Diamond Hill Capital Management, Inc.

The hospital industry has traditionally been below average from an investment standpoint, given its high levels of regulation, capital intensity, and leverage. Pricing power with private insurers is dependent on local market share, while Medicaid and Medicare rates are non-negotiable.

2014-08-20 Americas: Regional Economic Review - Q2 2014 by Team of Thomas White International

Economic trends from the region during the second quarter were in line with earlier periods, as the developed economies in North America are seeing healthier growth while most of the emerging economies in Latin America are facing a slowdown.

2014-08-19 Republic or Empire? An Update, Part 1 by Bill O'Grady of Confluence Investment Management

This topic was last discussed in our report from 2012. We have expanded sections of it in this update and, due to length, will present it in two parts. Over the past two years, how American society answers this question is becoming increasingly critical. There is a steady undercurrent in American politics that seeks to withdraw the U.S. from world affairs. In this report, we will discuss how the American republic began, how it evolved into an empire and how America conducted this role. Next week, we will finish our analysis and discuss market ramifications.

2014-08-19 Share and Share Alike?? by Richard Clarida of PIMCO

Labor compensation as a share of national income fell sharply in 2009–2010 and has remained depressed: The share of national income at the end of 2013 was the smallest slice paid to labor in at least 60 years! During the last three U.S. business cycles, the rise in labor’s share that commenced during the expansion phase of the business cycle was not accompanied by a material rise in PCE inflation.

2014-08-18 Global Economic Perspective: August by Franklin Templeton Fixed Income Group® of Franklin Templeton Investments

The US economy seemed to move into a higher gear during the second quarter, when gross domestic product (GDP) growth reached an estimated annual rate of 4%, supported by personal consumption and inventory build-up. Its first-quarter downturn also was not quite as severe as previously thought, falling by an annual rate of 2.1% instead of the 2.9% initially reported by the Bureau of Economic Analysis.

2014-08-18 Tug of War Continues Between Fundamentals and Geopolitics by Robert Doll of Nuveen Asset Management

Important progress in the global recovery, U.S. labor market and corporate earnings has been masked by geopolitical tensions. The conflict involving Russia could have a significant impact on the eurozone and global growth. Market volatility is likely to increase in the short term, causing headwinds for risk assets.

2014-08-16 The “Unfortunate” Truth About the Bond Market? by Bob Andres of Andres Capital Management

During the past four years, we investors have been inundated by financial commentators, strategists, economists and equity gurus prognosticating the coming collapse of the bond market. I can say with confidence that they have been woefully wrong during this period – I can also say with confidence that if they keep saying it, they will eventual get it right. These negative views on interest rates gained momentum in August of 2010 when Jeremy Siegel and Jeremy Schwartz authored, “The Bond Bubble and the Case for Equities.”

2014-08-16 Managing Expectations - Part III by Frank Holmes of U.S. Global Investors

In the first of this three-part series on managing expectations, I discussed the role cycles play in the investment management process. At U.S. Global Investors, we actively monitor both short- and long-term cycles, from the annual seasonality of gold to four-year presidential elections, in order to manage expectations based on historical patterns.

2014-08-16 Bubbles, Bubbles Everywhere by John Mauldin of Mauldin Economics

You can almost feel it in the air. The froth and foam on markets of all shapes and sizes all over the world. It’s exhilarating, and the pundits who populate the media outlets are bubbling over. There’s nothing like a rising market to lift our moods. Unless of course, as Prof. Kindleberger famously cautioned (see below), we are not participating in that rising market. Then we feel like losers. But what if the rising market is … a bubble? Are we smart enough to ride it high and then bail out before it bursts? Research says we all think that we are, yet we rarely demonstrate th

2014-08-13 Banking on Banks by Bradford Evans of Heartland Advisors

Banks have not fully participated in market advances, but we believe they stand to benefit from growth in loan demand, rising short rates, or both. Opportunity for earnings growth and multiple expansion offer something you can take to the bank. It's a compelling space with attractive valuations, especially at the regional level, and merits a closer look.

2014-08-12 Baseball, Hot Dogs, and Apple Pie by Michael Kayes of Willingdon Wealth Management

What really is, or perhaps isn't, economic patriotism? Read on to find out how this issue is impacting our economy and markets.

2014-08-12 Reflections on WWI: Geopolitics and Markets by Bill O'Grady of Confluence Investment Management

WWI was a devastating conflict and the postwar effects were substantial. From a market perspective, measuring the impact of geopolitics is difficult. Some events are short-term; others are more substantial but mostly cyclical. There are also events that permanently change the investing landscape. This report gives a short recap of the onset of WWI, and examines the problem that comes from induction, the logical process of observing the world and predicting the future. From there, we discuss the “lessons learned” from the post-WWII and post-Cold War era with an analysis of what may

2014-08-12 Middle East/Africa: Regional Economic Review - Q3 2014 by Team of Thomas White International

With a geopolitical setback and a positive market development, the Middle East had a mixed second quarter. Amid the civil war in Syria, another conflict erupted in the region during the quarter as a militant group started systematically seizing territory from Iraqi security forces.

2014-08-11 Transformation or Bust, Part 2 by John Mauldin of Mauldin Economics

Envisioning a clear path through the issues from where we are today is not easy, though China certainly has more options than the world had with subprime by the middle of 2008, when there was so much toxic waste on the balance sheets of banks all over the world and there was no turning back. As we have emphasized in the past and will do today, China does have options. But each of the options has costs associated with it, and those costs are going up every day. Who pays and when is the simple question that most readers want to have answered, but therein lies the conundrum.

2014-08-09 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Wage Growth May Not Be the Best Gauge of Labor Market Progress; The ECB's Summer Holiday May Not Be Very Relaxing; A Novel Proposal for Mortgage Lending

2014-08-09 Summer Void by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Although Wall Street and other corners of the business and political world may empty over the next few weeks, risks of a pullback in U.S. equities have gone up. Although we believe it would represent a buying opportunity and are optimistic longer term due to improving economic growth, nervous investors may want to consider a hedging strategy. China's stock market performance has improved and we remain positive, while European economic data has been more concerning, although the stocks still look attractively valued in our view.

2014-08-08 The Temptation of Market Timing by John Geissinger of Christian Brothers Investment Services

Highway drivers who shift lanes when traffic slows rarely get home faster. Likewise, investors who try to time market moves don’t improve returns with any consistency. Rebalancing to thoughtful asset allocation targets is the best way to keep your portfolio in the fast lane.

2014-08-06 Grey Owl Q2 Investment Commentary by Team of Grey Owl Capital Management

Even after a second quarter rebound, gross domestic product (GDP) growth is barely positive for the first half of 2014. That has not stopped the S&P 500 from climbing to new highs. In fact, GDP growth has been weak for the entire “recovery” and, while improved, corporate sales and earnings also leave something to be desired. Stock market returns look better still, but only when compared to these weak results. Looking over a longer timeframe, the US equity market is approaching fifteen years of low single-digit returns.

2014-08-06 Consumer Confidence Hits 7-Year High - Really? by Gary Halbert of Halbert Wealth Management

Today we’ll look at several key economic reports over the last week or so. Most have been better than expected. The Conference Board reported that its Consumer Confidence Index surged to the highest level in seven years in July. However, a couple of other reports we’ll look at below paint a very different picture.

2014-08-05 Stock Market Valuations Suggest That This Bull Market Still Has Teeth by Team of LPL Financial

Losing under 3% in a week seems a minor concern given historical market ups and downs; nevertheless, investors may begin to wonder if stock market valuations are signaling a decline. Since the end of the last significant sell-off for stocks, the market has been in a pretty consistent upward trend. Valuation is a poor market-timing indicator; while valuation should always be considered, it is a blunt tool that should be taken into broader context.

2014-08-04 US Stocks Make 31 Record Highs in 2014, But Investors Panic During 3% Selloff by David Edwards of Heron Financial

US stocks as defined by the S&P 500 made 31 record highs in 2014, most recently on July24th. Through Friday afternoon, stocks declined 3.3%, which is to say less than the decline of 4.2% we saw in April of this year, and decline of 5.6% in January.

2014-08-02 Transformation or Bust by John Mauldin of Mauldin Economics

China continues to be front and center on my list of concerns, even moreso than the latest Federal Reserve press release or fluctuation in the Dow (although you should pay attention). I believe China is the single biggest risk to world economic equilibrium, even larger than Japan or Europe. This week my young associate Worth Wray provides us with a keenly insightful essay on what is currently happening in China. I will admit to not having written about China very much in the past five years, primarily because, prior to Worth’s coming to work with me I really had no secure understanding o

2014-08-01 A Tear for Argentina by Kenneth Rogoff of Project Syndicate

Argentina’s latest default poses unsettling questions for policymakers. Though the country’s periodic debt crises are often the result of self-destructive macroeconomic policies, the default has been triggered this time by a significant shift in the international sovereign-debt regime.

2014-07-31 Principled Populism? by Paul McCulley of PIMCO

In the years before retiring from PIMCO in 2010, I often interviewed candidates for professional positions here, usually at the end of the process, after they had been thoroughly vetted through several rounds of interviews. My task was not so much to test candidates’ qualifications as to “take their measure” – and for them to take mine!

2014-07-31 Are You Concerned about Small-Cap Valuations? by Tripp Zimmerman of WisdomTree

Stocks often move more than is justified by changes in their underlying fundamentals, and as a result, investors run the risk of paying too much for stocks that have become more expensive relative to their fundamentals.

2014-07-30 The Outlook for MLPs and Midstream Energy Infrastructure Continues to Look Bright by David Chiaro of Eagle Global Advisors

The quarter saw a number of positive developments that underpin our long term positive outlook on MLPs. Firstly, the need for new midstream infrastructure remains significant, and a number of announcements of large new projects highlighted that this need is not abating. Also, a significant new development in the quarter was the emergence of new export markets for ethane and condensate which will entail associated infrastructure development and other possible profit opportunities for MLPs.

2014-07-30 Fed's Janet Yellen To Continue Punishing Savers by Gary Halbert of Halbert Wealth Management

New revelations have suggested that our new Fed Chair, Janet Yellen, may be the most liberal person to ever hold the highest monetary office in the world. This news comes after a recent extended interview Ms. Yellen did with The New Yorker Magazine and her testimony before Congress earlier this month.

2014-07-30 Trains and Boats and Planes? by Jeffrey Saut of Raymond James

hose of you who know me know that I have had a love affair with boats ever since I was a kid. In my youth it was speedboats on various lakes in Michigan. In my teens, and into my forties, it was sailboats combined with an occasional trawler. In later life, however, it has been strictly powerboats.

2014-07-28 Second Quarter Economic & Capital Market Summary by Gregory Hahn of Winthrop Capital Management

It seems there is a growing disconnect between what the financial markets are discounting and the reality of what is transpiring in the domestic and global economies. While economic growth has the potential to increase during the second half of the year we are not expecting a dramatic acceleration since there are still structural problems in the economy. The result is slow private credit expansion, a lack of fixed investment and a slow rate of business formation.

2014-07-28 Yes, This Is An Equity Bubble by John Hussman of Hussman Funds

Make no mistake – this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme.

2014-07-28 Emerging Europe: Regional Economic Review - Q2 2014 by Team of Thomas White International

During the second quarter of the year, the Emerging Europe region appeared to be displaying divergent trends. The fallout of the Ukraine crisis was not as damaging to the Russian economy as feared, with the economy even expanding during the review period. However, as the IMF pointed out, the sanctions imposed by the West appear to have dented investor confidence.

2014-07-28 And That's The Week That Was by Ron Brounes of Brounes & Associates

More favorable earnings; more decent economic releases; more devastating global turmoil. Stocks were little changed during the week (though the S&P did move into record territory) as many investors went on much-deserved summer vacation. Hope they are well-rested because next week brings a new month, a vast array of key data, financial word from Big Oil and others, and hopefully progress on peaceful resolutions to the never-ending geopolitical conflicts.

2014-07-26 Second Quarter Earnings: Marching Toward a Strong Recovery by Frank Holmes of U.S. Global Investors

It’s earnings season once again, and though only a quarter of the Russell 1000 has reported so far, the news is just north of positive. All signs indicate that the market has dusted itself off and is back to its cheerful self after a ho-hum first quarter, which was negatively affected by harsh winter weather.

2014-07-25 Yellen: Where No Man Has Gone Before by Peter Schiff of Euro Pacific Capital

Although Fed Chairwoman Janet Yellen said nothing new in her carefully manicured semi-annual testimony to Congress last week, her performance there, taken within the context of a lengthy profile in the New Yorker (that came to press at around the same time), should confirm that she is very different from any of her predecessors in the job. Put simply, she is likely the most dovish and politically leftist Fed Chair in the Central Bank's history.

2014-07-24 Mar Vista Investment Partners Second Quarter 2014 Review by Brian Massey of Mar Vista Investment Partners

Mar Vista Investment Partners second quarter commentary reviews the market and their large cap growth strategies during the most recent period and discusses the opportunities they see for their portfolios in the coming months.

2014-07-23 It’s Not Time to Pull the Portfolio Ripcord… Yet by Rick Vollaro of Pinnacle Advisory Group

The second quarter started in somewhat choppy fashion as small cap and other high flying momentum stocks continued to face pressure as investors decided to shed stocks with swollen valuation multiples. The major averages fared better than their risky counterparts, and after a brief dip stocks began their ascent towards record breaking highs on the back on improving economic data, decent earnings growth, and continuing liquidity support from global central banks.

2014-07-22 Cause and Effect: Bank of Japan Becomes Government’s Largest by Bradley Krom of WisdomTree

Although central banks often use their holdings of government debt to affect monetary policy, the meteoric rise in the expansion of the BOJ’s balance sheet is unprecedented. With the BOJ continuing to signal its willingness to aggressively stimulate the economy, we highlight here what we believe are the most significant implications of these policies.

2014-07-19 The Municipal Bond World, According to John Derrick by Frank Holmes of U.S. Global Investors

I sat down with Director of Research John Derrick, who also manages our Near-Term Tax Free Fund (NEARX), to get his thoughts on interest rates, the bond market and what investors should pay attention to as we move into the second quarter of 2014.

2014-07-19 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

From the Suez Canal, to Japanese bullet trains, to the American interstate highway system, to the Millennium Bridge to the Three Gorges Dam, the grandeur of infrastructure is on full display the world over. Awe-inspiring and beautiful to some, these fixtures also play a critical role in the functioning of the global economy. The choices nations make in the area of infrastructure can bear critically on prosperity.

2014-07-19 Perspectives from the Franklin Templeton Fixed Income Group by Christopher Molumphy, Michael Materasso, Roger Bayston, Michael Hasenstab, and John Beck of Franklin Templeton Investments

In early July, there was a noticeable disconnect between the median forecast of Fed officials for interest rates by end-2015 and the markets’ forecast, as expressed in the federal funds futures rate. But if unemployment continues to decline and inflation to pick up in the coming months, the danger for bond market participants is that their predictions for interest rates may be too low and will have to be adjusted.

2014-07-18 Reaching Escape Velocity? by Scott Brown of Raymond James

The strong pace of growth in nonfarm payrolls suggests much more than a rebound from bad weather. While recent economic figures have been generally mixed, the job market is clearly improving, led by increased hiring at small and medium-sized firms. The hope is that good news will feed on itself, lifting the pace of growth in the second half of the year. However, there are a few concerns in the outlook.

2014-07-18 Lack of Corporate Hubris Means Elongated Cycle by Richard Bernstein of Richard Bernstein Advisors

When we started Richard Bernstein Advisors roughly five years ago, we thought the US was entering one of the biggest bull markets of our careers. Today, we are likely in the midst of this long bull market. Despite the general consensus that a bear market is on the horizon and investors’ ongoing interest in protecting potential downside risk, we do not think the Fed, investors, or corporations are yet sowing the seeds for the next recession.

2014-07-18 Summer Essays by Jeremy Grantham of GMO

In a new quarterly letter to GMO's institutional clients, co-head of asset allocation Ben Inker uses the evolving Boston culinary landscape as a backdrop to examine the tendency of investors to pursue a "free lunch," when they should be looking for the "investing equivalent of an inexpensive and tasty food truck meal instead." In his section, chief investment strategist Jeremy Grantham looks back at investing mistakes made over his 47-year career, paying special attention to his formative investing years and the "painful lessons" learned therein.

2014-07-17 Mind the Gap by Tod Schneider of Diamond Hill Investments

Every company’s earnings can be evaluated on a quantitative and qualitative basis. Strictly speaking quantitative analysis is straightforward—is the company growing sales, profits, free cash flow, etc.? Analyzing these metrics in the context of competitive factors, sources of revenue and profit growth, and broader secular trends is a more subjective exercise but a very important one to pair with quantitative analysis.

2014-07-17 Equities Remain Resilient in Current Environment by Charlie Dreifus of The Royce Funds

While there was a brief shift towards higher quality from April through mid-May, low quality reasserted itself in June to mark a fairly muted—and mixed—second-quarter performance for small-caps. Forty-plus-year industry veteran Charlie Dreifus discusses the market's behavior during this period, as well as the U.S. economy and stock market.

2014-07-17 Trading Secrets: The Fed’s Maginot Line by Tad Rivelle of TCW Asset Management

It has been six years since the Fed zeroed out rates and still we wait for “assisted growth” to become “real growth.” Beginning with the “recovery summer” of 2010, the Fed has proclaimed that cheap money would rocket the economy to escape velocity, launching an organic, self-sustaining economic recovery. Instead, central bank policy has vaulted asset prices into the stratosphere even as wages wait their turn on the launch pad. Low rates have failed to deliver the goodies, but the Fed has its story and is sticking to it.

2014-07-17 Quarterly Review and Outlook, Second Quarter 2014 by Van Hoisington, Lacy Hunt of Hoisington Investment Management

Hoisington and Hunt review the second quarter in their regular review.

2014-07-15 Time to Invest in Change by Dan Kozlowski of Janus Capital Group

After significant multiple expansion in 2013, some of the best remaining opportunities for equity investors may lie with stocks that are due for a change in market sentiment as the company enacts dramatic changes to its business.

2014-07-15 The High Tide in China by Matt Lloyd of Advisors Asset Management

One axiom that has been used over the last couple decades is that high tide lifts all boats; meaning that a rise in economic or market conditions will lift every component of an economy or market to some degree. While true, we deal with relative measurements when discussing returns comparable to a benchmark. So, while the high tide does lift all boats, if the boat is tethered too tightly, you may be higher than being beached, but you also could still be underwater.

2014-07-14 Col. Jessup and Rufus T. Firefly by Michael Kayes of Willingdon Wealth Management

There is a tried and true methodology for dealing with disconcerting trends in the equity market. Read on to find out what it is.

2014-07-14 Strategies for Income-Seeking Investors by Ed Perks of Franklin Templeton Investments

Many income-seeking investors have traditionally centered their portfolios around government bonds, often failing to consider other asset classes. Ed Perks, executive vice president and director of portfolio management, Franklin Equity Group, believes equities can be a key part of an income-oriented portfolio, although individual stock selection is particularly important as valuations rise and interest rate dynamics may change.

2014-07-12 2014 Commodities Halftime Report by Frank Holmes of U.S. Global Investors

What a difference six months can make. After a disappointing 2013, the commodities market came roaring back full throttle, outperforming the S&P 500 Index by more than 4 percentage points and 10-year Treasury bonds by more than 6.

2014-07-10 Guarding Against Complacency by Scott Minerd of Guggenheim Partners

Investors should expect a quiet summer with markets rolling along, but with valuations becoming frothy now is a time to consider greater exposure to assets with higher credit quality.

2014-07-10 The End of Quantitative Easing by Gregory Hahn of Winthrop Capital Management

During the Financial Crisis, as the capital markets seized up and interbank lending froze, traditional tools of monetary policy proved ineffective. The Federal Reserve implemented a series of initiatives called Quantitative Easing that essentially used the central bank’s balance sheet to purchase bonds in the open market and directly manipulate interest rates lower. This tool proved extremely powerful and allowed the Fed to manipulate interest rates across the yield curve which, in turn, allowed for a wave of refinancing activity that helped to lower borrowing costs.

2014-07-09 Tocqueville Gold Strategy Investor Letter: Second Quarter 2014 by John Hathaway of Tocqueville Asset Management

John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), remarks in his latest quarterly letter that it appears "the precious metals complex, both mining shares and bullion, appears to be in the process of completing a major bottom extending back to mid-2013." He goes on to add that he is "becoming more comfortable with the proposition that the downside potential has been fully exhausted after nearly three years of declining prices and that the stage has been set for a major advance in the years to come."

2014-07-09 And That's the Quarter That Was by Ron Brounes of Brounes & Associates

The dismal winter weather is finally in the rearview mirror and stocks continued their record-setting ways.

2014-07-09 Will Firming Fundamentals Lead to a Firmer Fed? by Team of Northern Trust

Real gross domestic product (GDP) of the U.S. economy declined at an annual rate of 2.9% in the first quarter. Bad weather and distortions from the Affordable Care Act (ACA) left overall growth significantly weaker than expected. Nominal GDP fell at an annual rate of 1.7% in the first quarter, the first such occurrence during an expansion in the entire post-war period.

2014-07-08 Why Free Trade Hurts Economic Growth by Marianne Brunet (Article)

Free trade, deregulation and limiting the federal government's powers form what Columbia professors Joseph Stiglitz and Bruce Greenwald call the Washington Consensus - the core precepts that have dominated policymaking for the last 50 years. But those ideas are misguided, they contend. Tariffs and trade restrictions, for example, are fine, especially if they are part of a broad framework that stimulates learning throughout a society.

2014-07-08 Slow but Steady Growth by Richard Michaud of New Frontier Advisors

In the second quarter of 2014 major asset class performance was positive. The Dow was up 2.4%, the S&P up 4.7%, and the NASDAQ up 5%. International equities nearly kept pace with US equities; the MSCI ACWI ex US was up 3.8%.

2014-07-08 Will Latest Jobs Report Force the Fed to Act? by Chris Maxey, Ryan Davis of Fortigent

After a reasonably bleak winter, labor markets are on the rebound, just in time for the Federal Reserve to decide when they should stop asset purchases. Recent figures suggest that labor markets are very near Fed targets, raising the possibility that interest rate hikes could begin sooner than expected.

2014-07-07 The Tide is High by Edward Talisse of Chelsea Global Advisors

It took a while but I think I finally get it. The Federal Reserve has embarked on a Parallel Campaign - operating on two separate planes that seemingly never intersect, yet both having readily recognized similarities. My eureka moment finally came this past week when Ms. Yellen, in a rebuff to the Bank for International Settlements, said "because resilient financial system can (now) withstand unexpected developments, identification of bubbles is less critical."

2014-07-05 I'm Grateful to Live in America. Here's Why. by Frank Holmes of U.S. Global Investors

An important principle of our investment process at U.S. Global Investors is a belief that government policies are a precursor to change. As a result, we closely monitor the fiscal, monetary and other impactful governmental policies of the world’s largest countries, both in terms of economic stature and population. We’re always listening for the proverbial shot heard around the world. As we approach America’s Independence Day, this belief rings especially true.

2014-07-05 June Employment Situation: Fitting Gift for America’s Birthday by Carl Tannenbaum of Northern Trust

Today’s U.S. employment report was a very good one. It was strong enough to suggest good economic momentum but not so strong as to alarm the Federal Reserve.

2014-07-01 The 2014 Mid-Year Geopolitical Update by Bill O'Grady of Confluence Investment Management

As is our custom, we take the middle of the year to reflect on the current geopolitical situation. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year. It is not designed to be exhaustive; instead, it focuses on the “big picture” conditions that we believe will affect policy and markets going forward. They are listed in order of importance: America’s Strategic Drift, Chinese Maritime Expansion, The German Problem, and The Remaking of the Middle East.

2014-06-30 The New Normal of Healthcare Spending by John Mauldin of Mauldin Economics

A rather interesting shockwave came across the newsfeeds this week. I was actually doing a TV interview when the host announced that GDP was down 2.9% for the first quarter. There was not much else I could do but note that that was a really bad, ugly, terrible, not very good number.

2014-06-30 Revisiting Valuation Extremes - 2008 to Now by Team of GaveKal Capital

Last week we took a look at how much price to book multiples have expanded since 2008. Today, we are undergoing the same exercise but this time we are looking at price to cash flow multiples.

2014-06-28 Weekly Economic Commentary by Team of Northern Trust

The recovery which began in 2009 has been weak and uneven. Some have blamed scarring from the financial crisis: wounds to the balance sheets of households, banks, and governments are taking a long time to heal. Under this school of thought, returning to pre-crisis normalcy is simply a matter of time, with the mending promoted by accommodative monetary policy. If the strategy works, we’ll eventually return to the 3% real growth that we’ve averaged over the past generation.

2014-06-28 Health Care Sector Spurred by Population Growth and M&As by Frank Holmes of U.S. Global Investors

Recently I spoke with John Derrick, director of research here at U.S. Global, to pick his brain about what he thought was the most interesting sector right now. You might expect him to have said energy, perhaps because of the intensifying violence in Kurdistan Iraq, a major oil producer. But instead, he said that he had his eyes on health care.

2014-06-27 Time To Do Less Not More by John Browne of Euro Pacific Capital

The current situation in Iraq is a modern tragedy. But in more practical terms it is a very stark illustration of the folly of central planning and the limits of state power in the face of entrenched traditions and proven history. Although the parallels aren't perfect, the rapid dissolution of the puppet Iraqi state can offer some stark lessons to those who are optimistic about our current experiment in central bank dominated economic planning.

2014-06-26 Iraq Crisis Impact on Oil? by Tim Guinness, Will Riley, Jonathan Waghorn of Guinness Atkinson Asset Management

The rise and rapid expansion of the Sunni enclave known by its new rulers under Abu Bakr al-Baghdadi as the Islamic State of Iraq and al-Sham (or ISIS; al-Sham means greater Syria) comes as no great surprise. No-one can predict how far it can expand or how quickly it will be crushed (if ever).

2014-06-26 The Signal and the Noise by Scott Minerd of Guggenheim Partners

U.S. Federal Reserve policymakers are dismissing as “noise” signs that inflation pressure is building, but perhaps they should be listening more closely.

2014-06-25 Truth or Consequences? by Jeffrey Saut of Raymond James

I am always trying to manage the “risks” inherent with investing (or trading), for as Benjamin Graham stated, “The essence of investment management is the management of risks, not the management of returns. Well-managed portfolios start with this precept.” And that, ladies and gentlemen, is why I often “wait” on an investment until its share price is at a point where if I am wrong, I will be wrong quickly, and the incidence of “loss” will be small and manageable.

2014-06-24 Is The Fed Underestimating Inflation? by Robert Doll of Nuveen Asset Management

Following a week in which investors took pause and focused on the negatives, they reversed course last week and pushed equity prices higher. A number of factors seemed to contribute to the positive tone, not the least of which was an indication from the Federal Reserve (Fed) that there will be no near term change to its accommodative monetary policy.

2014-06-21 Ah, the Power of Mean Reversion. by Frank of U.S. Global Investors

The chatter this week has been gold. The precious metal flew up $45 an ounce on Thursday, surprising investors, the media and markets alike.

2014-06-20 Global Economic Perspective: June by Franklin Templeton Fixed Income Group of Franklin Templeton Investments

With 10-year US Treasury yields dropping below 2.5% at one point during early June in spite of improving forward economic indicators, the US bond market has continued to send out confusing signals, in our view. Purchasing manager indexes have remained well over the 50 mark that separates expansion from contraction for many months, consumer demand has remained relatively buoyant, and nonfarm payrolls show job creation running at over 200,000 per month for 13 of the 21 months to May 2014.

2014-06-20 Turkey Is the Big Winner Following the Crisis in Ukraine by Frank Holmes of U.S. Global Investors

Russia’s annexation of the Crimean Peninsula and the possibility of further action taken in Ukraine and other former Soviet Bloc nations have led many investors to wonder, understandably so, what impact the crisis has had on investment opportunities in Eastern Europe. To unravel these concerns and more, U.S. Global’s Director of Research John Derrick caught up with Gavin Graham of VoiceAmerica’s “Emerging and Frontier Markets Investing” program.

2014-06-18 Fed Outlook: Playing It Close to the Vest by Scott Brown of Raymond James

The Federal Open Market Committee will meet this week to set monetary policy. The FOMC is widely expected to further taper the monthly pace of asset purchases (not “on a preset path,” but continuing “in measured steps”). The bigger question is when the Fed will begin to raise short-term interest rates. The correct answer is “it depends.” Fed officials are currently debating the order of steps to be taken as they begin to normalize monetary policy.

2014-06-17 Boko Haram by Kaisa Stucke and Bill O'Grady of Confluence Investment Management

On April 14, the Nigerian terrorist group Boko Haram kidnapped 276 girls from their school in the town of Chibok, Nigeria. Investor interest in African economies has been increasing over recent years, piquing an interest in the continent’s rising economic and demographic power, Nigeria. This week, we will take a look at the country of Nigeria, including its history and economy. We will then describe the evolution of the terrorist group Boko Haram and its strategic goals and leadership. We will conclude with items of importance when investing in Africa, in general, and Nigeria, specifical

2014-06-16 Formula for Market Extremes by John Hussman of Hussman Funds

Market extremes generally share a common formula. One part reality is blended with one part misguided perception (typically extrapolating recent trends as if they are driven by some reliable and permanent mechanism), and often one part pure delusion (typically in the form of a colorful hallucination with elves, gnomes and dancing mushrooms all singing in harmony that reliable valuation measures no longer matter).

2014-06-14 Stealthy, Silent…Sustainable? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

US stocks should continue to move generally higher although activity may remain sluggish through the summer and the possibility of a correction is elevated as per both seasonal/election cycle tendencies and elevated optimistic sentiment. The U.S. economy should help support the market as signs are increasing that we may be entering the long-waited for self-sustaining expansion. The ECB's actions weren't game changing but are helpful and European equities look attractive, while we believe the worries over a Chinese slowdown are overblown.

2014-06-13 Trading the Last Third of a Move by Scott Minerd of Guggenheim Partners

When bull markets mature, investors fear a coming crisis and today there are plenty of candidates from Europe to China to Thailand. Still, some of the best profits may lie ahead.

2014-06-12 Central Banks Chart a Course for Overheating by Scott Minerd of Guggenheim Partners

When bull markets mature, investors fear a coming crisis. Today there are plenty of candidates from Europe to China to Thailand. But bull markets climb a wall of worry and there are reasons now not to expect a looming crisis.

2014-06-12 Many Moving Parts by Scott Brown of Raymond James

The U.S. economy contracted in the first quarter, but it appears very unlikely that we’ve entered a recession. Weather disruptions and the late Easter have made it difficult to gauge the underlying trends in the economic data, but a significant second quarter rebound appears to be baked in. Still, taking the first two quarters together, growth in the first half of the year is likely to be disappointing relative to earlier expectations.

2014-06-11 The US Economy – The Good, The Bad & The Ugly by Gary Halbert of Halbert Wealth Management

As is true more often than not, there are mixed signals in the economy. There are indeed some “green shoots” emerging that suggest the economy is finally gaining some momentum. Yet there are also continued troubling signs that, while not warning of an impending recession, suggest that we could be stuck in a structural period of continued below-trend growth.

2014-06-10 The Crossroad by Kendall Anderson of Anderson Griggs

As summer peeks around the corner, a machine with two wheels is silently calling me, telling me that a new adventure awaits. This machine stirs up memories of past adventures, which builds in me a desire to head out to places unknown. I know that before summer ends I will answer its call, but for now I will just have to relive a few moments from trips past.

2014-06-09 Bright Signs for the Economy and Equity Markets by Bob Doll of Nuveen Asset Management

The macro backdrop last week was positive for the markets. As expected, the ECB cut interest rates, highlighting the favorable global monetary policy backdrop. Closer to home, solid vehicle sales and a good May labor market report gave investors additional reasons to bid up stock prices. The S&P 500 Index advanced 1.4%, marking a third straight week of gains above 1% — the longest such streak since last September. Looking ahead, we believe the combination of an improving world economy, low levels of volatility and easy global monetary policy should continue to provide support for equ

2014-06-09 Why are bond yields and volatility so low? by Carl Tannenbaum and Asha Bangalore of Northern Trust

This year’s mid-point review would not be terribly kind to me or to other forecasters. None of us foresaw a big U.S. economic contraction during the first quarter of the year, although we should have better times ahead (as long as the Polar Vortex doesn’t return). A more vexing surprise, however, has been the steep decline in U.S. Treasury yields and the persistently low market volatility during the year’s first half.

2014-06-09 And That's The Week That Was... by Ron Brounes of Brounes & Associates

Let the summer partying begin. With the ECB alerting its Fed counterparts (and investors everywhere) that its policymakers will take whatever measures necessary to aid its economy and combat deflation, stocks again moved to record levels on key indexes and even the small-cappers recovered from the perpetual April slide and turned "in the black" for the year. The manufacturing and labor sectors appears to have put the winter storms behind them and even the consumer has shown signs of thawing out in time for the summer. Vacation anyone?

2014-06-09 Jobs return to pre-recession peak by Ryan Davis and Brian Payne of Fortigent

Global equity markets cheered the European Central Bank’s (ECB) decision to lower rates and provide further monetary stimulus last week, as the DJIA and S&P 500 gained 1.2% and 1.3%, respectively. As one might imagine, notable outperformance came from Europe’s peripheral countries with Italy (MSCI Italy) and Spain (MSCI Spain) gaining 3.4% and 2.6%, respectively.

2014-06-08 Can Central Planners Revive China’s Economic Miracle? by John Mauldin of Mauldin Economics

We are going to try gamely to finish with China today, having left at least three or four letters worth of copy on the editing floor. There is just so much information and misinformation to cover. I’m going to turn it over to Worth and then follow up with a few final thoughts of my own.

2014-06-07 China Leads the World in Green Energy, Gaming and Gambling Markets by Frank Holmes of U.S. Global Investors

Last month, Xian Liang, co-portfolio manager of our China Region Fund (USCOX), attended the 19th CLSA China Forum in Beijing. There he and hundreds of other global attendees were given the opportunity to meet with representatives from Chinese corporations, some of which U.S. Global owns. Xian also managed to get a sense of how the nation’s recent changes in consumer behavior and governmental policy reforms might affect its investment outlook. Although China remains an emerging market, it has lately taken a number of considerable strides to position itself as one of the world’s most

2014-06-05 Acta Non Verba by Scott Minerd of Guggenheim Partners

Now is the time for strong actions rather than words from the European Central Bank, but their actions could send more capital to the United States and push interest rates lower over the summer.

2014-06-03 The US Housing Market's Darkening Data by Brian Pretti of PeakProsperity.com

Unlike past housing price cycles, the current environment is being driven not by natural household formation, but by a central bank-fueled investment cycle where institutional and foreign capital are the largest influence on the marginal price. This is unknown territory for homebuyers and certainly unsustainable at today's price levels. Brian Pretti shows how price mean reversion is inevitable; and urges homeowners (both residents and investors) to take steps not be as vulnerable as they were in 2008.

2014-06-02 Equities and Bonds Diverge Amid Low Volatility by Robert Doll of Nuveen Asset Management

Another week brought another record close for equities. The S&P 500 Index increased 1.2% for the week, notching a new high, but investor attention appeared to be focused elsewhere. Low levels of market volatility, a pickup in M&A activity, a difficult revenue environment for banks and improving housing data all gathered headlines, yet the bond market garnered the most focus.

2014-05-31 From Constantinople to Istanbul, Turkey Has Never Been Better by Frank Holmes of U.S. Global Investors

Every time he travels to Turkey, portfolio manager of our Emerging Europe Fund (EUROX), Tim Steinle, says the country continues to develop. Although technically classified as an emerging market, one wouldn’t think to label the country as such upon arrival. The population is young and growing, there are improvements to infrastructure everywhere you look, beautiful green parks are more prevalent, and the professional staffs that run many of the shops and businesses are both well organized and thriving.

2014-05-31 Looking at the Middle Kingdom with Fresh Eyes by John Mauldin of Mauldin Economics

China has the potential to become a real problem. It seemed to me that almost everyone who addressed the topic was either seriously alarmed at the extent of China’s troubles or merely very worried. Perhaps it was the particular group of speakers we had, but no one was sanguine. If you recall, a few weeks back I introduced my young colleague and protégé Worth Wray to you; and his inaugural Thoughts from the Frontline focused on China, a topic on which he is well-versed, having lived and studied there. Our conversations often center on China and emerging markets (and we tend

2014-05-30 Taking Advantage of Pessimism by Scott Minerd of Guggenheim Partners

The world is distracted with fears of the next great calamity, but heading into summer U.S. financial markets are enjoying a remarkably positive environment.

2014-05-27 Four Market Risks to Focus on This Summer by Russ Koesterich of BlackRock

What could lead to a more severe market correction? While there’s a long list of things that could go wrong in 2014, Russ lists four market risks to pay attention to this summer.

2014-05-25 A Bubble in Complacency by John Mauldin of Mauldin Economics

The simple fact is that we are in what I call a Muddle Through Economy. Things aren’t terrible, but they are not great, either. We’ve come through a devastating Great Recession caused by a crisis in the financial sector. It is quite typical for the effects of such a crisis to linger for a decade or more. So compared to where we were at the bottom of the Great Recession, the glass is half-full. But compared to the expectations we have for economic recovery and the resumption of vibrant growth, half-full seems like an exaggeration. And for many people, the glass is simply empty, whil

2014-05-25 Mounting Momentum? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Although the stock market remains sluggish, with the potential for a correction elevated, the U.S. economy appears to be improving. There is probably no great rush to get into the stock market at this point, but maintaining a steady investing discipline in the face of what we think is a continuing secular bull market is key. Investors frustrated with the low yield environment should be careful about adding too much risk to a portfolio in search of higher yields.

2014-05-24 In a Flash, China Looks Strong by Frank Holmes of U.S. Global Investors

If you want to know where the world economy is headed, there is one number that I believe investors should focus on: the HSBC China Manufacturing Purchasing Managers’ Index (PMI). On Thursday, the preliminary flash PMI for May came in at 49.7, beating Bloomberg’s consensus of 48.3.

2014-05-22 Scarce Growth - Can the Tortoises Continue to Outpace the Hares? by Robert McConnaughey of Columbia Management

For some time we have suggested that in a world slowly recovering from the 2008 financial crisis, aggregate global growth would be sub-par and that investors would benefit from seeking scarce growth, so long as that growth did not become wildly overvalued. Recent market action has tested that stance severely.

2014-05-22 Why We're Often Bullish When the Market Turns Bearish by Francis Gannon of The Royce Funds

While economic anxiety has hit the market prior to the often bearish summer months, we continue to concentrate on matters less publicized: a shift in equity market leadership in favor of quality driven by rising interest rates.

2014-05-21 And That's The Week That Was by Ron Brounes of Brounes & Associates

What goes up must come down (and then go up again). Such was the fickle week in the stock market. After soaring to new highs on the major indexes, investors went into selling mode (profit-taking for the most part?), before jumping back in for the end-of-week bargain shopping.

2014-05-20 A Revised Bond Market Outlook? by Scott Brown of Raymond James

A year ago, as Fed Chairman Bernanke spoke of the possibility of tapering the Fed’s Large-Scale Asset Purchase program (QE3), bond yields moved higher. They’ve been range-bound over the last year, but have more recently dipped to the lower end of that range. What’s driving the bond market?

2014-05-17 Which Resource Areas Show Signs of Strength? by Frank Holmes of U.S. Global Investors

Global synchronized growth, as measured by the Global Purchasing Managers' Index (PMI), remained stable or positive for the past 12 months until Japan reversed the momentum in April with a precipitous drop in its PMI. China is contributing modest growth but, fortunately, the U.S. and Europe are rebounding. This lack of consistent global momentum has created a short-term, volatile, hot and cold, stop-and-go sentiment. Global real GDP growth peaked in 2010 at 5.2 percent then slowed for the next three years to 3 percent. Global growth in 2014 is likely to accelerate, for the first time in four y

2014-05-15 Schroders Monthly Markets Review: Overview of Markets in April 2014 by Keith Wade, Azad Zangana, Craig Botham of Schroder Investment Management

Global equities edged higher in April. Some stronger macroeconomic data from developed economies helped to support returns but the ongoing crisis in Ukraine remained a headwind for equities. Developed markets outperformed emerging markets. In the US, a generally firmer tone to macroeconomic data and a broadly encouraging corporate earnings season supported sentiment. Investors were also reassured by comments from Federal Reserve (Fed) Chair Janet Yellen about maintaining low interest rates.

2014-05-14 Has Dividend Investing Lost its Luster? by Paul Stocking and Dean Ramos of Columbia Management

With interest rates rising in 2013 and after a number of years of outperformance from high-yield dividend paying equities, investors want to know if dividend investing remains an attractive strategy. With corporate balance sheets looking healthy and dividend payout ratios remaining low by historical standards, we believe dividend growth will continue to be strong. In our view, high-yielding equities will continue to provide strong total returns especially relative to fixed income alternatives.

2014-05-13 Dollar Bulls Drop Their Heads in Frustration by Chris Maxey, Ryan Davis of Fortigent

For some time, strategists have been bullishly positioned on the U.S. Dollar, anticipating a rally that failed to materialize. The arguments were straightforward – the Federal Reserve is exiting its easing cycle, Europe is facing deflationary pressure and likely to ease further, and the economy in the U.S. is on improving footing. Those expectations, while true to some extent, are not translating into gains for the Dollar, leaving many frustrated. The Dollar is suffering from a bad case of dejection and could struggle to see a sustained breakout for some time.

2014-05-13 Is Rising Consumer Credit a Good Thing? by Kristina Hooper of Allianz Global Investors

When gauging whether a rise in consumer credit is a sign of progress or cause for concern, investors should look beyond debt levels to assess who’s taking on more debt and why, as well as the pace of economic activity, writes Kristina Hooper.

2014-05-12 Setting the Record Straight by John Hussman of Hussman Funds

If you think the market is not going to lose a large fraction of its value over the next few years, a century of history thinks you’re wrong.

2014-05-11 Are Valuations Really Too High? by John Mauldin of Mauldin Economics

I have done quite a number of media interviews and question-and-answer sessions with audiences in the past few months, and one question keeps coming up: "Are valuations too high?" In this week’s letter we’re going to try to look at the various answers (orthodox and not) one could come up with to answer that basic question, and then we’ll look at market conditions in general.

2014-05-10 The Good, the Bad and the Opportunity by Frank Holmes of U.S. Global Investors

Twice a day, in the morning and at lunch, our investment team sits down together to discuss what’s important and what’s immaterial. This past week, in my opinion, the good outweighed the bad. Much of the economic news was a direct result of government policies, both fiscal and monetary. Here are my findings, which I hope will help you filter through the noise.

2014-05-08 Middle East/Africa: Regional Economic Review - Q1 2014 by Team of Thomas White International

As the Middle East and Africa region stepped into the New Year, the three regional economies under our coverage did not see any material change in their political or economic situation. Labor problems remained the most immediate concern for South Africa while Egypt unveiled yet another stimulus program to mend an economy that has been struggling amid political uncertainty for three years now.

2014-05-08 And That's The Week That Was by Ron Brounes of Brounes & Associates

Yes, spring has officially sprung. After months of hearing that "poor winter weather" excuse, investors seem ready to turn the page (and the calendar) as the 1st quarter GDP is now in the books. With that said, the numbers are expected to be stronger in the coming days and the markets are already reacting accordingly as the Dow Jones even pushed into record territory. Manufacturing and labor have shown signs of thawing out, though housing still lags behind. Earnings season has been better than expected and must of the over-analyses focuses on the outlooks these days.

2014-05-06 Optimists and Pessimists Find Fuel in Jobs Data by Kristina Hooper of Allianz Global Investors

Last week?s batch of hot and cold jobs numbers pointed to a conflict that the Fed saw coming months ago, writes Kristina Hooper: The unemployment rate is a flawed metric for gauging the health of the economic recovery.

2014-05-06 The Risk Trilogy by W. Ben Hunt of Salient Partners

Gregg Greenberg at TheStreet.com was kind enough the other week to give me a few minutes (2:30 to be exact) in a video interview to enumerate the three biggest risks I saw facing markets today. At first I rolled my eyes at the request and the format. 150 seconds? Really? I mean, have you heard my Alabama drawl? It can take me 150 seconds just to order a cup of coffee.

2014-05-05 Retail, Infrastructure Are Issues to Watch in Colombia and Peru by Jason Trujillo of Invesco Blog

The Invesco Emerging Markets team spent a week traveling through Colombia and Peru, meeting with company management teams, consultants and government officials. During our trip, two themes were prevalent that could have broad implications for local companies and global investors: the relative under-penetration of modern-format retailing throughout Colombia and Peru, and the severe need for infrastructure improvement.

2014-05-05 Economic Capital Market Summary by Gregory Hahn of Winthrop Capital Management

After the Financial Crisis and the resulting Dodd-Frank Act and Affordable Health Care Act, we knew there was no way we would go back to normal, whatever normal really was. Our world changed and we still continue to feel the uncomfortable mutations after the crisis. The management of Citigroup showed another disconnect with regulators as its 2014 capital plan was rejected. After several attempts to launch its healthcare website, the Obama administration announced that over 8 million people had signed up for health care insurance through the government exchange.

2014-05-04 Albania's Fertile Grounds for Oil Opportunities by Frank Holmes of U.S. Global Investors

Texas is oil country. The state I now call home leads the nation in oil production and would be one of the top oil-producing nations if it were its own country. But that doesn?t stop us from exploring other promising oil opportunities further afield. Last week I traveled to Albania to check out a drill site of Petromanas Energy, a Calgary-based international oil and gas company focused on exploration and production throughout Europe and Australia. We own the junior stock in our Global Resources Fund (PSPFX) and Emerging Europe Fund (EUROX).

2014-05-03 Housing may be returning to a bad neighborhood by Team of Northern Trust

The head of financial stability at the Bank of England recently called rising property prices ?the very brightest [hazard] light on its dashboard.? But he may have a difficult time getting his colleagues who are charged with promoting full employment to agree with him. And if they do, it is far from clear what they might do about the issue. Some favor supervisory curbs; others prefer the more-traditional method of raising rates. The recovery in global real estate has been pronounced. While it beats the alternative, one wonders whether the hard lessons learned in recent corrections have been su

2014-05-02 Yellen?s Three Big Questions (and a Few Others) by Scott Brown of Raymond James

Speaking to the Economic Club of New York, Fed Chair Janet Yellen presented an analysis of the monetary policy actions taken to address the Great Recession and offered guidance on what will drive policy decisions going forward. The centerpiece of her talk was about the three big questions that the Fed has to answer. However, there are a number of other debates going on in economics right now that have long-term consequences.

2014-05-02 Emerging Markets Outlook - April 2014 by Team of Thomas White International

Emerging market equities as an asset class have been underperforming developed market equities for more than three years, though they continue to maintain the lead over 10-year returns. The divergence in returns between emerging and developed markets widened sharply in 2013, when the prospect of reduced capital inflows heightened investor concerns about slower economic growth in the emerging countries.

2014-05-01 Old Embers Never Die by Scott Minerd of Guggenheim Partners

The situation in Ukraine could become worse than markets now anticipate as Putin?s best interests might not be what investors expect.

2014-05-01 Small-Cap Valuations: Way Too High or Room to Run? by Adam Peck of Heartland Advisors

Small-cap stocks have been on a tear for several quarters. Conventional wisdom in this situation would be to shift assets away from small-caps, and reallocate them to other asset classes. The concept sounds reasonable, but is it well-grounded in fact? What is the state of small-cap valuations today? These questions merit a closer look.

2014-04-29 How to Help Business Clients Unlock Wealth by Bob Veres (Article)

Is there a way to help your business clients diversify their holdings, take some risk off the table and create a side investment portfolio that will sustain them if their business runs into trouble? Is there a way you can help your clients find capital when they need it most?

2014-04-29 Americas: Regional Economic Review - Q1 2014 by Team of Thomas White International

The developed economies in North America continue to see relatively healthier growth prospects this year, while the outlook for the emerging economies in Latin America remains subdued. Trends from both the U.S. and Canada indicate that these economies are recovering from the slowdown at the beginning of the year, caused by adverse weather.

2014-04-29 Will a Rise in Rates See a More Lasting Shift to Quality? by Charlie Dreifus of The Royce Funds

Late March saw signs of a re-emergence and shift back to the kind of quality names that we like. Portfolio Manager and Principal Charlie Dreifus discusses the recent Fed policies and their effects on the market, his outlook on the U.S. and global economy, current valuations, small-cap quality, and more.

2014-04-29 Putin's Ideologist by Bill O'Grady of Confluence Investment Management

For the past few months, Western leaders have been baffled by Russia?s behavior toward Ukraine and, to a lesser extent, Eastern Europe. To better understand Russia?s actions, we will examine the ideology of Aleksandr Dugin, the man who created the ideology that appears to be behind Putin?s behavior. We will offer a short biography of Dugin, focusing on his intellectual roots and the creation of the Eurasian Concept. Using Dugin?s framework, we will examine Putin?s recent behavior. As usual, we will conclude with market ramifications.

2014-04-28 Henny Pennies by Tony Crescenzi, Mike Amey, Tadashi Kakuchi, Ben Emons of PIMCO

While the Fed?s qualitative guidance may have increased uncertainties over monetary policy, volatility will likely remain contained by powerful short- and long-run forces related to the economic outlook. In the UK, we should at least respect the risk of a hike late in the first quarter of 2015, earlier than what is currently priced in. In Japan, we believe the BOJ will remain full throttle on its current monetary easing for some time.

2014-04-28 The Devolution of Diversification by Chris Richey of Neosho Capital

We are only some 40 years removed from an era when the typical investment account had 12 or fewer individu-al holdings, and less than 20 years removed from a time when respected stock funds might hold 20-30 stocks and be considered ?fully diversified?. Now we find that the typical active equity portfolio or fund holds between 50-100 individuals stocks and that there are generally three or more such active equity managers for each institutional or high net worth account, all adding up to hundreds of underlying holdings.

2014-04-28 Resisting the Sirens by Mark Oelschlager of Oak Associates

There has been an interesting shift in the market over the past several weeks, as high-growth stocks (an area to which we have limited exposure, given our preference for more fairly-valued growth opportunities) have suffered a significant correction after being the darlings of the market since June of last year.

2014-04-27 The Cost of Code Red by John Mauldin of Mauldin Economics

There is reason to believe that there have been major policy mistakes made by central banks - and will be more of them - that will lead to dislocations in the markets - all types of markets. And it’s not just the usual anti-central bank curmudgeon types (among whose number I have been counted, quite justifiably) who are worried. Sources within the central bank community are worried, too, which should give thoughtful observers of the market cause for concern.

2014-04-26 China Holds the Keys to the Gold Market by Frank Holmes of U.S. Global Investors

It’s important to follow the money, or in this case the gold, to see how people around the world react to this rare commodity. Looking forward, stay curious as an investor and you’ll see if China can keep the key to the gold market.

2014-04-25 Rhyme or Reason? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Stocks have seen wide swings recently, but year-to-date major indexes are roughly flat. Volatility may persist, but we suggest investors look past the near term and focus on the underlying fundamentals.

2014-04-25 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The link between money and inflation has clouded, but it hasn?t disappeared

2014-04-25 A Strong Balance Sheet by William Smead of Smead Capital Management

In his book, Great by Choice, Jim Collins points out that companies he defines as great have good luck and bad luck just like all the other companies do. The great companies handle difficult circumstances better than good companies and take the most advantage of the breaks they get in business.

2014-04-24 Global Economic Outlook by Team of Northern Trust

Advanced economies should dominate the growth picture in 2014, but the jobless rate is likely to show only a small improvement

2014-04-23 The Real Obamacare Nightmare is Just Beginning by Gary Halbert of Halbert Wealth Management

Last Thursday, the Obama administration said that a total of eight million Americans had signed up for Obamacare. In a hastily called press event, President Obama spiked the football, took a victory lap around the White House and declared the healthcare law a smashing success ? although they still haven?t told us how many enrollees have actually paid a premium, or how many were simply replacing their policies that were canceled due to Obamacare.

2014-04-23 Positioning Your Portfolio for Rising Rates. by Team of Forward Management

Accelerating outflows from bond funds in 2013 highlight investor nervousness over the prospect of rising interest rates. Investors may want to carefully assess the role of fixed-income investments in their portfolios, particularly in light of other types of income-producing vehicles. Upon careful evaluation of their options, investors can make adjustments suitable to their objectives.

2014-04-23 Yellen?s Three Big Questions (and a Few Others) by Scott Brown of Raymond James

Speaking to the Economic Club of New York, Fed Chair Janet Yellen presented an analysis of the monetary policy actions taken to address the Great Recession and offered guidance on what will drive policy decisions going forward. The centerpiece of her talk was about the three big questions that the Fed has to answer. However, there are a number of other debates going on in economics right now that have long-term consequences.

2014-04-22 Taxes are the Pits, But Not for Everyone It Seems by Chris Maxey, Ryan Davis of Fortigent

A number of Americans breathed a joyful sigh of relief last week after closing the books on their 2013 income taxes. The annual rite of passage rarely elicits excitement when addressed in conversation, and this year was unlikely to be any different. But, the latest tax data suggests the economy is gaining speed, news bound to make even the most hardened filers crack a smile.

2014-04-22 Israel ? Under the Radar by Brad Jensen of AdvisorShares

In recent travels and presentations, I was asked frequently about Israel. How is it that the Israeli market is #2 in our country ranking methodology? It seems as though the country is off the radar screen of most investors, so a quick overview of the market and why it ranks high currently seems to be in order.

2014-04-22 2016 (Part 3, The Election Situation) by Bill O?Grady of Confluence Investment Management

In this final report, we will analyze why we think 2016 may be a pivotal election and examine the potential that it could bring about a coalition change similar to the 1932 and 1980 elections. We will discuss the various methods of addressing the current high level of private sector debt and offer what we believe to be the three highest probability scenarios of how the current problems can be addressed and their impact on the domestic political scene and on America?s superpower role. Unlike our last two reports, we will conclude with market ramifications.

2014-04-22 Emerging Europe: Regional Economic Review - Q1 2014 by Team of Thomas White International

The International Monetary Fund’s latest assessment of the global economy pointed out that robust economic recovery in developed countries has significantly reduced the risk of a downturn this year. The Washington-based lender said it sees growth in emerging and developing Europe as a whole at 2.4 percent in 2014, which is expected to accelerate to 2.9 percent next year.

2014-04-21 The Economic Cost of Brazil?s Spending Spree by Mark Mobius of Franklin Templeton Investments

Brazil has been on a spending spree during the past few years, which, unfortunately, has failed to generate meaningful growth and has led to negative economic consequences. In addition to the lavish spending in preparation for the FIFA World Cup? this summer and the Olympic Games in 2016, Brazil?s national oil company has been spending billions of dollars on expensive offshore oil exploration, production and energy development.

2014-04-21 The Federal Reserve's Two-Legged Stool by John Hussman of Hussman Funds

In viewing the Fed?s mandate as a tradeoff only between inflation and unemployment, Chair Yellen seems to overlook the feature of economic dynamics that has been most punishing for the U.S. economy over the past decade. That feature is repeated malinvestment, yield-seeking speculation, and ultimately financial instability, largely enabled by the Federal Reserve?s own actions.

2014-04-18 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

After examining much of the latest scholarly research, and conducting in house research on the link between household wealth and spending, we found the wealth effect to be much weaker than the FOMC presumes. In fact, it is difficult to document any consistent impact with most of the research pointing to a spending increase of only one cent per one dollar rise in wealth at best. Some studies even indicate that the wealth effect is only an interesting theory and cannot be observed in practice.

2014-04-17 Equity Outlook by Team of Osterweis Capital Management

Short term, we would not be surprised if the market took a breather after its strong gains last year. Additionally we may see volatility related to news coming out of the Middle East and Russia. But longer term, we remain very optimistic on the outlook for U.S. equities. In addition to the reasons we discussed above we believe U.S. equities are very attractive relative to the alternatives. The great bull market in bonds appears to be over. The great decades of emerging market growth appear to be behind us.

2014-04-17 Why Energy is Catching the Market's Eye by Frank Holmes of U.S. Global Investors

Over the last month the energy sector has outperformed the market, and as you can see in the chart below, has done so by 6.5 percent. Year-to-date the sector is beating the S&P 500 Index by over 3 percent. In a spectacularly performing market during 2013, energy lacked some of the incredible performance seen throughout the other sectors, but recently it has turned up, catching the attention of the market yet again.

2014-04-16 Echo-Mania at The Fed by Cliff Draughn of Excelsia Investment Advisors

Greetings from a thawed out Savannah! Q1 of 2014 will be remembered for a number of things, but the most prominent were the erratic weather patterns and arctic-blast temperatures that most of the country experienced. I missed writing my Q1 letter for the first time in ten years due to a nasty bout with pneumonia in mid-January. For those of you who have never had pneumonia, I do not recommend it!

2014-04-15 Equity Market Insight by Thomas Faust, Jr. of Eaton Vance

After a powerful rally in 2013, the first quarter of 2014 saw the bull market demonstrate a measure of resilience in the face of several headwinds. In the latter half of January, stocks fell sharply on emerging-market concerns, with volatility spiking to more "normal" post-financial crisis levels. The market bounced back strongly in February and went on to record a new all-time closing high on March 7. Performance was choppy in the final few weeks of the quarter, as investors digested mixed economic reports, geopolitical issues and the latest U.S. Federal Reserve (Fed) meeting.

2014-04-15 Credit Availability Underpins Recovery in Commercial Real Estate Prices, But Also Poses Risks to CMB by Bryan Tsu of PIMCO

Credit availability, low interest rates, limited new construction and improving economic conditions have contributed to the recovery in commercial real estate (CRE) prices. We expect a strong 2014 in the commercial mortgage-backed securities (CMBS) market, which has been a primary source of CRE credit expansion. Increasingly aggressive loan underwriting is a concern. CMBS investors need to speak with their wallets and push back on either valuations or underwriting standards if recent trends continue.

2014-04-15 5 Things You Need to Know About the Selloff by Kristina Hooper of Allianz Global Investors

Kristina Hooper puts the sharp pullback in the stock market in perspective for investors who may be wondering about a correction.

2014-04-14 Uncovering Opportunities in Emerging Markets by Mark Kiesel of PIMCO

Emerging markets have underperformed expectations, but the longer-term secular outlook remains constructive for many regions. Highly negative investor sentiment and outflows have sharply reduced prices, significantly improving relative value in emerging markets. We see opportunities in emerging markets in interest rates, sovereign credit and select companies for investors with a longer-term investment horizon. ?

2014-04-12 Every Central Bank for Itself by John Mauldin of Millennium Wave Advisors

Whether the FOMC can actually turn the taper into a true exit strategy ultimately depends on how much longer households and businesses must deleverage and how sharply our old-age dependency ratio rises, but markets seem to believe this is the beginning of the end. For now, that’s what matters most. Under Fed Chair Janet Yellen’s leadership, the Fed continues to send a clear message to the rest of the world: Now it really is every central bank for itself.

2014-04-10 The Russians Are Coming by Jeffrey Saut of Raymond James

The Russians Are Coming, The Russians Are Coming is a 1966 American comedy film directed by Norman Jewison and based on Nathaniel Benchley?s book The Off-Islanders. The movie tells the Cold War story of the comedic chaos that happens when a Soviet submarine runs aground closely offshore a small island town near New England and the crew is forced to come ashore. Last Friday, however, rumors that the ?Russians are coming? swirled down the canyons of Wall Street, causing a late Friday Fade that left the S&P 500 (SPX/1865.09) down an eye-popping 24 points.

2014-04-10 "I Will Gladly Pay You Tuesday for a Hamburger Today" by Robert Mark of Castle Investment Management

In October of 2013, Robert Shiller won the Nobel Prize in economics for his research on spotting market bubbles. Shiller, an economist and professor at Yale University who accurately predicted the housing bubble, is a pioneer of behavioral finance, or the understanding of how psychology causes us to act irrationally with our money.

2014-04-10 And That's The Week That Was by Ron Brounes of Brounes & Associates

One quarter down; three to go. After a rough January, stocks rebounded to complete a solid quarter with the Dow Jones the lone main index still "in the red." The new week found decent numbers from manufacturing and labor and investors moved past the "bad weather" excuse, though still took profits from high-flying bio-techs and internet stocks. The late-week selling hindered the overall equity performance.

2014-04-09 Reasons To Remain Optimistic In 2014 by Sandra Martin of Martin Investment Management

The equity markets have taken a respite in 2014 after returning more than 32% in 2013. Margin expansion has been the largest influence on profit growth and should continue with present low inflation expectations. We believe that mergers and share buybacks may continue to increase shareholder value for large capitalization stocks.

2014-04-08 How to Avoid the Coming Crunch on Advisor Compensation by Dan Richards (Article)

Here are the two key ways that life will look very different for financial advisors in 10 years: a change in the structure of advisor practices and downward pressure on compensation.

2014-04-08 Labor Markets Looking for a Spring Blossom by Chris Maxey, Ryan Davis of Fortigent

With an unusually harsh winter finally ending, economists were excited to see if labor markets would rebound in March. By many accounts, they were left wanting for more, but the underlying theme in the March report was consistent, steady job growth.

2014-04-07 The Other Side of the Mountain by John Hussman of Hussman Funds

Having witnessed the glorious advancing portion of the uncompleted market cycle since 2009, investors might, perhaps, want to consider how this cycle might end. After long diagonal advances to overvalued speculative peaks, the other side of the mountain is typically not a permanently high plateau.

2014-04-07 The Doubt of Appearances by Dimitri Balatsos of Tesseract Partners

Households have made significant progress mending their balance sheet in the post-crisis period. Assets have been boosted on the back of higher home values and stock prices, while liabilities have been trimmed, mostly mortgages, thanks in large part to widespread home foreclosures.

2014-04-04 Meet "Lowflation": Deflation's Scary Pal by Peter Schiff of Euro Pacific Capital

In recent years a good part of the monetary debate has become a simple war of words, with much of the conflict focused on the definition for the word "inflation." The latest front in this campaign came this week when Bloomberg News unveiled a brand new word: "lowflation" which it defines as a situation where prices are rising, but not fast enough to offer the economic benefits that are apparently delivered by higher inflation. Although the article was printed on April Fool's Day, sadly I do not believe it was meant as a joke.

2014-04-04 A New Machine: Is a Capital Spending Cycle Imminent? by Liz Ann Sonders of Charles Schwab

Activist investors have helped highlight companies’ bias toward stock buybacks/dividends vs. longer-term capital investments. Preconditions for a pickup in capital spending appear to be lining up. The technology and industrial sectors are likely the biggest beneficiaries.

2014-04-03 Q2 fixed income outlook ? Hitting for the cycle by Gene Tannuzzo of Columbia Management

By the middle of this year, the economic expansion in the U.S. will officially turn five years old. By comparison, the average of all business cycle expansions tracked by the National Bureau of Economic Research dating back to the mid-1800s is about three and half years. But like many five year olds, this cycle hardly seems mature. In particular, we have taken notice of three key elements of the business cycle that have distinct implications for bond investing today.

2014-04-02 Gain International Exposure with Small-Caps by David Nadel of The Royce Funds

Portfolio Manager and Director of International Research David Nadel discusses our attraction to international small-caps, how our investment approach translates into the international small-cap universe, how we try to avoid value traps, the effect monetary policy has had on our approach and performance, and more.

2014-04-02 Consumer Confidence Up, But Concerns Remain by Gary Halbert of Halbert Wealth Management

The Conference Board reported last week that its Consumer Confidence Index jumped to 82.3 in March (up from 78.3), the highest reading since January 2008, just as the recession was beginning. But the two underlying components of the Index provided two different perspectives, as we will discuss today.

2014-04-01 A Look at First Quarter Market Performance by Chris Maxey, Ryan Davis of Fortigent

As the first quarter draws to a close, equity markets appear poised to finish in positive territory despite a somewhat tumultuous news environment. As noted by Bloomberg, save for a sharply negative Monday period, the S&P 500 will close out a fifth consecutive quarter in positive territory for the first time since 2007.

2014-04-01 Fundamental Tango by Scotty George of Alexander Capital

The economy and financial markets are forever sending out mixed, parallel, or confusing messages. Inflation or stagflation? Buy now, or take your profits? Proceed slowly, or go home? At this moment, the signals are hardly synchronized.

2014-03-31 Shifting Policy at the Fed: Good for Long-Term Growth, Bad for Cyclical Bubbles by John Hussman of Hussman Funds

The Fed is wisely and palpably moving away from the idea that more QE is automatically better for the economy, and has started to correctly question the effectiveness of QE, as well as its potential to worsen economic risks rather than remove them.

2014-03-29 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Using energy as a pawn may work to Russia’s disadvantage in the long run. China’s 2014 economic outlook is hazy. Lessons from the 2014 stress test.

2014-03-28 Americas: Regional Economic Review 4Q 2013 by Team of Thomas White International

The outlook for the developed economies in North America remains healthy while the emerging economies of Latin America continue to face headwinds. Though recent data from the U.S. and Canada have indicated moderation in economic activity, most of the slowdown was likely caused by adverse weather conditions in the region.

2014-03-28 Lacking Conviction by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Investors seem to lack conviction, what will potentially push them to one side or the other.

2014-03-28 Four Areas Revved Up for a Resources Boom by Frank Holmes of U.S. Global Investors

Commodity returns vary wildly, as experienced resource investors can attest and our popular periodic table illustrates. This inherent volatility can spell opportunity for the nimble investor who can look past the mainstream headlines to identify hot spots. Our global resources expert, Brian Hicks, CFA, identified four we believe are revved up for a resources boom.

2014-03-26 And That's The Week That Was by Ron Brounes of Brounes & Associates

Well, apparently Janet Yellen has her own style, her own personality, her own mixed message. Just as Fed watchers had to get used to Bernanke in the aftermath of maestro Greenspan (does that name still apply after the financial crisis?), investors will need a few meeting to figure out the new Fed Chair. An early rebound was followed by a selloff which was followed by a rebound which was followed by a late-week selloff. Nicely done, Ms. Yellen (though Russia played a role as well).

2014-03-26 Picture This by Jeffrey Saut of Raymond James

Picture this: you?re an investor starting out in the 1940s after World War II came to an end. Your own experience in the contemporary history of the stock market would've taught you that bonds were the safer, and superior, asset allocation over the long-term.

2014-03-25 Why I Sold - Part 4 by Jim Whiddon (Article)

The months I spent considering whether to sell my successful independent RIA were difficult personally and professionally. But once my decision was made, it felt good to focus on the positive aspects of a merger that would benefit my staff and my clients.

2014-03-25 Janet Yellen Enters the Picture by Chris Maxey, Ryan Davis of Fortigent

After bursting onto the scene earlier this year, Janet Yellen held her first official FOMC meeting last week. Rather than upset the apple cart, she held a largely status quo stance, but several comments raised more than a few questions.

2014-03-25 Will Putin Stop with the Crimea? by Bill O'Grady of Confluence Investment Management

Now that the Crimean referendum has passed in favor of annexation, what will Putin do next? In other words, will he stop with the Crimea? In this report, we will look at the post-Cold War situation from Putin?s perspective. From this viewpoint, we will examine Putin?s likely next steps and how this will affect the U.S. and the rest of the developed world. As always, we will conclude with market ramifications.

2014-03-25 Stocks: "Aging Bull" Could Still Pack a Punch by Milton Ezrati of Lord Abbett

Bearish market observers fret that earnings growth will falter and that current equity valuations are unsustainable. Their worries are misplaced.

2014-03-24 Market Outlook by Scotty George of Alexander Capital

For those of us that have been around for awhile, we have come to recognize that each Federal Reserve Board Chairman has had a unique way of speaking and a unique personality. Remember the "Volcker Rules"? How about "Greenspan-speak"? Well, last week we had a chance to take a measure of the person, and her language, who currently presides over monetary policy, Fed Chair Janet Yellen. And while a snapshot is not necessarily a truism of the embodiment of the whole, there were a few takeaways, not the least of which was the market's (once again) overreaction to what was being said.

2014-03-24 Is the Fed Supporting the Equity Markets? by Tom Riegert of Hatteras Funds

The Federal Reserve?s unprecedented increase in reserves purchased through its quantitative easing programs has paralleled the performance of the equity markets to a startling degree. Has the Fed?s program been supporting the equity markets? We examine the strong correlation between the Fed?s balance sheet and the performance of the S&P 500 since end-2008, and ponder the effects the Fed?s long-awaited tapering will have on market volatility. Investors facing the uncertainty ahead could well find alternative investments a welcome addition to their portfolio.

2014-03-22 We See Opportunities in Commodities by Bob Greer, Ronit M. Walny, Klaus Thuerbach of PIMCO

Fundamentals and some recent data suggest that challenging trends for commodity investing may be coming to an end. Commodities may increase their role as an important and unique source of returns, diversification and protection from unanticipated inflation. As commodity sectors are each dominated by unique factors, we see even more opportunities to add value through active management.

2014-03-21 A Second Leg to Our Economic Outlook by Will Nasgovitz of Heartland Advisors

In our heavily consumer?driven economy, it can be easy to overlook the importance of corporate capital spending. We?ve seen a number of data points suggesting such expenditures are due for an uptick.

2014-03-21 Climbing a Wall of Worry? by Norm Boersma of Franklin Templeton

One of the main questions our clients have been asking us lately revolves around worries of how strong equity markets have been over the last five years. During that period, we?ve seen markets bottoming out in February ? March 2009 and basically recovering since then.2 Given the performance of the market since the trough, it?s not surprising that people are a bit concerned right now, and the market has been quite volatile in early 2014.

2014-03-21 Emerging Markets: Four Reasons for Caution, Not Abstinence by Russ Koesterich of iShares Blog

In the space of three years, emerging markets have gone from a key strategic asset class to persona non grata. But while Russ shares investors? concerns on the near-term outlook for EM assets, he doesn?t agree that EM stocks should be completely shunned.

2014-03-21 We See Opportunities in Commodities by Bob Greer, Ronit Walny, Klaus Thuerbach of PIMCO

Fundamentals and some recent data suggest that challenging trends for commodity investing may be coming to an end. Commodities may increase their role as an important and unique source of returns, diversification and protection from unanticipated inflation. As commodity sectors are each dominated by unique factors, we see even more opportunities to add value through active management.

2014-03-19 Is the Fed's Monetary Mojo Working at Last? by Milton Ezrati of Lord Abbett

It just might be. Data suggest that the central bank?s massive liquidity boost may be starting to flow into the broader economy.

2014-03-19 Objects in the Rear View Mirror May Appear Closer Than They Are: A Look Back at the 1990s by Liz Ann Sonders of Charles Schwab

Human nature tells us to look back to help divine the future. Today's environment looks strikingly similar to the mid-1990s, which has pros and cons.

2014-03-19 If They Will Lend, Someone Will Spend (on Something) by Paul Kasriel of Econtrarian, LLC

Upon awakening from my winter hibernation way up here in beautiful northeastern Wisconsin, I have noticed that bank asset managers have been anything but hibernating. Rather, they have been quite busy expanding their loans and securities.

2014-03-17 Emerging Markets Equity Commentary - February 2014 by Team of Thomas White International

After a weak start to the year, emerging market equity prices recovered in February as concerns about slower than expected global expansion and a further decline in Chinese economic growth subsided.

2014-03-17 Stocks Weighed Down by Ukraine, China and U.S. Economy by Robert Doll of Nuveen Asset Management

U.S. equities came under pressure last week as the S&P 500 declined almost 2.0%. Blame was primarily placed on the crisis in Ukraine and the growth slowdown and tight credit environment in China. Safe haven investments such as U.S. Treasuries and gold outperformed. Stocks may have already discounted the weather distortions on early 2014 data, and an overhang is expected to linger into first quarter earnings season. Cautiousness surfaced for investments that support the recovery, including banks and homebuilders.

2014-03-15 Like Houdini, the Markets Escape Again and Again by Stephen C. Sexauer of Allianz Global Investors

Like the great escape artist Harry Houdini, the markets have repeatedly escaped a series of potential catastrophes. Central banks around the world have coordinated policy making these escapes possible, but the end result is another trap from which we need to escape - seemingly permanent low interest rates for savers ("financial repression"), slow growth, and high asset prices. Financial repression is better than an outright debt deflation, but it causes its own problems. The outlook is for low returns.

2014-03-14 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Global trade negotiations have stalled; This is a delicate time for Chinese finance; Where will Europe’s growth come from?

2014-03-13 PIMCO Cyclical Outlook: A Steady Passage in 2014? by Saumil Parikh of PIMCO

PIMCO's baseline expectation is for 2.5% to 3% real growth in the U.S., thanks to trends toward growth and spending in the consumer, corporate and public sectors. In the eurozone, our baseline expectation of 1% to 1.5% real growth calls for a broad-based cyclical improvement in domestic demand amid steady external demand. We anticipate Japan will be the only major developed economy experiencing a slowdown this year, down to 0.5% to 1%, and we expect China's growth will continue slowing as well, with growth in the range of 6.5% to 7.5%.

2014-03-13 Beware of Earnings Gimmicks by Jason Wang of Columbia Management

Since the global financial crisis, economic recovery worldwide has been slow. Over the last three years, annual gross domestic product (GDP) growth in the U.S. was limited to 2.1%, significantly below its long-term average of 3.3%. In this low growth environment, for a majority of companies, churning out high earnings-per-share (EPS) growth rates, either through top-line growth or margin expansion, has become increasingly more difficult.

2014-03-12 Reflections on Ukraine by Bill O'Grady of Confluence Investment Management

Over the past five weeks there have been a number of significant events that have occurred in Ukraine. A president has fled, a revolutionary government is forming and Russia has taken de facto control over the Crimea. The events themselves are momentous but the broader effects are significant as well. In this report, we will offer three reflections?Putin?s Gambit, The U.S. Adrift and A Dangerous New World. Although any of these could be a topic in themselves, we will shorten these issues to offer a single journey through the current crisis. As always, we will conclude with market ramifications

2014-03-11 U.S. Economy: The Mild Kingdom by Milton Ezrati of Lord Abbett

"Animal spirits" remain caged as business spending lags. What will it take to unleash them?

2014-03-11 Thirsty for Income? Try Dividend Growth by Frank Caruso of AllianceBernstein

Chasing yield has become a challenging mission for investors in recent years. As yields collapsed in fixed income, investors flocked to bond-like substitutes such as high dividend-yielding stocks. Now that these stocks have become a bit pricey, we think companies with strong dividend-growth potential offer a better way to source equity income.

2014-03-10 Positive Payroll Report Offsets Geopolitical Concerns by Bob Doll of Nuveen Asset Management

U.S. equities increased 1.1% last week after somewhat volatile trading due to heightened tension in Ukraine. Although the crisis dominated headlines, the market relegated the major geopolitical issue to the back burner. The broader macro narrative did not change, as concerns about dampened growth momentum continued to be pacified by the distortion from adverse weather.

2014-03-10 Tech Bubble 2.0? by Chris Maxey, Ryan Davis of Fortigent

The $19 billion acquisition of WhatsApp by Facebook in late February put an exclamation point on several high profile takeovers in the technology space in recent months. Sizeable deals such as Google?s $3 billion acquisition of Nest and Facebook?s $3 billion offer for SnapChat have fueled the idea that an indiscriminate buying spree in the technology space a la 1999 could set up financial markets for another valuation bubble.

2014-03-09 The Problem with Keynesianism by John Mauldin of Millennium Wave Advisors

Keynes himself would appreciate the irony that he has become the defunct economist under whose influence the academic and bureaucratic classes now toil, slaves to what has become as much a religious belief system as it is an economic theory. Men and women who display an appropriate amount of skepticism on all manner of other topics indiscriminately funnel a wide assortment of facts and data through the filter of Keynesianism without ever questioning its basic assumptions. And then some of them go on to prescribe government policies that have profound effects upon the citizens of their nations.

2014-03-07 Inflation Blues: Is it Time to Start Worrying? by Liz Ann Sonders of Charles Schwab

Inflation was revised higher in the latest GDP revision; while an increase in the minimum wage could push it higher still. But we remain sanguine about inflation risk as long as velocity and wage growth remain low. The key to watch near-term is bank lending, which is starting to accelerate sharply; signaling the possible return of "animal spirits."

2014-03-07 Making Green from Gold, Palladium and Pollution by Frank Holmes of U.S. Global Investors

Gold is coming back with a vengeance, experiencing a clear recovery and grabbing the attention of market cynics. Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years, according to Barron's.

2014-03-06 The Briefest Flight to Safety by Scott Minerd of Guggenheim Partners

Tensions in Ukraine and tapering speculation seem unlikely to derail rising U.S. equity markets and the positive outlook for U.S. credit.

2014-03-04 Market Update by of Castleton Partners

With the Ukrainian situation very much in focus, Treasury rates moved mostly lower last week. The yield curve exhibited a flattening bias, as longer dated maturities registered the biggest declines. For the week, 10 year treasury yields closed at 2.65%, a drop of eight basis points from the prior week, while two year yields were unchanged at 0.32%. As Gross Domestic Product (GDP) was revised lower to 2.5% from 3.2%, we also learned last week that the economy expanded at a slower pace in the fourth quarter of 2013 than previously estimated, giving the expansion less momentum heading into 2014.

2014-03-04 A Consumer Releveraging Renaissance? by Chris Maxey, Ryan Davis of Fortigent

After a long period of deleveraging, there are appearances that consumers are entering a stage of releveraging. The devil is always in the details, though, and this releveraging cycle is likely to play out vastly different than those of previous expansions.

2014-03-03 The Long Road Back by Scott Brown of Raymond James

Five years ago, the economy appeared to be in freefall. Monetary policy and fiscal stimulus helped to halt the downslide, but a full economic recovery was still expected to take years. This wasn?t your father?s recession that we went through; it was your grandfather?s depression. We have made progress, but we still has very long way to go.

2014-03-03 Market Outlook by Scotty George of Alexander Capital

Whereas the "micro" details of ascribing corporate valuations are litigated every day through securities' trading on global bourses, there is very little "macro" disagreement that we are at a critical global inflection where recovery and purchasing power either expand or remain less than satisfactory. If it doesn't happen now, after all the intervention, debate, austerity and fiscal changes, it is not likely to take root at all.

2014-03-03 Equities Rise Despite Mixed Fundamental News by Bob Doll of Nuveen Asset Management

U.S. equities increased 1.3% last week as the S&P surpassed the key 1850 level and pushed to new record highs. One favorable dynamic of the rally was the upside leadership from retail stocks, as earnings were largely ahead of expectations. Fed Chair Janet Yellen suggested concern about softerthan-expected spending in a number of recent data releases, but the bar for adjusting the tapering process has not been lowered.

2014-02-28 The Stock Market's Shaky Foundation by Chris Martenson of Whitney Peak

Martenson explains the headwinds that make the long-term case for lower valuations than we've seen in previous decades. But more urgently, he lays out the litany of short-term triggers likely to result in a vicious correction in stock prices this year. In fact, for the first time in years, he believes the time to actively short equities is arriving.

2014-02-27 Big Wheel Keep on Turning by Scott Minerd of Guggenheim Partners

Economic uncertainty from this winter soft patch will linger for months, but strong housing fundamentals should underpin a strengthening U.S. economy while low inflation augers well for stock prices.

2014-02-26 What Columbus Missed: Royce Rediscovers India by David Nadel of The Royce Funds

In 1492, Italian explorer Christopher Columbus set sail to discover India. He missed his mark, however, landing in America instead. The rest, as they say, is history-with the exception that more than 500 years later India is still worthy of discovery for many Western investors.

2014-02-26 Market Perspective by CCR Wealth Management Investment Committee of CCR Wealth Management

It cost $0.32 to mail a letter, unemployment was 4.9%, O.J. Simpson was found liable in a civil suit, Hong Kong was returned to Chinese rule, Timothy McVeigh was sentenced to Death, Green Bay defeated the Patriots in the Super Bowl, Titanic came crashing into movie theatres, and Dolly, the first genetically engineered lamb was unveiled to the public; the year was 1997.

2014-02-26 Gaps, Not Growth by Zach Pandl of Columbia Management

Monetary policy is primarily about "gaps" not growth: the Fed is trying to reduce spare capacity in the economy, not bring about a rapid expansion per se.

2014-02-25 Time to Worry About Europe Again? by Chris Maxey, Ryan Davis of Fortigent

The European sovereign debt crisis has all but faded from investors? minds since ECB President Mario Draghi?s famous pronouncement on July 26, 2012 that he would do ?whatever it takes? to save the monetary union. Since that time, equity markets in Europe rallied sharply as accumulated risk aversion fell away.

2014-02-25 U.S. Economy: Curb Your Enthusiasm by Milton Ezrati of Lord Abbett

Amid optimistic projections of an acceleration in growth, the factors that have restrained GDP remain firmly in place.

2014-02-25 The Return of Japan by Bill O'Grady of Confluence Investment Management

Two weeks ago, we discussed Germany?s apparent early steps to return to regional power status. In this week?s report, we will examine Japan?s steady evolution to regional power status.

2014-02-25 How to Profit from the Yellen Fed by Axel Merk of Merk Funds

Janet Yellen might have the most powerful job in the world, as the Federal Reserve (Fed) she now chairs controls what may be the world?s most powerful printing press. We take a closer look at what her reign might mean for investors? portfolios.

2014-02-24 Market Outlook by Scotty George of Alexander Capital

In the four and one-half year market recovery since the "Great Recession" there has been a remarkable transformation in the construction and analysis of corporate earnings. This is something that gives me pause for concern.

2014-02-24 Confusing Crosscurrents Result in Trendless Market by Bob Doll of Nuveen Asset Management

U.S. equities finished mixed after the shortened holiday week.1 The broad market narrative did not change, as additional disappointing economic data was largely attributed to the impact of adverse weather. Comfort that the recovery may be gaining traction was evidenced through Fed discussions and the January FOMC minutes, with consensus expectations for tapering to continue at a measured pace. Some renewed concerns about a growth slowdown in China surfaced but had little impact.

2014-02-24 Secular Bull Or Bear? by Doug Ramsey of Leuthold Weeden Capital Management

At the January highs, the S&P 500 had gained almost 175% in just 58 months, while secondary stocks and equal-weighted market measures have gained considerably more. If it?s already over (and we don?t think it is), this cyclical bull will go down as a memorable one. But is this move the first leg of a new secular bull market? ? We think the next cyclical bear market will drive the market to levels low enough that debate will rage over the true date of the secular bear market low: was it 2009, or 201X?

2014-02-23 The Worst Ten-Letter Word by John Mauldin of Mauldin Economics

A new word is achieving ubiquity. The word has always been with us and at times has been a beacon to attract the friends of liberty and opportunity. But now I?m afraid it is beginning to be used as a justification for social and economic policies that will limit the expansion of both liberty and opportunity. The word? Inequality.

2014-02-19 Checking in on Earnings by Chris Maxey, Ryan Davis of Fortigent

Earnings season is nearing its finale, and the latest results show plenty of reason to be bullish, but the longer-term trend remains an outstanding question for markets.

2014-02-18 From Micro-Caps to Mid-Caps, a Comprehensive Approach to Smaller Companies by Team of The Royce Funds

As the small-cap asset class has grown in size, those companies just beyond the periphery of small-cap have become somewhat orphaned.

2014-02-18 A Time for Optimism in Europe? by Philippe Brugere-Trelat of Franklin Templeton

Volatile markets and an uneven recovery may appear to justify a cautious outlook for investing in Europe right now, while in the US the specter of higher interest rates might also be signaling a challenging market environment ahead. Philippe Brugere-Trelat believes the investment case for European equities favors a more optimistic outlook and despite a bumpy start to the year for equities globally, he still sees the market as rife with potential opportunities for selective investors, particularly undervalued segments of the market. One place where he thinks caution is likely warranted? Japan.

2014-02-18 Global Growth Expectations Push Stocks Forward Despite Weather by Bob Doll of Nuveen Asset Management

U.S. equities finished sharply higher last week with the S&P 500 increasing 2.3% and all major U.S. averages up more than 2%.1 The rapid market recovery from the January pullback is a bigger surprise than the pullback that preceded it.

2014-02-14 Arresting Disinflation Will Require Taking up the Slack by Carl Tannenbaum of Northern Trust

Arresting disinflation will require taking up the slack. Estimates of the U.S. output gap remain substantial. The U.S. achieves budget peace but still faces long-term fiscal challenges.

2014-02-14 Weather Related? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

The recent slowdown in economic data appears to be largely weather related and we believe decent growth will reassert itself. Stocks have bounced after a weak start to the year, but the threat of a further pullback remains, although our longer-term optimism has not been dented. Likewise, we believe Europe offers some attractive investment opportunities but we’re in a wait-and-see mode with Japan. Finally, we don’t see EM turmoil becoming overly contagious, but we are watching that situation closely.

2014-02-13 A Time for Optimism in Europe? by Philippe Brugere-Trelat of Franklin Templeton

Volatile markets and an uneven recovery may appear to justify a cautious outlook for investing in Europe right now, while in the US the specter of higher interest rates might also be signaling a challenging market environment ahead. The investment case for European equities favors a more optimistic outlook and despite a bumpy start to the year for equities globally, he still sees the market as rife with potential opportunities for selective investors, particularly undervalued segments of the market. One place where caution is likely warranted? Japan.

2014-02-12 Was the labor report positive, or negative, anyone? by Chris Maxey and Ryan Davis  of Fortigent

Stocks were modestly positive last week following three straight weeks of negative performance. Markets crawled back following an ugly Monday in which the S&P 500 suffered its worst loss in more than seven months. For the week, the S&P rose 0.9% while the Dow Jones Industrial Average added 0.7%.

2014-02-12 The Expanding Leveraged Loan Market by Heather Rupp of AdvisorShares

At the end of the day, a loan investor may be left with a security that has a low starting yield, little left in the way of capital gains potential, and with coupon income that is not at all increasing even if rates were to rise. While there are some selective opportunities for value in the loan space, broadly speaking we see high yield bonds as a more attractive market in the current environment.

2014-02-12 Grey Owl Capital?s Third Quarter Letter by of Grey Owl Capital Management

2013 was a banner year for the US stock market. Despite equities? meager fourteen-year record of accomplishment, investors, broadly speaking, are limited to short-term memory. Last year?s performance was enough to generate significant enthusiasm for stocks. We continue to believe, the current environment warrants a more balanced approach.

2014-02-11 Equities Markets Start 2014 in Deep Freeze by Douglas Coté of ING Investement Management

By slowly normalizing policy, the Fed is passing the responsibility of pricing risk back to the markets, resulting in higher volatility. The health of the emerging markets is vital to global growth, as developing countries have doubled their contribution to global GDP over the past decade to nearly 40%. S&P 500 corporations derive half their revenue from overseas; support from global consumerism and manufacturing is on track to continue. Broad global diversification across equity and fixed income markets is the best way to protect against volatility.

2014-02-10 Market Outlook by Scotty C. George of Alexander Capital

Despite the inverted gyrations of the stock market during the past three weeks, my market overview continues to be moderately bullish, of course with specific reservations about investors’ unbridled carryover of unrealistic expectations borne out of last year’s performance.

2014-02-09 Global Economic Overview - December 2013 by Team of Thomas White International

The global economic outlook has turned brighter as several major economies are improving. Both business and consumer sentiment have become healthier across most regions, as the policy uncertainties that plagued several countries last year have faded. The U.S. economy is expected to accelerate further in 2014, while Europe and Japan are also likely to see faster growth.

2014-02-07 2013 Year-End Investment Commentary by Team of Litman Gregory

We find ourselves with a more sanguine big-picture view, at least over the nearer term, than we have had in some time. U.S. and global economic fundamentals gradually improved over the past year across a number of dimensions, and seem poised for continued improvement or at least stability in 2014. However, as we look ahead, the longer-term risks related to excessive global debt, subpar growth, and unprecedented government policy that we have worried about since the aftermath of the 2008 financial crisis still remain largely unresolved.

2014-02-07 Emerging Europe: Regional Economic Review - 4Q 2013 by Team of Thomas White International

The club of emerging European economies expanded, as Morgan Stanley Capital International (MSCI) moved Greece from developed to the status of an emerging economy. The majority of the countries covered in this review, including the new entrant, had something to look up to in the New Year.

2014-02-07 Over-Stimulated, Over-Priced by Neeraj Chaudhary of Euro Pacific Capital

At the end of 2013 Wall Street appeared to be convinced that the markets were enjoying the best of all possible worlds. In an interview with CNBC on Dec. 31 famed finance professor Jeremy Siegel stated that stocks would build on the great gains of 2013 with an additional 27% increase this year. So far 2014 hasn’t gone according to script. In contrast to the prevailing optimism I maintain a high degree of skepticism regarding the current rally in U.S. stocks. But opinions are cheap. To back up my gut feeling, here are six very diverse indicators that suggest U.S. stocks are overvalued.

2014-02-07 What's the Game Changer for Gold? by Frank Holmes of U.S. Global Investors

What will break gold of its losing streak? Will inflation, which is a lagging indicator, be stronger than expected? In one of my most popular posts last year, I said that based on the jobs market, the limited housing recovery and regulations slowing down the flow of money, the Fed would have no choice but to start tapering and raising rates very gradually to keep stimulating the economy.

2014-02-06 Emerging Market Woes abd Fed Tapering Equals Stocks Plunge by Gary Halbert of Halbert Wealth Management

January saw US stocks record their first losing month since last August. After reaching new record highs at the end of December, the Dow Jones shed almost 1,000 points in the last half of the month and the decline continues. Analysts attributed the sell-off in large part due to troubling news from several emerging nations, in particular to the so-called "Fragile Five" - Turkey, India, Brazil, Indonesia and South Africa.

2014-02-06 So Cruel: Pullback Could Become Correction by Liz Ann Sonders of Charles Schwab

For now, the EM tail is wagging the dog, but the US remains the world’s big dog and should ultimately get through the latest turmoil. "January Barometer" has sent mixed signals for the remainder of the year historically. More technical and sentiment recovery is likely needed before a market recovery is likely.

2014-02-06 Beyond the Mall: Why Consumers Matter by Ted Baszler of Heartland Advisors

The bottom line is, more people are working now than were a few years ago, pumping income into the economy. At the same time that employment and real wages have been staging a moderate comeback, the housing market has continued to hold firm, and equity markets have posted impressive returns. Record-high levels of personal net worth have prompted more discretionary spending. Periods of greater spending also are associated with higher levels of equity ownership, which can push P/Es higher.

2014-02-05 This Just In: The Secular Bear Market May Be About to Resume. by Martin Pring of Pring Turner Capital Group

In our 2012 book, Investing in the Second Lost Decade we laid out the case for the secular bear market in equities lasting at least through the end of the decade. Since then prices of most averages have moved to all-time highs. It’s time to throw in the towel on the secular bear market for stocks...right?

2014-02-05 Most 'Medieval' by William Gross of PIMCO

Unlike today, when most believe that animals were put on this Earth for humanity’s pleasure or utility, most people in the Middle Ages believed that God granted free will to Adam, Eve and all of His creatures. Animals were responsible in some strange way for their own actions and therefore should be held accountable for them.

2014-02-04 China’s Problems are America’s Opportunity by Justin Kermond (Article)

Fear not Federal Reserve tapering, lackluster U.S. earnings, oncoming deflation or markets heading into bubble territory, says Francois Trahan. Our economic and market growth will be fueled by structural changes driven by rebalancing in China. Don’t be surprised to see a repeat of 2013’s U.S. equity market performance, according to Trahan, who offered a script for countering clients’ unfounded fears over what might go wrong.

2014-02-04 Investors Should Focus on Wages, Not Jobs by Chris Maxey, Ryan Davis of Fortigent

This Friday investors receive the first official labor market report of 2014. Following a highly disappointing jobs figure in December, many market participants hope to see a rebound - particularly one that will help justify the Fed’s decision last week to continue tapering its asset purchases.

2014-02-04 Crisis in Ukraine by Bill O'Grady of Confluence Investment Management

Since November, Ukraine has experienced widespread civil unrest. In late November, Ukrainian President Yanukovych decided not to join an EU-sponsored trade pact. This led to protests from Ukrainians who desired closer relations with Europe. In this report, we will begin by discussing the geopolitics of the nations involved, examining how nations have adjusted their policies over time to changing conditions. We will analyze the risks to the region from current unrest, including a look at the impact on emerging markets. As always, we will conclude with potential market ramifications.

2014-02-03 Market Outlook by Scotty George of Alexander Capital

Despite the inverted gyrations of the stock market during the past three weeks, my market overview continues to be moderately bullish, of course with specific reservations about investors’ unbridled carryover of unrealistic expectations borne out of last year’s performance.

2014-02-03 NY Fed Models Forecasting Excess Returns Through 2018 by John Bougearel of Structural Logic CTA

The NY Federal Reserve has an equity research department. Their research department determined in 2013 that "stocks are cheap" and that investors should enjoy "excess high returns" in an abnormally low or negative real interest rate environment for the next five years through 2018. Before reviewing potential mean reversions, implications from the Year of the Horse, & George Lindsay’s bearish Three Peaks and Domed House model, let’s attempt to quantify the NY Fed models. How high the Dow Jones might climb if it is to enjoy "excess high returns" through 2018.

2014-02-03 A Secular Bull Market? by Juliet Ellis of Invesco Blog

Five years from now, I believe we will look back and see that 2014 was part of the early stages of a multi-year secular bull market for US equities, characterized by rising stock prices with only short, intervening market corrections.

2014-02-01 Central Banker Throwdown by John Mauldin of Millennium Wave Advisors

The Federal Reserve is signaling that it is going to end quantitative easing at some point in the future; therefore, investors are trying to find the exits before the end actually comes.

2014-01-31 Thrift, Thrift, Burning Bright by Christine Hurtsellers, Matt Toms of ING Investment Management

Does the title sound familiar? Think feral instead of frugal, and William Blake’s "Tyger, Tyger, burning bright" may start to flicker between the synapses of memory and an English lit class you once soldiered through. But even if you haven’t read "The Tyger", its theme is aptly captured in the opening line and its image of a big flaming kitty cat. Essentially, Blake saw reality in duality: To appreciate the ferocious feline in all its glory is to come face to face with the same force that created "The Lamb", another entry in the poet’s Songs of Innocence and of Experience.

2014-01-31 A Surprising Gift for Chinese New Year by Sherwood Zhang of Matthews Asia

Beijing-based China Credit Trust Company, a firm that operates as a non-banking financial institution in China, announced this week it reached an agreement to restructure a risky high-yield product that had earlier ignited worries over the health of China’s trust industry. Just in time for the Lunar New Year, investors in the troubled trust may receive a big (metaphorical) red envelope-a monetary gift traditionally given during Chinese New Year or other special occasions-or at least avoid a financial hit.

2014-01-31 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

China’s shadow banking products are coming under the spotlight. Emerging markets: Be sure to differentiate. The fixed income sector’s surprising strength.

2014-01-31 Value-Hunting in the US by Cindy Sweeting of Franklin Templeton

With key stock indices in the US closing the year near historical highs and many pundits predicting stronger growth rates both in the US and globally going into 2014, one would think bargains would be hard to find this year. January’s volatility, however, proved just how unpredictable markets can be. The recent market gyrations may be somewhat painful for many investors in the short-term, but the silver lining is that corrections can serve up buying opportunities, particularly for long-term, value-oriented investors.

2014-01-30 Quarterly Review and Outlook - Fourth Quarter 2013 by Van Hoisington, Lacy Hunt of Hoisington Investment Management

In The Theory of Interest, Irving Fisher, who Nobel Laureate Milton Friedman called America’s greatest economist, created the Fisher equation, which states the nominal bond yield is equal to the real yield plus expected inflation. It serves as the pillar of macroeconomics and as the foundational relationship of the bond market. It has been reconfirmed many times by scholarly examination and by the sheer force of historical experience. Examining periods of both low and high inflation offers insight into how each variable in the Fisher equation affects the outcome.

2014-01-30 A Healthy Correction in Emerging Markets by Scott Minerd of Guggenheim Partners

It has been a hard start to the year, especially for emerging markets, but the latest dislocation is a healthy part of the cycle and the risk-on trade remains intact.

2014-01-30 High Yield in 2014: Where Can You Look for Upside in a 'Medium Yield' Market? by Andrew Jessop, Hozef Arif of PIMCO

Default rates and credit losses in high yield markets remain below their long-term averages, and we believe default rates will remain low in 2014 and 2015 as well. Investors should consider positioning for better convexity via exposure to sectors with favorable industry dynamics and positive event risk from M&A or equity offerings, potential upside from price recovery in high quality bonds trading below par and exposure to select new supply from former investment grade companies.

2014-01-29 Do China Insider Transactions Lie? by William Smead of Smead Capital Management

In our business, we like to say that insider transactions never lie. For this reason, one of our eight criteria for selecting common stocks is strong insider ownership, preferably with recent purchases. Additionally, as contrarians, we want to make our original purchases in a business at a time when most investors are scared to buy for one reason or another. When we see officers, directors and substantial existing shareholders of a business buying at prices which are temporarily depressed, we raise our confidence in the long-term future of a business.

2014-01-29 How the Pioneer of Hydraulic Fracturing changed the MLP Landscape by David Chiaro of Eagle Global Advisors

A banner year for MLPs and the future looks bright.

2014-01-29 All Things in Moderation, Including Housing by Ed Devlin of PIMCO

In our view, the cooling housing market and other domestic factors will keep Canadian growth at a modest 1.75%-2.25% in 2014, despite a boost from higher U.S. growth. While we expect a correction in Canada’s housing market to begin this year, the macroeconomic environment and the availability of mortgage credit suggest a housing crash is unlikely. In this environment, we think the Canadian dollar should remain attractive, 10-year bonds should offer the potential for gains, and provincial bonds will likely outperform federal government and corporate bonds.

2014-01-29 A Few Concerns by Scott Brown of Raymond James

We’ve begun 2014 with widespread expectations that economic growth will pick up. Growth last year was restrained by tighter fiscal policy. With that out of the way and the housing sector recovering, the pace of expansion is poised to improve. However, there are a number of concerns. Weak growth in real wages may limit consumer spending, which accounts for 70% of Gross Domestic Product. Long-term interest rates could rise too rapidly, choking off the recovery in the housing sector. A continued low trend in inflation, a major concern for some Fed officials, could weaken growth.

2014-01-29 Middle East/Africa: Regional Economic Review - 4Q 2013 by Team of Thomas White International

The International Monetary Fund (IMF) anticipates weak growth in the Middle East and North Africa (MENA) region mainly due to heightened political instability. What’s more, after years of healthy performance, growth in the oil exporting nations is expected to lose pace due to lower international demand and local oil supply disruptions. Given that these countries are witnessing a population boom, the IMF emphasized the need for economic diversification by the oil exporters and job creation in private non-oil sectors.

2014-01-28 Expect Higher Volatility to Persist by Russ Koesterich of BlackRock Investment Management

Last week’s selloff can be attributed to EM turmoil, stretched valuations and mediocre earnings. Volatility is likely to move higher to levels closer to long-term averages. We suggest investors adopt overweight positions in European and Japanese stocks.

2014-01-27 Broadleaf's 2014 Investment Playbook by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

Most sell side firms publish their outlook for the economy and stock market at the end of December and in early January. As a buy side firm, we really aren’t under any expectation to share our outlook for the coming year and, as funny as it might sound, some of our clients don’t even care to know what we think, only that we handle what they hired us to do, which is to outperform the market indices over a full market cycle and help them attain their financial goals over time.

2014-01-27 Increasing Concerns and Systemic Instability by John Hussman of Hussman Funds

The potential collapse of a now-complete log-periodic bubble is best considered something of a physics experiment, and it’s not what drives our investment stance. Still, the backdrop of steep overvaluation, extreme bullish sentiment, record margin debt, and international dislocations could hardly provide a more fitting context for a disruptive completion to the present market cycle.

2014-01-25 Why the Recent Lift in Junior Miners Will Likely Continue by Frank Holmes of U.S. Global Investors

Junior venture companies in Canada are finally seeing a significant lift. In early January, the S&P/TSX Venture Composite Index rose above the 200-day moving average for the first time in three years. The index is also very close to experiencing a golden cross, which is when the shorter-term 50-day moving average crosses above the 200-day moving average. Historically, traders see this cross as extremely bullish.

2014-01-25 Five Things To Ponder: Valuations, Triggers & Inequality by Lance Roberts of Streettalk Live

I was thinking about valuations, profits and what could cause a real correction in the markets. That is the premise behind today’s "Things To Ponder" for your weekend homework.

2014-01-25 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

So while the Fed was the first to implement nontraditional monetary strategies, the BoE may be the first to unwind them. And it may be the first to test the power of macroprudential policy. The results might make for an interesting export back across the Atlantic.

2014-01-25 At Davos, Inequality and Africa in Focus by Scott Minerd of Guggenheim Partners

The focus at Davos has shifted to two new topics: growing income inequality as a risk to economic growth and social stability and the emergence of Africa as an economic force. Neither of these is a big surprise as neither is new. But the fact that these are the primary focus this year tells us that these topics will likely become more prominent in 2014.

2014-01-24 The Week by Jeffrey Saut of Raymond James

Arguably, the best magazine of recent times has been The Week, a publication that embraces magazine journalism in its most functional style. The Week is written in one-hundred synopses culled, for the most part, from other news organizations from around the world on all topics. If I had but one publication to read in order to stay informed on just about everything, it would be The Week. In this morning’s missive, however, I am referring to "the week" I experienced last week in South Florida.

2014-01-23 Can Equities Continue Their Rise? Equity Investment Outlook: January 2014 by Matt Berler, John Osterweis of Osterweis Capital Management

2013 marked the fifth year of recovery following the near-death experience of the 2008 global financial system meltdown. From a low of 677 in 2009, the S&P 500 Index (S&P 500) finished 2013 at 1,848, delivering a stunning 203% total return from the low. Over the same period, the total return for the Dow Jones Industrial Average was 188%. The tech-heavy and arguably more speculative NASDAQ logged a 249% total return. These very large equity returns reflect both a strong recovery in corporate profits and a dramatic clean-up of our financial system.

2014-01-22 Crosscurrents Buffet Markets by Bob Doll of Nuveen Asset Management

U.S. equity performance was mixed last week, as the S&P 500 recovered from Monday’s sell-off that was the largest one-day decline since early November. Economic data was mostly in line or slightly better than expected, following the disappointing December unemployment report. Corporate earnings drove much of the price action. Bank earnings were fairly well received but did not always translate to good performance since the stocks ran up earlier. Negative guidance trends remain an overhang, particularly for retail.

2014-01-22 Market Outlook by Scotty George of Alexander Capital

One of the most common themes we hear from political pundits and market observers these days is about either the demise or rise of the middle class, an amorphous, non-homogeneous group of people not quite rich but also not too poor. This class is often cited as the reason either to be for or against legislation, fiscal policy, social norms, or the price of a gallon of gasoline at the pump!

2014-01-22 4 Simple Truths About US Consumers by Kristina Hooper of Allianz Global Investors

The December employment report called into question the momentum of the jobs recovery, which has clear implications for consumers. While further clarity on jobs is needed, here are some key observations that help frame the consumer-sentiment discussion.

2014-01-22 Market Share: The Next Secular Investment Theme by Richard Bernstein of Richard Bernstein Advisors

It is well known that corporate profit margins are at record highs. US margings, developed market margings, and even emerging market margins are generally either at or close to record highs. A myopic focus on profit margins may miss an important investment consideration. Whereas most investors remain fearful of margin compression, we prefer to search for an investment theme that could emerge if margins do indeed compress. Accordingly, our investment focus has shifted toward themes based on companies who might gain market share.

2014-01-21 Superstition Ain't the Way by John Hussman of Hussman Funds

When you believe in things that you don’t understand, then you suffer.

2014-01-21 And That's The Week That Was by Ron Brounes of Brounes & Associates

With a few more days to digest the labor data, investors began the week on another sour note, but a sense of normalcy returned on some other better-than-expected releases. Still, the Fed’s stimulus remains atop the headlines as speculation runs amuck about how the tapering will play out. Earnings season pushes ahead and, thus far, the results are lackluster at best. Don’t forget, as January goes...

2014-01-18 Forecast 2014: 'Mark Twain!' by John Mauldin of Millennium Wave Advisors

The surface of the market waters looks smooth, but the data above suggest caution as we proceed. Perhaps slowing the engine and taking more frequent soundings (or putting in closer stops!) might be in order. The cry should be "Mark twain!" Let’s steam ahead but take more frequent readings and know that a course correction may soon be necessary.

2014-01-17 What Does It Take to Be in the Top 1 Percent? Not As Much As You Think by Frank Holmes of U.S. Global Investors

You might be surprised to learn that the top 20 percent of income earners bring in a household income of just over $100,000. The top 10 percent of earners have a household income of more than $148,687. To be considered in the top 1 percent, household income is at least $521,411.

2014-01-16 Keep Optimistic and Carry On by Scott Minerd of Guggenheim Partners

This is likely to be another good year for risk-on investing, as an improving economic outlook supports stocks and bonds in an environment marked by less volatility than 2013.

2014-01-16 EM Sovereign Debt 2014: Neither Phoenix nor Failure by Paul DeNoon of AllianceBernstein

Emerging-market (EM) sovereign bonds were burned badly in 2013. Will they rise from the ashes in 2014? We believe some will and some won’t. The watchword for 2014 will be selectivity.

2014-01-15 Fed Tapering -- Shades of 1937? by Paul Kasriel of Econtrarian, LLC

In the press conference immediately following the December 17-18, 2013 FOMC meeting, Fed Chairman Bernanke indicated that it was the FOMC’s current plan to have terminated Federal Reserve outright securities purchases by the end of 2014, commencing with a $10 billion reduction in securities purchases immediately after the December 2013 FOMC meeting and then continuing to taper its purchases by about $10 billion after each 2014 FOMC meeting. Of course, this tapering plan is subject to modification in either direction depending on forthcoming economic and financial market developments.

2014-01-14 The Great Man or the Great Wave by Bill O'Grady of Confluence Investment Management

One of the seminal debates among historians is how the process of history develops, characterized as the "great man versus the great wave" debate. In this report, we will begin by developing this debate with relation to America’s superpower role; specifically, we will examine whether the U.S. is struggling with the superpower role because of a lack of leadership (a great man position) or because the wave of history is aligned against the U.S. keeping that role. As always, we will conclude with potential market ramifications.

2014-01-14 Merk 2014 Dollar, Currency & Gold Outlook by Axel Merk of Merk Investments

Rarely has the future been so clear. Really?? A lot of money has been lost jumping on the bandwagon. Let’s do a common sense check on the greenback to gauge where risks might be lurking and where there might be profit opportunities for investors.

2014-01-14 Market Outlook by Scotty George of Alexander Capital

The stock market’s valuation expansion has left a bittersweet taste in the mouths of some who believe that this historic sequence of "new highs" is simply smoke and mirrors and accelerated expectations. Indeed, while the wealth effect is improving the lot of many, it is also exacerbating the gap between "reality" and "perceived-reality".

2014-01-13 Hovering With an Anvil by John Hussman of Hussman Funds

In my view, the stock market is hovering in what has a good chance of being seen in hindsight as the complacent lull before a period of steep losses. Meanwhile, we would require a certain amount of deterioration in stock prices, credit spreads, and employment growth to amplify our economic concerns, but even here we can say that there is little evidence of economic acceleration. Broad economic activity continues to hover at levels that have historically delineated the border of expansions and recessions.

2014-01-10 5 Investor Tips for 2014 by Kristina Hooper of Allianz Global Investors

While the winding down of QE signals better times ahead, investors need to be selective and focused in taking smart risks, says US Investment Strategist Kristina Hooper.

2014-01-10 High Yield and Bank Loan Outlook- January 2014 by Team of Guggenheim Partners

Improving U.S. macroeconomic conditions should spur additional investor demand for high-yield bonds and bank loans, particularly with defaults exceptionally low. Still, investors should monitor trends pointing to an erosion of safety in leveraged credit.

2014-01-10 2014 Economic and Investment Outlook by Team of Ivy Investment Management Company

Although the December 2013 U.S. budget pact between House and Senate negotiators was a welcome development, partisan battles over government spending still are possible in 2014. The agreement ends a three-year budget fight and sets government spending through fall 2015, but it does not eliminate the need to raise the nation’s borrowing limit - the "debt ceiling."

2014-01-10 Macro Strategy Review by Jim Welsh of Forward Investing

Heavy emphasis on the fundamentals factors driving the U.S., European Union, China, and Emerging economies, and how the fundamentals are likely to impact markets.

2014-01-10 Continuing a Winning Formula for 2014 by Frank Holmes of U.S. Global Investors

We believe there’s a way that increases the odds of winning. It’s by combining a bottom-up approach with a top-down strategy: Find great, fast-growing and shareholder-focused companies and focus on the best stocks in the sectors experiencing positive momentum.

2014-01-09 The U.S. Begins an (Un)employment Experiment by Sam Wardwell of Pioneer Investments

Extended unemployment benefits stopped for 1.3 million people at year-end. This doesn’t change their employment status...they just stop getting unemployment compensation. Extended benefits (of up to 99 weeks) was part of the recession-fighting fiscal stimulus package. A question was: did this create a dis-incentive to find a job (aka "funemployment").

2014-01-09 A Great Time for Investors by Scott Minerd of Guggenheim Partners

Last January, the global economy faced myriad headwinds, choppiness lay ahead, and we expected plenty of volatility. Nevertheless, I said then that risk assets were the best choice for investors. Now, the headwinds of 2013 have largely dissipated, and the outlook is benign for risk assets for the first three to six months of 2014, if not longer.

2014-01-09 The Price Action of Stocks Trumps Fundamentals by Robert Mark of Castle Investment Management

Perhaps the best argument that one can make for stocks is that many hold doubts about the continuing bull market. The reasons for these doubts are understandable, as the economic recovery has been anemic and growth has slowed significantly - likely leading to lower profits in the future. As a result, corporations have aggressively cut costs, increased productivity and preserved cash - pushing profit margins to historically high levels.

2014-01-08 Ready For Lift-Off? by Scott Brown of Raymond James

While some had expected a quick recovery from the recession, that was never likely to be the case. Recessions that are caused by financial crises are different from the usual downturns - they are more severe, they last longer, and the recoveries take a long time. The economy has been in recovery mode for the last four and a half years, but finally appears to be poised for an acceleration in 2014.

2014-01-07 Is 2014 the Year That Alternatives Matter Again? by Chris Maxey, Ryan Davis of Fortigent

In the wake of the financial crisis of 2008, investors piled into alternative investments en masse to help insulate their portfolios from another dramatic market decline. For those who had not yet bought into the idea of improving portfolio risk-adjusted returns, the 50% drawdown in the S&P 500 provided all the convincing needed.

2014-01-07 Turn the Page: Outlook for Economy/Stocks in 2014 by Liz Ann Sonders of Charles Schwab

In this comprehensive (read: long...sorry!) 2014 outlook report, we assess the likelihood a correction is in the offing given the strong gains since 2009.

2014-01-06 Confidence Abounds by John Hussman of Hussman Funds

It’s the very nature of a peak that it can’t be produced except by unusual optimism.

2014-01-06 Reflections on 2013: What's Important, What's Not, and What's Ahead by Mike Shedlock of Sitka Pacific Capital Management

A tale of 2 halves with lingering questions characterizes what we can say was the story for housing for 2013. In the first half of the year, rates were low as the 10 year note was well under 2%. People were still refinancing, as home prices rocketed. Multiple bids were common, and pundits like Ivy Zelman cheered the improving market with praise like "Housing is in Nirvana".

2014-01-06 How High Can US Stocks Go this Year? by Russ Koesterich of iShares Blog

Russ explains why last year’s combination of significant multiple expansion and higher interest rates suggests more muted gains for U.S. equities in 2014.

2014-01-06 And That's The Week That Was by Ron Brounes of Brounes & Associates

To say that 2013 was an interesting year would be a bit of an understatement. We learned a long time ago not to make predictions about the stock market because no matter what is predicted, it is likely to be wrong. Even if we get lucky one year, we are not likely to even get close the following year. We do try to give guidance, however. Last year we suggested that, given the late run in the market in 2012 and its 15% return, investors should be happy with a return of 8 to 10% in 2013. Obviously, investors enjoyed much better returns.

2014-01-06 2013: A Review of the Past, the Present and the Future by Ron Surz of PPCA Inc

This commentary is divided into three sections. I begin with a review of current U.S. and foreign stock markets, examining the year 2013 and the past six years, including the crash of 2008. This perspective serves as a launch point into the future, specifically 2014 and the remainder of this decade. I conclude with a review of the past 88 years of U.S. stock and bond markets.

2014-01-04 Forecast 2014: The Human Transformation Revolution by John Mauldin of Millennium Wave Advisors

It is that time of the year when we peer into our darkened crystal balls in hopes of seeing portents of the future in the shadowy mists. This year I see three distinct wisps of vapor coalescing in the coming years. Each deserves its own treatment, so this year the annual forecast issue will in fact be three separate weekly pieces.

2014-01-03 Gold Stocks: What to Expect in the New Year by Frank Holmes of U.S. Global Investors

After three years of pain, can gold stocks break their losing streak and see a gain in 2014? History says chances are good.

2014-01-03 Six Questions for 2014 - January 3, 2014 by Carl Tannenbaum of Northern Trust

Our economic outlook for this year will be available next week. To provide a taste of what’s ahead, here are six of the key questions we’ll focus on during the coming months.

2014-01-03 2014 Outlook: The Emergence of a Global Expansion by Team of Loomis Sayles

After years of a global recovery characterized by fits and starts, we expect more synchronized global growth in 2014. Global GDP growth will accelerate modestly from 2.7% in 2013 to approximately 3.4% in 2014, primarily driven by larger advanced economies. In particular, we are optimistic that US growth will be sustainable. The fading economic drag from government policy and the ongoing housing recovery should help boost US GDP growth toward 3% as the year progresses. The UK is poised for a similar rate of expansion in 2014, and Europe will likely post positive growth in the coming year.

2013-12-31 2014? by Jeffrey Saut of Raymond James

Year-end letters are difficult to write because there is always a tendency to discuss the year gone by or, worse, attempt to forecast the coming year. Typically, when the media asks where the S&P 500 (SPX/1841.40) will be at the end of the new year, I tell them you might as well flip a lucky penny.

2013-12-27 Gary Shilling: Review and Forecast by John Mauldin of Millennium Wave Advisors

It’s that time of year again, when we begin to think of what the next one will bring. I will be doing my annual forecast issue next week, but my friend Gary Shilling has already done his and has graciously allowed me to use a shortened version of his letter as this week’s Thoughts from the Frontline. So without any further ado, let’s jump right to Gary’s look at where we are and where we’re going.

2013-12-27 2013: Looking Back at the Year of the Bull by Frank Holmes of U.S. Global Investors

Will stocks continue to climb in 2014? Odds are "very good," finds BCA Research. According to historical data going back to 1870, there were 30 times when annual returns in domestic stocks climbed more than 25 percent. Of these, 23 experienced an additional increase, resulting in a mean of 12 percent, says BCA. Thinking back to January 2013, investors had a very different frame of mind. While we recently talked about the year’s biggest stories in U.S. energy and gold, today, we recap our popular commentaries focused on the domestic market.

2013-12-26 Does the CAPE Still Work? by William Hester of Hussman Funds

We feel no particular obligation defend the CAPE ratio. It has a strong long-term relationship to subsequent 10-year market returns. And it’s only one of numerous valuation indicators that we use in our work - many which are considerably more reliable.

2013-12-24 And That's The Week That Was by Ron Brounes of Brounes & Associates

vestors thanked Bernanke this week for what they perceived as an early holiday present. While no one knew how they would react once the Fed began to taper its bond purchases, many surprised analysts by lifting stocks to one of the best showings of the year (and a new record on the Dow). And now that that uncertainty is out of the way, let the vacations begin.

2013-12-24 Bernanke's Santa Claus Cheer by Scott Minerd of Guggenheim Partners

What will Santa bring for Christmas...does he exist at all? Yes he does, his name is Bernanke and he has a stock market rally to share and good holiday cheer for all!

2013-12-23 China's Consumer Stocks: Opportunities Despite Slower Growth by Richard Flax of PIMCO

A weaker macro environment and curbs on spending by government bureaucrats have hit a range of consumer businesses and, in some cases, forced a reassessment of expansion plans. While Chinese consumption may be challenged in the near term, we think the impact will be felt most in the retail sector where slowing demand is compounded by oversupply. We see opportunity in other sectors that benefit from secular demand growth and constrained supply or strong brands, notably casinos and luxury sectors.

2013-12-21 What Has QE Wrought? by John Mauldin of Millennium Wave Advisors

Now that we have begun tapering, we will soon see lots of analysis about whether QE has been effective. What will the stock market do? The US economy seems to be moving in the right direction, but the Fed has forecast Nirvana (seriously) - do we dare hope they can finally get a forecast right? Or have they jinxed us?

2013-12-20 Staying Power by Kapish Bhutani of Diamond Hill Investments

In addition to reducing the risk of a permanent loss of capital, the staying power of a company allows for capital to compound over long periods of time. While the defensive and less cyclical nature of many consumer staples companies indicates an ability to survive, most are able to invest only a portion of earnings at historical rates of return.

2013-12-20 A Surprising Way to Participate in Today's Tech Boom by Frank Holmes of U.S. Global Investors

China has become one of the best consumption stories out there, and looking over the next few years, local technology companies are almost certain to benefit. So while many U.S. investors are getting excited about the growing number of initial public offerings in the tech sector, they would be remiss if they didn’t look beyond Silicon Valley.

2013-12-20 The Mundane Truth Behind Margins by Doug Ramsey of Leuthold Weeden Capital Management

The margin expansion story of the last 20 years is a financial one, not an operating one. Investors routinely attribute today’s near-record margins to operating efficiencies like factory automation and the outsourcing of labor to lower-wage foreign locales. This is certainly an attractive story, but the reality is that competition demands these actions, and many more, to merely maintain margins. We don’t understand why economists who seem to be perfectly good capitalists in every other way think these innovations should result in a permanent jump in profitability.

2013-12-19 Market's Fed Frenzy Can Finally End by Scott Minerd of Guggenheim Partners

The Fed surprised many investors by announcing it will taper in January, but made clear that interest rates will remain near the zero-bound as forward guidance becomes its primary policy tool.

2013-12-17 The 2014 Geopolitical Outlook by Bill O'Grady of Confluence Investment Management

As is our custom, we close out the current year with our outlook for the next one. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international situation in the upcoming year. It is not designed to be exhaustive; instead, it focuses on the "big picture" conditions that we believe will affect policy and markets going forward. They are listed in order of importance.

2013-12-16 The World We Live In by Michael Kayes of Willingdon Wealth Management

For me, the final month of the year has always been a time to reflect upon the past as well as plan for the future. Analyzing the year soon to pass provides a valuable perspective with which to evaluate the important issues that will impact our country and economy going forward. In this context, 2013 sure has been a memorable year highlighted by horrific natural disasters, the deaths of Margaret Thatcher and Nelson Mandela, and on the lighter side, the unforgettable ending to perhaps the greatest Iron Bowl ever played.

2013-12-16 Absolute Return Letter: Squeaky Bum Time by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners

QE has led to asset price inflation. That much we established in the November Absolute Return Letter. In this month’s letter we go one step further and look at whether we are now in bubble territory. Considering the strong bull-run we have experienced in 2012-13 it is perhaps surprising to learn that, in a historical context, it is not an outsized rally, nor are equity markets - with the possible exception of the United States - particularly expensive.

2013-12-16 The Power of the Platform: The Promise and Peril of Technology Investing by Ryan Jacob of Jacob Asset Management

Without question, technology’s rapid development during the past 20 years has played an incredibly powerful and largely positive role in furthering the progress and productivity of modern economies throughout the world. Technology’s track record as a profitable investment theme, however, is a bit cloudier.

2013-12-16 2014 Investment Outlook: Economic Growth Should Broaden by Bob Doll of Nuveen Asset Management

For the first time in several years, we approach the new year without big clouds on the horizon. In the United States, accommodative monetary policy has healed many of the wounds from the 2008-2009 crisis.

2013-12-13 And That's The Week That Was by Ron Brounes of Brounes & Associates

No one deserved a break more than investment guys/gals (except maybe politicos). Unfortunately, Thanksgiving holiday was too "short and sweet" for many and the economic week that followed was crazy. Number after number depicted an economy on solid ground with strong confirmation from the late-week labor releases. Investors took profits throughout much of the week as the final month of the year began, but the Bulls were back in force to conclude the week.

2013-12-12 The Fed, Inflation, and the Perfect Storm in Gold Miners by Clyde Kendzierski of Financial Solutions Group

Neither hopes of job creation nor fears of inflation (based on the massive expansion of the monetary base since late 2008) have thus far materialized. Total credit creation (i.e. money supply) during most of the last five years either shrank or barely grew despite massive growth in the monetary base. Nominal GDP (growth plus inflation) grows in response to total expansion of credit (both from the Fed and the banking system), not just the monetary base.

2013-12-12 All News is Good News by Scott Minerd of Guggenheim Partners

Financial markets have been discounting the end of tapering for months, and whether it happens in December or March is less important than the reality that the U.S. economy is recovering amid a global synchronous expansion.

2013-12-11 The Fed is Playing Hamlet to the Markets by Sam Wardwell of Pioneer Investments

To taper or not to taper-that is the question the Fed is asking itself. What’s moving the market is (it appears) the odds of Fed action. For the first half of last week, "good news was bad news" as stock and bond markets apparently interpreted better economic data as suggesting an earlier QE (Quantitative Easing) Taper. On Friday, the market apparently decided the jobs report was good enough to further reduce downside risks to the economy but not strong enough to spur the Fed to action.

2013-12-11 Q3:2013 Flow-of-Funds Report - 'Tis the Season to Be Jolly by Paul Kasriel of Econtrarian, LLC

I know that being a Debbie Downer gets more face time on cable news, but after looking at the Fed’s latest Financial Accounts of the U.S. report, formerly known as the Flow-of-Funds report, I cannot contain my optimism about the economy’s prospects in the New Year.

2013-12-10 Macro Factors Distract Wealth Creation by Bill Smead of Smead Capital Management

What do Obamacare, Federal Government debt/budget deals, Quantitative Easing and jobs data have in common? To us they are all types of macroeconomic factors on which most investors focus. We believe the reason most investors focus on these types of news stories is because they can influence the US stock market over the next six to twelve months instead of the next 10 to 20 years. In this missive, we would like to challenge everyone’s thinking about their ultimate goal for investing in the stock market and the behaviors which lead to wealth creation.

2013-12-09 Fed Creating More Financial Market Uncertainty by John Browne of Euro Pacific Capital

Although the U.S. stock market continues to hit new nominal highs on a nearly daily basis, the U.S. economy bumps along at a lackluster pace. This disconnect has been achieved by a massive Fed experiment in monetary stimulation.

2013-12-09 Gauging Tapering Post November Jobs Report by Chris Maxey, Ryan Davis of Fortigent

With another month down in 2013, last week came time to dissect the latest report on employment. If the market reaction was indicative, the highly anticipated November labor report did not disappoint, sending stocks up more than 1% on Friday.

2013-12-06 Did the Government Shutdown Help the Economy? by Frank Holmes of U.S. Global Investors

Take the government shutdown in October, when the House and Senate fought over the debt ceiling. Economic data wasn’t released, services were halted, national parks were closed, and "non-essential government workers were told to stay home. As a result, GDP was expected to collapse. Yet, data released this week reveal a different, stronger image of the U.S. economy. I think Shakespeare would deem the media’s fear mongering tactics as Much Ado About Nothing.

2013-12-05 A Synchronous Expansion by Scott Minerd of Guggenheim Partners

Major developed economies are all contributing to global economic growth, and this improving fundamental picture, coupled with ongoing monetary accommodation, bode well for risk assets.

2013-12-05 10 for '14 by Richard Bernstein of Richard Bernstein Advisors

Each December we publish a list of investment themes that we feel are critical for the coming year. We continue to believe the US stock market will continue its run through one of the largest bull markets of our careers. Our positive outlook extends to the following areas: US Equities, Japanese Equities, European small cap stocks, high yield municipals.

2013-12-04 ACA: The Importance of Being Transparent by Harlan Sonderling of Columbia Management

President James A. Garfield survived an assassin’s bullet in 1881, only to die several months later of complications from the infection that developed from his doctors’ probing his healing wound with their unclean hands and instruments, contrary to the developing understanding of the need for sanitary medical treatment. In effect, the President was a victim of his doctors’ inattention to or ignorance of medical best practices. As well, one can’t help inferring that the President’s doctors were among the best paid in the nation, regardless of their disastrous outco

2013-12-04 Emerging Asia Pacific: Regional Economic Review - Q3 2013 by Team of Thomas White International

The second half of 2013 has posed significant challenges to growth in major Emerging Asia Pacific economies. Almost all emerging Asia Pacific economies showed signs of strain arising from stubborn inflation, higher interest rates, slower consumer spending and lukewarm exports.

2013-12-04 Dramatically Dropping Deficits? Keep Dreaming by Milton Ezrati of Lord Abbett

A smaller U.S. budget shortfall for fiscal 2013 will be largely due to transitory factors.

2013-12-03 Why Does the U.S. Have High-Cost Low-Quality Healthcare? by Michael Edesess and Kwok L. Tsui (Article)

The U.S. has worse mortality rates than virtually all other developed nations, and yet it spends twice as much per capita on health care. How on earth has the U.S. racked up such an appallingly bad health-care record, and what is the solution? A recent edition of the Journal of the American Medical Association identified many of the problems but was not persuasive in prescribing a cure.

2013-12-03 Philly Fed, the Geo Score and A Housing Stat Making Some Blue by Gregg Bienstock of Lumesis

Following a wonderful Thanksgiving holiday that involved way too much food, I found myself doing all I could to avoid the Black Friday masses and succeeded until I took to the highway for a journey to Albany, NY - they were leaving the malls and, perhaps it was exhaustion from their day of shopping, but the traffic and driving skills left something to be desired. Those weary shoppers amassed along I-87 brought to mind the question of how healthy (or not so healthy) is the economy?

2013-12-02 Economic Cycle Update: Evidence Suggesting Slow Growth Reigns by Team of Manning & Napier

Since the start of the current recovery, we have made the case that the economy would grow at a slower pace compared to most other expansions in recent memory. The consumer factored prominently in this outlook as they embarked on a long overdue period of balance sheet repair. Corporations would have little reason to invest if consumer growth was weak and large fiscal deficits would limit the ability of the federal government to contribute to growth.

2013-12-02 China's Great Leap by Equity Investment Team of Janus Capital Group

China’s government just announced it would take a big step back...and let its economy take a giant leap forward. We believe China’s proposed economic reforms will transform the economy and should allay investors’ main concerns about Chinese markets. In Janus’ latest Equity Monthly, our equity team offers its perspective on China’s Great Leap.

2013-11-29 From the Taj Mahal to Westminster Abbey: Notes from a Global Investor by Frank Holmes of U.S. Global Investors

I recently returned from India, a nation where an incredible 600 million people are under the age of 25. That’s nearly double the entire population of the U.S.

2013-11-27 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

This particular time of year is often a time of contemplation and reflection. As families and friends gather for the holidays, many pause to consider the year almost past, and perhaps the year to come. Whether it’s tax-lot accounting for securities bought and sold, or healthcare issues left unattended, or simply holding ourselves accountable for goals unmet, we tackle these issues as an annual right of passage each year.

2013-11-27 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

This has been another quiet week for stocks which closed at their highs for the year. The Dow Jones Industrial Average even closed above 16,000 for the 1st time.

2013-11-27 Emerging Markets Equity Commentary - October 2013 by Team of Thomas White International

Equities Gain as Currencies Remain Stable and Data Trends Show Positive Signs.

2013-11-27 The Future in Focus: Our Demographic Destiny by Milton Ezrati of Lord Abbett

In the first of a series on population trends that will shape the U.S. economy, Milton Ezrati looks at the policy challenges posed by an aging America.

2013-11-25 Recent Economic Trends Help Make Korea a Hidden Gem in Asia by Paul Chan and Simon Jeong of Invesco Blog

After more than two decades of financial setbacks, recent macroeconomic data is helping Korea overcome the negative economic stigma associated with its economy and equity markets.

2013-11-25 Equities Extend Gains for the Seventh Consecutive Week by Bob Doll of Nuveen Asset Management

U.S. equities finished higher again last week as the S&P 500 increased 0.4%. The Fed continued to dominate headlines, with heightened emphasis on the distinction between tapering and tightening. Bubble speculation continued to receive attention in the press, while many articles refuted such concerns. The financial sector performed well, led by banks.

2013-11-25 Permanently Depressed? by Scott Brown of Raymond James

One of the main economic debates of the last few years has been whether weakness is cyclical or structural. If the downturn is due to a temporary (albeit, severe) shortfall in domestic demand, then growth should pick up sharply at some point as the economy returns to its potential. If it’s structural, fiscal and monetary policy can do little to help. Opinions differ, but while the consensus may see the sluggish economy as reflecting mostly cyclical forces, cyclical weakness is more likely to become structural the longer it lasts.

2013-11-22 Shifting Global Fortunes by Mark Mobius of Franklin Templeton

Most investors, particularly those who live in developed markets, probably aren’t aware of the influence emerging markets have on the global economy. I’m not just talking about China or just about governments. More and more large corporations are headquartered in emerging markets, a trend that I expect to continue. In addition, more of those companies that are located in emerging markets are also joining the ranks of the top companies in the world. In fact, some might be surprised to hear that some of the world’s largest initial public offerings (IPOs) have been in emerging m

2013-11-22 Understanding the Rise of China by Frank Holmes of U.S. Global Investors

If the sweeping economic reforms planned by Chinese leaders during the Third Plenum can be our guide, it looks to be a promising decade for global investors. Details released this week confirmed President Xi Jinping’s concerted efforts to move China toward a market-based economy that mirrors the West.

2013-11-21 The Fed and the Economy: “Don't Shoot Until You See the Whites of Their Eyes” by Scott Minerd of Guggenheim Partners

The Federal Reserve has started to highlight “forward guidance” as a way to keep interest rates lower for longer and get the exhausted hamster off the treadmill of quantitative easing. We still think tapering remains farther off than most investors expect.

2013-11-21 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Some weekly commentaries are chock full of information, editorial content, market swings, economic data, and the like. Others, like today, reveal nothing magical about the preceding week or the outlook ahead.

2013-11-21 Developed Asia Pacific: Regional Economic Review Q3 2013 by Team of Thomas White International

Developed Asia Pacific economies were back on their feet during the second quarter of 2013 as economic growth gained momentum, inflation fell mildly and exports climbed strongly. Most developed countries in the region such as Japan, Australia, and New Zealand reported a sharp positive swing in consumer and business confidence. Predominantly expansionary monetary and fiscal policies also helped keep the pace of economic recovery.

2013-11-20 Entrepreneurship in Asia by Jerry Shih of Matthews Asia

Using Silicon Valley as a yardstick to measure the success of Asia’s entrepreneurs is an interesting exercise. But it offers little insight into the development of more creative processes in Asia. Many policymakers in the region have declared innovation to be a national, strategic prioritycreating policies aimed at spurring growth to increase R&D expenditure, attract knowledge-intensive foreign direct investment and building more skilled labor pools. This month, Jerry Shih, CFA, takes a look at what changes are occurring around Asia to build more robust start-up ecosystems.

2013-11-20 Setting Sail on the QE Express by Dawn Bennett of Bennett Group Financial Services

I’ve been managing money for over 25 years and rarely have I seen the level of craziness and insanity in both our politics and financial markets in the U.S. I’m frightened of this deepening manmade disaster that’s unfolding in front of us right now in both the financial markets and the economy. Too much faith is being placed in untested theories and that quantitative easing is going to cure all of our ills.

2013-11-20 Yellen's Testimony Not Surprising: Fed Has More Work to Do by Sam Wardwell of Pioneer Investments

Janet Yellen’s Senate testimony in last week’s confirmation hearings was very dovish and offered no real surprises. She did not signal or hint at any change in Fed policy (it was a confirmation hearing), but suggested that the best way to achieve an exit from unconventional policy is to deliver a stronger recovery . . . and the Fed has "more work to do" to support that recovery. The risk that she will not be confirmed is considered negligible.

2013-11-18 The Muddle-Through Economy and Grind-Higher Equity Market Continue by Bob Doll of Nuveen Asset Management

U.S. equities finished higher last week as the S&P 500 and Dow Jones Industrial Average closed at record highs, marking the sixth straight week of advances.1 Several macroeconomic themes are important as third quarter earnings season comes to an end. Fed Chairman nominee Janet Yellen spoke before the Senate in support of current monetary policy and suggested a similar path under her leadership. Economic data was mixed for the week, and any economic weakness continues to be perceived as supporting a delay in tapering. In turn, this can be seen as positive for equities.

2013-11-18 The ECB Rate Cut - Too Little and Too Late by John Greenwood of Invesco Blog

The decision of the European Central Bank (ECB) last week to cut its main refinancing rate from 0.5% to 0.25% and the marginal lending facility from 1.00% to 0.75% is too little and too late -- and virtually irrelevant to financial markets. The decision came after published data showed the eurozone headline consumer price index slowing to 0.7% year-on-year in October. Of course the equity markets rallied temporarily in a knee-jerk reaction to the ECB’s move, but by the end of the day most of the gains were lost.

2013-11-17 The Unintended Consequences of ZIRP by John Mauldin of Millennium Wave Advisors

Two recently released papers make an intellectual and theoretical case for an extended period of very low interest rates and, in combination with other papers from both inside and outside the Fed from heavyweight economists, make a strong case for beginning to taper sooner rather than later, but for accompanying that tapering with a commitment to an even more protracted period of ZIRP. We are going analyze these papers, as they are critical to understanding the future direction of Federal Reserve policy. Secondly, we’ll look at some of the unintended consequences of long-term ZIRP.

2013-11-16 Gliding to Year End? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Although we remain optimistic, the path to year-end may have some potholes. US stocks are among the more attractive investment options available, but there is the risk of a pullback in the near term should sentiment conditions continue to be elevated. There is also a risk of a melt-up in stocks given recent momentum. Europe is dealing with falling inflation and weak growth, although expectations are low, leaving investment opportunities somewhat attractive. Both Japan and China appear to be at a crossroads and we are watching political and monetary developments carefully.

2013-11-15 Has Washington Drama Taken Its Toll On MLPs? by David Chiaro of Eagle Global Advisors

“They did it! They blew it up!” shouts Charlton Heston in the iconic ending scene of the film Planet of the Apes when he finds out he has been living on a post-nuclear war planet Earth. Americans are probably having some of the same feelings about our current world resulting from the ongoing political “nuclear war” raging in our nation’s capital.

2013-11-15 Dressed to the Nines with Gold by Frank Holmes of U.S. Global Investors

While paper gold is getting the cold shoulder in the West, the Love Trade buyers in the East are wrapping their arms around all the physical gold they can get their hands on.

2013-11-15 Are You Prepared for Economic Recovery? by Nanette Abuhoff Jacobson of Hartford Funds

Nanette Abuhoff Jacobson discusses how many portfolios are out of balance today and explains why investors should consider increasing their equity exposure.

2013-11-14 And That's The Week That Was by Ron Brounes of Brounes & Associates

Data keeps coming fast and furious and (for the most part) it has been favorable. Investors remain torn between being ecstatic about the solid recovery or worried about the implications for another Fed move. Stocks were mixed throughout the week with the Dow Jones staying in record territory. Is that worth a Tweet (now that it’s public)?

2013-11-13 When Flexibility Meets Opportunity in the European Commercial Real Estate Market by Laurent Luccioni of PIMCO

The pace of asset sales by European banks has been slower than many anticipated due to the fragile economic, political and regulatory environment across the continent. A complex CRE landscape and the pervasive effects of cognitive bias, capital rigidity and the unintended consequences of regulation mean mispricing can occur frequently. Unlocking value in this environment requires a flexible approach to investing across the capital structure and the resources to source, underwrite, structure, service and operate commercial real estate assets.

2013-11-12 Big Ideas on Gold and Resources in the Big Easy by Frank Holmes of U.S. Global Investors

For nearly four decades, curious investors have made their way to the Big Easy for a taste of New Orleans and several helpings of advice and perspective at the New Orleans Investment Conference.

2013-11-11 That Was the Week That Was?! by Jeffrey Saut of Raymond James

That Was the Week That Was, informally TWTWTW or TW3, was a satirical comedy program on BBC television in 1962 and 1963. It was devised, produced, and directed by Ned Sherrin and presented by David Frost. An American version by the same name aired on NBC from 1964 to 1965, also featuring David Frost. And last week was just such a week for me.

2013-11-10 What Would Yellen Do? by John Mauldin of Millennium Wave Advisors

In advance of this week’s confirmation hearings for Federal Reserve Board Chairperson-nominee Janet Yellen, let’s pretend we are prepping our favorite Banking Committee senator for his or her few questions. What would you like to know? In this week’s letter I offer a few questions of my own.

2013-11-08 U.S. Shale Oil: A Central Banker's Best Friend by Charles Wilson of Thornburg Investment Management

After nearly a decade of sustained high energy prices , U.S. oil and natural gas producers responded to the market’s call for supply with newly exploitable shale resources. The fresh supply helped reduce concerns about global spare production capacity and limited upward pressure on energy prices. Central bankers around the world were able to maintain highly accommodative monetary policies for prolonged periods as a result.

2013-11-08 Taking Stock in the Economy by Ken Taubes of Pioneer Investments

Now is a good time to take stock in the current macro environment from a market perspective. Here’s what we think could happen at the end of this year and next year.

2013-11-08 Big Ideas in the Big Easy by Frank Holmes of U.S. Global Investors

This is likely a contrarian view to the folks in the White House, but I think investors benefit from being contrarian and thinking differently. In preparation for my presentations in New Orleans as well as for the Metals & Minerals Investment Conference in San Francisco and the Mines and Money in London in a few weeks, I’ve been pulling together this kind of research that we can all put to use now.

2013-11-06 Tighter Fiscal Policy Not Helping by Scott Brown of Raymond James

We are now more than five years into the economic expansion, but to many Americans, it still feels like a recession. Many of the headwinds that restrained the recovery early on, such as housing and state and local government, have turned to modest tailwinds, and monetary policy remains highly accommodative. The biggest restraint on growth this year has been fiscal policy. There is a near-term focus on a long-term budget deal, but an agreement seems rather unlikely. Sequester spending cuts set for mid-January should be a more important consideration for lawmakers.

2013-11-05 Skepticism Still Abounds by Bob Doll of Nuveen Asset Management

U.S. equities were mixed last week as the markets were broadly unchanged. The October FOMC statement was a bit more hawkish than expected, causing concern that the recent delay in tapering may have been too aggressive. Other worries appear to be tail risks surrounding a possible Fed liquidity trap and accompanying asset bubbles. Economic data were mixed as markets struggle with the trade-offs between recovery and policy normalization.

2013-11-05 Ex-US Property Bubble Peaking? by Chris Maxey, Ryan Davis of Fortigent

For several years now, a common storyline on China was the immense overcapacity in the country’s housing market. A mixture of easy credit policies and officials’ explicit economic growth plans based on capital investment yielded construction on a massive scale across the countryside. So-called ghost towns emerged as the pace of building and the migration of rural citizens into these cities fell out of sync.

2013-11-05 The Saudi Tribulation by Bill OGrady of Confluence Investment Management

In this report, we will discuss the basic history of U.S. and Saudi relations, focusing on the historical commonality of goals between the two nations. We will detail how the aims of the two nations have diverged since the Cold War ended and use this to examine America’s evolving plans for the Middle East. We will discuss how the evolution of U.S. policy is affecting Saudi Arabia and the pressures these changes are bringing to the kingdom. As always, we will conclude with market ramifications.

2013-11-05 Don't Miss This Golden Cross in Resources by Frank Holmes of U.S. Global Investors

While investors have been focusing on the strengthening U.S. market, we’ve also kept our eyes on other improving indicators happening in resources, Europe, and emerging markets. These places may not be as widely popular, but we believe investors can benefit greatly from taking a view that’s different from the ones observed by the majority.

2013-11-04 Sovereign Ambitions to Develop Infrastructure Benefit Emerging Asia's Utilities Sector by Raja Mukherji, Emily Au-Yeung of PIMCO

The scope for infrastructure development in emerging Asia is tremendous, and the utilities sector has potential to contribute to and benefit from that growth. In general, we have found that state-owned utilities benefit from a range of operational advantages, partly as a result of the government’s vested interest. PIMCO’s bottom-up research allows us to analyze evolving company- and sector-specific factors within the greater macroeconomic picture to identify the best investment ideas in Asia’s utilities sector.

2013-11-04 Leash the Dogma by John Hussman of Hussman Funds

It’s fascinating to hear central bankers talk about the economy, because in the span of a few seconds they can say so many things that simply aren’t supported by the evidence. For anyone planning to watch the confirmation hearings for the next Fed Chair, the evidence below is provided as something of a leash to restrain the attacking dogma.

2013-11-04 How I Explain Amazon's Stock Performance by Chuck Carnevale of F.A.S.T. Graphs

Amazon (AMZN) is a stock that seems to defy conventional wisdom about how a stock is, or should be, valued. Fundamental investors, like yours truly, recognize and respect the importance of the earnings and price relationship. Moreover, I will be so bold as to emphatically state that in the long run profitability (earnings) will be the primary determinant of a businesses’ fair value, any business. However, my bold statement is predicated on the longer run. In the short run it is often a truth that all bets are off.

2013-11-04 What Price for Growth? by Equity Investment Team of Janus Capital Group

Cloud computing and social media are bringing a level of disruption and innovation not seen in the technology sector since the dot-com era. The troubling aspect is that valuations for many of these companies seem just as stretched as Internet stocks were back then. We think investors may be paying too much for the growth inherent in these companies.

2013-11-02 Bubbles, Bubbles Everywhere by John Mauldin of Mauldin Economics

The froth and foam on markets of all shapes and sizes all over the world. It is an exhilarating feeling, and the pundits who populate the media outlets are bubbling over with it. There is nothing like a rising market to help lift our mood. Unless of course, as Prof. Kindleberger famously cautioned, we are not participating in that rising market. Then we feel like losers. But what if the rising market is a bubble? Are we smart enough to ride and then step aside before it bursts? Research says we all think that we are, yet we rarely demonstrate the actual ability.

2013-11-01 Where Do Profits Go from Here? Up. Here's Why. by Joseph Tanious, Anthony Wile of J.P. Morgan Funds

After record-setting earnings in the first two quarters of 2013, the S&P 500 is on track to hit another historic high in profits for 3Q13. If this occurs, the first three quarters of this year will have been the most profitable ever in the 56-year history of the S&P 500. Future earnings growth through margin expansion seems unlikely, as an improving labor market and higher interest rates will most likely squeeze margins. However, stable revenue growth, share buybacks and the additional use of debt financing should support modest earnings gains in the year ahead.

2013-11-01 Korea Raises Voice for Shareholders by Soo Chang Lee of Matthews Asia

Corporate governance practices in South Korea’s family-controlled conglomerates, known as chaebol, find their roots in a social contract that was implicit in the process of the country’s economic development under military dictatorship, which began in the early 1960s. Korea’s previously autocratic government initiated economic plans and wielded power in the private sector by assigning different areas of development to each of several chosen corporate families.

2013-11-01 Weekly Economic Commentary by Team of Northern Trust

The public needs to move beyond its bad feelings toward financial institutions. Should we modify the price stability mandate of central banks? The Fed offers no surprises.

2013-10-31 Third Quarter Letter by Team of Grey Owl Capital

Despite the recent shenanigans in Washington concerning funding the government and raising the debt ceiling, as well as the constant news coverage of the quantitative easing “taper” that the Federal Reserve may or may not begin, we are going to spare (at least for this quarter) both you and us another long discussion of these very real issues.

2013-10-31 A Rebound in Global Equities by Scott Minerd of Guggenheim Partners

With the U.S. economic expansion entering its fifth year and the global economic picture improving, it appears equities in Europe and Asia can still rise.

2013-10-31 Fed Outlook for the Short and Longer Run by Zach Pandl of Columbia Management

One of the ironies of Ben Bernanke’s tenure is that he set out with a goal to improve Fed communication while in office. Immediately after his first meeting as chairman in March 2006, Bernanke set up a subcommittee tasked with facilitating debate around communication issuesincluding inflation targeting, post-meeting statements and minutes and public speeches by individual Fed officials.

2013-10-31 The Age of Experimentation (Global Economic Outlook for Fourth Quarter 2013) by Robert Scherfke of Hartford Funds

Macroanalyst Robert Scherfke, PhD discusses the progress global economies have made since 2008 and the challenges officials face as they normalize fiscal policies.

2013-10-31 Scrooge McDucks by William Gross of PIMCO

With the budget and debt ceiling crises temporarily averted, perhaps a future economic priority will be to promote economic growth; one way to do that may be via tax reform. How to proceed depends as always on the view of the observer and whether the glasses are worn by capital, labor or government interests.

2013-10-31 International Equity Commentary by Team of Thomas White International

International equity prices saw robust gains in September as the U.S. Federal Reserve unexpectedly refrained from reducing its bond purchase programs. In addition, the lowering of the U.S. growth forecast by the Fed lifted investor optimism that the quantitative easing is likely to be wound down at a very gradual pace.

2013-10-29 Defining the EM Corporate Bond Opportunity by Sponsored Content from Loomis Sayles (Article)

Finance is a numbers business. Investors study prices, yields, rates of return. However, when it comes to sizing up emerging markets, we think they should also pay attention to semantics. In the past, terming a country “emerging” made it synonymous with low credit quality and higher risk. But today, many emerging markets boast strong credit profiles while parts of the developed world buckle under heavy debt loads.

2013-10-29 Equities Reach All-Time HighsYet Again! by Bob Doll of Nuveen Asset Management

U.S. equities marked another all-time high last week as the S&P 500 increased 0.9%. (1) Global equities reached new cycle highs for the second week in a row. Many investors have concerns that the gains will not last since the world economy remains lackluster and the liquidity driving the current rally will eventually stop.

2013-10-28 Crawling, Economic Impact of Stubbing Your Toe and Employment by Gregg Bienstock of Lumesis

I have to admit, I had a lot of trouble figuring out where to start this week -- unemployment from last week, post-shutdown observations, exports or sobering observations around expected growth of the US economy and expected implications. It was a Barron’s article, “Slowing to a Crawl” that pushed me to address the latter first. Why? Much of what the article focuses on hit very close to home the impact of demographics and economic data on our economies.

2013-10-28 The Markets in a Tug of War in the Short Run by Matt Lloyd of Advisors Asset Management

As the damage to sentiment that was brought about by the Washington “Drama Club,” a somewhat cautious number has come about. On October 21, 2013, the Wall Street Journal had an article detailing margin debt hitting new highs which counteracts some of the investor sentiment numbers that are detailed by several sources. To get a better understanding, we ran the margin debt as a percentage of corporate equities over the last 25 years.

2013-10-26 A Code Red World by John Mauldin of Millennium Wave Advisors

The heart of this week’s letter is the introduction of my just-released new book, Code Red. It is my own take (along with co-author Jonathan Tepper) on the problems that have grown out of an unrelenting assault on monetary norms by central banks around the world.

2013-10-25 Weekly Economic Commentary by Team of Northern Trust

The upcoming check-up of eurozone banks is long overdue. Quantitative easing is having little impact on U.S. bank lending. China needs to do more to stress consumption.

2013-10-25 Why Growth is Deep in the Heart of Texas by Frank Holmes of U.S. Global Investors

TIME Magazine’s cover this week features an engaging collage of the 50 states reassembled to fit within the boundaries of Texas. With a growing number of solid-paying jobs, affordable housing, and low taxes, “the Lone Star State is America’s Future,” declares economist and writer Tyler Cowen.

2013-10-25 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

When an economy is excessively over-indebted and disinflationary factors have forced central banks to make overnight interest rates as close to zero as possible, central bank policy has repeatedly proved powerless to further move inflation or growth metrics. Four considerations suggest the Fed will continue to be unsuccessful in engineering stronger growth and higher inflation with their continuation of the current program of Large Scale Asset Purchases.

2013-10-23 The Right Investment Vehicle by Craig French of WBI Investments

Remember your first car? You probably had some good times in it passing your driver’s license exam, going to the prom, driving to your first job. You most likely have a different car now that you’re older one more suited to your current lifestyle and needs. I’ll bet your current car is a lot safer and more reliable than that first one. A car is a motor vehicle you use to reach your destination. Like a car, an investment portfolio is a vehicle you use to reach your clients investment goals.

2013-10-23 Can Kicked Down the Road Once Again... by Blaine Rollins of 361 Capital

Donkeys 1, Elephants 0, Congress -535. The can was kicked down the road once again. We would all like to think that Congress will avoid another last minute battle in early 2014, but unfortunately we can’t put it past the current list of non-negotiators. The only thing that is certain in the future is that it will be many election cycles before a member of Congress makes it into the World Series of U.S. Presidential ballots.

2013-10-23 Economic & Capital Market Summary by Gregory Hahn of Winthrop Capital Management

It has been five years since the Financial Crisis wreaked havoc on the economy and capital markets. With equity markets trading near record highs and new issue corporate bonds coming to market regularly, the capital markets have largely recovered. However, we are concerned that the economic recovery is just an illusion that exists in spite of the efforts in Washington D.C. to kill it.

2013-10-23 Emerging Europe: Regional Economic Review - 3Q 2013 by Team of Thomas White International

In its latest World Economic Outlook, the International Monetary Fund (IMF) further trimmed its forecast for global growth. The Washington-based lender said expansion will be driven more by developed economies as emerging markets grapple with slowing growth and a tighter global financial scenario as interest rates hint of trending higher in advanced economies such as the United States. However, a reading of economic tea leaves for the Euro-zone and economies such as Russia, Turkey, Poland, Hungary, and the Czech Republic offers room for optimism.

2013-10-22 Earnings Season Hides in the Government Shadow by Chris Maxey, Ryan Davis of Fortigent

Lost in all the discussion about Washington is the fact earnings season is in full swing.It is shaping up to be another interesting reporting season, on account of volatility in the markets and economy.So far, companies are beating expectations, but the broader trend is lower.

2013-10-22 A by Milton Ezrati of Lord Abbett

State and local government revenues have finally started growing again. The resultant boost to spending and hiring should aid the economy.

2013-10-22 Middle East/Africa: Regional Economic Review - 3Q 2013 by Team of Thomas White International

Economic activity in the Middle-East and North Africa (MENA) has been hindered by prolonged political unrest and civil strife. The region’s vulnerability has increased over the last two years due to mounting structural challenges. What’s more, widening fiscal deficits due to the economic slowdown and dwindling foreign currency reserves remain sources of concern, as noted by a World Bank report.

2013-10-21 A Last Minute Deal Averts Default - For Awhile by Andy Friedman of The Washington Update

With the deadline for the United States to avoid defaulting on its debt fast approaching, Congress reached another late night compromise to reopen the government and raise the nation’s debt limit. The deal also called for yet another bipartisan committee to try to set a budget for future government spending. Before discussing what that committee is likely to do, let’s compare the predictions I’ve been making since early this year against the reality of what ultimately occurred.

2013-10-18 Despite Uncertainty, the Market Still Looks Strong by Charlie Dreifus of The Royce Funds

Although it was an ugly battle, on Thursday morning October 17 President Obama signed a bill that reopened the government into January 2014 and raised the debt ceiling until early February of next year.

2013-10-18 In Other News by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

It will take some time to gauge the full impact of the government shutdown and data is likely to be somewhat skewed over the next couple of months. However, sitting on the sidelines isn’t a great option and stocks still appear to us to be the best place to invest money for the longer term. International growth, although not robust, appears to be more supportive as we head into 2014 than it has since the financial crisis, and we favor developed over emerging markets for the time being.

2013-10-17 And That's The Week That Was by Ron Brounes of Brounes & Associates

The gov is closed for business. Nuff said. (But help may be on the wayor not?)

2013-10-16 Pacific Basin Market Overview - September 2013 by Team of Nomura Asset Management

North Asian markets ended higher during the quarter after comments from Federal Reserve Chairman Bernanke appeared to infer that the Fed’s asset purchase program would be extended for a while longer. On the other hand, India and the ASEAN (Association of Southeast Asian Nations) region underperformed along with weakening currencies and continued fund outflows. In China, Premier Li Keqiang’s statement that China would meet its gross domestic product (GDP) growth target this year, coupled with better-than-expected economic data, brought some relief to the equity markets.

2013-10-16 Equity Outlook by Team of Osterweis Capital Management

As we write this outlook, our political leaders once again have succeeded in holding the U.S. government budget, and by extension the financial markets and the broader economy, hostage to their respective political agendas. We believe it is important to avoid getting caught up in the drama on Capitol Hill and remain focused on the slow but continued healing taking place in the U.S. economy.

2013-10-16 Two More Reasons to Like Equities: Growth & Inflation by Russ Koesterich of iShares Blog

Russ offers more evidence supporting his preference for equities over bonds: Historically equities have tended to outperform bonds on a monthly basis in a growth and inflation scenario like the one we’re in today.

2013-10-14 Equity Market Review & Outlook by Richard Skaggs of Loomis Sayles

Equities generally performed well across the board in the third quarter. The S&P 500 Index’s solid 5.24% return built on strong gains from earlier in the year. The Index has returned more than 19% through September, surpassing expectations at the start of the year. Slow but steady economic growth in the US, support from the Federal Reserve (the Fed), and more recently, signs of potentially better growth in Europe and Asia have been important positive catalysts.

2013-10-14 Me and My Horse by Jim Goff of Janus Capital Group

This is not a story about getting back on the horse that throws you. It is about just staying on the horse. It is also a market story.

2013-10-12 Debt Ceiling Delusions by Peter Schiff of Euro Pacific Capital

The popular take on the current debt ceiling stand-off is that the Tea Party wing of the Republican Party has a delusional belief that it can hit the brakes on new debt creation without bringing on an economic catastrophe. While Republicans are indeed kidding themselves if they believe that their actions will not unleash deep economic turmoil, there are much deeper and more significant delusions on the other side of the aisle.

2013-10-10 Economic and Market Overview: Third Quarter 2013 by Team of Envestnet

The economic environment in the third quarter was one of growth, albeit at a slower pace than most economists, and the Federal Reserve (“Fed”), believe can be self-?sustaining. The slow but steady gains the economy made were enough to buoy the stock market, but likely only because the Fed has seen it necessary to maintain its aggressive monetary policy. While employment gains were anemic during the quarter, the unemployment rate actually declined to 7.3%, largely due to a contraction in the labor force.

2013-10-09 Taper Time - Mining, That Is by Adam Bowe, Robert Mead of PIMCO

Recent data suggest that mining investment is tapering, with the sector detracting from real growth in the first half of 2013. We see three possible growth scenarios: a handoff to the corporate sector; no handoff, with demand continuing to slow; or a handoff to the highly levered household sector, which would create long-term risks. Until we see meaningful signs of a growth handoff from the mining sector to a new balance sheet that has the capacity to expand, our base case calls for sub-trend growth and low interest rates, supporting bond prices over the cyclical horizon.

2013-10-08 Government Shutdown Masks Pending Debt Ceiling and Third Quarter Earnings by Bob Doll of Nuveen Asset Management

Equities were mixed last week as the markets were focused on the budget impasse in Washington, D.C., that forced the federal government into a partial shutdown. As with the 17 prior shutdowns, we do not anticipate a lasting impact on the economy or markets. While the shutdown makes headlines, the issues that will likely have the most impact are the debt ceiling debate and third quarter corporate earnings announcements, which could mean a bumpy ride for investors.

2013-10-08 The Death of Fixed Income? Not so Fast . . . by Giordano Lombardo of Pioneer Investments

Recent market movements have reminded investors that the fixed income market is facing a secular change, after a 30-year-long bull market driven by a continuous decline in interest rates. I believe the announcements of the death of fixed income as an asset class are greatly exaggerated, and in order to face the new reality, fixed income investors and asset allocators need to adopt a significant change of approach.

2013-10-08 And That's The Qaurter That Was by Ron Brounes of Brounes & Associates

An obsession with Fed policy; troubles in Syria; new concerns in DCand yet the market kept rolling (for a while).

2013-10-08 And That's The Week That Was by Ron Brounes of Brounes & Associates

The gov is closed for business. Nuff said. Coming up in the week ahead: ISM Fed Minutes (Wednesday) Retail Sales (Friday), PPI (Friday)or maybe not.

2013-10-07 Defining the EM Corporate Bond Opportunity by Elisabeth Colleran, Peter Frick, Peter Marber, David Rolley, Edgardo Sternberg of Loomis Sayles

Finance is a numbers business. Investors study prices, yields, rates of return. However, when it comes to sizing up emerging markets, we think they should also pay attention to semantics. In the past, terming a country “emerging” made it synonymous with low credit quality and higher risk. But today, many emerging markets boast strong credit profiles while parts of the developed world buckle under heavy debt loads.

2013-10-04 The Fire Fueling Gold by Frank Holmes of U.S. Global Investors

For patient, long-term investors looking for a great portfolio diversifier, a moderate weighting in gold and gold stocks may be just the answer. And, today, when looking across the gold mining industry, you’ll find plenty of companies that have paid attractive dividends, many higher than the 5-year government yield.

2013-10-03 More Heat Than Light by Zach Pandl of Columbia Management

Following their surprising decision to maintain the current pace of quantitative easing (QE), Fed officials provided more detailed reasoning last week in public remarks and interviews with media outlets. Unfortunately, the latest comments added more heat than light to the QE debate in our view. Much like Chairman Bernanke’s post-meeting press conference, officials expressed contradictory views on several major policy questions.

2013-10-03 PIMCO Cyclical Outlook for the Americas: A Slow-Moving Fed Benefits Economies on Both Continents by Mohit Mittal, Lupin Rahman, Ed Devlin of PIMCO

PIMCO expects the U.S. economy to grow 2.0%2.5% over the next year. However, a continued government shutdown would be a drag on growth. In Latin America, we see growth picking up to 3.0%3.5%, but the outlook varies by country. Mexico should fare well, but Brazil’s story is more mixed. In Canada, we believe the housing correction will be less severe than many are predicting, and we expect GDP to grow 1.5%2.0% over the cyclical horizon.

2013-10-02 Weak Credit Growth Main Reason for Lackluster Economic Recovery by Minyi Chen of AdvisorShares

The U.S. economy is a credit-based economy. Economic expansion is fueled mostly by borrowing and consuming rather than saving and investing. A continuous expansion of credit is needed for the economy to grow. The main reason the economic recovery has been so lackluster is that credit growth has remained weak despite the Federal Reserve’s continuing liquidity injections.

2013-10-02 Quarterly Market Commentary by Scotty George of du Pasquier Asset Management

Many of us bear emotional scars from the excesses of a debt-driven, casino-like mid-2000 decade. The last recession was punctuated by lost jobs, lowering wages, diminishing portfolio valuations, putrid returns on cash savings, and a total decimation of confidence in the so-called “Titans” who drove the Wall Street bus during that period.

2013-10-01 Europe Pokes Its Head Out From the Shadows by Chris Maxey, Ryan Davis of Fortigent

With all the focus on affairs in the US, China and developing nations, Europe has largely been given a free pass in recent months. The lack of attention gave Europe the opportunity to fix some of its troubles, but challenges remain and are likely to surface in the weeks ahead.

2013-10-01 Putin's Gambit by Bill OGrady of Confluence Investment Management

Earlier this month, President Obama found himself in a very difficult position regarding Syria. An ill-advised comment about making the use of chemical weapons a “red line” forced a response when the weapons were clearly used in Syria. The administration began moving toward a military response. However, support for military operations was lacking both domestically and internationally. The clearest signal of this opposition was the British Parliament’s vote to prevent P.M. Cameron from authorizing military action in support of the expected U.S. military strike.

2013-09-30 Government Shutdown Could Lead to a Buying Opportunity by Matt Lloyd of Advisors Asset Management

As we approach yet another self-induced “the sky is falling and the other guy is to blame” environment, recall that this situation is not uncommon. We have had 17 of these budget debt ceiling deadlines and yet we have unbelievably (said with extreme rolling of the eyes) been able to overcome our elected officials’ calls for the end of the world. The most recent time when the U.S. government shutdown was in November 1995 concluding in January 1996,when arguably the animosity and polarization was as pronounced as it is today.

2013-09-28 The Renminbi: Soon to Be a Reserve Currency? by John Mauldin of Millennium Wave Advisors

Contrary to the thinking of fretful dollar skeptics, my firm belief is that the US dollar is going to become even stronger and will at some point actually deserve to be the reserve currency of choice rather than merely the prettiest girl in the ugly contest the last currency standing, so to speak. But whether the Chinese RMB will become a reserve currency is an entirely different question.

2013-09-27 Decomposing Today's Record Profit Margins by Doug Ramsey of Leuthold Weeden Capital Management

Again, the popular perception is that this cycle’s record margins stem from dramatic strides in corporate efficiency, driven in good part by the outsourcing of manufacturing/assembly operations to lower labor cost countries. But most margin expansion since the 1990s is attributable to a couple of other players -- specifically, the “Bond Bulls and the Bookkeepers” (we know, it sounds like a cheap romance novel).

2013-09-27 Give Me Tapering... Just Not Yet by Zach Pandl of Columbia Management

Last week Federal Reserve (the Fed) officials surprised investors by choosing not to begin slowing the pace of quantitative easing (QE) despite months of setup in their public comments. Instead, the latest iteration of the Fed’s bond buying strategy will continue at $85 billion per month. At this point our best guess is that the decision was a path of least resistance among a divided committee: there seemed to be a number of officials who were concerned about downside risks to growth from fiscal policy uncertainty and higher interest rates.

2013-09-27 How to Profit from a Changing China by Frank Holmes of U.S. Global Investors

We believe China’s rebalancing is positive for investors who selectively invest in its stocks. As Jim O’Neill puts it, “When a country is embarking on a significant compositional change to its economy, stock-pickers rather than index-trackers have the upper hand.”

2013-09-27 You Never Know by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Surprises come at any moment in the investing world, reinforcing the need to have both a long-term view and a balanced/diversified portfolio. We believe signs are pointing to better US and European growth, a near-term rebound in China, and some possible positive momentum building in Japan. But near-term fiscal policy risks abound. Investors that need to add to equity positions should use pullbacks to do so.

2013-09-26 One Trick Pony: Whipping the GDP Donkey into a Stallion by Cliff Draughn of Excelsia

The difficulty since 2012 has been that if you are not significantly overweight US equities, then your returns are less than stellar. Employing a diversified, risk-averse investment strategy in 2013 has in hindsight been the wrong thing to do, given that every other asset class is negative year-to-date, while US stocks are up double digits. The combination of the Fed’s Zero Interest Rate Policy and the artificial bubble in Treasury bonds has forced conservative investors into riskier positions in order to find risk-adjusted returns.

2013-09-25 Secular Trends in Asian Credit Markets Shape Long-Term Investment Themes by Robert Mead, Raja Mukherji of PIMCO

The next several years will likely see many Asian corporate issuers to come to the market for financing, whether to pursue long-term business plans or to employ traditional corporate finance and leverage strategies. Rigorous credit research, flexible resources, experienced local portfolio management and strong relationships with local stakeholders are all crucial to uncovering attractive opportunities while monitoring volatility in Asia’s credit markets.

2013-09-25 Misplaced Budget Priorities by Scott Brown of Raymond James

The Federal Open Market Committee delayed the initial reduction in the pace of its asset purchases, citing concern about the recent tightening of financial conditions (higher long-term interest rates). However, Bernanke also noted uncertainty in fiscal policy. He recognized the improvement in economic activity and labor market conditions since the Fed began QE3, which was achieved in spite of a federal fiscal retrenchment. He also suggested that the debates on the government’s spending and borrowing authorities may create downside risks.

2013-09-25 Bernanke's Temporary Reprieve by Bill Smead of Smead Capital Management

There is no nice way to state this opinion: the end of Quantitative Easing and the ultimate allowance of the open market to set interest rates will create a grueling multi-decade bear market in US bond investments. Higher rates mean the re-pricing of existing bond instruments to lower prices and the principle risk of longer-dated maturities getting exposed. In 1983, I remember people losing approximately 15% of their market value in one year as Treasury interest rates rose from 11% to 14%, temporarily crushing owners of 25-year tax-free unit trusts.

2013-09-24 ENERGY MLPs: A Suitable and Sustainable Asset Class by Sponsored Content from ClearBridge Investments (Article)

Key Takeaways: MLPs have provided income with little correlation to other asset classes and little sensitivity to interest rates, commodity prices or economic cycles. The market for MLP stocks has expanded greatly and offers liquidity which appeals to long-term institutional investors. The renaissance in U.S. energy production is driving sustainable growth in the infrastructure that MLPs own and operate

2013-09-24 Michael Aronstein’s Warning to Fund Investors by Robert Huebscher (Article)

Fixed-income investors may think rising interest rates are their biggest worry. But bond funds face a new risk, driven by their need for liquidity to service investors’ daily redemptions, according to Michael Aronstein.

2013-09-24 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

The Federal Reserve kept its word last week: until they see an improvement in jobs growth and wages they simply won’t budge on their mission to keep interest rates low to stimulate borrowing and economic expansion. What this means to the markets, however, is more ambiguous.

2013-09-24 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Financial markets have found out the answer to important questions in the last week. While there have alternatively been both positive and negative reactions, the net result is lower interest rates and higher stock prices.

2013-09-24 The Brazil Conundrum by Bill OGrady, Kaisa Stucke of Confluence Investment Management

The last decade has been exceptionally good for emerging markets. Never before have so many countries grown so rapidly, and at the same time. The average growth rate from 2003 to 2012 was 13.1% for emerging markets, while the long-term average stands at 5.0%. This growth rate was partly due to mean reversion after sluggish growth periods in the 80s and 90s, when the average growth rate for the group stood at 3.5%.

2013-09-23 Seeking Global Growth: Our Outlook for Credit by James Balfour of Loomis Sayles

Global business and credit cycles are nothing new to investors. The familiar sequence of recession, recovery, expansion and slowdown plays out over time, influencing interest rates, credit availability, business climate and capital markets. It’s a time-honored process, but in practice, no two business and credit cycle pairings are exactly alike. Business and credit cycles tend to be driven by specific but varying factors that accumulate until an economic “tipping point” is reached, after which the business and credit climates deteriorate.

2013-09-23 Happy Anniversary? Perspectives on the Financial Crisis Five Years Later by Nanette Abuhoff Jacobson of Hartford Funds

Since 2008, there’s been slow but steady improvement in the global economypolicy makers’ unconventional tools have helped stabilize ?nancial markets and bought time for economies to rebalance. Expectations are too low for developed-market growth and in?ation, in our view. As such, we think this environment will be positive for developed-equity marketsparticularly in Europe and Japan.

2013-09-23 Fed Inaction Lengthens Reflationary Economy by Bob Doll of Nuveen Asset Management

U.S. equities advanced last week as the S&P 500 increased 1.32%.1 The Federal Reserve (Fed) delivered a big surprise by leaving intact the current $85 billion monthly purchase program. The Committee appears nervous about the resiliency of the economy. Chairman Bernanke pointed to three factors for postponing tapering: 1) the need for more labor market data to be confident in the outlook, 2) a desire to assess the degree to which tighter financial conditions, particularly mortgage rates, are affecting the real economy and 3) an interest in gaining clarity on “upcoming fiscal debates.̶

2013-09-21 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Global deleveraging has a long way to go. Fiscal drama and the economy. Funding for economic statistics needs to be enhanced

2013-09-20 Rising Interest Rates Must End Soon by Scott Minerd of Guggenheim Partners

The yield on the benchmark 10-year U.S. Treasury bond has risen by more than 84 percent from May to early September, one of the most violent and rapid increases on record. This spike has caused severe convulsions in the bond market, leading many investors to wonder how long the torment can last.

2013-09-20 Growth and Rising Stars by Mark Kiesel of PIMCO

While developed market growth in several regions is picking up cyclically from low levels, overall global economic growth should remain subdued over the next several years. We believe credit spread tightening and rating upgrades are most likely for specific companies in industries and areas with strong growth. We see these "rising star" companies in the U.S. and European auto sector, the gaming, energy and chemical industries and in sectors tied to the U.S. housing market.

2013-09-19 A Closer Look at Earnings by Ted Baszler of Heartland Advisors

To get a sense of whether forward estimates currently in place for the S&P 500 may be excessiveparticularly in light of an economic recovery that has at times moved in fits and startswe took a look at how earnings have historically related to weekly jobless claims figures.

2013-09-19 The Taper That Wasn't by Peter Schiff of Euro Pacific Capital

The Fed’s failure today to announce some sort of tapering of its QE program, despite the consensus of an overwhelming percentage of economists who expected action, once again reveals the degree to which mainstream analysts have overestimated the strength of our current economy. The Fed understands, as the market seems not to, that the current "recovery" could not survive without continuation of massive monetary stimulus.

2013-09-19 Will Healthcare Reform Raise the Economy's Pulse? by Milton Ezrati of Lord Abbett

The prognosis is by no means clear. Ambiguity surrounding the implementation of the Affordable Care Act will create further uncertainty for the economy in the years ahead.

2013-09-19 A Fine Balance in the Global Profits Cycle by Saumil Parikh of PIMCO

In the U.S., we expect growth to accelerate over the cyclical horizon, but to disappoint elevated consensus expectations. In Europe, we also expect growth to accelerate, but just barely, and also below consensus. In Japan, we expect growth to remain heavily reliant on aggressive fiscal and monetary policies. And in emerging markets, we expect a stabilization in growth assisted by central banks regaining control of currency and financial market conditions. The outlook for global corporate profits is a key measure of success in determining the handoff to self-sustaining growth going forward.

2013-09-18 Bernanke Gets Another Chance to Communicate by Scott Brown of Raymond James

It seems clear that most Fed policymakers have not decided whether to begin reducing the pace of asset purchases. Officials will review a wide range of data and anecdotal information this week. It’s generally (but not universally) expected that this will lead the Federal Open Market Committee to begin tapering, but modestly, while signaling a wait-and-see attitude on further action. The Fed should continue to stress that short-term interest rates will remain low for some time. The economy is still far from being fully recovered, but we’re well on our way.

2013-09-18 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks rallied last week as military options in Syria no longer look likely given the disapproval of the American people and Congress. Additionally, this embarrassing agreement reached with Russia is an admission that the USA will not intervene.

2013-09-18 The End Times for Strategic Ambiguity by Bill O'Grady of Confluence Investment Management

Strategic ambiguity is defined as a condition where various parties say something similar but believe something entirely different. A good example of this is U.S. and Chinese policy toward Taiwan. Both nations say Taiwan is part of China. The U.S. believes that Taiwan’s democratic government should become the model for the mainland, whereas China believes Taiwan should be part of its nation as it is currently structured. Because both nations say the same thing, the policy difference is not publicly obvious and thus not a problem, at least as long as the ambiguity lasts.

2013-09-17 “Risk-On” Resumes as Uncertainty Subsides by Bob Doll of Nuveen Asset Management

Equity markets rallied last week with the hope of a diplomatic solution to the crisis between Syria and the United States. The S&P 500 advanced 2.03% for the week.1 Broadly, the S&P 500 is in a churning phase after witnessing an all-time high of 1709 on August 2 and then stalling.1 We believe the market has been on hold while waiting for lower oil prices, progress on Syria, further global growth and successful Federal Reserve tapering.

2013-09-17 Consumers Face An Economy at a Crossroads by Chris Maxey, Ryan Davis of Fortigent

As the Federal Reserve prepares to debate the merits of tapering its asset purchase program this week, a key area of the economy that will be closely analyzed by Bernanke and Co. is the health of the American consumer. There are tenuous signs that consumers are spending more, but attitudes towards the economic recovery are hardly encouraging. Consumers will find it difficult to stay the key cog of economic growth in the U.S., but at the very least, their participation in the recovery is imperative, and leaves much to be desired.

2013-09-16 Russia is Tough to Love, Easier to Hate, Hard for Investors to Ignore. Here's Why by Frank Holmes of U.S. Global Investors

Russian President Vladimir Putin created a stir recently when he shared his thoughts with Americans in an op-ed printed in The New York Times. According to The Times, very few pieces written by heads of state have been published by the paper and very few received the attention Putin attracted.

2013-09-16 Syria: Foreign Policy Turmoil is a Distraction for Investors by Charles Lieberman (Article)

The equity and bond markets have been buffeted by the turn of events in Syria, although incoming economic data is vastly more important than political developments. Syria remains a mess on many levels. But it is essentially irrelevant in affecting labor scarcity, inflation or possible changes in monetary policy. Many politicians and analysts consider the pace of growth unsatisfactory, but the moderate growth rate has been sufficient to bring down the unemployment rate, while corporate profits have increased.

2013-09-16 Opportunities in Uncertainty by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Uncertainty and volatility are elevated, which we believe provides opportunities for investors.

2013-09-13 What's Happening to Bonds and Why? by Mohamed El-Erian of PIMCO

To say that bonds are under pressure would be an understatement. Over the last few months, sentiment about fixed income has flipped dramatically: from a favored investment destination that is deemed to benefit from exceptional support from central banks, to an asset class experiencing large outflows, negative returns and reduced standing as an anchor of a well-diversified asset allocation.

2013-09-13 The View from Here - September 13, 2013: Five Years After by Carl Tannenbaum of Northern Trust

How much have we recovered from the global financial crisis?

2013-09-12 Brave New World by Christine Hurtsellers, Matt Toms of ING Investment Management

If the monotony of high school lulled you into a catatonic state the semester you were supposed to read Brave New World, here’s the CliffsNotes summary of what you missed. Aldous Huxley imagined a futuristic utopia in which the government promotes economic and emotional stability through the plentiful use of a soporific opiate called “soma”. Soma allows the mind to take a holiday from worldly problems via a gram, or two or three. Imagine the chaos into which this fictional world would descend were the government to abandon its role as pharmacist to the masses.

2013-09-12 Unemployment, Participation and the Fed by Zach Pandl of Columbia Management

Despite a mediocre August jobs report, we still expect the Federal Reserve to announce a slowing of the pace of bond purchases when it meets next week. One reason for this view is that Fed officials care more about the level of the unemployment rate than the pace of job creation. We often write that monetary policy is about “gaps” not growth: the Fed is trying to reduce spare capacity in the economy, not bring about a rapid expansion per se.

2013-09-10 Letters to the Editor by Various (Article)

Several readers responded to Michael Edesess’ article, Did Steve Jobs Really Build That?, which appeared last week. A reader responded to Stephen Roach’s commentary, The Global QE Exit Crisis, which appeared on August 26.

2013-09-09 The Lesson of the Coming Decade by John Hussman of Hussman Funds

Even if the S&P 500 Index goes nowhere over the coming decade - as historically reliable measures of valuation suggest - it will probably go nowhere in an interesting and volatile way, providing better value and opportunities that are well-supported by historical evidence. The challenge will be to maintain discipline even when frustration begs investors to abandon it.

2013-09-09 And That's the Week That Was by Ron Brounes of Brounes & Associates

A couple of holidays during the week prompted some light volume and volatility as investors were forced to digest a slew of key economic releases and some potentially concerning geopolitical developments on a limited work schedule. In the end, investors took advantage of bargains leftover from a poor August, but many still maintain the same uncertainties that caused the pullback in the first place. Syria and the Fedthe headlines should be around for the foreseeable future.

2013-09-09 Market Technicals Signal Trouble Ahead by Chris Maxey, Ryan Davis of Fortigent

Bear market enthusiasts have so far been disappointed in September after the sudden market rally last week. With equities up more than 1% on the month, many bears pointed to the historically poor performance of equity markets during this month as a reason to remain cautious. Bear enthusiasts need not fear, as markets appear to be converging toward an inflection point right around the Fed meeting in the middle of the month.

2013-09-06 The Emerging Markets Debt Evolution by Giordano Lombardo of Pioneer Investments

My colleagues Mauro Ratto, Head of Emerging Markets, and Yerlan Syzdykov, Head of Emerging Markets Bond & High Yield, offered these thoughts on emerging markets.

2013-09-06 Four Interest Rate Scenarios We Could Face by Mike Temple of Pioneer Investments

I’ve written a lot lately on the subject of “duration” and its potential impact on investor portfolios, now that the initial goals of the Federal Reserve’s “Great Monetary Experiment” appear largely accomplished and tapering of its monthly purchase of Treasuries to keep rates low is on the table. The era of lowering interest rates and rising bond prices looks finally at an end, with no place for rates to go but up. It’s vital, then, that investors think about the impact that rising bond yields could have on their portfolios. Here are a few scenarios w

2013-09-06 India - A World of Contrasts by William Hackett of Matthews Asia

Recently, I had the opportunity to join one of our Matthews Asia portfolio managers during a research trip to India, and was reminded of both the importance of such on-the-ground visits as well as the rigor required to conduct them.

2013-09-06 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Manufacturing surveys are upbeat, but should we trust them? The August employment report leaves lots of room for improvement.

2013-09-06 Will Gold Follow Its Seasonal Pattern This Year? by Frank Holmes of U.S. Global Investors

There are factors beyond Syria this week driving gold. That’s the Love Trade. This group gives gold as gifts for loved ones during important holidays and festivals. This is the time of the year that we are in the midst of right now. Historically, September has been gold’s best month of the year. Looking at more than four decades of monthly returns, the precious metal has seen its biggest increase this month, averaging 2.3 percent.

2013-09-05 Congress Returns from Recess to Face Fiscal Deadlines by Andy Friedman of The Washington Update

Congress returns from its August recess facing two imminent deadlines.First, Congress has appropriated funds to keep the federal government operating only through September 30, 2013.If Congress does not appropriate additional funds during September, on October 1 the federal government will shut down.House Speaker Boehner has said he will propose short term “stop gap” legislation without conditions that would fund the federal government for a few more months at 2013 levels.If Congress adopts such a resolution, the funding deadline will be pushed later into 2013.

2013-09-05 India and Indonesia by Team of Matthews Asia

Comments from the Federal Reserve to begin reducing its stimulus operations have weighed heavily on markets across Asia in recent weeks. Growing investor concerns have largely centered on those economies that have been running current account deficits and that are likely to be further impacted by lower growth forecasts and reduced capital inflows. More short term, speculative flows from investors into fast-growing Asian economies have also fallen as expectations for higher interest rates in the U.S. have risen.

2013-09-05 Is China Past Its Manufacturing Prime? by Sammy Suzuki of AllianceBernstein

China has been an incredible export engine of manufactured goods over the past decade and the central player of the BRICs era. But mounting competition from other countries is gradually pulling production away from China. How should investors proceed?

2013-09-04 The Bond Bear is Waking Up by Brian Wesbury, Bob Stein of First Trust Advisors

We’ve been bond bears for quite some time, and we still are. The good news is that the violent part of the bear market has passed. We expect a slower, but still painful and consistent, move higher in interest rates during the quarters ahead. The 30-year bull market in bonds is over.

2013-09-04 Abe Wins - Does Japan Benefit? by Milton Ezrati of Lord Abbett

The Japanese seem willing to give Abe room to reform when he decides to act.

2013-09-04 In a Little While: Market's Not Out of the Woods Yet by Liz Ann Sonders of Charles Schwab

Since moving into the "pullback" camp in early August, the market has had a mini-correction and it may not be over. Sentiment and technical conditions have improved; as has the economic backdrop, but risks remain. Until we get past Syria, Fed tapering and the debt ceiling, volatility may remain elevated.

2013-09-03 Where's the Job Growth? Puerto Rico & Illinois and the ACA by Gregg Bienstock of Lumesis

Welcome back from your Labor Day weekend. This week we take a look at the employment data (pre-First Friday Employment Report) and try and find where there is Job Growth of any kind. We then take a closer look at Puerto Rico against the backdrop of some recent changes and comparative data, and close out with a look at the Affordable Care Act (aka Obamacare).

2013-09-03 So Step Right Up, Pick Your Favorites... by Blaine Rollins of 361 Capital

So with the backing of The White House, the State Department, the Senate & The Economist, the United States is going to launch Tomahawks on Syrian targets. The President did say that he will let Congress vote on a strike, but both he, Secretary Kerry and Senator Reid let it be known that they will be lighting fuses soon. So as a refresher as to who is supporting whom in Syria, the chart below will both assist and thoroughly confuse you...

2013-09-03 Momentum in Europe by Janus Equity Investment Team of Janus Capital Group

We think now is a good time to be investing in Europe. European equity valuations are at the lowest level in more than 40 years, by some measures, and we are seeing green shoots in the region’s downtrodden economy. Meanwhile, European companies in several industries have right-sized their cost structures or refocused their businesses, setting them up to be more competitive on a global scale.

2013-09-03 As Uncertainty Abounds in September, Sideways Consolidation Continues by Bob Doll of Nuveen Asset Management

Global equities struggled last week, with the S&P 500 declining -1.39%.1 Volatility rose from geopolitical uncertainty over the military strike in Syria.2 Oil prices spiked with concerns about escalation and tension but retreated due to dampened international support and expectations that a military campaign would be short-lived. The U.S. Treasury announced its borrowing capacity will be exhausted by mid-October, exposing contentious fiscal battles. Reports mentioned former Treasury Secretary Larry Summers may be leading the succession race for Fed Chairman.

2013-08-30 The Unfriendly Skies by Peter Schiff of Euro Pacific Capital

As if the federal government were not already doing enough to kill the U.S. airline industry with restrictive workplace rules, over-regulation, and a monetary policy that supports higher fuel prices, earlier this month anti-trust authorities at the Justice Department blocked the merger between American Airlines and US Air.

2013-08-30 An American Energy Revolution by Frank Holmes of U.S. Global Investors

In Texas these days, there’s a feeling of absolute and unwavering confidence in the concept of an American energy revolution. From the depths of reserves to the richness of the energy, an incredible transformation is taking place.

2013-08-29 More Evidence of Pressure on Housing by Scott Minerd of Guggenheim Partners

The slowdown in housing due to higher mortgage rates is becoming more evident in the data for that market. This comes during a time when the Fed is making a crucial decision about tapering quantitative easing, which is causing market uncertainty to rise further.

2013-08-29 Earnings: Just Good Enough by Milton Ezrati of Lord Abbett

Corporate profits aren’t exactly setting the world on fire, but the rate of growth should be sufficient to support further equity market gains.

2013-08-27 How Real is the Recovery in Commercial Real Estate? by Joel Beam, Ian Goltra of Forward Management

How Real Is the Recovery in Commercial Real Estate? A conversation with Joel Beam and Ian Goltra of Forward’s Real Estate Portfolio Management Team.

2013-08-27 The Egyptian Coup: an Update by Bill O'Grady of Confluence Investment Management

In this report, we will update developments in Egypt and discuss how the military’s actions increase the odds of future problems. We will study the military’s goals for the coup. From there, we will examine the Obama administration’s difficult position and how the Egyptian coup has caused a divergence of responses from regional powers. As always, we will conclude with potential market ramifications.

2013-08-27 Policy Uncertainty on the Rise by Libby Cantrill, Josh Thimons of PIMCO

Congress seems to be digging in and ramping up the rhetoric in advance of a possible government shutdown, a debt ceiling increase and a probable selection of a new Fed chair. We think it is likely policymakers will agree to a short-term deal to fund the government and avert a shutdown, and also cobble together a resolution on the debt ceiling, although neither is likely until the last minute. The Fed chair debate will likely continue to sway markets over the next few months, leading to greater uncertainty and greater market volatility.

2013-08-26 The Outlook Will Shift as Conditions Shift by John Hussman of Hussman Funds

Though I expect that the present cycle will be completed by a market loss on the order of 40-55%, conditions can certainly emerge over the course of this cycle that could warrant a more constructive stance than we have presently, though possibly less extended than we’d like. The most likely constructive opportunity would emerge from a moderate retreat in market valuations, ideally to “oversold” conditions from an intermediate-term perspective, coupled with an early firming in measures of market internals.

2013-08-26 Summers For Fed Chair by Brian Wesbury, Bob Stein of First Trust Advisors

In the next month or two, President Obama will pick someone to succeed Ben Bernanke at the Federal Reserve. At this point, we think the odds-on favorite is Larry Summers.

2013-08-26 Chicago Post Script, Reported Data Errors (Really) and What is a “Geo Score”? by Gregg Bienstock of Lumesis

Regular readers know I periodically suggest looking at alternative data points to gain a broader perspective. In this instance, something a little different. At the core of the DIVER platform is our database and we take data integrity very seriously. So much so that we periodically find errors in reported data. Many times, the source will correct the data as we notify them. Typically, when we find an error in a CAFR, the source will defer the correction until the next CAFR is released. In DIVER however, we will display the accurate values.

2013-08-26 Equities Relatively Flat as Crosscurrents Remain by Bob Doll of Nuveen Asset Management

U.S. equities finished mostly higher last week, and the S&P 500 advanced 0.50%.1 The Dow Jones Industrial Average was the only the only major U.S. index to falter last week.1 Market sentiment was dominated by the notion that the market had become too bearish in the wake of the prior week’s sell-off in equities and credit. Continued improvement in global recovery sentiment seemed to provide a notable tailwind. The Fed dominated headlines markets appear obsessed with policy normalization and succession issues.

2013-08-25 France: On the Edge of the Periphery by John Mauldin of Millennium Wave Advisors

Charles de Gaulle said that "France cannot be France without greatness." The current path that France is on will not take it to renewed greatness but rather to insolvency and turmoil. Is France destined to be grouped with its Mediterranean peripheral cousins, or to be seen as part of the solid North Atlantic core? The world is far better off with a great France, but France can achieve greatness only by its own actions.

2013-08-23 5 China Charts That Look Bullish for Commodities by Frank Holmes of U.S. Global Investors

Over the past few months, investors have seen better economic data coming out of Europe. Consumer confidence in the continent has been rising, manufacturing data is improving and the fiscal situation is on the mend. Now, China appears to be strengthening as well, which could signal better times ahead. Below are five charts that look bullish for China and commodities. While not meant to be comprehensive, they do point to areas where investors might want to pay close attention.

2013-08-23 Embrace Bottom Up by Herbert and Randall Abramson of Trapeze Asset Management

With all the conflicting macro news, some good, some not, and with the S&P 500 and the Dow at new highs while many sectors languish, it is preferable to focus on the little picture not the big one. The big one may currently be more unpredictable than the small one, being bottom up investment in undervalued securities. Those may currently be less popular, but we value investors are naturally driven to buy investments low, that are neglected and unpopular, with the view of selling them high when their popularity is enhanced. Buy low and sell high. Not buy high and sell higher as is now in vogue.

2013-08-23 Buckle Up by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Caution is warranted near-term. For investors that have a solid strategy of dollar-cost averaging into the market, we don’t recommend deviating from that path. However, for investors who are more tactical, better entry points are likely yet to come. Longer-term, we remain bullish on US equities and prefer developed international markets over emerging markets.

2013-08-20 August Monthly Investment Bulletins by Team of Bedlam Asset Management

For the first seven months of the year the portfolio rose by 25.2% vs. 19.3% for the index. During the month, the 6.4% gain was 150 basis points ahead. Three trends continued: the gradual increase in fund flows into equity markets relative to other asset classes, slightly improving economic data across most developed countries, and a mild deterioration in many developing nations.

2013-08-19 Equity Fatigue Continues with Headwinds from Bond Sell-off by Bob Doll of Nuveen Asset Management

U.S. equities finished lower for the second straight week as the S&P 500 declined 2.04%, narrowly escaping its worst week of the year. A specific catalyst behind the pullback was not identified by us or market analysts.

2013-08-19 Consumers: Wallets Open, but Not Too Wide by Milton Ezrati of Lord Abbett

U.S. consumer spending is likely to remain on a slow, but steady, growth trajectory, boosting overall economic growth.

2013-08-16 Pacific Basin Market Overview July 2013 by Team of Nomura Asset Management

Asian markets ended higher in July after comments from Federal Reserve Chairman Bernanke appeared to infer that the Fed’s asset purchase program would be extended for a while longer. In China, Premier Li Keqiang stated that China would meet its gross domestic product (GDP) growth target this year, which brought some cheer to the markets. The MSCI AC Asia Pacific Free Index including Japan gained 1.5% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.0% higher during the quarter.

2013-08-16 Using Equities to Hedge Inflation? Tread With Care by Bob Greer, Raji Manasseh of PIMCO

Historically, broad equity returns have not intrinsically provided a good hedge against inflation. Three key attributes may help companies withstand inflationary environments - pricing power, supply side advantages and a willingness and ability to sustain dividend hikes at a rate faster than inflation. To realize equities’ long-term potential as a key source of portfolio returns, investors should consider enlisting active managers who select stocks with a view on inflation and its effect on specific companies.

2013-08-16 Weekly Economic Commentary by Team of Northern Trust

The speculation about Fed leadership has gone too far. Eurozone growth should be placed in perspective. The velocity of money may turn around soon.

2013-08-16 What Happens When You Tell Indians to Stop Buying Gold by Frank Holmes of U.S. Global Investors

With the government in India raising its import tax for gold to 10 percent this week, I firmly believe Indians will continue indulging in gold, even if they have to smuggle it in.

2013-08-16 Attention Investors: Don't Fear Rising Rates; Fear Perpetually Low Rates by J.J. Abodeely of Sitka Pacific Capital Management

This month’s Insight will take a look at the performance of bonds during two previous inflationary periods, the 1940s and the 1970s, and illustrate two very different total return experiences. Through these examples, we will show that bond investors-- and by extension, any investor with a traditional balanced portfolio, should not fear rising rates as much as they should fear perpetually low rates.

2013-08-15 What Lies Ahead for China? McKinsey Lists 10 Forces by Frank Holmes of U.S. Global Investors

By 2022, research by McKinsey suggests that 75 percent of urban consumers in China will earn around $9,000 to $34,000. This income level, which is currently between the average earned in Brazil and Italy, is only 4 percent of what Chinese households were bringing home in 2000.

2013-08-14 Pause: Breather Needed Short-Term, But Longer-Term Still Looks Good by Liz Ann Sonders of Charles Schwab

Sentiment has gotten a little frothy ahead of a typically-seasonally weak period, but valuation remains attractiveoh, and don’t fret low volume.

2013-08-14 What Role for Emerging Markets After the Sell-Off? by Ramin Toloui of PIMCO

While history suggests that the sell-off in emerging market bonds could ultimately offer attractive buying opportunities, it is important to anchor investment decisions firmly within a forward-looking economic and market outlook. Continuing vulnerabilities in global growth suggest there is fundamental value in EM bond yields at present valuations, as interest rate hikes priced into EM yield curves are unlikely to materialize in an environment of tentative growth.

2013-08-13 China Struggles to Fight the Trend by Chris Maxey, Ryan Davis of Fortigent

Prior to the global financial crisis, decoupling’ was the word du jour. In the years since the crisis began, however, decoupling has vanished from the everyday lexicon. In recent weeks, the financial media noticed a new form of decoupling, one that shows improving growth prospects in the developed world but slower growth in developing economies. Rightly or otherwise, much of that slowdown is pinned on China and recent data continues to suggest a slower pace of growth than investors became accustomed to in prior decades.

2013-08-13 Emerging Asia Pacific: Regional Economic Review - Q2 2013 by Team of Thomas White International

Asia’s emerging nations, the darling of the world economy since the 2000s, uncharacteristically slowed in the first quarter of 2013. After a decade of robust growth, many of Asia’s fast-growing economies are coming to terms with structural changes. Asian currencies, which had appreciated quite a bit over the past few years thanks to ultra-loose monetary policy in the developed world, came tumbling down at the first talk of a slowdown in the supply of cheap money.

2013-08-13 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stock prices declined modestly last week. A shrinking trade deficit caused 2nd quarter GDP estimates to increase (over 2% now annualized), thus renewing fears that the Federal Reserve would commence “tapering” at their September meeting.

2013-08-13 Dog Days of Summer Are Upon Us by Blaine Rollins of 361 Capital

Hopefully you are reading this from the beach, because there is so little news happening in the markets that those of us in the office are about to start making news up to justify stock price movements. But while news and volumes are at August lows, here are some thoughts that might ring a bell to help you to either make some money or to set down your smartphone and get back to the water.

2013-08-12 The Key Economic and Market Forces Guiding Equity Markets by Bob Doll of Nuveen Asset Management

This week we want to address important themes that underline our continued cautious optimism for a slowly improving global economy and signs of revenue and earnings growth momentum.

2013-08-09 A Surprising Way to Play a Europe Rally by Frank Holmes of U.S. Global Investors

After a lengthy period of stagnant growth and lackluster results, the gradual crescendo of improving economic data that’s been coming out of Europe lately certainly commands attention.

2013-08-09 The Calm Before the Storm? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Record highs in US equities have resulted thus far in only modestly elevated investor sentiment and it appears retail investors are returning to the market, which could fuel further gains. However, volatility is likely to increase with political and Fed issues on the horizon. Europe remains attractive, along with Japan, but we are watching the potential consumption tax increase closely, while China’s valuations are improved but concerns remain.

2013-08-08 Market Melt-Up Catches Defensive Investors by Surprise by Douglas Cote of ING Investment Management

Extraordinary returns in the fourth year of a bull market remind us that long-term defensiveness can’t be rationalized. July saw remarkable returns across global equity and fixed income markets, with the exception of U.S. Treasuries. Investors would be well served to ignore media drama and fear mongering and simply follow the fundamentals. Five years spent worrying about Armageddon is too long, but there’s still time to get back to a normal allocation.

2013-08-08 Not an Entry Point for U.S. Stocks by Scott Minerd of Guggenheim Partners

My long-term view of U.S. equities remains bullish, but a number of indicators, as well as near-term macro challenges, point to a pause in the run-up of that asset class.

2013-08-08 The Role of Confidence by Howard Marks of Oaktree Capital

The so-called wealth effect plays an important and well recognized part in the functioning of an economy. When assets appreciate in value, the owners translate their increased wealth into increased spending. While at first glance this is unsurprising, it should be noted that this is true even if the appreciation is unrealized, and thus the increased wealth exists solely on paper. The relationship can be stated as follows: the richer people feel, the more they spend. Changes in confidence have an impact on behavior similar to the wealth effect. That’s what this memo is about.

2013-08-07 Adapt or Die... by Blaine Rollins of 361 Capital

Bond king Bill Grosss $261.7 billion Total Return Fund at Pacific Investment Management Co. suffered a $7.5 billion net outflow last month, according to data from fund tracker Morningstar Inc. on Friday. It is the third straight monthly outflow for the Fund, on the heels of nearly $10 billion in redemptions in June. Clients have yanked $15.6 billion from Gross’s Fund in 2013 through July. Jeffrey Gundlach’s $37.9 billion DoubleLine Total Return Bond Fund suffered $580 million net outflow in July, according to Morningstar.

2013-08-06 Is China the New France? by Marianne Brunet (Article)

Imagine a country that grows its economy by greatly devaluing against the reserve currency to develop a strong export sector. As the country becomes a major world power, it accumulates massive amounts of the reserve currency, and fears grow that its actions could destabilize global markets. If you think that description sounds like China today, you’re right. But it also describes France in the 1920s. Lessons from that era are instructive for those seeking to forecast China’s long-term position in the world.

2013-08-06 And That's the Week That Was by Ron Brounes of Brounes & Associates

After a week like this, everyone needs a vacation. Big Oil led the earnings trail and the results were not pretty. Europe and China both expressed nice signs for their previously weaker manufacturing sectors. At home, the labor results were mixed, manufacturing looked solid, the consumer remained active, and Michael delayed the vote yet again.

2013-08-06 China's Slowdown by Bill O'Grady of Confluence Investment Management

Over the past three decades, China has seen its economy grow significantly.

2013-08-06 Low Quality Jobs Recovery Continues in July by Chris Maxey, Ryan Davis of Fortigent

In a busy week of economic data, investors ended the week on a mixed note.The government jobs report revealed a labor market experiencing steady if not unspectacular growth, as nonfarm payrolls came in below consensus estimates while the unemployment rate surprised to the upside.

2013-08-06 Europe's Fake Normal by Mohamed El-Erian of Project Syndicate

This summer’s sense of economic normality in Europe is neither natural nor necessarily tenable in the long term, because it reflects temporary and potentially reversible factors. If Europe does not return to addressing its economic challenges in a more comprehensive manner, the current calm may quickly give way to renewed turmoil.

2013-08-05 Can It Get Any Better Than This? by John Mauldin of Millennium Wave Advisors

What in the world is going on?! As I write this letter from the Maine woods, the S&P 500 has just cleared 1,700 for the first time. The German DAX continues to set all-time highs above 8,400. The United Kingdom’s FTSE 100 is quickly approaching its 1999 record high of 6,930, and its mid-cap cousin, the FTSE 250, just broke through to its all-time level above 15,000. And last but not least, Japan’s Nikkei 225 is extending its gains once more, toward 14,500.

2013-08-05 Weekly Economic Commentary by Team of Northern Trust

July U.S. employment report a bit disappointing. Part-time employment gains are not uniform across nations. Affordable Care Act and small business employment.

2013-08-05 Two Charts Illustrate How to “Follow the Money” by Frank Holmes of U.S. Global Investors

Too often investors get caught up in their political allegiance or parties, focus on the negative and lose confidence in stocks. As a result, they can miss great bull markets. I believe when it comes to finding investment opportunities, it’s not about the political party, it’s about the policies, both monetary and fiscal.

2013-08-05 The Minsky Bubble by John Hussman of Hussman Funds

In his classic treatise on speculation, Manias, Panics and Crashes (originally published in 1978), the late Charles Kindleberger laid out a pattern of events that has periodically occurred in financial markets throughout history. Drawing on the work of economist Hyman Minsky, the conditions he described are likely far more relevant at the present moment than investors may recognize.

2013-08-02 Fed Shows Its Dovish Side by Brian Wesbury, Bob Stein of First Trust Advisors

The Federal Reserve made several small changes to the text of its statement, which, combined, suggest a slightly more dovish posture at this meeting than at the last one in June.

2013-08-02 Second Half Challenges by Michael Kayes of Willingdon Wealth Management

One of the most challenging aspects of managing portfolios is to process the endless information flow and determine what impact it will have, if any, on the markets. Some information, while interesting to read about, has virtually no impact on the future direction of stock and bond prices. Other information may not have an immediate impact, but it may be impactful in the future. This, delayed-impact information encompasses the vast majority of information that surfaces on a daily basis.

2013-08-02 U.S. Equities: Tapering expectations by Joseph Tanious of J.P. Morgan Funds

Given the market’s strong recent performance, investors are now asking what to expect moving forward. The top of mind question remains: are we likely to see a pull-back and is there still any room for this market to rally further?

2013-08-01 Weekly Commentary & Outlook by Scotty George of du Pasquier Asset Management

Throughout the 1980’s, we heard talk from the investment community to “go global”, invest worldwide, perhaps driven by true globalization of corporate exchange and balance sheets, and perhaps also by the need by firms to create “new” products for their consumers to devour. Mutual funds, brokerages, and private equity companies alike saturated the media with product offerings from every corner of the globe and every possible market sector, including telecom, basic materials, energy and industrial development.

2013-08-01 Is It Time for the Fed to Wind Down the Economic Stimulus? by Team of Knowledge@Wharton

Is it time for the Federal Reserve to start tapering down the "quantitative easing" bond-buying program that has helped stimulate the U.S. economy since the financial crisis of 2008? Views are mixed. Several experts, say yes, it’s time. Others worry it could be too soon.

2013-08-01 Fed in Watch-and-Wait Mode by Team of Northern Trust

The Federal Open Market Committee (FOMC) today held unchanged its current asset purchase program of $85 billion per month. The Federal Reserve avoided providing new nuances to existing forward guidance and re-issued the June policy statement with minor modifications to reflect recent economic developments.

2013-07-31 Bad Trade?! by Jeffrey Saut of Raymond James

Last week I asked myself the obligatory question, “Did I make a bad trading decision by targeting mid-July through mid-August (with the date specific of July 19th) as the timing point for the first meaningful decline of the year?” The reason for said question was that every time the S&P 500 (SPX/1691.65) sold off last week, buyers showed up to save the day. And, the operative word is “trading” because that potential downside strategy was merely a short-term tactical call.

2013-07-30 Conflicting Crosscurrents Move Equities Sideways by Bob Doll of Nuveen Asset Management

U.S. equities finished last week narrowly mixed, with the S&P 500 falling -0.02%.1 While the second quarter earnings per share growth continues to move higher, revenue growth remains below trend. The economic calendar is focused on this week’s release of the July employment report. Global macro headlines generated more uncertainty than direction for the markets.

2013-07-30 Earnings Take a Back Seat to Policy by Chris Maxey, Ryan Davis of Fortigent

Although it was a quiet week on the economic front, there were a few notable indicators to digest.

2013-07-30 Economic & Capital Market Summary by Gregory Hahn of Winthrop Capital Management

We are approaching the five year anniversary of the beginning of the Financial Crisis. By this time in 2008 we had already experienced the complete seizure of the Auction Rate Preferred securities market and the takeover of Bear Stearns by JP Morgan Chase. In August of 2008, we would see the collapse of Lehman Brothers and the government takeover of AIG. We stand here today, shoulders slumped, and heads bowed mourning the lack of real progress in addressing the structural problems that are impeding sustained economic growth and private credit expansion.

2013-07-30 FPA Crescent: Steve Romick's Quarterly Commentary by Steven Romick of FPA Funds

FPA Crescent Fund has released its quarterly commentary examining the state of the fund and its investments as well as an outlook on the greater economy. Portfolio manager Steve Romick feels that the economic “recovery has been disappointing and largely engineered by central bank policy” and worries “that low interest rates and novel and theoretical Fed policy could lead to unintended consequences.”

2013-07-29 And That's the Week That Was by Ron Brounes of Brounes & Associates

So now Prez Obama is sharing his two cents about the economy. After weeks of endless babble from the Fed Chief and his partners in crime about the economy and the longevity of the bond buying program, O is now making job creation his number one priority. Is anyone listening to his urgent messages (certainly no one in DC)? Investors (at least those not on vacation) were less than impressed with the less than impressive earnings of the week, though markets held their own.

2013-07-29 Driftingbut for How Long? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Equities have drifted higher during a decent earnings season with few surprises, while yields have calmed and volatility has plunged. Typical lackluster summer action may prevail for the next month, but action is likely to heat up as the weather begins to cool.

2013-07-26 Emerging Markets Equity Commentary June 2013 by Team of Thomas White International

Emerging market equity prices declined appreciably on heightened investor concerns over an early withdrawal of the monetary stimulus measures in the developed world. The most recent policy statement issued by the U.S. Federal Reserve, which was more optimistic about the growth prospects for the U.S. economy, and comments by Fed officials seemed to suggest that the central bank is preparing to wind down its bond purchase program.

2013-07-26 Is Europe Ready to Take Off? by Frank Holmes of U.S. Global Investors

After the U.S.’s huge run, is it possible the country will be handing off the baton across the Atlantic for the next leg of the relay race? Here are a few areas of strength that could send European stocks higher.

2013-07-26 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Income inequality is rising, but it’s not clear what to do about it. Brazil’s struggles come at a delicate time. Detroit’s road to bankruptcy does not set a path for others to follow.

2013-07-25 A Midyear Update: Getting Back to “Normal” by Douglas Cote of ING Investment Management

Though markets were whipsawed by the announcement, the Fed’s plan to step aside and allow normalization is a good thing. Today, the primary risk for investors to hedge is economic growth and the strong equity returns it tends to produce not financial Armageddon. While risks in Europe and China persist, U.S. fundamentals look relatively strong. Two consecutive quarters of S&P 500 earnings growth prompts a forecast update.

2013-07-25 A One-Pillar Economy by Scott Minerd of Guggenheim Partners

Despite blockbuster new home sales, higher interest rates have put downward pressure on housing activity. This is highly worrisome given the importance of housing to the health of the U.S. economy.

2013-07-25 Perspective by Jim McDonald of Northern Trust

Investors have faced a torrent of central bank actions and communications during the last month, and markets continue to differentiate among economies and companies a welcome maturation from the markets’ prior regime of “risk on/risk off.” We believe the Federal Reserve has moved from an easing bias to one of tightening but at an elongated pace that will remain data dependent. Joining in this parsimony are some key emerging-market central banks, including the People’s Bank of China, which is working to control credit risk in the Chinese economy.

2013-07-25 The Damage Potential of Rising Rates by Michael Temple of Pioneer Investments

The initial goals of the Federal Reserve’s “Great Monetary Experiment” to keep rates low, create negative real yields, spur consumption and cushion the budgetary consequences of fiscal stimulus have largely been accomplished. Investors could now face the threat of rising bond yields. Various bull and bear scenarios might ensue. What are they and what could trigger them? What are the risks to portfolios?

2013-07-24 Stocks and Bonds Both Again Rally as Bernanke Soothes by Sam Wardwell of Pioneer Investments

Fed Chairman Ben Bernanke’s congressional testimony got more headlines, but Detroit’s long-anticipated formal filing for Chapter 9 bankruptcy was by far the more important development. Billions of dollars of losses will be imposed on general obligation bondholders and/or retired employees.

2013-07-24 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

The secular low in bond yields has yet to be recorded. This assessment for a continuing pattern of lower yields in the quarters ahead is clearly a minority view, as the recent selling of all types of bond products attest. The rise in long term yields over the last several months was accelerated by the recent Federal Reserve announcement that it would be “tapering” its purchases of Treasury and mortgage-backed securities. This has convinced many bond market participants that the low in long rates is in the past.

2013-07-24 Bursting of the Bond Bubble by Clyde Kendzierski of Financial Solutions Group

Our April newsletter focused on the extreme overvaluation in the bond market. I argued that money market funds (or cash) were likely to outperform bonds and bond funds over the next decade. In May I applied the same logic to US stock prices and the inherent fallacy in the prevailing TINA (“there is no alternative” to stocks) hypothesis. Although stocks are likely to outperform bonds over the next decade, both asset classes remain seriously overvalued. In a world of overvalued assets, zero return looks much better than large potential losses even when that means foregoing transitory

2013-07-23 Emerging Europe: Regional Economic Review Q2 2013 by Team of Thomas White International

Trimming its forecast for global growth, the International Monetary Fund’s mid-year assessment of the world economy highlighted the slowdown in emerging economies such as Russia and recessionary conditions in the Euro-zone. Still, the recent surge in factory production and rise in new orders brought a whiff of optimism to emerging European markets such as Poland, the Czech Republic, and Hungary, which have been reeling under a prolonged downturn due to weak demand from the Euro-zone.

2013-07-23 You Thought It Was Hot Outside... by Blaine Rollins of 361 Capital

You thought it was hot outside? Wait until you see the weekly cash inflows into U.S. Equities... Funds that hold only U.S. stocks gained $15.58 billion in new cash, the most since June 2008. ETFs that hold domestic equities attracted $12.45 billion of those gains.

2013-07-22 Middle East/Africa: Regional Economic Review Q2 2013 by Team of Thomas White International

Moderate growth is anticipated in Middle-East and North Africa (MENA) region as the International Monetary Fund (IMF) notes that economic expansion in the oil exporting countries has slowed down due to subdued global oil demand. While oil importing countries are expected to make a slight recovery, nations in transition are facing complex socio-political issues, which could further delay their recovery.

2013-07-19 Fixed Income Outlook by Team of Osterweis Capital Management

The question we keep asking is “Will the real Fed mandate, please stand up?” The Federal Reserve (the Fed) traditionally is charged with keeping inflation in check, but it also has a second mandate to ensure full employment. This dual mandate can occasionally create general confusion as to what is the best policy at a given time and which policy goal the Fed is trying to achieve. Today, we are at a juncture where the Fed’s mandates may not clearly align with stated future monetary actions.

2013-07-19 European Equities: Beyond the Headlines by Philippe Brugere-Trelat of Franklin Templeton Investments

It’s fairly easy for investors to find reasons to shun European equities. While struggles in some Eurozone “periphery” countries continue to make eye-catching headlines, the broader story of Europe is far less fatalistic, according to Mutual Series Executive Vice President Philippe Brugere-Trelat, who manages the Mutual European Fund, Mutual Global Discovery Fund and Mutual International Fund. When it comes to Europe, he says one shouldn’t throw out the baby with the bathwater, so to speak.

2013-07-19 Challenging a Long-Held Assumption about Commodities by Frank Holmes of U.S. Global Investors

It is widely accepted that China spurred higher commodity prices in the past decade. And if the country was the force behind the boom, then the assumption is that China’s lower, but still healthy growth will be a drag on commodity prices. But recent research challenges this assumption.

2013-07-16 Don't Be Deceived by the Deficit Dip by Milton Ezrati of Lord Abbett

Recent budget reports have been encouraging. Revenues are rising faster than originally expected, and deficits are running lower. Some of this improvement is real, but, sadly, not all of it.

2013-07-16 Investment Bulletin: Global Equity Strategy July by Team of Bedlam Asset Management

For the first half of the year, the 17.7% gain by the portfolio was 390 basis points better than the index; during June, market panic over potential changes in Fed policy resulted in a 3.0% fall in the index, with the portfolio down by a similar amount. US bond funds suffered a record $58 billion outflow during the month, 2%of their assets.

2013-07-15 Rock-A-Bye Baby by John Hussman of Hussman Funds

I’ve always thought that singing “Rock-a-bye baby” offers a bizarre lesson to our young, encouraging them to be lulled gently to sleep by describing a scene that should have them wide-eyed with terror.

2013-07-12 China's Very Relative Malaise by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at “China’s Very Relative Malaise”, an observation which he describes as “a vaguely uneasy feeling that seemed to be shared by most (Chinese) but not always for the same reasons.”

2013-07-12 Weekly Economic Commentary by Team of Northern Trust

The view of Spain’s economy from the ground is no prettier than it is from distance. Not all forward guidance is created equal. China’s suspension of key economic data raises, not quells, concern.

2013-07-12 Commodities 2013 Halftime Report: A Time to Mine for Opportunity? by Frank Holmes of U.S. Global Investors

It was a challenging first half of the year for most commodities, with only two resources we track on our Periodic Table of Commodities Returns rising in value. Natural gas and oil rose 6.5 percent and 5 percent, respectively, while silver lost a third of its value and gold lost a quarter of its price from the beginning of the year.

2013-07-12 Calming Downand Changing Focus by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Markets are calming and investors seem to be focusing on fundamentals againa nice change from recent history. The bar is relatively low for earnings season but focus will be on the commentary surrounding releases. We believe more sideways movement in both US equities and Treasury yields could prevail over the next couple of months, with summer months muting action; but remain optimistic about stocks longer-term. Likewise, Japan could tread water until new elections are held, but we believe the eurozone provides opportunities that should be looked into at the expense of investments in China.

2013-07-11 Turmoil and Transition in China by Scott Minerd of Guggenheim Partners

Tensions in Asia are rising, as China attempts to move toward a more market driven economy. This, combined with the ongoing ultra loose monetary conditions in Japan, has elevated the threat of a financial crisis in the region between now and the end of 2013.

2013-07-11 Prepare for the 1-2 Punch of Declining Earnings and Multiple Contraction by JJ Abodeely of Sitka Pacific Capital Management

The market today is counting on continued earnings growth driven in large part by ongoing quantitative easing without inflationary consequences. In a recent strategy letter, we show that the market’s expectation for future earnings growth is overly optimistic based on the fact that earnings are currently more than 40% above the long-term trend and mean-reversion and history suggests that real earnings are likely to decline over the next 5 years.

2013-07-09 ENERGY MLPs: A Suitable and Sustainable Asset Class by Sponsored Content from ClearBridge Investments (Article)

Greater capitalization. More liquidity. The energy MLP market has grown steadily, with good reason: our constant demand for energy. While oil prices go up and down, volume has stayed consistent. Production is increasing. And the infrastructure is needed to support it. Add some risk, and you’ve got an investment which could fit in a diversified portfolio.

2013-07-09 High Yield Munis: Risky Business by Ryan Davis, Jingwei Lei of Fortigent

We shine a spotlight on the obscure market of high yield municipals this week. In the current fixed income selloff, the market has been among the worst performing with a drawdown of 6.1%. Investors could not get enough of the sector in 2012 as they chased yield; the Barclays high yield muni index returned over 18%. Investor sentiment has turned sharply, however, on this asset class. Funds experienced significant outflows over the last couple of months, which is especially troubling for a small and retail dominated market. Why did this onetime darling asset turn into a pariah so abruptly?

2013-07-09 The Fed's Bind: Tapering, Timetables and Turmoil by Scott Minerd of Guggenheim Partners

There are striking parallels between the dramatic recent sell-off in U.S. Treasuries and the Great Bond Crash of 1994. But the summer of volatility now facing financial markets is no doomsday scenario. Instead, it puts the U.S. Federal Reserve in a bind. Higher interest rates will reduce housing affordability, which is especially troublesome since housing is the primary locomotive of U.S. economic growth.

2013-07-09 Jobs, the Fed, and Long-Term Interest Rates by Scott Brown of Raymond James

The June Employment report showed a labor market that is far from fully recovered, but appears to be well on its way. Federal Reserve policymakers are not going to react to any one report, but the trend in nonfarm payrolls has remained strong. Is that enough to ease up on the gas pedal? Perhaps. However, it should still be some time before the Fed has to hit the brakes.

2013-07-08 Obamacare and Stocks by Brian Wesbury, Bob Stein of First Trust Advisors

For much of the past four years, we have felt like psychologists who constantly must help hypochondriacs over their fear of one thing after another. There is no reason to remind everyone of “the list” it’s been endless, but the stock market and the economy have moved consistently higher despite these fears.

2013-07-05 The Asian Giant Stampeding into Gold by Frank Holmes of U.S. Global Investors

In this environment, gold should remain attractive. However, as the West flees the precious metal, another set of gold buyers has come forward with the aim to preserve wealth. Take a look at the chart below which shows total gold production compared to the gold deliveries on the COMEX and the Shanghai Gold Exchange.

2013-07-03 For Abenomics, the Hard Part Is Still to Come by Guy Bruten of AllianceBernstein

Prime Minister Shinzo Abe’s “Abenomics” program, designed to revive Japan’s economy, was a big success in its first five months, easily surpassing low expectations. But it’s drifted off course since it began, and the going is sure to get tougher from here. Still, it’s too early to write off this policy experiment.

2013-07-02 Do Dividend-Paying Stocks Have Staying Power? by Nanette Abuhoff Jacobson of Hartford Funds

The role of dividend-paying stocks in a diversified portfolio and the environment in which they are likely to outperform the broader equity market are often topics of debate among investors. I believe there are a number of reasons why a strategic allocation to dividend-paying stocks makes sense.

2013-07-01 The Golden Cycle by Peter Schiff of Euro Pacific Capital

The New York Times had the definitive take on the vicious sell off in gold. To summarize one of their articles: Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels.

2013-07-01 Headlines, Patience, Pensions, Tax Collections, Income and Send a Letter! by Gregg Bienstock of Lumesis

Muni Tax Exemption Justification Please: Back in the news. As Congress makes another run at overhauling the tax code, the Senate Finance Committee had a pretty good idea let’s start with a “blank slate” when it comes to deductions, exemptions and credits. The Committee has asked Senators for proposals around deductions and exemptions and to support the same.

2013-07-01 All of the Above by John Hussman of Hussman Funds

Market internals remain broken here. That may change, and it might even change soon. Until it does, we would be inclined to tread carefully, because this may be the highest level investors will see on the S&P 500 for quite some time. Choosing between potential catalysts - credit strains in China, the risk of disappointing earnings, or economic weakness, the incoming data is consistent with one conclusion: all of the above.

2013-06-28 Reviewing the Dividend Sell-Off by Jeff Middleswart of Ranger International

Higher yielding stocks outperformed for much of this year, but fell sharply with the pop in interest rates.

2013-06-28 Stay the Course As Mixed Signals Move Markets by Frank Holmes of U.S. Global Investors

We maintain that gold is in extremely oversold territory and mathematically due for a reversal toward the mean. Yet when gold prices plummet, fear takes over and some investors forget the fundamental reasons to own gold: Gold is a portfolio diversifier and a store of value. It is a finite resource with increasing global demand.

2013-06-28 China's Near-Term Macro Outlook by Team of Nomura Asset Management

The key message from the recent Shibor volatility is that the Chinese government is now willing to tolerate slower near-term growth while carrying out reform to rebalance the economy for long term sustainable growth. The diminishing demographic dividend as a result of the aging population and One-Child Policy will result in slower potential growth for the economy.

2013-06-28 The New, Old Normal by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

We believe the recent volatility will be relatively short lived and provides an opportunity for investors who need to adjust their portfolios to do sowith long-term goals in mind. The risks associated with fixed income have been illustrated over the past couple of weeks and rising yields have caused equity volatility and a pullback. But we remain optimistic about US equities as well as developed international markets; particularly relative to emerging markets.

2013-06-28 Inflation Lags Monetary Expansion: Prepare to be Swindled by JJ Abodeely of Sitka Pacific Capital Management

In May 1977, the consumer price index (CPI), which measures a basket of consumer goods in the U.S. economy, had risen 6.7% from the year before. The indexes had doubled over the previous 15 years, and by 1977 investors were fully aware that the rate of change was increasingi.e. the inflation rate was spiraling higher. By then, this inflationary awareness had worked its way into every corner of the financial markets, as commodities, gold and interest rates rose, and the stock market remained in a deep funk.

2013-06-28 Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management

For the first five months of the year the global portfolio enjoyed a net gain of 21.0%, 350 basis points better than the index, edging ahead further in May. Recent smoke signals from the Federal Reserve Bank implying - subject to a wide range of get-out clauses that less money might be put into the system, have caused market hysterics. Bond investors have rightly been stampeding out, ending a 32-year old bull market. Its longevity had caused dangerous complacency and overexposure, especially to illiquid and expensive emerging market debt through open-ended vehicles.

2013-06-27 Policy-Induced Volatility Continues by Scott Minerd of Guggenheim Partners

The recent bond market collapse is reminiscent of the Great Crash of 1994. Further pressure on the economy due to rising interest rates could cause the Fed to revisit its timetable for QE.

2013-06-27 Commodities: Still Worried About Supply by Doug Ramsey of Leuthold Weeden Capital Management

Gold’s 2013 fall has been the lone development in the two-year commodities decline that seems to have captured much attention. The CRB Raw Industrialsa spot index of 13 commodities exhibiting a much tighter linkage to the global economy than goldpeaked in mid-April 2011, coinciding with the bull market relative strength highs in the both S&P 500 Energy and Materials sectors and the “absolute” price highs in the MSCI stock market indexes of commodity exporters Brazil, Canada and Russia.

2013-06-27 Currency Wars: A Case for the U.S. Dollar by Gibson Smith, Chris Diaz of Janus Capital Group

In recent years, the U.S. dollar has tended to lose value when the global economy improves, as investors are more willing to take risks. We believe that pattern has changed and that the U.S. dollar will outperform the Japanese yen, the euro and the British pound over the medium term, even if the global economy continues to improve. In our view, current conditions justify a material deviation in currency exposure compared with certain global fixed income benchmarks, such as the Barclays Global Aggregate Bond Index.

2013-06-26 Win Ben's Money by Bill Smead of Smead Capital Management

From 1997 to 2003 a show called,” Win Ben Stein’s Money” ran on the Comedy Central Network. The last five years, investors in the US have been playing a very similar game we are calling, “Win Ben’s Money”. The new game stars Federal Reserve Board Chairman, Ben Bernanke. The object is to win the money the Fed creates via Quantitative Easing (QE) through macroeconomic analysis. In this missive, we will look at how these investors chased Ben’s Money and consider what to do going forward.

2013-06-26 June 2013 Float Shrink Review by TrimTabs Asset Management of AdvisorShares

Sharing some commentary from our friends at TrimTabs, which summarizes a few changes in the investment landscape that may give you an indication of what to expect following May’s “sell in May and go away” trading adage. TrimTabs research focuses on fund flows and float shrink. They believe the market is heavily influenced by what people and institutions are doing with their dollars. You can read more about the research behind float shrink at AdvisorShares.com.

2013-06-26 Trampled By the Crowd? Logic Briefly Abandoned Creates Opportunity by Scott Colyer of Advisors Asset Management

The past two week slide in asset prices has caused a resurgence of doomsday pundits warning of impending calamity. The negative interpretation of Fed Chairman Bernanke’s comments regarding the U.S.economy’s future upgraded prospects is simply not logical. A careful review of what Bernanke said at his press conference was entirely consistent with what the Fed has said and done in the past.

2013-06-26 2 Ways to Play the US Energy Boom by Russ Koesterich of iShares Blog

Russ offers two ideas one perhaps obvious and one perhaps not for investors looking to potentially benefit from the US energy renaissance.

2013-06-24 The Fed Unintentionally Lays an Egg by Bob Doll of Nuveen Asset Management

U.S. equities declined last week as the S&P 500 ended down 2.09%.1 The S&P suffered the first back-to-back one-day declines of more than 1% since last November. Global equities and bonds were also hit hard, with large sell-offs in emerging market assets, commodities and commodity currencies. Concerns about the fallout from dampened Fed policy accommodation are driving the weakness.

2013-06-21 Weekly Economic Commentary by Team of Northern Trust

Today, the relative health of banks around the world goes a long way toward explaining differences in economic fortunes. As policy-makers seek ways to improve growth, addressing structural issues in their financial systems may be more effective than monetary or fiscal stimulus.

2013-06-21 What's an Investor to do in Markets like These? by Frank Holmes of U.S. Global Investors

What should an investor do after a day like yesterday? Stay calm and invest on, as I believe there is opportunity in picking up what the bears left behind. Here are a few ideas to ponder.

2013-06-19 The Trouble with Tapering by Scott Minerd of Guggenheim Partners

Rising interest rates are beginning to put pressure on the recovery in the housing market, which will affect economic output. This reduces the likelihood that the Fed will taper QE in 2013, and could even lead it to signal a possible expansion or extension of the current policies.

2013-06-19 Changes in our Asset Allocation by Gregory Hahn of Winthrop Capital Management

We believe that valuations in publicly traded securities are stretched, and, although we have seen a move higher in interest rates and stocks have sold off from their high levels, investors are faced with choices that offer generally lower expected returns based on historic measures of return. Today, with the S&P 500 hitting 1650 and the yield on the 10 year US Treasury Note moving abruptly from 1.70% to 2.15%, there are generally two schools of thought on the minds of investors.

2013-06-19 Pride: In the Name of the US Manufacturing/Energy Renaissance by Liz Ann Sonders of Charles Schwab

Manufacturing/energy renaissance in the United States is a long-term theme; not a short-term trade but it’s underway. The list of companies "reshoring" to the United States are powerful and growing. Can the United States become a global exporting powerhouse?

2013-06-18 Three Time Bombs that Threaten Retirement Plans by Dan Richards (Article)

Three poorly understood developments threaten secure retirements ? without wishing to be alarmist, I will call them time bombs. These developments will change the retirement dynamic for many Americans: increasing lifespans, escalating medical costs as people age and safe withdrawal rates on savings dropping from historical levels.

2013-06-18 The Snowden Affair by Bill O'Grady of Confluence Investment Management

Over the past two weeks, revelations published in The Guardian and the Washington Post reported on a massive data gathering program that the National Security Agency (NSA) has been operating since 2001. The NSA, created during the Truman administration, mostly monitors signal intelligence and is the primary cryptographer for the U.S. government.

2013-06-17 2013 Midyear Economic Update -- Another False Dawn? by Paul Kasriel of Econtrarian, LLC

We’ve seen this movie before since midyear 2009, haven’t we? The pace of economic activity begins to quicken and it looks as though a full-throated cyclical expansion might finally be at hand, only to have the economy slip back into the doldrums. Nominal private domestic spending on currently-produced goods and services grew in the first quarter at an annualized rate of 5.5% compared to 3.4% in the previous quarter. Consumer spending accelerated, housing sales picked up and business spending on equipment and software continued to grow at a healthy pace.

2013-06-17 Equities: As Companies Reinvest, the Long-Term View Turns Bullish by Ron Sloan of Invesco

This is the third in a three-part series on the economy, earnings and equities. The first two posts examined the US Federal Reserve’s gross domestic product (GDP) goals and how they set the stage for businesses to increase their capital expenditures. This post discusses the US manufacturing resurgence and the outlook for equities.

2013-06-14 Looking for Growth? Go Small and Global by Liliana Castillo Dearth, Bruce Aronow of AllianceBernstein

In the hunt for growth in today’s low-growth world, up-and-coming small- and mid-sized companies are a good place to start. But you need to look everywhere, from Indiana to Indonesia.

2013-06-14 Global Small Cap Investing: Unconstrained Opportunities by Blake Pontius of William Blair

Equity asset allocations have become more global in recent years as investors have sought to reduce the long standing home country bias in their portfolios. Further propelling this trend has been the growing aversion to traditional asset class structures and indeed, conventional asset class definitions, in the aftermath of the 2008-2009 global fi nancial crisis. Against this backdrop, global equity strategies have continued to garner asset fl ows in Europe and have slowly begun to gain traction in the U.S. after years of tepid demand.

2013-06-14 A Sweet Find on an African Adventure by Frank Holmes of U.S. Global Investors

The heart of Africa has been beating strong in recent years due to elevated commodity prices and resilient domestic demand, despite the global economic slowdown. Among the sub-Saharan African countries, Sierra Leone was the fastest growing country last year, according to the World Bank. Its economy experienced growth that is as rare today as Fancy Red diamonds. GDP increased a whopping 18 percent.

2013-06-13 The Instability of Stability by Scott Minerd of Guggenheim Partners

Hyman Minsky’s scholarship holds valuable lessons for the current dynamic in the economy. The Fed, via QE, continues to induce speculative buying in the Treasury market, which is having the effect of destabilizing a number of asset classes.

2013-06-13 Securing a Lasting Economic Recovery by Team of Northern Trust

According to the National Bureau of Economic Research, business expansions have averaged 59 months in the past 11 business cycles. June 2013 marks the fourth birthday of the current U.S. economic recovery, and this one seems very likely to be above average on this score.

2013-06-12 Who Is Your Daddy and What Does He Do? by Cole Smead of Smead Capital Management

In the 1990 movie Kindergarten Cop, Arnold Schwarzenegger portrayed a police officer who goes undercover as John Kimble, a kindergarten teacher in Astoria, OR. Early in the movie, Mr. Kimble tells his class they are going to play a game called “Who is your daddy and what does he do?” After a myriad of answers, one of the children asks him if his ensuing headache is a tumor. Kimble replies “It’s not a tumor.” We at Smead Capital Management believe this was not only one of the more comical moments of Kindergarten Cop, but also a great question to ponder in today&rs

2013-06-11 Gundlach ? Don’t Sell Your Bonds by Robert Huebscher (Article)

Don’t sell your bonds just yet, according to Jeffrey Gundlach. Global economic growth is slowing, he said, and the U.S. will be competing for a larger slice of a shrinking worldwide pie. A weaker economy dims the prospects for higher interest rates. The benchmark 10-year Treasury yield ? currently 2.08% ? will be 1.70% by the end of the year, according to Gundlach, providing profits for holders of long-term bonds.

2013-06-11 How Asia's Growth Transitions and Policy Experiments Are Shaping the Global Outlook by Ramin Toloui, Tomoya Masanao, Robert Mead of PIMCO

Our view is that Chinese GDP growth will downshift, averaging 6%-7.5% for the next five years as net exports and investment are reaching their limits. In Asia, Japan is perhaps the economy closest to the “T-junction” described in PIMCO’s global secular outlook: The destination of Japan’s journey looks increasingly uncertain, with multiple potential outcomes that could stabilize or destabilize the global economy and markets.

2013-06-10 2009 vs. 2013 by John Hussman of Hussman Funds

One of the most strongly held beliefs of investors here is the notion that it is inappropriate to “Fight the Fed” reflecting the view that Federal Reserve easing is sufficient to keep stocks not only elevated, but rising. What’s baffling about this is that the last two 50% market declines both the 2001-2002 plunge and the 2008-2009 plunge occurred in environments of aggressive, persistent Federal Reserve easing.

2013-06-10 What's Capping Capital Spending? by Milton Ezrati of Lord Abbett

Now that housing has at last begun to make a contribution to the economic recovery, the pace of capital spending seems to have ebbed. To some extent, the slowed pace of such spending reasonably reflects the economy’s still-more-than-ample production capacity. Reasonable as this seems, the slowdown does come as a disappointing change from the unusually strong growth earlier in the recovery. Now, looking forward, the prospect is for this slowed growth to continue, for a while at least.

2013-06-07 As Economy Heats Up, Will Commodities? by Frank Holmes of U.S. Global Investors

Don’t wait for the Fed to officially raise rates, as research shows that investors get the most benefit from materials and energy stocks by getting in now

2013-06-06 The Fed's Dilemma by Scott Minerd of Guggenheim Partners

Market volatility is rising as the Fed continues with its asset purchase program. The economy also appears increasingly vulnerable to a rise in interest rates, which would have an adverse effect on housing in particular.

2013-06-06 The Risk of Government Policies and the Rationing of Retirement by Jason Hsu of Research Affiliates

In late April, a group of leading economists and investment practitioners assembled in La Jolla, California, for Research Affiliates’ 2013 Advisory Panel. Our theme this year touched on two topics that have been front-and-center in recent public debates: the risk of government intervention and the potential rationing of retirement.

2013-06-06 More Than a Feeling by Team of AdvisorShares

Tangible signs of fundamental weakness are appearing everywhere, yet financial market participants are simply choosing to ignore these signs. There remains a significant disconnect between the real economy and financial markets. Read this paper by Peritus Asset Management to learn how to navigate the weak fundamental picture in what they believe to be the beginning of a 15-20 year positive technical backdrop, which will put yield generating assets, such as high yield bonds, in the sweet spot.

2013-06-06 June Economic Update by Justin Anderson of Cambridge Advisors

Stocks sold off on the last day of the month but still managed to finish higher in May with the large-cap S&P 500 index up 2.2% and the small-cap Russell 2000 up 4.0%. International stocks finished the month lower with the MSCI EAFE index down -2.9%. Bond prices came under significant pressure as yields rose after Fed Chairman Ben Bernanke hinted that Quantitative Easing may be tapered off sooner than the market expected. The 10-Year US Treasury Yield rose sharply to end the month at 2.16%.

2013-06-05 Certainty, Rates and the Year Ahead by Peritus Asset Management of AdvisorShares

The government tells us not to worry, as the Federal Reserve comes to rescue with QE-Forever. Certainty with fiscal policy doesn’t seem to change the demand equation and cheapened money doesn’t do anything if demand isn’t present. Treasury rates remain at 0% for the foreseeable future making yield hard to find. Read this position paper by Peritus Asset Management scrutinizing how all this has come to pass and what indicators are foretelling the near future effects on the high yield asset class.

2013-06-05 The Canary in the Coal Mine by Scott Minerd of Guggenheim Partners

Ongoing monetary stimulus is leading to heightened volatility, and the bull market which has been in place since 2009 is becoming overextended. The recent string of surprise downside moves in markets may be the canary in the coal mine for global investors.

2013-06-05 Driving with the Doors Off, Part II by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

About ten months ago, I wrote about my new bulldozer-yellow Jeep Wrangler, comparing the sensation of Driving with the Doors Off to investing in the New Normal, or as I like to call it, a “slow growth for as far as the eyes can see” environment. While the pavement had always been a mere twelve inches beneath my feet, Driving with The Doors Off made the experience far more real, far more alive, and far more aware of the risks that had always been there. In the New Normal it feels like we are always and everywhere just one small pothole away from the next economic disaster.

2013-06-04 Woody Brock’s Challenge to Krugman and the Keynesians by Bob Veres (Article)

A polarizing choice confronts policymakers. Either they side with Paul Krugman and the Keynesians, and advocate for aggressive fiscal measures to stimulate America’s economic growth rate, or they align themselves with the so-called austerians, who argue that budget cutbacks are necessary to eliminate deficits. A third option is rarely discussed. Its most outspoken proponent, Horace “Woody” Brock, says that America should continue to borrow, but spend wisely ? and develop new policy instruments that would eliminate asset bubbles and stimulate economic activity.

2013-06-04 Vincent Reinhart on Debt and Growth in the U.S. and Japan by Robert Huebscher (Article)

High debt levels translate to slower growth, according to Vincent Reinhart. That conclusion will be disheartening to those who jumped on the errors several University of Massachusetts scholars found last month in Carmen Reinhart (Vincent’s wife) and Ken Rogoff’s research. But Vincent Reinhart is the author, along with his wife and Rogoff, of a study published in 2012 that documented the degree to which high debt-to-GDP levels correlate with slower economic growth in developed countries.

2013-06-04 Wounded Heart by Bill Gross of PIMCO

Joseph Schumpeter, the originator of the phrase “creative destruction,” authored a less well-known corollary at some point in the 1930s. “Profit,” he wrote, “is temporary by nature: It will vanish in the subsequent process of competition and adaptation.” And so it has, certainly at the micro level for which his remark was obviously intended. Once proud, seemingly indestructible capitalistic giants have seen their profits fall short of “everlasting” and exhibited a far more ephemeral character.

2013-06-04 Finding Healthy Stocks in Europe's Troubled Landscape by Tawhid Ali of AllianceBernstein

European equity markets continue to face severe stress as the continent struggles to contain fallout from the sovereign-debt crisis. Yet this seemingly toxic environment is creating some exceptional investment opportunities in relatively healthy companies that can control their own destinies.

2013-06-03 And That's the Week That Was by Ron Brounes of Brounes & Associates

And the streak continues. (The monthly winning streak that is.) While stocks have drifted lower each of the past two weeks, the Dow has surged for six straight months and the S&P 500 now stands at seven and counting. In fact, much of the week’s losses came in the final hour(s) of trading as investors took profits for the month and positioned their portfolios for the summer. No news from the Fed yet, but the bond debates continue. Housing remains strong on the economic front, but next week’s data will go a long way toward setting the tone for the future.

2013-06-03 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Recent history has shown us that when investors feel “prosperous” their spending habits become more robust. Sometimes they even throw caution to the wind and splurge on discretionary purchases they previously sought to avoid or postpone. Such is the nature of a rapidly changing landscape that what previously had been a vulnerability now becomes a necessity. The impact of financial decision-making can have a manic effect upon virtually any part of the world. This is why crises become epidemics, and cures become panacea.

2013-06-03 Defense and Selective Offense by Mark Kiesel of PIMCO

Given the market’s newfound risk appetite for credit and less attractive valuations, we are taking advantage of global credit market liquidity in an effort to reduce our overall risk posture. In our selective offense approach, we continue to favor U.S. housing and housing-related areas, in addition to select investments in the energy, pipeline, specialty finance, gaming, hospitals, and airline and auto industries, given the more positive fundamental outlook for these sectors.

2013-06-03 US Balance Sheet Repair: More Difficult This Time by John Greenwood of Invesco

In most developed economies, the post-war years since 1945 saw sustained business cycle expansions alternating with shorter recessions. At the end of each expansion, authorities dealt with inflation by raising interest rates and slowing credit growth. When inflation subsided, interest rates were lowered again.

2013-06-01 Central Bankers Gone Wild by John Mauldin of Millennium Wave Advisors

For the last two weeks we have focused on the problems facing Japan, and such is the importance of Japan to the world economy that this week we will once again turn to the Land of the Rising Sun. I will try to summarize the situation facing the Japanese. This is critical to understand, because they are determined to share their problems with the world, and we will have no choice but to deal with them. Japan is going to affect your economy and your investments, no matter where you live; Japan is that important.

2013-05-31 Into the Woods by Tony Crescenzi, Tadashi Kakuchi, Ben Emons of PIMCO

Excess liquidity, falling net issuance and higher correlations among assets complicate the eventual exit that the Federal Reserve and other central banks must make from their extraordinary policies. The Bank of Japan’s ideology has completely changed to “tackling deflation” from “tolerating deflation.” The key focus in the coming months will be how private sectors react. Investors who depend chiefly upon central bank activism may put themselves at risk. They may need to hedge volatility by ensuring their investments are built more on solid fundamentals and reasona

2013-05-31 What's the Answer to Unprecedented Policies and Ultralow Rates? by Frank Holmes of U.S. Global Investors

So what’s the answer to unprecedented central bank policies that have been driving stocks higher and ultralow rates? I believe investors need to stick to a strategy that includes dividend-paying stocks that offer the opportunity for both income and growth.

2013-05-30 And That's the Week That Was by Ron Brounes of Brounes & Associates

All good things must come to an end (hopefully just temporarily). After a nice month-long weekly winning streak, stocks gave back some ground as investors over-analyzed Fed comments and worried about future monetary policy. (The stimulus will end at some pointthat’s not necessarily a bad thing.) Japan took the over-analysis the hardest as its market suffered a serious setback, though the rally for the year had been significant and some watchers expected a pullback at some point (just not all in one day).

2013-05-30 UK Secular Outlook - Morphing into the Carney Era by Mike Amey of PIMCO

The UK remains in a “stable disequilibrium”, one that needs to either transform into growing economy with narrowing income differentials or risk a more aggressive policy response. Financial repression, protection of real purchasing power, tail risks of accelerated currency weakness and price sensitivity will likely dominate UK markets over the secular horizon. Investors may consider progressively reducing exposure to assets susceptible to tail risks. Higher quality short-dated income-generating, inflation-hedging and non-sterling assets remain attractive.

2013-05-30 Are We There Yet? by Vitaliy Katsenelson of Investment Management Associates

I started writing my first book, Active Value Investing: Making Money in Range-Bound Markets, in 2005; finished it in 2007; and published the second, an abridged version of the first (The Little Book of Sideways Markets), in 2010. In both books I made the case that there is a very high probability that we are in the midst of a secular sideways market a market that goes up and down, with a lot of cyclical volatility, but ends up going nowhere for a long time.

2013-05-30 Reflation in the Balance by Richard Clarida of PIMCO

Four of the world’s major central banks are now “all in” when it comes to ballooning their balance sheets in correlated, if not coordinated, efforts to achieve escape velocity in their economies. In accounting for the impact of quantitative easing on two key balance sheets, we are able to interpret, monitor and calibrate the programs currently in place. This in turn can help us prepare portfolios if or when sentiments and inflation expectations shift.

2013-05-29 Weekly Market Commentary by Team of Tuttle Tactical Management

Last week we talked about the market being overbought in the short term, so the three day selloff (Wednesday-Friday) was to be expected. The media will blame the Fed but they didn’t tell us anything we didn’t already know. Bottom line, when the market gets extremely overbought traders will use anything and everything as an excuse to take profits. Interestingly, last week was the first streak of three down days this year. The S&P 500 seemed to find some support at 1640.

2013-05-28 Is Austerity a Bad Idea? by Michael Edesess (Article)

There are strong arguments for and against both austerity and Keynesianism. However, some recent writings should make us remember to question the terms of the argument itself. While evidence-based economics is important, it can also mislead.

2013-05-28 Europe's Crossroads: The End of the Muddle Through? by Andrew Balls of PIMCO

The eurozone may be nearing a critical junction, owing to its weak growth, weak institutions, debt dynamics and domestic and cross-border political challenges. The German government may take a more active leadership role after its national election, but it is more likely it will continue with piecemeal measures. Considering the current low yield environment and ample central bank liquidity, it is important to focus on absolute yield levels and returns, and consider global alternatives such as emerging market securities and currency exposure.

2013-05-28 Watching Risk-Reward Ratios: Economic Data Still PositiveBut Rate Is Slowing by Rob Stein of Astor Asset Management

Risk-reward ratios are on our radar screen these days as we review the most recent economic data against the backdrop of recent market movement. This is not to say that we are in any way suggesting a top, a bear market, or even that a correction is on the horizon, even taking into account this past week’s movement and volatilityalthough each of these scenarios remains a possibility. At this point, though, we do have some minor concerns about risk-reward in the markets going forward, suggesting that a slight adjustment in beta or equity exposure from current levels is prudent.

2013-05-28 You Now Have All of Our Attention by Blaine Rollins of 361 Capital

Mr. Bernanke’s opening statement was just what the market wanted to hear... "Premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending this economic recovery and causing inflation to fall further".

2013-05-25 The Mother of All Painted-In Corners by John Mauldin of Millennium Wave Advisors

Japan has painted itself into the mother all corners. There will be no clean or easy exit. There is going to be massive economic pain as they the Japanese try and find a way out of their problems, and sadly, the pain will not be confined to Japan. This will be the true test of the theories of neo-Keynesianism writ large. Japan is going to print and monetize and spend more than almost any observer can currently imagine. You like what Paul Krugman prescribes? You think he makes sense? You (we all!) are going to be participants in a real-world experiment on how that works out.

2013-05-24 The Love Trade for Gold is Still On! by Frank Holmes of U.S. Global Investors

The more important demand for gold, in my opinion, comes from the enduring Love Trade, as countries like China and India buy the precious metal out of love and tradition.

2013-05-24 Bifurcation Blues by Herbert and Randall Abramson of Trapeze Asset Management

Bifurcation. A very technical sounding word. It merely means “a division into two parts”, which is what we are witnessing in many areas related to investment, both macro and micro. And it is exhibiting to value investors those areas to avoid and the most attractive to embrace. And giving rise to a wide range of disparate opinions among economic and investment professionals as to what outcomes are likely. Needless to say, we have our own strong views.

2013-05-24 Ten High Yield Market Takeaways by Mark Hudoff of Hotchkis & WIley

Mark Hudoff, portfolio manager of the Hotchkis & Wiley High Yield strategy, shares his thoughts on the current opportunities and challenges in the high yield marketplace.

2013-05-23 The Labor Force Participation Puzzle by David Kelly of J.P. Morgan Funds

Slow growth and mediocre job creation have been common themes used to describe the U.S. economy in recent years, as both the labor market and broader economy failed to produce the snap-back rebound many expected following the deep recession seen in 2008 & 2009. Despite that lackluster growth, the unemployment rate has now fallen to 7.5% after peaking at 10% in October of 2009, a much faster decline than expected, given average employment growth of less than 125,000 per month.

2013-05-22 Cyprus and the Eurozone...Still Stuck in the Middle by Gregory Hahn of Winthrop Capital Management

The debt crisis in the Eurozone turned another chapter as Cyprus finally reached the point of requiring a bailout from the European Union. The wisdom of Gerry Rafferty’s hit song “Stuck in the Middle with You” which was written in 1973, rings true today as we watch the EU and the European Central Bank navigate the mess in Europe. With each attempt at containment, there appears some plot twist, the proposed Cyprus bank bailout is no exception. While the bailout of Cyprus and its banks is not large in size, only 10 billion, relative to the Cyprus economy, it is significant.

2013-05-22 Asia Brief: China's Car Fleet The Largest in the World? by Edmund Harriss, James Weir of Guinness Atkinson Asset Management

Car sales in China have grown rapidly since 2009 and it is on course to outstrip the US in terms of the size of its car fleet by the end of this decade. This presents a major challenge to the Chinese government, which must balance its people’s happiness and political stability with economic development in an environment which has already been compromised. The momentum of demand for new passenger vehicles is likely to make air quality worse and Beijing has introduced emissions and efficiency standards to address the problem.

2013-05-22 Malaysia's Post-Election Investment Outlook by Scott Klimo of Saturna Capital

Earlier this year we identified ASEAN as the most attractive region within the emerging markets universe. That prediction has proved accurate. Market indices (USD returns) year-to-date through April in the Philippines, Thailand, and Indonesia are 23%, 22%, and 16%, respectively. Singapore (which we do not consider an emerging market) gained 6%, while Malaysia rose only 3.9%. So what’s the outlook for Malaysia?

2013-05-21 (Yawn)...As Equities Advance Another 2% by Bob Doll of Nuveen Asset Management

U.S. equities advanced again last week, with the S&P 500 increasing 2.1%. Global stocks are reaching new highs in this cycle and the U.S. market is at an all-time high. Bonds were hurt in the move, dragging credit down, while commodities fell slightly on weaker manufacturing data. The unrelenting equity rally and an environment without positive news about earnings and the economy is making many investors uncomfortable.

2013-05-21 Developed Europe: Regional Economic Review 1Q 2013 by Team of Thomas White International

After withdrawing into the background in late 2012, the Euro-zone sovereign debt crisis resurfaced in the first quarter with the Italian elections and Cyprus’ banking crisis. In late February, Italy’s national elections resulted in a fractured mandate, and Italians voted out the incumbent, the main architect of the country’s austerity and reforms agenda.

2013-05-21 Capitalism and Democracy by Bill O'Grady of Confluence Investment Management

In the Italian elections, the party that showed the strongest results was the Five Star Movement, led by the comedian Beppe Grillo. Despite this strong showing, the party failed to form a government and refused to participate in any coalitions. This decision not to participate in the political process has been exhibited by other protest groups, such as Occupy Wall Street, the Israeli Tent Movement, and the Spanish “Indignant” movement.

2013-05-21 Are Equity Investors Pushing the Gas Pedal Too Hard? by Norman Boersma of Franklin Templeton Investments

Whatever previous reticence investors may have had about equities last year seems to have evaporated and, with remarkable speed, turned into fear over having missed the equity rally. Some major market averages have accelerated at a pace some say is reckless, so as we head toward the mid-point of the year, Norm Boersma, CFA, chief investment officer of Templeton Global Equity Group, takes a look at reasons investors might continue to push the gas pedalor tap the brakes.

2013-05-20 Not in Kansas Anymore by John Hussman of Hussman Funds

Knowing where you are doesn’t mean that you’re leaving, but you should still know where you are.

2013-05-20 The President's Proposed Future Tax Changes and Some Questions About Past Ones by Andy Friedman of The Washington Update

The United States government has once again hit its borrowing limit. The government is permitted to borrow through May 18, after which it can continue to operate without additional borrowing for about three months. By fall, Congress will have to raise the debt limit to prevent the United States defaulting on outstanding debt.

2013-05-18 All Japan, All the Time by John Mauldin of Millennium Wave Advisors

This week we again focus on Japan. Their stock market has been on a tear, and their economy grew 3.5% last quarter. Is Abenomics really the answer to all their problems? Is it just a matter of turning the monetary dial a little higher and voila, there is growth? Why doesn’t everyone try that? And what would happen if they did?

2013-05-17 Making the Most of Equity Allocations by Andrew Pyne, Sabrina Callin of PIMCO

We believe slowing global growth and deleveraging are likely to result in lower long-term returns for equities. Traditional approaches to building equity portfolios may not be enough for investors to meet their return goals. We have found three complementary ways investors can enhance equity return potential: fundamental indexes, index-plus strategies and high active share stock selection approaches.

2013-05-17 Finding Opportunity Far and Near by Frank Holmes of U.S. Global Investors

Would it surprise you to learn that a vast majority of equity valuation models state that stocks should head much higher over the next five years?

2013-05-16 Saving for College: A Family Affair by Team of Franklin Templeton Investments

The language of personal finance isn’t especially racy, but “debt” certainly has taken on the negative tone of other “four-letter words.” Even so, with college costs on the rise and many parents feeling especially pinched in this challenging economic environment, student loans rather than college savings have become the solution for many.

2013-05-16 Hold Your Houses: The Housing Recovery May Take Longer Than You Think To Reach Consumers by Joshua Anderson, Emmanuel S. Sharef, Grover Burthey of PIMCO

New residential construction needs to double from 2012 levels to meet long-run stable demand, and the pace of that increase is critical. Consumer credit growth is hindered by strict lending standards, continued deleveraging and limits to mortgage equity withdrawal. As a result, the balance of mortgage debt is unlikely to meaningfully increase in the next 12-18 months, delaying a return of the virtuous consumer cycle.

2013-05-15 Is Japan's Sun Rising Again? by Kenichi Amaki of Matthews Asia

Japan’s stock market continues to rise while its currency heads in the other direction. Its new leaders, now enjoying high approval ratings, are battling deflation and trying to jump-start its economy with a new determination. This month Kenichi Amaki takes a look at what, if anything, is different this time.

2013-05-15 Consumers: The Great Sobriety by Milton Ezrati of Lord Abbett

Americans have cut debt, boosted savings, and held spending in checkall of which should aid the economy.

2013-05-14 Is Kyle Bass Wrong About Japan? by Robert Huebscher (Article)

It’s standard practice for short sellers to kick dirt on their targets, and Kyle Bass is doing just that by asserting that Japan’s economy is on the verge of a financial crisis. In a talk on May 3, he said that Japan’s demise is imminent. So far, though, Bass has been wrong ? and he has his detractors, who are far less certain of Japan’s destiny.

2013-05-14 Guide to Working with Monetary Napalm by Scott Colyer of Advisors Asset Management

Napalm is a highly incendiary form of jellied fuel. It was used extensively in the Vietnam War to quickly ignite massive fires over large areas of land. In the world of financial incendiaries, the Fed’s overwhelming monetary stimulus has ignited asset prices in the United States with the force and effectiveness of napalm. Is the fire short lived? Are the gains in asset prices temporary or can they be believed? Are the housing and stock markets on fire just because of the Fed’s quantitative easing (QE) or could there be a much more fundamental reason?

2013-05-14 Cyclical and Emerging Market Strength May Be Pointing to Better Growth by Bob Doll of Nuveen Asset Management

Last week U.S. equities advanced as the S&P 500 increased by 1.3%. We have been amazed bythe market’s ability to continue to rally in an environment in which sales growth has been anemic and earnings gains have been largely based on companies’ abilities to manage margins and utilize financial engineering.

2013-05-13 Closing Arguments: Nothing Further, Your Honor by John Hussman of Hussman Funds

Nothing further, your honor. I am resting my case.

2013-05-13 Tenuous Times? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

US stocks continue to make new highs, yet commodities have struggled and Treasury yields remain low, albeit up from recent near-record lows. Although not the standard playbook, we remain optimistic but acknowledge an equity pullback can occur at any time. Manufacturing data has been soft, the employment picture is mixed, and housing continues to improve. The European Central Bank (ECB) has joined the easing arty, illustrating the continued disappointments coming out of the eurozone.

2013-05-13 The Cash Conundrum by Ric Dillon of Diamond Hill Investments

In an effort to keep interest rates low, the Federal Reserve, along with other global central banks, is flooding the financial markets with liquidity. This additional liquidity is pushing prices for most financial and real assets higher. At some point, the Fed’s policy of easing will end and in some ways will be reversed. Purchases of government-backed securities may end this year (QE3); however, the Fed has signaled that the near zero interest rate policy for Fed Funds is likely to continue into 2015.

2013-05-13 Americas: Regional Economic Review 1Q 2013 by Team of Thomas White International

Weaker global demand and prices for energy and commodities, as well as softer than expected domestic consumption have restricted the growth outlook for most economies in the Americas region during the first three months of the year. Fewer monthly job additions in the U.S. have dented consumer confidence, and growth for the current year is now forecast to be moderately lower than earlier expectations.

2013-05-10 A Tale of Two Markets: Equity Bulls and Bond Bears by Douglas Cote of ING Investment Management

Surging equity markets absent an accompanying rate rally is a red flag, as Treasury yields remain well below “normal”. While investors’ renewed enthusiasm for equities is warranted, they must be careful to avoid the “folly of gaming diversification”. Corporate earnings have impressed, though revenue has struggled due in part to a moribund Europe. Divergent markets mean investors should stay broadly diversified in equities and real bonds not near-cash and ever alert to the fundamentals.

2013-05-10 2013 US Financial Markets: Part 2 - The TINA Hypothesis by Clyde Kendzierski of Financial Solutions Group

Contrary to the “Bernanke Illusion” (money market funds are a zero return investment), history indicates that money market funds are likely to provide investors with returns approximating inflation over the next decade. As I pointed out in our last letter, the markets are pricing in inflation levels significantly higher than the prospective total returns of 10 year TBonds. The small additional return achieved by corporate bonds or US stocks (at current prices) is unlikely to compensate a buy and hold investor with sufficient gains to justify the interim risks.

2013-05-10 Symptoms Don't Lie by Peter Schiff of Euro Pacific Capital

A good doctor will not simply make a diagnosis based on measurements. The symptoms and complaints expressed by the patient are at least as important in making a determination as the data provided by diagnostic tools. When the data says one thing and the symptoms continuously say another, it makes sense to question the reliability of the instruments. This would be particularly true if the instruments are furnished by a party with a stake in a favorable diagnosis, say an insurance company on the hook for treatment costs. The same holds true for the U.S. economy.

2013-05-10 The U.S. Economy Stands to Gain from Actions of Central Banks by Team of Northern Trust

Recent central bank meetings have resulted in a reiteration of accommodative monetary policy from the Federal Reserve and new initiatives from its counterparts overseas.

2013-05-09 Make Way for the MIPS by Scott Minerd of Guggenheim Partners

Emerging markets still provide excellent opportunities for outperformance in equities, with Malaysia, Indonesia, the Philippines and Singapore being among the best positioned for the decade ahead.

2013-05-08 Germany Under Pressure To Create Money by John Browne of Euro Pacific Capital

Currently, central banks around the world are walking in lock step down a dangerous path of money creation. Led by the Federal Reserve and the Bank of Japan, economic policy is driven by the idea that printed money can be the true basis of growth. The result is an unprecedented global orgy of currency creation. The only holdout to this open ended commitment has been the hard money bias of the German-dominated European Central Bank. However, growing political pressure from around the world, and growing dissatisfaction among domestic voters have shaken, and perhaps cracked, the German resolve.

2013-05-08 Deflation Is OverPlease Come Out by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

A blooper reel of 20th century history would likely include a feature on Japanese soldier Hiro Onoda. Posted to a small island in the Philippines during the waning days of World War II, when Onoda’s mission proved unsuccessful he was ultimately forced to flee into the woods, where he survived on a steady diet of coconuts and bananasfor almost 30 years after the end of the war.

2013-05-08 Are Investors Breathing a Sigh of Relief? by Bob Doll of Nuveen Asset Management

Last week U.S. equities delivered another gain as the S&P 500 increased by 2.0%.1 On Friday, the U.S. jobs report offered relief from fears of an accelerating weakness caused by prior softness during this time in each of the last three years. However, the full set of economic data for the week supports our view of a slower second quarter in a post-sequestration environment.

2013-05-08 Absolute Return Letter: In the Long Run We Are All in Trouble by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners

In the long run we are all dead, said Keynes. Maybe so, but we could be in trouble long before then. Investors appear preoccupied with central bank policy. We argue that investors are quite right in keeping their eye on the ball but, to us, it looks as if they are focusing on the wrong ball. The real worries for the long term are demographics and negative real interest rates and the effect these factors may have on equity returns.

2013-05-07 Niall Ferguson: Four Reasons Why the U.S. is Failing by Robert Huebscher (Article)

Niall Ferguson is the champion of anti-Keynesian economists. Last week, he explained why America’s pursuit of Keynesian policies is leading to disastrous consequences.

2013-05-07 Mutual Fund Companies Need to Prepare for a Changing Environment Fund Industry Turbulence Ahead by Paul Franchi (Article)

The mutual fund industry grew explosively from the 1980s on a rare tonic of a low-inflation credit expansion powered indirectly by international trade flows. That run reached a peak in 2008 when the application of quantitative easing (QE) served to prevent industry collapse with a softer form of transition, which continues today but must end when inflation returns.

2013-05-07 And That's the Week That Was by Ron Brounes of Brounes & Associates

The trend is your friend (and the current trend is a “friend with benefits” for investors). After a record-setting first quarter for stocks, analysts were skeptical that the “party” would continue. And yet, the Dow Jones enjoyed a fifth straight month of gains in April, while the S&P 500 and Nasdaq one-upped the Blue Chips with six month winning streaks.

2013-05-07 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Financial markets got the news they wanted last week as Europe cut interest rates, while here at home the Federal Reserve hinted they might do even more when it comes to money printing. To top it off, Friday’s employment report showed improvement from March although the details caused most to discount the excitement.

2013-05-07 Central Banks Steal the Spotlight Once Again by Chris Maxey, Brian Payne of Fortigent

Central banks around the world continue to provide increased stimulus to their respective economies. Increased conviction over pro-stimulus policies comes in light of recent flaws found in the Reinhart, Rogoff January 2010 paper, which suggested that government debt of more than 90% of GDP is detrimental to economic growth. The latest week brought another round of news in the world of central banking, although it seems the number of options left on the table is running short. What central bankers hope for now is that economies will finally enter recovery mode.

2013-05-07 Quarterly Letter by Team of Grey Owl Capital Management

In his April 2013 commentary, PIMCO’s Bill Gross wrote, “PIMCO’s epoch1, Berkshire Hathaway’s epoch, Peter Lynch’s epoch, all occurred or have occurred within an epoch of credit expansion What if an epoch changes? What if perpetual credit expansion and its fertilization of asset prices and returns are substantially altered? What if a future epoch favors lower than index carry or continual bouts of 2008 Lehmanesque volatility ?”

2013-05-06 Aligning Market Exposure With the Expected Return/Risk Profile by John Hussman of Hussman Funds

Some risks and market conditions are more rewarding than others. My objectives for this week’s comment are very specific. First, to demonstrate using a very simple model that investment returns do indeed vary systematically with market conditions. Second, to demonstrate that overvalued, overbought, overbullish conditions have historically dominated trend-following measures when they have emerged. Third, to demonstrate the impact of accepting investment exposure in proportion to the return/risk profile that is associated with a given set of market conditions.

2013-05-06 That Was the Week That Was by Jeffrey Saut of Raymond James

Informally the TV show, “That Was The Week That Was,” is referred to as TW3and was a satirical comedy program first aired in the early 1960s. The program was considered a lampooning of the establishment. At the time it was considered a radical departure from legitimate television, but it set the stage for many more such radical departures. I revisit TW3 this morning because I have had so many requests for a formal repartee of a number of last week’s Morning Tacks woven into a more formal strategy letter.

2013-05-03 Job Creation May Be More Robust Than Official Statistics Suggest. by Team of Northern Trust

Job creation may be more robust than official statistics suggest; U.S. employment situation; Central bank meetings

2013-05-02 “Twin Peaks” Target Achieved, What's Left? by Doug Ramsey of Leuthold Weeden Capital Management

Pithy sound bites aren’t our forte. So when we came up with the “Twin Peaks” idea (last decade’s S&P 500 highs of 1527 and 1565) a few months back, we hoped we’d stumbled on a market theme that might last a while. That wish was dashed on March 28th, when the S&P 500 exceeded its October 2007 peak of 1565.15.

2013-05-02 Gold Recovers Amidst Uncertainty by John Browne of Euro Pacific Capital

The selloff in gold that captured the world’s attention in mid-April has revealed some truths about how the market trades and the sentiments of many of the investors who have piled into the trade over the past few years. While the correction does highlight a higher degree of uncertainty than many of the most ardent gold advocates had anticipated, it does not represent the historic "end of an era" reversal that the many in the media have so gleefully suggested. In many ways, the market has shown a resiliency that its detractors do not understand.

2013-05-01 Emerging Asia Pacific: Regional Economic Review by Team of Thomas White International

Major emerging Asia Pacific economies, which picked up growth momentum during the latter half of 2012, struggled to carry forward the economic pace during the initial months of 2013. China, India, and Indonesia, some of the most populous countries in the region and in the world, faced significant headwinds to growth as key engines of the economy investment, consumption, and exports came under strain.

2013-05-01 May 2013 Commentary by Team of Sadoff Investment Management

The slow growing economy will cause the Federal Reserve to stay the course with continued stimulus via low interest rates and Quantitative Easing (QE) for some time. This environment continues to be bullish for stocks.

2013-04-30 Stockman to America: Sinners, Repent! by Laurence B. Siegel (Article)

In a massive volume that melds economic history and social criticism, the former Reagan administration budget director David Stockman has documented countless ways in which America went astray over the last century. Most notably, he decried the corruption of free-market capitalism by those seeking effortless profits at the public’s expense. This is the source of his book’s title, The Great Deformation.

2013-04-30 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks rebounded from the previous week. Earnings were not bad, and investors now appear to be focusing on this week’s Federal Reserve and European Central Bank meetings.

2013-04-30 Is May Really the Time to Go Away? by Chris Maxey, Ryan Davis of Fortigent

As investors near the witching hour of May, the oft-asked question once again comes to the foreground is it best to sell in May and walk away? This year could prove the exception to recent history, but a number of trends are beginning to take shape inside the market’s inner workings.

2013-04-29 New Highs Bring New Worries by Richard Golod of Invesco

The sustainability of the rallies in US and Japanese equities this year so far is looking uncertain amid slowing year-over-year earnings growth and mixed global economic signals. European and emerging market shares have traded lower year to date and seem likely to continue lagging in the near term. However, on balance, I remain optimistic about global equities, seeking yield opportunities and investments with an actively managed, more selective approach.

2013-04-29 Developed Asia Pacific: Regional Economic Review by Team of Thomas White International

After facing subdued economic conditions for the most part of 2012, developed Asia Pacific economies started 2013 on a cautious note. While most countries opined that downside risk to GDP growth declined substantially, challenges to growth arose from a recessionary scenario in key developed economies, especially from the European Union.

2013-04-29 Economic Slowdown Has Not Weakened Share Prices by Bob Doll of Nuveen Asset Management

U.S. equities rebounded last week as the S&P 500 increased by nearly 1.8%,1 despite continued weak economic data. We believe recent data is not yet weak enough to change forecasts. The relative stability of data and forecasts - supported by stimulative monetary policies, an improving U.S. housing market and fading political polarization in the U.S. and Europe - sends a message of reasonably low volatility and manageable downside risks.

2013-04-27 The Cashless Society by John Mauldin of Millennium Wave Advisors

A cashless future might be farther off than we either fear or hope. Not only is it farther away than some think, we are actually seeing an increase in the use of cash all over the world (and this is not just a US phenomenon). We will look at some interesting factoids that make for thought-provoking discussions, but when we couple them with research on the rise of the unreported economy (aka the underground economy) and the number of people who get some form of government assistance, we may find problematic consequences resulting from hidden incentives that work in unintended ways.

2013-04-26 An Update on the Global Business Cycle by Investment Strategy Group of Neuberger Berman

Understanding where we are in the an important aspect of investing, as the behavior of asset classes may vary throughout that cycle. Recent data indicate that the U.S. remains in its fourth year of expansion, but payroll and retail numbers have disappointed. Outside the U.S., Europe continues to be mired in recession while China’s growth rebound recently has appeared to sputter. In this edition of Strategic Spotlight, we review what these developments mean for the global business cycle and how to position portfolios accordingly.

2013-04-26 The Race of Our Lives by Jeremy Grantham of GMO

Our global economy, reckless in its use of all resources and natural systems, shows many of the indicators of potential failure that brought down so many civilizations before ours. By sheer luck, though, ours has two features that might just save our bacon: declining fertility rates and progress in alternative energy. Our survival might well depend on doing everything we can to encourage their progress. Vested interests, though, defend the status quo effectively and the majority much prefers optimistic propaganda to uncomfortable truth and wishful thinking rather than tough action.

2013-04-26 The Yin and the Yang of Commodity Price Trends by Team of Northern Trust

In recent weeks, financial press headlines have centered on the sharp drop in the price of gold. Of greater importance, however, are the significant price declines of oil, wheat, corn and copper. The S&P Goldman Sachs Commodity Index is down 6.1% year-to-date after a nearly steady reading in 2012 and gains exceeding 20% in both 2010 and 2011. It is essential to recognize the different nuances buried in these commodities’ price trends. First we will focus on the implications of declining commodity price trends and then discuss gold specifically in more depth.

2013-04-26 No Escape by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Global economic growth has weakened, while the US economy hasn’t reached "escape velocity." US stocks have held up relatively well. With few other attractive alternatives, domestic equities appear to be the best house in a rough neighborhood. With the Fed committed to easing, housing improving, and valuations reasonable, the trend should continue. Risks remain and diversification and some hedging strategies are recommended.

2013-04-26 Why The Fed's Balance Sheet Matters Neosho Capital Takes On Alan Blinder by Chris Richey of Neosho Capital

We anticipate the Fed will begin slowing, but not eliminating, its QE purchases later this year, barring another severe downturn in the intervening period. As such, we expect macro-economic factors such as currency, interest rates, growth, and inflation to continue to be a significant influence on stock market returns and that the long-term benefits of active portfolio management and individual company performance will continue to be masked by these macro influences.

2013-04-26 A Playbook for Investors: How to Shoot, Score, Win by Frank Holmes of U.S. Global Investors

So, in the competitive spirit of the NBA playoff season, I’ve gathered a series of plays that investors can use to shoot, score and win during this year’s market. I’m happy to say they include all the elements of an exciting game, including a comeback kid, an upset and an underdog.

2013-04-26 Financial Repression: Why It Matters by Shane Sheperd of Research Affiliates

Financial repression refers to a set of governmental policies that keep real interest rates low or negative, with the unstated intention of generating cheap funding for government spending. The ramifications of these policies will be measured in decades, not years.

2013-04-26 Like Baseball in the Snow by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

As has occurred in each of the last three years, the economy should continue to plug along, not as we might like it to be, but as we can reasonably expect. Growth scare or not, we suspect that the end of 2013 will show that continued progress lies ahead, but perhaps not exactly in the same pattern as it has thus far.

2013-04-25 Questioning Quantitative Easing by Scott Minerd of Guggenheim Partners

Speculation over the reduction or expansion of quantitative easing largely amounts to market noise.

2013-04-24 What's Behind China's Economic Slowdown? by Weili Huang of Columbia Management

China’s economy grew by 7.7% year over year (yoy) in the first quarter of 2013, against the market expectation of 8.0% yoy and a prior quarter’s 7.9% yoy. Gross domestic product (GDP) expanded 1.6% quarter on quarter (qoq), with an annualized growth rate of 6.6%, a step down from the 2.0% qoq and 8.2% annualized growth seen in 4Q 2012.

2013-04-23 The New Challenges to Reinhart and Rogoff by Robert Huebscher (Article)

Advocates for debt reduction and austerity have had no more authoritative sources than Carmen Reinhart and Ken Rogoff. But last week, these two professors had to defend claims that errors in their research ? ranging from a typo in a spreadsheet to the failure to include data from New Zealand ? invalidated their much-acclaimed findings.

2013-04-23 Looking Back at Peak Oil: The Coming Crisis in Energy Supplies by Richard E Vodra, JD, CFP® (Article)

Peak Oil ? the maximum sustainable rate of global oil production ? happened in 2012. That’s one of the main conclusions of a new report, Fossil and Nuclear Fuels ? The Supply Outlook, released in March 2013 by the Energy Watch Group. This event will have profound long-term implications for how advisors should manage clients’ portfolios, and how clients should plan their future expenses.

2013-04-23 Ugly Week All Around Bombings, Explosions and Selloffs by John Buckingham of AFAM

It was a miserable week, what with the Boston bombings, lockdown and shootout, the horrific fertilizer plant explosion in Texas and the ricin-laden letters sent to elected officials providing vivid reminders that we still live in a dangerous world. True, the week ended about as well as it could as Friday night’s incredible drama in Watertown brought some closure in Boston and the come-from-behind victory for the Red Sox on Saturday was right out of Hollywooda three-run go-ahead home run after Neil Diamond leads Fenway Park in a rendition of Sweet Caroline!

2013-04-23 Q1 Earnings Leave Much To Be Desired by Chris Maxey, Ryan Davis of Fortigent

Following the strongest first quarter in 15 years, it is not surprising to see equity markets faltering in April. Last week’s decline of 2.1%, however, may reflect deeper concerns about corporate fundamentals amid a mixed earnings season.

2013-04-22 Strategy for a Second Gear Economy by David Kelly of J.P. Morgan Funds

American investors could be forgiven for feeling just a little confused. One week after the stock market posted its strongest first-quarter gains since 1998, the Bureau of Labor Statistics announced the weakest monthly job growth in nine months. Real GDP growth was just 0.4% in the fourth quarter but appears to have been much stronger in the first. So is the economy getting stronger or weaker, how is the Federal Reserve likely to react to it and what, if anything, should investors do about it?

2013-04-22 And That's the Week That Was by Ron Brounes of Brounes & Associates

The end to another tax season; a hectic week on the earnings calendar; a number of key domestic economic releases; and ongoing developments on the global economic frontand yet, much of the country (and world for that matter) was focused on the events in Boston and the aftermath of the bombing that led to a massive manhunt and a shootout with police. Early in the week, the celebrated Boston Marathon came to an abrupt halt as terror again reigned throughout the country and nearby residents were sent into lockdown mode.

2013-04-22 Weekly Commentary & Outlook by Scotty George of du Pasquier Asset Management

Despite recent gains in portfolio valuations, I question whether we are really “profiting” from the upward surge. To be sure, there is more money in your account, according to your last three monthly statements. And who’s to argue that doesn’t translate to “real” dollars, “real” well-being.

2013-04-22 Emerging Europe: Regional Economic Review by Team of Thomas White International

The European Bank for Reconstruction and Development (EBRD) was established in 1992 to help Russia and former communist states such as Poland, Hungary, and Czech Republic among others in their transition to market-based economies. In its January forecast, the London-headquartered bank sounded optimistic over the economic prospects of most of the countries covered in this review, which also include Turkey.

2013-04-22 Is There a Silver Lining to the Gold Price Plunge? by Jon Ruff of AllianceBernstein

It’s been a volatile week for gold prices, which tumbled by the most in 30 years. Although gold is still not obviously undervalued, we think the recent market moves make stock prices of gold miners look attractive when compared with prices of the precious metal.

2013-04-19 Equity Investment Outlook by Team of Osterweis Capital Management

Every so often we write an Investment Outlook with conclusions that prove to be both accurate and worth repeating. Such is the case with our prior outlook issued in January 2013. In it we stated that “At the risk of sounding complacent, we believe that the fundamental trends that produced such favorable results in 2012 are still in place and should support another good year in 2013. We are not blind to the challenges and uncertainties that still face us, nor do we believe that the year ahead will be devoid of volatility.

2013-04-19 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

“The Federal Reserve is printing money”. No statement could be less truthful. The Federal Reserve is not, and has not been, “printing money” as defined as an acceleration in M2 or money supply. A review of post-war economic history would lead to a logical assumption that the money supply would respond upward to this massive infusion of reserves into the banking system. The reality is just the opposite. Printing money? No.

2013-04-19 F.I.R.S.T.: Bond Market Outlook by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

Amid heightened political uncertainty in Europe and subdued global growth expectations, global investors owe Hiroki Kuroda a big domo arigato for his pledge to inject about $1.4 trillion into the moribund Japanese economy by the end of 2014. The newly appointed BOJ governor’s unprecedented plan to buy Japanese government bonds,

2013-04-19 "America Has Faced the Unknown Since 1776," So Says Warren Buffett by Paul Kasriel of Econtrarian, LLC

So wrote Warren Buffett in his March 1, 2013 letter to Berkshire Hathaway Inc. stockholders. In the phrase before this quote, Mr. Buffett wrote: “Of course, the immediate future is uncertain ” And after this quote, he wrote: “It’s just that sometimes people focus on the myriad of uncertainties that always exist while at other times they ignore them (usually because the recent past has been uneventful).”

2013-04-19 First Quarter Investment Commentary by Team of Litman Gregory

Looking ahead, significant uncertainty surrounds fiscal and monetary policy in terms of what policies will be adopted and their ultimate economic and financial market impacts. More broadly, still-high global debt levels pose an economic headwind. Against this backdrop, our outlook for stocks has not improved. If anything, given the sharp run-up in stock prices, we are getting closer to reducing our U.S. equity exposure further than we are to increasing it.

2013-04-17 Hyperactive Monetary Policy: The Good, the Bad and the Ugly by Lupin Rahman, Mohit Mittal, Josh Thimons of PIMCO

Hyperactive monetary policy (HMP) is in full force as fiscal policy retreats. The benefits of HMP outweigh the costs for now. Despite cyclical growth, we will likely not achieve escape velocity and eventually the costs will likely overtake the benefits.

2013-04-17 In the Category of Sign Spinners by Blaine Rollins of 361 Capital

If you thought the plunge in Gold prices was tough on those long the precious metal, wait until you see the upcoming hit to the April Non-Farm Payrolls in the category of Sign Spinners...

2013-04-17 The Interest Rate Environment: Comparing High Yield Bonds and Bank Loans by Team of Hotchkis & Wiley

In its first quarter 2013 newsletter, "The Interest Rate Environment: Comparing High Yield Bonds and Bank Loans," Hotchkis & Wiley’s high yield team analyzes the behavior of the high yield market and the bank loan market in different interest rate environments to determine whether they can make sensible assumptions about the future.

2013-04-17 Present and Emerging Risks to the Gold Trade by Amit Bhartia, Matt Seto of GMO

The notion of gold as a hedge against systemic risks is flawed. We believe that the concept of gold’s role as an insurance policy needs to be narrowed significantly.

2013-04-17 Signs of a Correction by Scott Minerd of Guggenheim Partners

Although the long-term economic picture remains sanguine, a number of global risks and economic results point to a temporary period of consolidation in equity markets.

2013-04-17 What's Driving Emerging Markets? by James McDonald, Daniel Phillips, Phillip Grant of Northern Trust

Emerging market (EM) equities have historically outperformed as the global economy gained momentum, as shown in Exhibit 1. After a great catch-up rally in the second half of 2012, the stocks finished the year as global outperformers only to lose that momentum in the first quarter of 2013. What is behind the recent underperformance, and what does it say about the outlook? Our research points to a number of contributors to the recent weakness.

2013-04-17 Emerging Markets Equity Commentary by Team of Thomas White International

Emerging market equities corrected for the second successive month in March, on concerns that continuing weakness in European demand could hurt export growth for several countries in Asia and Latin America. These economies had seen a revival in their export fortunes during the second half of last year as U.S. consumer demand turned healthier. However, the moderation in U.S. consumer sentiment during March has somewhat dulled the optimism.

2013-04-16 Will Germany Lead the World’s Energy Revolution? by Michael Edesess (Article)

Germany’s energy plans lie between Scylla and Charybdis: fossil fuel-generated carbon dioxide emissions on the one hand and potentially catastrophic nuclear energy on the other. With strong motivation to avoid both, Germany has been left with only one alternative. The direction of energy policy in the U.S. ? and the rest of the world ? may rest on whether Germany succeeds in its ambitious plan to embrace renewable sources.

2013-04-16 All That Glitters Is Not Gold by Scott Colyer of Advisors Asset Management

This quote from Shakespeare’s Merchant of Venice is apropos given the nosedive in the gold markets today. In our 2013 Best Ideas piece we labeled gold a neutral as gold had not had a significant correction since 2008. Our research indicated a significant slowing of bullion purchases by gold Exchange Traded Funds (ETFs) in 2012 versus 2011. We looked for a correction and now need to contemplate whether we are in the end of the commodity bull market or merely a pause that refreshes.

2013-04-16 Gold in the Crosshairs by Peter Schiff of Euro Pacific Capital

In the opening years of the last decade, most mainstream investors sat on the sidelines while "tin hat" goldbugs rode the bull market from below $300 to just over $1,000 per ounce. But following the 2008 financial crisis, when gold held up better than stocks during the decline and made new record highs long before the Dow Jones fully recovered, Wall Street finally sat up and took notice.

2013-04-15 The (Up) Beat Goes On, Part II by Bob Doll of Nuveen Asset Management

We wrote Part I of this theme on February 11 during the first quarter rally, when the S&P 500 closed the week at 1518. This past week the S&P ended at 1589, after increasing 2.3%. Global stock prices continue to push to new highs and thus provide support for a pro-equity bias. One nuance is that the composition of the equity rally has been abnormally defensive.

2013-04-12 How a Landslide Shifts Copper Supply by Frank Holmes of U.S. Global Investors

The U.S. mining industry was dealt a devastating blow as Kennecott Utah Copper’s Bingham Canyon Mine experienced a pit wall failure causing a massive landslide with rocks and dirt covering the bottom of the mine pit. It’s a miracle no one was hurt due to the vigilance of its owner, Rio Tinto. The landslide is just one example of how quickly and unexpectedly the supply and demand factors facing the red metal can shift, which underscores the need for nimble active management.

2013-04-12 Assume a Perfect World by John Mauldin of Millennium Wave Advisors

Waiting for our forecasts to be wrong before we adopt a yet another “solution” based on a temporary fix of yet another forecast that turned out to be wrong is no way to run a railroad, unless you want your train running off a cliff. I applaud the recent attempts in DC to come to a solution on the deficits and budget, but where are the leaders who want to get real with those forecasts?

2013-04-12 Soft Patch - Part Four? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Stocks continue to trade at all-time highs, but concerns are rising over a possible pullback and downturn in economic growth. A consolidation of gains is likely, but trying to trade around a pullback can be quite difficult. A potential tapering of Fed asset purchases continues to be discussed, but the Fed also appears nervous over the potential for a spring downturn. Cooler heads appear to be gaining traction in Washington and at least some marginal progress is being made. Economic improvement is gaining traction in Japan, raising hopes of sustainable change, while Europe continues to suffer.

2013-04-11 The Ripple Effect of Abenomics by Scott Minerd of Guggenheim Partners

Monetary policy in Japan will continue to drive investors in that country to overseas markets, which will affect global asset prices and bond yields.

2013-04-11 Global Investing in 2013: Policy Dominance, Active Management and a New Paradigm in Currencies by Scott Mather of PIMCO

We expect that the impact of ongoing global policy experimentalism on real economic growth and financial markets will likely vary substantially from country to country, creating both risks and opportunities. With flexible, active global strategies investors can potentially benefit from a broader opportunity set and the ability to go off benchmark in an effort to both avoid risks and tap opportunities.

2013-04-09 MLPs: Winning Streak Broken, Growth Story Intact by Sponsored Content from Legg Mason ClearBridge
by Chris Eades, Portfolio Manager (Article)

After an off year clouded by investors’ concerns about future tax policy, ClearBridge’s outlook for MLPs is again brightening. Oil and natural gas production are both ahead of estimates and the resulting infrastructure build-out is continuing.

2013-04-09 First Quarter Market Commentary by Mark Oelschlager of Oak Associates

After a strong 2012, the market continued its ascent in the first quarter, shrugging off macro issues like the Sequester and the Cyprus “bail-in.” The S&P 500 rose roughly another 10%, reaching a new all-time high. Normally when stocks are moving higher at a fast rate, it is the economically sensitive sectors that lead and the defensive ones that lag. But the first quarter saw the reverse, as the top three performing sectors were the three traditional defensive ones: healthcare, consumer staples and utilities.

2013-04-09 Labor Markets Stumble in March by Ryan Davis, Chris Maxey of Fortigent

In an unexpected development, labor markets fell flat during March. Following several months of healthy job growth, the economy was only able to muster 88,000 new jobs in March, well below economists’ expectations for nearly 200,000 jobs.

2013-04-09 PIMCO Cyclical Outlook for Asia: How Leadership Changes Are Shaping Asia's Outlook by Q&A with Ramin Toloui, Tomoya Masanao and Robert Mead of PIMCO

For Asia, “slow but not slowing” global growth will likely keep external demand neutral, and policy developments will therefore help shape the economic outlook. In Japan, we see a significant boost to aggregate demand coming from the concerted monetary and fiscal expansion of the new Abe government. In China, concerns about inflation, housing market excesses, and long-term financial stability are prompting policy restraint that should keep growth below 8% this year.

2013-04-09 Bond Market Review & Outlook by Thomas Fahey of Loomis Sayles

The first quarter of 2013 turned out pretty much as expected: a low volatility environment with the level of bond yields and credit spreads relatively stable. At some point, we have to be happy with earning a yield on our fixed income investments. The last several years have been a major bond bull market, particularly 2012, but with yields at low levels, there is not much room left for bond price appreciation and we should be comfortable with earning our yield and carry.

2013-04-09 Morning in Japan by Christian Thwaites of Sentinel Investments

There were two very important central bank meetings last week, one from the Bank of Japan the other the ECB. Bank of Japan press conferences have been soporific affairs for years with a few QE programs not leading to much and no changes to inflation targets. Deflation, a declining workforce and falling aggregate demand have been pretty much the unbroken story for the best part of two decades.

2013-04-09 John Hussman ? Why Prospective Returns Are Low by Robert Huebscher (Article)

Monetary and fiscal policies have driven our economy into an unstable equilibrium, pushing investors into higher-yielding securities, according to John Hussman. But those higher yields are illusory, he said, because corporate profit margins are too high to be sustainable.

2013-04-08 Taking Distortion at Face Value by John Hussman of Hussman Funds

The U.S. stock market presently reflects two unstable features. One is that extraordinary monetary policy specifically quantitative easing has created an ocean of zero-interest money that someone has to hold at each point in time, and that provokes a speculative reach for yield. The other is that extraordinary fiscal policy, coupled with household savings near record lows, have joined to elevate profit margins more than 70% above their historical norm, as the deficit of one sector has to emerge as the surplus of another.

2013-04-08 Ben Bernanke, the Rodney Dangerfield of Fed Chairmen by Paul Kasriel of Econtrarian, LLC

First it was 2012 presidential candidate Rick Perry, who wanted to deal with Ben Bernanke’s money-printing “Texas style”. Then 2012 presidential candidate Mitt Romney indicated that Ben Bernanke had better have his personal effects packed up and ready to move out of his Fed office by January 21, 2013.

2013-04-05 Could Consumers Change Japan's Tide? by Team of Matthews Asia

This year, investor attention has focused on Japan and its macroeconomic policy with hopes that rising inflation expectations might spur businesses to invest and consumers to spend. Since Prime Minister Shinzo Abe and Japan’s ruling Liberal Democratic Party (LDP) regained power late last year and proposed more aggressive monetary policies, including an ambitious inflation target, the yen has weakened more than 20% against the U.S. dollar and more than 15% against the euro.

2013-04-05 Eye of the Beholder: Dissecting the Variety of Price-Earnings Ratios by Liz Ann Sonders of Charles Schwab

There are many ways to value the stock market. Here, a look at several popular metrics, along with my view on the attractiveness of stocks.

2013-04-04 Absolute Return Letter: The Need for Wholesale Change by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners

The seeds of the next crisis have probably already been sown as a consequence of the lax monetary policy currently being pursued. Frustrated with the lack of direction from political leaders, most recently witnessed in the handling of the crisis in Cyprus which was a complete farce, central bankers from around the world are likely to demand change, but politicians will have to be pushed into a corner before they will respond to any such pressure. Hence nothing decisive will happen before the next major crisis erupts.

2013-04-03 First Quarter Recap by Bob Doll of Nuveen Asset Management

This past month marked the fourth anniversary of the global equity market bottom on March 9, 2009. U.S. stocks have clawed back all of the losses from the Great Recession and are near historical highs. Most other major markets are still well below their 2007 peaks, but have rebounded sharply since last June and look increasingly resilient. However, there is tremendous anxiety about the economic outlook, and many investors fear equities and other risk assets are floating on a sea of liquidity rather than solid fundamentals. We are more constructive and maintain a pro-growth investment stance.

2013-04-03 Surprise! 2013 Rally Pales in Comparison to 2012 “Stealth” Rally by Douglas Cote of ING Investment Management

Despite the hoopla over first quarter market performance, it paled in comparison to the first three months of 2012. Driven in part by an extremely accommodative Fed, the U.S. economy is gaining traction, but Europe continues to flounder. After their first negative print in three years during the third quarter, S&P 500 companies returned to positive earnings growth in the fourth. A broad, globally diversified portfolio is the best way to balance the desire for wealth accumulation with an appreciation of volatility.

2013-04-03 F.I.R.S.T.: Made in the U.S.A. by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

Not just the preamble for the “machine-wash-in-cold-water-and-eat-celery-only” instructions on the inside of your skinny jeans, “Made in the U.S.A.” is a brand in vogue these days as the Stars and Stripes looks to dawn a manufacturing renaissance to go with that snazzy new housing recovery everyone’s been talking about.

2013-04-03 Why This Economic "Recovery" is So Weak by Gary Halbert of Halbert Wealth Management

We start today with an excellent editorial I read last week written by Mort Zuckerman, Editor-In-Chief of U.S. News & World Report. My goal every week is to do a lot of reading and summarize what I’ve learned in these pages week in and week out. But every now and then I run across something so good that it just makes sense to reprint it in its entirety, even if it’s not my own work. Not many of my contemporaries are willing to do that, as they think it makes them look less scholarly. I don’t have that problem.

2013-04-03 A Man in the Mirror by Bill Gross of PIMCO

Am I a great investor? No, not yet. To paraphrase Ernest Hemingway’s “Jake” in The Sun Also Rises, “wouldn’t it be pretty to think so?” But the thinking so and the reality are often miles apart. When looking in the mirror, the average human sees a six-plus or a seven reflection on a scale of one to ten. The big nose or weak chin is masked by brighter eyes or near picture perfect teeth. And when the public is consulted, the vocal compliments as opposed to the near silent/ whispered critiques are taken as a supermajority vote for good looks.

2013-04-02 Bernanke’s Motives Behind Quantitative Easing by Paul Franchi (Article)

We are at a turning point: away from one global monetary standard, to a yet-to-be-determined new form.

2013-04-02 New Market Records, Quarterly Review, And What's Next by John Rothe of Riverbend Investment Management

Last week, after gyrating for the past month, the S&P 500 was finally able to close in record territory. However, investors may not be feeling the joy in their pocketbooks just yet; when inflation is factored in, it becomes clear that the US stock market is still in the extended cyclical bear cycle which started in 2000.

2013-04-01 A More Mature Bull Market by Scott Minerd of Guggenheim Partners

One of the characteristics of a more mature bull market, such as the one we are in today, is that asset prices become more susceptible to contractions due to negative news.

2013-04-01 Currency and Emerging Markets: What Can We Expect? by Giordano Lombardo of Pioneer Investments

Currency markets are making headlines again after taking a low profile amid the crises and the turmoil in financial markets of the last five years or so. I asked Greg Saichin, Head of High Yield and Emerging Markets Fixed Income Portfolio Management here at Pioneer, to provide his views about what is going on, and what he sees as the drivers of investment flows into emerging markets.

2013-03-29 China on the Move by Stephen Roach of Project Syndicate

After six years of weighing the options, China is now firmly committed to implementing a new growth strategy. But it will take courage and sheer determination to tackle the biggest obstacle of all deeply entrenched local and provincial power blocs.

2013-03-29 Learnings From the Cyprus Saga by Carl Tannenbaum of Northern Trust

There are important differences between the situation in Cyprus and the challenges other southern European nations face that should limit the transfer of financial trauma. The hope remains that the ECB’s promise to do whatever it takes to solve the sovereign debt crisis will ultimately settle markets. But access to certain types of ECB support requires reaching agreement on restructuring with the same European officials who have handled the situation in Cyprus so maladroitly.

2013-03-29 Market Resilience by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

After a stellar first quarter performance from US stock markets, which showed impressive resilience to continued headwinds, a pullback is certainly possible but we don’t suggest investors who need to add to allocations wait. In a relative world, the US stock market continues to look like an attractive place to invest, although there may also be opportunities in Japan and Europe as well. The upcoming earnings season could tell the story for the market over the next couple of months, but we continue to advocate a long-term point of view and maintaining a diversified portfolio.

2013-03-28 What Maslow and Rand Would Tell Investors Today by Frank Holmes of U.S. Global Investors

While gold’s performance in the short term has been counterintuitive, I plan to stick to my own advice. I simply feel safer with a small weighting in gold as insurance.

2013-03-27 Why Not a Quantitative Target for Quantitative Easing? by Paul Kasriel of Econtrarian, LLC

When I should have been practicing my bass guitar in preparation for my band class Thursday evening, I, instead, watched the first few minutes of Federal Reserve Chairman Bernanke’s post-FOMC press conference. A number of press inquiries were related to adding specificity to the FOMC’s criteria for modifying its current $85 billion per-month purchases of securities. In the short time that I watched the press conference, Chairman Bernanke did not seem to satisfy the press on this issue.

2013-03-26 Smart People's Opinions, The Data Says and Some Looming Deadlines by Gregg Bienstock of Lumesis

Being on the road gives me a lot of time to read the views and opinions of many very smart people (Faber, Mauldin, Hussman, Hunt and Zhao this week citations below as they all are worth a read). An interesting thread runs through much of what I absorbed this week: they don’t believe the hype.

2013-03-25 The Hook by John Hussman of Hussman Funds

At the 2000 peak, Richard Russell observed "Every bull and bear market needs a hook.’ The hook in a bear market is whatever the bear serves to keep investors and traders thinking that everything is going to be all right. There is always a hook."

2013-03-25 Cyprus Reminds Us of Threats and Improving Global Economy by Bob Doll of Nuveen Asset Management

Equity averages sagged slightly last week. Strength later in the week made up for earlier weakness as the equity rally paused for the Cyprus crisis. We (and the consensus) perceive Cyprus as mainly a local problem and believe it supports our view to remain cautious with Eurozone weightings.

2013-03-22 In Gold We Trust by Frank Holmes of U.S. Global Investors

Poorly thought out government policies hurt the formation of capital and destroy people’s trust in paper money. Leaders may have good intentions, but some of their actions show disrespect for private property and individualism. This only reemphasizes gold as an important asset class.

2013-03-21 Goldilocks Roars by Team of Bedlam Asset Management

Equity markets are producing supra-normal returns. To March 18th, the portfolio is up over 15% year-to-date, over 100 basis points ahead of the index. Many investors would be happy with such a gain over a full year rather than a mere twelve weeks, so are puzzled, the more so as respected pundits agree that the data makes for easy stories of rampant inflation, collapsing government credit and a prolonged global recession. Equity markets, however, are stubbornly refusing to follow the script.

2013-03-20 US Equities: Does Valuation Matter? by Mark Ungewitter of Charter Trust Company

With growing talk of a new secular bull market, it’s time to take a look at valuation history. While it’s true that “anything can happen” in financial markets, it seems unlikely that a new secular bull market will lift off from a P/E multiple of 17x.

2013-03-19 The Outlook for Equities by Howard Marks of Oaktree Capital Management

It doesn’t take much to get me started on a memo. In this case one sentence was enough, in an article from the February 4 online edition of Pensions & Investments, as described by FierceFinance on February 28: “The long-term equity risk premium is typically between 4.5% and 5%.”

2013-03-19 Why Are Emerging Markets Struggling in 2013? by Ryan Davis of Fortigent

Despite one of the sharpest rallies in US equities in recent memory, emerging market equities have been left curiously behind in 2013. Through last Friday, the market segment was down 1.0%, compared to an S&P 500 index that was up 10.0%. This seems to violate the regime that investors have gotten used to over the past 10 years, whereby the emerging markets equity index served as a high beta proxy for the US equity market.

2013-03-18 Little Hope for the Government Budget by Charles Lieberman (Article)

The President spoke to Republicans this week to see if they could find common ground to overrule the budget sequester and form the basis for a new agreement over the budget, taxes and government spending going forward. Instead, the meeting crystallized how far apart the two sides are in their vision for a deal. Since there is no budget or broader economic crisis looming, there is nothing to force the two sides into an agreement.

2013-03-18 Finding the Sweet Spot by Mark Kiesel of PIMCO

Where is the investment “sweet spot” in today’s global financial markets? The uneven global growth outlook means there are opportunities and risks for both credit and equity investors.

2013-03-18 Outlook for the Yen by Team of Nomura Asset Management

For several quarters ahead, we estimate that the Yen will remain range bound near the level of PPP (purchasing power parity), which is estimated to be between 90 to 95 Yen/USD. Though currency movements will be affected by various factors, we think the monetary policies of both Japan and the U.S. are the most important.

2013-03-18 UK Budget: No Fiscal Consolidation, but Looser Money Ahead by Darren Williams of AllianceBernstein

We expect little change in UK fiscal policy in Wednesday’s budget. Instead the Chancellor George Osborne may try to nudge the Bank of England towards more aggressive monetary easing, putting further pressure on the pound.

2013-03-15 Emerging Markets Equity Commentary by Team of Thomas White International

Emerging market equities saw a moderate correction in February, broadly similar to the rest of the world. Prices reacted negatively to renewed concerns of a worsening European fiscal crisis as the results of the recent Italian elections turned out to be inconclusive.

2013-03-15 The Big Four Economic Indicators: Industrial Production and Real Retail Sales by Doug Short of Advisor Perspectives (dshort.com)

With the exception of Real Personal Income Less Transfer Payments (e.g., Social Security, Supplementary Security Income, workers compensation, etc.), the Big Four continue to show expansion. The seemingly bizarre income data is the result of the end-of-year strategy of early bonuses and moving forward of 2013 income to avoid higher taxes. We’ve seen this situation before in the 1990s. The PI anomaly is the reason the average for the Big Four (the gray line above) has shows contraction for the past two months.

2013-03-15 Global Economic Overview by Team of Thomas White International

Global economic trends largely remained positive during February, though the stalemate after the Italian elections and the failure by policymakers to reach a deal to avoid the U.S. sequester heightened the political and policy risks. The U.S. GDP figure for the last quarter of 2012 was revised higher, showing the world’s largest economy managed to avoid a decline.

2013-03-15 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Despite exceptionally easy monetary policy, inflation risk remains low. Record stock market levels are boosting consumer spending. U.S. capital spending is poised to be a bright spot this year.

2013-03-15 China’s Next Stop by Frank Holmes of U.S. Global Investors

Would it surprise you to discover that China is planning to add 800 miles to its subway system over the next two years? That’s the distance equivalent to building a network from Dallas to Chicago in less time than the U.S. Congress can resolve a budget!

2013-03-15 Finally!! Now What? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Surprise! We don’t know what’s going to happen in stocks over the next few weeks. But we are seeing an environment that we believe can foster further gains in the US as economic data remains generally positive, the Fed maintains its accommodative stance, and small progress is being made in the fiscal realm. Investors concerned about a pullback may want to hedge their portfolios, but maintain adequate exposure to equities.

2013-03-14 Global Currency Battles: A Waiting Disaster or a Win for All? by Team of Knowledge @ Wharton

To many, Japan’s recent moves to devalue the yen looked like the spark that could ignite a global currency war -- a series of competitive devaluations that, last century, helped plunge the world into the Great Depression. Until now, central bankers have been resisting the urge to politicize exchange rates. However, while currency skirmishes can be dangerous and require monitoring, they are also necessary for establishing equilibrium in markets and will help in the global economic recovery, some experts say.

2013-03-13 Who Cares if There's a High-Yield Bond Bubble? by Gary Halbert of Halbert Wealth Management

High-yield bonds, or "junk bonds" as they are widely known, have received a lot of attention in recent months. Is there a high-yield bond bubble? Certainly a ton of new money has gone into high-yield bond funds over the last few years. Millions of Americans who would have never considered high-yield bonds have bought in due to near zero returns on traditional savings vehicles.

2013-03-12 Gundlach: Investors are asking the Wrong Question by Robert Huebscher (Article)

If you're trying to assess the Federal Reserve's so-called exit strategy from quantitative easing, then you're asking the wrong question, according to Doubleline's Jeffrey Gundlach. Quantitative easing is a permanent policy tool, he said, and investors should be asking what that means for their investment strategy.

2013-03-12 Finally, a Jobs Report Worth Reading by Chris Maxey, Ryan Davis of Fortigent

Surprisingly, the February employment report showed a labor market growing at a reasonably healthy rate. Concerns that the sequester would spill into the broader economy have yet to materialize and if recent trends hold, the economy may finally be approaching a point of robust and sustainable job growth.

2013-03-12 Pacific Basin Market Overview February 2013 by Team of Nomura Asset Management

Monthly returns for February 2013 were somewhat mixed, but the Pacific Basin regional markets generally ended in positive territory this month. Outside of Asia, political instability in Italy and concerns that the Federal Reserve might begin to scale back its monetary stimulus in the U.S. led to weaker investor sentiment. Economic data from China was weak, largely due to the effect of the Chinese New Year.

2013-03-12 We Made It. Now What? by Christian Thwaites of Sentinel Investments

What looks like a fairly settled policy in Europe is fast becoming a very dangerous situation, according to Christian Thwaites in his latest "Thought of the Week" -- "We Made It. Now What?" -- adding that the outlook for the world's second largest economic bloc is pretty week.

2013-03-12 U.S. Dominates World Markets for the Trifecta by Douglas Cote of ING Investment Management

While large-cap indices get all the headlines, mid and small caps have continued to excel. Frontier markets have picked up the slack as major emerging markets stumble. Global risks persist, though U.S. fundamentals appear solid. The move toward U.S. energy independence should soon result in a trade surplus, boosting GDP.

2013-03-12 The 2030 Increasing Inequality Scenario by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

Last month we started looking at the 2030 alternative world development scenarios as laid out by the National Intelligence Council (NIC). The NIC forecasts the likely paths that are either currently underway or are forecast to occur in the future. In its most recent report, the NIC projects four possible global political and economic states based on expected trends. Last time, we presented the most likely best case scenario. This week, we will explore the third scenario, under which the world gets wealthier as a whole, but inequalities increase.

2013-03-12 After Last Week's US Rally: Proceed with Caution by Russ Koesterich of iShares Blog

While last week's rally was supported by better-than-expected economic data and improving investor sentiment, the magnitude of US stocks' advance is starting to cause some indicators to flash yellow. Russ explains.

2013-03-11 Two Myths and a Legend by John Hussman of Hussman Funds

The present market euphoria appears to be driven by two myths and a legend. Make no mistake. When investors cannot possibly think of any reason why stocks could decline, and are convinced that universally recognized factors are sufficient to drive prices perpetually higher, euphoria is the proper term.

2013-03-08 Spasmodic Stupidity: The Wile E. Coyote Congress by Cliff Draughn of Excelsia Investment Advisors

I predict the Ides of March will find us in a continued sequestration, and Congress will use the time between now and the debt ceiling deadline on March 27th to debate the merits of true tax reform as opposed to governing by crisis. In the end, though, the reform conversation will revert to governance by crisis, with another stop-gap measure to avoid government shutdown during Holy Week and Easter, which will tide us over to the elections of 2014. Do you expect any different?

2013-03-08 Labor Policy Needs to Help, Not Hinder Employment. by Team of Northern Trust

Labor policy needs to help, not hinder employment. The U.S. employment report surprised on the upside. Watch the shadows behind China's official credit measures

2013-03-08 How to Keep Calm and Invest On by Frank Holmes of U.S. Global Investors

The market noise of today will not be going away. However, investors can gain confidence in the following wisdom of the crowd. As famous investor Benjamin Graham said, "The individual investor should act consistently as an investor and not as a speculator. Keep calm and invest on.

2013-03-08 Flying High by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

The media has made a spectacle out of the Dow Jones Industrial Average reaching new all-time highs. The Dow Jones Industrial Average and the S&P 500 indices do not include the compounding effect of dividends paid by member companies. Any retiree will tell you that dividends represent a return of capital and useful income in the real economy. If you had reinvested those dividends back in the index as they were paid, the old time highs reached in October of 2007 likely would have been passed some time ago.

2013-03-07 Gentlemen, Start Your Presses by John Browne of Euro Pacific Capital

In his Congressional testimony last week in Washington, Fed Chairman Ben Bernanke took time to downplay the significance of the few dissenting voices on the Fed's Open Market Committee (FOMC). Those statements, combined with an even more dovish statement by Fed Vice Chairman Janet Yellen earlier this week, clearly reaffirm the Fed's indefinite commitment to $85 billion of monthly quantitative easing.

2013-03-07 When Will the Music Stop? by Scott Minerd of Guggenheim Partners

The investment environment is in transition, with uncertainty around policy moves contributing an increasing amount of uncertainty for asset prices.

2013-03-07 Animal Spirits: F.I.R.S.T. by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

Call it what you will a dog-eat-dog world in which you're wearing Milk-Bone underwear or an example of capitalism at its finest an M&A cycle is heating up. This activity may be signaling the rebirth of what British economist John Maynard Keynes originally referred to as "animal spirits", much to the delight of fictional corporate barbarian Gordon Gekko and his real-life analogues, who require little prompting to act on Keynes "spontaneous urge to action".

2013-03-07 Capex Revival by Francis Gannon of The Royce Funds

For some time now, we have been noting the defensive nature of the investment environment, one in which fear and uncertainty continue to be the major forces driving markets. Interestingly, this trend has held true for both investors and corporations alike of late. Even after a powerful move from the low of last November, for example, investors remain fearful about cyclical or economically sensitive sectors while at the same time embracing those very sectors that benefit from easy money, are defensive by nature, and are supposedly riskless.

2013-03-07 A New Chapter for Turkey? by Frank Holmes of U.S. Global Investors

In 2012, Turkey was the best performer among the emerging markets we track on our Periodic Table showing a decade of returns. All developing countries rose last year, but stocks in Turkey climbed an astounding 56 percent.

2013-03-06 U.S. Sequester: How Significant is it for the Global Economy? by Team of Thomas White International

Since the U.S. has been one of the brightest spots in the current global economic environment, any negative development that restricts activity in the U.S. could have a magnified impact on the economic prospects for the rest of the world.

2013-03-05 Is Now the Time to Diversify? by Chris Maxey, Ryan Davis of Fortigent

The use of global diversification in constructing client portfolios has come under fire in recent years due to the underperformance of many risk assets. Traditionalists who stuck to their familiar S&P 500 and BarCap Aggregate Bond index blends generally outperformed their diversified peers in 2011 and 2012, as historic risk premiums failed to materialize and various alternative investment strategies faced headwinds.

2013-03-04 And That's the Week That Was by Ron Brounes of Brounes & Associates

The sky is falling. The sky is falling. It's the millennium all over again. (How did those fears work out?) With politicos unable to reach any agreement on the budget (taxes), the "dumb, arbitrary" spending cuts began to take effect to the tune of $85 billion this year. (So much for a military preparedness.) Though the impact on the economy will not be felt overnight, some areas will begin to suffer sooner than others and biz/consumer confidence could become an issue in the near future.

2013-03-04 Living in the Past: Investors Finally Putting Away the Rear-View Mirror? by Liz Ann Sonders of Charles Schwab

With a very strong January in the books for stocks, and hefty inflows into stock mutual funds, are we finally seeing the investor class become believers?

2013-03-04 Out On A Limb - An Investor's Guide to X-treme Monetary and Fiscal Conditions by John Hussman of Hussman Funds

Massive policy responses, directed toward ineffective ends, are scarcely better than no policy response at all. A look at the current monetary and fiscal policy environment, as well as more effective policy initiatives, and why they make sense.

2013-03-04 Health Care Reform: A Q&A With Our Municipal Bond Experts by Shari Sikes, Art Schloss of Invesco

Health care reform took center stage in the last year as the Supreme Court upheld the Patient Protection and Affordable Care Act of 2010 (ACA), affirming the constitutionality of portions of the law. The decision made it possible for major health care reform to proceed. This January, health care spending again was at the forefront during the fiscal cliff debate as a means to reduce government spending. Health care is poised to remain at the center of this discussion until a federal budget deal is reached.

2013-03-01 The Fed's Tightening Pipe Dream by Peter Schiff of Euro Pacific Precious Metals

Testifying before the US Senate this past Tuesday, Fed Chairman Ben Bernanke made an extraordinary claim about its bloated balance sheet: "We could exit without ever selling by letting it run off." What Bernanke means here is that the Fed could simply hold its Treasuries and agency bonds until they mature, at which point the government would then be forced to pay the Fed back the principal amount. Through this process, the Fed's unprecedented and inflationary position will be gradually and placidly unwound.

2013-03-01 ECRI "Recession" Update: Proprietary Indicators Slip Again by Doug Short of Advisor Perspectives (dshort.com)

ECRI adamantly denied that the sharp decline of their indicators in 2010 marked the beginning of a recession. But in 2011, when their proprietary indicators were at levels higher than 2010, they made their recession call with stunning confidence bordering on arrogance.

2013-03-01 Greetings from Istanbul! by Frank Holmes of U.S. Global Investors

As I travel around Turkey, I am reminded how vital good government policies are to the health of a nation. Following a decade of fiscally responsible actions, Turkey is the picture of a growing prosperity. Perhaps Americas elected officials could take a tip from this vibrant country overseas.

2013-02-28 An Ephemeral Swoon by Scott Minerd of Guggenheim Partners

Although volatility is likely to stay relatively high going forward, the recent move in the markets to risk-off mode appears to be a temporary condition.

2013-02-27 Potential Threats to Equity Rally by Chris Maxey, Ryan Davis of Fortigent

Equity markets started a third consecutive year in rather impressive fashion, gaining more than 6% to date. With so much optimism in the investment community, it is always worth keeping an eye open for risks possibly overlooked. By now, it is apparent that investors are increasing their exposure towards equities with arms wide open. Data from the Investment Company Institute (ICI) estimates $39 billion flowed into equity mutual funds this year through February 13. Following outflows of $153 billion in 2012, the sudden reversal has been impressive.

2013-02-27 The Healthcare Blues by John Mauldin of Millennium Wave Advisors

It has been some time since we peeked into my worry closet. A few questions this weekend prompted me to think about things I am paying attention to but have not written about, and one thing that I am not worried about at all, despite the apparent media hysteria.

2013-02-27 ING Fixed Income Perspectives February 2013 by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

Despite its diminutive size, February has been a whirlwind. Eat and drink too much on Fat Tuesday, be reminded of our corporeal nature on Ash Wednesday, receive a sappy Hallmark card on Thursday, and cap it all off with a memorial for a bunch of ex-presidents on Monday. Unfortunately, the next several weeks don't appear to offer any relief from this calendar whiplash.

2013-02-27 The Great Migration by Herbert Abramson, Randall Abramson of Trapeze Asset Management

We are value investors dedicated to creating portfolios for clients, whether growth (equities), income or a balanced blend of both, of undervalued securities with meaningful upside potential and a margin of safety to guard against permanent loss. For us, the bottom-up factors are the most compelling, but we are also mindful that we need to take account of the top-down macro factors. We know how the Crash of ?08 and the accompanying recession created havoc for investors, including us, no matter how undervalued stocks were.

2013-02-26 Looking For A Reason To Sell-Off by Christian W. Thwaites of Sentinel Investments

Markets were looking for a reason to correct. Risk assets had outpaced themselves since mid November and in the first seven weeks the S&P[1] had outperformed the US Treasury 10-year note by 12% and the 30-year bond by 15%. The markets will lumber through the sequester and face the next test on the debt ceiling and first quarter results. Below the surface, the outlook is mildly optimistic. Why the qualifier? Because everything, in Europe, US and Japan, must be set in the context of the asset deflation and deleveraging going on and that will go on for some years.

2013-02-26 Sudden Discomfort by Scott J. Brown of Raymond James

Minutes of the January 29-30 meeting of the Federal Open Market Committee showed a growing discomfort with the Feds Large-Scale Asset Purchase program (QE3). Thats not all that surprising. Even those who strongly favor the program arent exactly happy with it. However, thats a far cry from wanting to end the program anytime soon. We should learn more this week as Fed Chairman Bernanke delivers his semiannual monetary policy testimony (Tuesday and Wednesday).

2013-02-25 Dodging the bullets by Team of Bedlam Asset Management

Although the year is barely a month old there are already signs that the long-awaited rotation out of the perceived safety of bonds and into inflation-proofed equities may have begun. Given the dismally low yields on offer it seems likely that, at the very least, it is the beginning of the end of the bond market bubble. Some of the biggest bubbles in the bond market, and thus most at risk from a sell-off, are in high yield and emerging market debt.

2013-02-22 Emerging Markets Outlook: Will Emerging Markets Continue Their Run in 2013? by Scott Klimo of Saturna Capital

A number of times we have been asked whether emerging markets will continue their run in 2013. Our response typically begins with the following clarification: "Emerging markets" may be a handy way to refer to the countries that constitute a generally recognized asset class, but this group is far from monolithic. Widely differing levels of development, economic drivers, opportunities to invest, and returns exist under the emerging markets umbrella. For this reason it's not entirely correct to imply that "emerging markets" had a run in 2012.

2013-02-22 ECRI "Recession" Update: Proprietary Indicators Slip Again by Doug Short of Advisor Perspectives (dshort.com)

ECRI adamantly denied that the sharp decline of their indicators in 2010 marked the beginning of a recession. But in 2011, when their proprietary indicators were at levels higher than 2010, they made their recession call with stunning confidence bordering on arrogance...

2013-02-22 Central Banks Are Factoring Financial Stability into Their Decision Making by Team of Northern Trust

Central banks are factoring financial stability into their decision making. The FOMC is taking a critical look at its asset purchase strategy. Don't look now, but the sequester is coming.

2013-02-22 A Test of Strength for Gold by Frank Holmes of U.S. Global Investors

This week, we saw the gold bears growling louder and gaining strength, as the worlds largest gold-backed ETF, the SPDR Gold Trust, experienced its largest one-day outflows since August 2011. The Fear Trade fled the sector following the Federal Reserves meeting that revealed a growing dissension among some of its members over the central banks bond-buying program.

2013-02-21 Tapping China's Growth via Dividends by Yu Zhang of Matthews Asia

When the long-term historical performance of global equity markets is considered, investors can see that the contribution of dividends to total return is significant. In this regard, China has been no exception. Between 1999 and 2012, 46% of the total return of the MSCI China Index was derived from dividends received and reinvested. This month, Yu Zhang, CFA, explores the ways in which a dividend-investing approach can be an effective investment strategy in China.

2013-02-21 Gold Miners- Back in the Abyss- An Update by JJ Abodeely of Value Restoration Project

Back on May 18th, 2012 I wrote a piece titled Jumping Into The Abyss: A Bull Case for Gold Mining Stocks. The miners had declined 40% from their August 2011 highs and for a variety of fundamental reasons like valuation and the relationship between mining costs and the price of gold and technical reasons, like sentiment, I felt the case to buy was compelling. The stocks subsequently rallied more than 30% over the following 4-5 months.

2013-02-20 And That's the Week That Was by Ron Brounes of Brounes & Associates

Tick Tick Tick. The President has plans for improving life in America. Tick Tick Tick. Republicans want to fix the middle class (and restricting taxes on the upper class may help). Tick Tick Tick. Earnings reports look good, but forecasts for the current quarter have been lowered. Tick Tick Tick. Weekly jobless claims keep falling, but major corporations are announcing layoffs. Tick Tick Tick. Sales figures show growth, but Wal-Mart and others are worried. Tick Tick Tick.

2013-02-19 Alan Greenspan on the Market and the Global Economy by Adam Jared Apt (Article)

During his six-decade-long career in financial services, Alan Greenspan was a central figure in seminal events that drove investment markets, from the savings-and-loan crisis to the dot-com bubble to the housing crisis. Now, nearing 87, he rarely speaks in public. But he did so last week, offering his forecasts for the U.S. and European economies.

2013-02-19 Too Great Expectations by Richard Golod of Invesco

Global investors entered the year with newfound enthusiasm. Across the board, global equities traded higher in January, and retail money flows into global equities were the best in 17 years. Media reports about a "Great Rotation" from fixed income into equities are raising expectations about the possibility of a new secular bull market. However, I believe a little perspective is in order.

2013-02-16 Seeing the Forest by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Equity markets continue to be resilient and investor confidence is elevated in various sentiment indices, suggesting a near-term pullback is possible. But there are longer-term trends developing that give us hope that the US economy's expansion and market's rally are sustainable. Federal spending cuts via the "sequestration" appear sure to happen, but there will continue to be debates about the nature and size of the cuts. Similarly, questions are increasing as to the potential unwinding of current Fed policy with regard to timing and rapidity.

2013-02-16 When It Comes to Gold, Stick to the Facts by Frank Holmes of U.S. Global Investors

During short-term gold corrections, its much more important to focus on the facts, including the fact that gold is increasingly viewed as a currency. Rather than buying real estate, lumber or diamonds, central banks around the world are buying gold. According to the World Gold Council (WGC), over 2012, central bank demand totaled 534 tons, a level we have not seen in nearly 50 years.

2013-02-16 The Squeeze: Reassessing the Japan/Korea/China Manufacturing Nexus by John Longhurst of PIMCO

If the yen settles between 95 and 100 to the dollar, it could be a game changer for Japanese companies which have restructured to become profitable at 75 yen to the dollar. Some Korean companies, especially those in heavy industry, may be squeezed by intensified Japanese and Chinese competition. We expect Korean firms to fish in profit pools in businesses related to their core competencies, chiefly to the detriment of Asian and European competitors.

2013-02-16 In the Year of the Snake, Where Will Copper Head? by Frank Holmes of U.S. Global Investors

With an improving global economy and Chinas new leadership ramping up projects, will base metals, such as copper, head higher?

2013-02-15 Latest OECD Data Shows Global Economy in State of Flux by Steve Rumsey of Optimus Advisory Group

According to the OECD ("Organisation for Economic Co-operation and Development"), the US economy managed to stage a leading indicator "rally" into the most favorable northeast quadrant. The red six month lagging tail on the graph clearly shows the economic leading indicators moving from expansion to slowdown, only to move back to the expansion quadrant in late 2012.

2013-02-15 ECRI "Recession" Update: Propietary Indicators Take a Pause by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) slipped fractionally in today's update. It is now at 129.6 versus the previous week's 130.2.The WLI annualized growth indicator (WLIg) also eased, now at 8.3, down from last week's 8.9. WLIg has been in expansion territory since August 10th of last year, but is is fractionally off its interim high set last week.

2013-02-15 Thailand: Land of the Smiles by Mark Mobius of Franklin Templeton Investments

China and India may be Asia's largest economies, but they aren't the only countries with growth potential on the continent. Southeast Asian countries can also offer compelling investment opportunities. Thailand, known as the land of the smiles because of the expression its natural beauty and friendly people inspire, is a country where we believe the economic prospects could give investors reasons to smile too.

2013-02-15 Hyperinflations, Hysteria, and False Memories by James Montier of GMO

In the past, Ive admitted to macroeconomics being one of my dark, guilty pleasures. To some value investors this seems like heresy, as Marty Whitman1 once wrote, Graham and Dodd view macro factors...as crucial to the analysis of a corporate security. Value investors, however, believe that macro factors are irrelevant. I am clearly a Graham and Doddite on this measure (and most others as well).

2013-02-14 When Politics Trump Economics by Scott Minerd of Guggenheim Partners

The U.S. economic expansion continues, but increasing attention to political risks, and currency wars, in particular, indicate a period of heightened volatility could be ahead.

2013-02-14 Emerging Markets Consolidate After Last Year's Gains by Team of Thomas White International

After the strong relative performance towards the end of last year, emerging market equities settled with moderate gains during the month of January as global investor sentiment remained optimistic. Global economic data continue to be mostly positive, sustaining the trend from the second half of last year.

2013-02-13 Concerned by Recent Economic Data? Look Closer by Marco Pirondini of Pioneer Investments

We've seen a lot of GDP data recently that, at first look, may seem a bit concerning. But if we take a moment for analysis, much of the news is actually good for the economy and the markets.

2013-02-13 Trading Secrets: And All Our Yesterdays by Tad Rivelle of TCW Asset Management

Markets work. Not because they are perfect, but because they self-correct. Inherent to their functioning is the ability for buyers and sellers, borrowers and lenders, to freely express their predilection to engage in commercial transactions as proxied by the price mechanism. This is all utterly basic. So, why are the capital markets in general, and the credit markets in particular, not to be trusted to operate without the price and quantity guidance of the Federal Reserve? I

2013-02-13 Global Economic Overview January 2013 by Team of Thomas White International

Global economic trends continued the moderate positive momentum from earlier months and helped sustain investor sentiment in January. The unexpected decline in U.S. economic output for the fourth quarter of last year was mostly due to a sharp fall in government spending and a smaller inventory buildup, while consumer and business spending exceeded forecasts. Also, recent data suggest that U.S. labor market gains during last year were better than earlier estimates.

2013-02-13 It's Time To Take Advantage Of Rising Energy Prices by John Rothe of Riverbend Investment Management

Oil prices have been on the rise again as we enter a period of the year that is historically strong for the energy sector. While markets continue to be a bit overbought, investors should not yet panic at rising oil prices. Since last summer, oil prices and the market have been closely correlated. What had been viewed by consumers as a "tax" in the past, is now viewed as a sign of increasing demand for gas due to economic expansion.

2013-02-12 The Milton Friedman Centenary: One Hundred Years of Surprisingly Little Solitude by Laurence B. Siegel (Article)

Milton Friedman was once a lonely voice for capitalism in a collectivist era, and seemed doomed to a hundred years of solitude. Instead, he arguably became the preeminent public intellectual of the hundred years that followed his 1912 birth.

2013-02-12 Consumers Less Enthused to Bail Out the Economy by Chris Maxey, Ryan Davis of Fortigent

Following recent recessions, it was commonplace to rely on American consumers to bail out the economy. The reliance on the American consumer was widely understood as the best remedy for an ailing economy. We are not as fortunate this time around and our dependence on consumers is one reason for the sluggish rate of recovery since 2008.

2013-02-11 Solving the Profitability Puzzle by Vadim Zlotnikov of AllianceBernstein

Companies around the world enjoyed especially high profit margins in late 2012. But can this trend be maintained or is profitability poised for a collapse that might threaten stocks this year?

2013-02-11 And That's the Week That Was by Ron Brounes of Brounes & Associates

With folks in the Northeast finally returning to normalcy following Superstorm Sandy's impact in October, a "potentially historic" blizzard threatened the region with predicted disruptions to businesses, schools, travel, etc. Though New England is expected to catch the brunt of the damage, forecasters are calling for up to 20 inches of snow in New York City. For now, NYSE Euronext does not anticipate anything but "business as usual" at the NY Stock Exchange as contingency plans are well in place.

2013-02-08 ECRI "Recession" Update: Leading Index Growth Sets Another Interim High by Doug Short of Advisor Perspectives (dshort.com)

First a flashback for those of us who have followed ECRI's media appearances: we know that the company adamantly denied that the sharp decline of their indicators in 2010 marked the beginning of a recession. But in 2011, when their proprietary indicators were at levels higher than 2010, they made their recession call with stunning confidence bordering on arrogance...

2013-02-07 Commodities: Correlating Trends with Opportunities by Mark Mobius of Franklin Templeton Investments

Commodity price inflation is both a social and an economic issue. In emerging markets in particular, food and energy costs take a deeper slice out of consumers' income, which can lead to the type of unrest that causes governments to topple. In addition to the potential impact of extreme weather on food supplies, central banks around the world are printing a flood of money, which could lead to inflated prices for other goods and services.

2013-02-07 Echoes of 2004 by Scott Minerd of Guggenheim Partners

Rising equities and tightening credit spreads define the near-term investment outlook, but this is not the first time we have seen this cycle play out in recent memory.

2013-02-07 From QE to Queasy: Fiscal Policy and the Risk of Inflation by Jason Hsu of Research Affiliates

Quantitative easing does not directly cause inflation. Rather, by enabling the government to issue low-cost debt, it fosters undisciplined spending, says Jason Hsu, CIO of Research Affiliates, LLC in this commentary. This spending, in turn, generates inflation, transferring wealth from future taxpayers to the current generation. Hsu argues that Americans are more likely to follow the European model of insufficient saving than to imitate the Japanese practices of private sector belt-tightening, high savings rates, and international lending.

2013-02-06 The January Barometer by Jeffrey Saut of Raymond James

It's that time of year again when the media is abuzz with that old stock market saying, "so goes the first week of the new year, so goes the month and so goes the year." With the S&P 500 (SPX/1513.17) better by 2.17% over the first five trading sessions of this year, and up 6.10% for the month of January, it is worth revisiting the January Barometer. Devised by Yale Hirsch in 1972, the January Barometer states that as the S&P 500 goes in January, so goes the year.

2013-02-06 Focus on Fixed Income by Steve Van Order of Calvert Investment Management

Last week Administration officials, including the President, clearly ruled out using extraordinary legal measures to avoid defaulting on Treasurys financial obligations in the absence of a debt ceiling hike by Congress. The two legal measures most discussed, going back to the summer 2011, were invoking the 14th Amendment and minting a trillion dollar platinum coin. The coin idea was dismissed as Fed officials commented that the central bank would not honor the coin as a deposit, and the amendment idea has been shelved a number of times.

2013-02-06 GDP Report Tanks - Is A Recession Looming? by Gary Halbert of Halbert Wealth Management

We will cover a lot of ground today. We begin with a new report from Goldman Sachs which argues that the US economy will remain the strongest in the world for many more years. The report rebuts claims that America is a nation in decline. Quite the contrary, say Goldman analysts who claim that there is a growing"awarenessof the key economic, institutional, human capital and geopolitical advantages the U.S. enjoys over other economies."

2013-02-05 Letters to the Editor by Various (Article)

A reader responds to Joe Tomlinson's article, Predicting Asset Class Returns: Recommendations for Financial Planners, which appeared last week, and another reader responds to Dan Richards' articles.

2013-02-05 In Uncertain Environment, Jobs Grow Tepidly by Chris Maxey, Ryan Davis of Fortigent

For the 35th consecutive month, private payrolls registered positive growth. It was hardly the robust report economists would prefer, but the labor market continues to mend. However, there are still plenty of reasons to be concerned, especially with sequestration on the horizon.

2013-02-05 Fourth Quarter 2012 Equity Market Review by Natalie Trunow of Calvert Investment Management

With the excitement of the QE3 announcement wearing off in the fourth quarter, market participants refocused on the less-than-stellar earnings season in the U.S. and uncertainties surrounding the U.S. presidential election and impending fiscal cliff, while the negative impact of Hurricane Sandy further dampened investor sentiment. Despite a double-dip recession in the eurozone, there was some progress on the European policy front and China's economy continued to show signs of stabilizing, which helped international stocks outperform their U.S. counterparts.

2013-02-04 Our Outlook: Very Bullish for the Stock Market by Team of Sadoff Investment Management

The combined readings of these breakouts, volume strength, significant pivots by a long list of financial stocks and improving commodity prices evidence major trend improvements. Restated, the underpinnings for both the economy and stock market evidence significant strengthening ahead.

2013-02-04 A Gross Underestimate by Jonathan Coleman, Soonyong Park of Janus Capital Group

As we enter 2013, we felt it would be an appropriate time to revisit one of last years most controversial predictions of future equity performance. We acknowledge that equities in general may not continue to deliver the same real rate of return they have over the last century; however, we believe the glum outlook for the asset class forecasted by Bill Gross last year misses the mark. Our estimates of future equity returnsbased on three different approachesall point to a meaningfully higher forecast than Gross' pessimistic prediction.

2013-02-04 Shifting Sentiment? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Is investor sentiment shifting in favor of equities, which could help to continue the recent rally?

2013-02-04 A Reluctant Bear's Guide to the Universe by John Hussman of Hussman Funds

In recent years, I've gained the reputation of a "perma-bear." The reality is that I'm quite a reluctant bear, in that I would greatly prefer market conditions and prospective returns to be different from what they are. There's no question that conditions and evidence will change, unless the stock market is to be bound for the next decade in what would ultimately be a low-single-digit horserace with near-zero interest rates. For my part, I think the likely shocks are larger, and the potential opportunities will be greater than investors seem to contemplate here.

2013-02-01 Crystallization at Davos by Scott Minerd of Guggenheim Partners

The euphoria among my fellow Davos attendees was palpable, but short and long-term risks for the world's advanced economies, including competitive currency devaluation, remain concerning.

2013-02-01 Feasting in a Time of Famine: The South African Consumer by Maria (Masha) Gordon, Richard Flax of PIMCO

South Africa's consumer sector has been on a strong run for the past several years, but there are signs the consumer is now coming under pressure. For all the challenges that have faced the South African economy, most listed consumer companies have enjoyed a great run since 2008. However, a combination of factors strong growth in retail sales and credit along with the rise in consumer debt levels and weak employment growth suggest the South African consumer sector may have pulled consumption forward in a way that could prove ultimately unsustainable.

2013-02-01 ECRI "Recession" Update: Leading Index Growth Hits Another Interim High by Doug Short of Advisor Perspectives (dshort.com)

ECRI posts its proprietary indicators on one-week delayed basis to the general public, but ECRI's Lakshman Achuthan has switched focus to his company's version of the Big Four Economic Indicators I've been tracking for the past several months. See, for example, this November 29thBloomberg video that ECRI continues to feature on their website. Achuthan pinpoints July as the business cycle peak, thus putting us in at the beginning of the eighth month of a recession.

2013-02-01 2013 Economic & Capital Market Outlook by Gregory Hahn of Winthrop Capital Management

It took our country 229 years to accumulate $8 trillion in federal debt. It only took the next eight years to double it to $16 trillion. History shows that when a country accumulates debt at this rapid pace, economic growth languishes. Not surprisingly, Congress is pursuing policies that attempt to inflate the economy. Five years after the Financial Crisis, we really havent fixed much. Instead, we've issued more debt in order to pay our bills and sustain a quality of life society cannot afford long term.

2013-02-01 The Big Four Economic Indicators: Nonfarm Employment by Doug Short of Advisor Perspectives (dshort.com)

Note from dshort: This commentary has been revised to include the latest Nonfarm Employment data released today.... Nonfarm Employment rose 0.12% in January, following 0.15% and 0.18% gains in December and November, respectively. The Year-over-year increase is 1.52%. Nonfarm employment has been the tortoise of the Big Four, slow and steady. The average MoM change over the past 12 months has been 0.13%, and the range has been 0.07% to 0.20% -- no contractions.

2013-02-01 The Biggest Loser by Peter Schiff of Euro Pacific Capital

For the past few generations Switzerland has enjoyed some of the strongest economic fundamentals in the world. The country boasts a high savings rate, low taxes, strong exports, low debt-to-GDP, balanced government budgets, and prior to a few years ago one of the most responsible monetary policies in the world. These attributes made the Swiss franc one of the world's "safe haven" currencies. But in today's global economy, no good deed goes unpunished.

2013-02-01 Dow To 14,000 and Beyond? by Frank Holmes of U.S. Global Investors

So will the Dow go beyond 14,000? Although you cant predict how hot the weather will be this summer, the clouds appear to be parting to reveal the sun today. Make sure your asset allocation positions your portfolio to shine.

2013-02-01 Weekly Economic Commentary by Team of Northern Trust

Is the world engaged in a currency war? Januarys job report had some pleasant surprises, but more progress is needed. Purchasing managers surveys suggest growth in the US, retreat for Europe

2013-02-01 A Gross Underestimate by Jonathan Coleman and Soonyong Park of Janus Capital Group

The glum outlook for the asset class forecasted by Bill Gross last year misses the mark. Our estimates of future equity returnsbased on three different approachesall point to a meaningfully higher forecast than Gross pessimistic prediction.

2013-02-01 Look at the Bears! Look at the Bears! by Christine Hurtsellers, Matt Toms and Mike Mata of ING Investment Management

Yes, the grumbling of bond bears is reverberating in Treasury yields, but that sound isnt the death knell of a grizzly; at this point, the closest ursine analogue is Boo-Boo Bear.

2013-01-31 China's Market Ups and Downs by Mark Mobius of Franklin Templeton Investments

China's stock market was a roller coaster in 2012, and those investors with a weak stomach for unpredictability probably found the ride unpleasant. Its true that by many measures last year's weak market performance in China's A share market was disappointing, but in a market of this size the story isn't all good or all bad, so unlike the market masses, I remain confident about China's prospects and continue to search for long-term investment opportunities in China.

2013-01-31 Q4 2012 Letter by Team of Grey Owl Capital Management

During the second half of 2012, central banks turned their massive and coordinated monetary intervention "up to eleven." This is the overwhelmingly dominant economic and market force today. Despite the long-term consequences (which are very real), we believe the central bankers commitment is steadfast. It has and will likely continue to mute both real economic and financial market volatility (at the expense of long-term growth). A deeper analysis of what has changed, our assessment of the impact, and our portfolio response follows.

2013-01-31 Credit Supernova! by Bill Gross of PIMCO

They say that time is money. What they don't say is that money may be running out of time. There may be a natural evolution to our fractionally reserved credit system which characterizes modern global finance. Much like the universe, which began with a big bang nearly 14 billion years ago, but is expanding so rapidly that scientists predict it will all end in a "big freeze" trillions of years from now, our current monetary system seems to require perpetual expansion to maintain its existence.

2013-01-31 Elliott's Paul Singer On How Money Is Created ... And How It Dies by Team of TimeCapital

When we launched our series into the US Shadow Banking system in the summer of 2010 we had one simple objective: to demonstrate just how little the process of modern (and by modern we mean circa 2004 not 1981) money creation was understood.

2013-01-30 An Apple's First Worm by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

Writing about Apple is painful. Not because I have lost money in recent months or have no insight to provide, but because the media will likely report on it ad nausea for the next few days. It is perhaps human nature that the news which is most readily produced is also the news that is most easily consumed. If you want to be read, it's best to write words that people will read. While this makes for great entertainment and advertising, it hasn't typically been the best way to get new investment ideas.

2013-01-30 U.S. Debt Crisis End-Game Looms in 3-5 Years by Gary Halbert of Halbert Wealth Management

Last week, one of the most respected research groups in the world predicted that the US likely has only 3-5 years before the wheels fall off and the world is thrust into a major financial crisis, possibly even a depression. We'll talk about all of these things as we go along today. But before we go there, let's take a brief look at the economy before tomorrow's advance (first) estimate of 4Q GDP.

2013-01-29 And That's the Week That Was by Ron Brounes of Brounes & Associates

The trend is your friend...so hopefully it will continue for a little (lot) longer. With the uncertainty of the fiscal cliff on the backburner (for now), investors seem to like what they are seeing from earnings season and in the economy. They continued to take stocks higher as the S&P 500 settled above 1500 for the first time in five years and is currently riding a eight session winning streak.

2013-01-29 Emerging Europe: Regional Economic Review 4Q 2012 by Team of Thomas White International

As the 2012 year closed, the emerging economies of Europe joined their cousins in the developed world for their share of woes, and in particular, were impacted by the debt crisis in the Euro-zone, their primary trading partners. Though Russia, the biggest of these economies, finally managed to become a member of the World Trade Organization, the resource-dependent economy recorded slowing growth during the third quarter as both household consumption and state spending expanded at a slower pace.

2013-01-28 Conflicted Objectives by Charles Lieberman (Article)

Policymakers in the U.S., Europe, Japan, and elsewhere all seek to weaken their currencies to stimulate exports and domestic growth. It is not possible for all of them to succeed, since some currencies must rise in value, if others decline. Although their individual objectives may be in conflict, their efforts are actually mutually supportive. As each country runs an accommodative monetary policy to weaken its currency, they are also simultaneously promoting stronger domestic growth directly. Indirectly, they are also stimulating demand for their trading partners.

2013-01-28 Is the Fed Doing the Right Thing? by Mark Oelschlager of Oak Associates Funds

After a strong 2012, the stock market is off to a good start in 2013, rising more than 5% so far in January and currently riding an eight-day winning streak (the longest since 2004). Encouraging economic data has a lot to do with this. Unemployment claims are at a 5-year low, home sales and prices are up, and consumer credit and retail sales are growing. Research firm ISI says that the current level of unemployment claims is consistent with 4% real GDP growth for the first quarter, which would be an acceleration from the sluggish growth of recent years.

2013-01-25 Feeding the Dragon: Why China's Credit System Looks Vulnerable by Edward Chancellor, Mike Monnelly of GMO

Edward Chancellor and Mike Monnelly, members of GMO's Asset Allocation team, write to institutional clients in a new white paper about China's credit boom and outlines some worrying recent developments in its financial system. In GMO's view, "China's credit system exhibits a large number of indicators associated with acute financial fragility," including China's debt and real estate bubbles, the belief that the government is underwriting financial risk, the shadow banking system, a proliferation in credit guarantees, among others.

2013-01-25 Americas: Regional Economic Review 4Q 2012 by Team of Thomas White International

The outlook for most economies in the Americas region improved during the fourth quarter as domestic consumption growth was sustained and the anticipated revival in global demand has lifted the prospects for export growth this year. Partly helped by fiscal and monetary policy measures introduced since 2011, consumer demand has held up across most countries in the region.

2013-01-25 ECRI "Recession" Update: Leading Index Growth Hits a New Interim High by Doug Short of Advisor Perspectives (dshort.com)

For a few months, ECRI's indicators cooperated with their forecast, but that has not been the case in the second half of 2012 -- hence, I surmise, their switch to the traditional Big Four recession indicators. ECRI's December 7th article,The Tell-Tale Chart, makes clear their public focus on the Big Four.

2013-01-25 Opine Less, Think More by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at investing from a broad perspective and goes over in detail some of the macro themes he is examining as he tries to help the reader make sense of what 2013 will bring. He discusses potential "black swans" that he has his eye on, the bounceback of American and European stock markets, the sometimes overlooked lack of a correlation between economic growth and stock market performance, what P/E ratios tell us both historically and in the present, and where valuations can go from here.

2013-01-25 Housing Is Off the Floor, But Faces Ceilings. by Team of Northern Trust

Housing is off the floor, but faces ceilings. The cost of housing could be a source of increased inflation. January's FOMC meeting should not break any new ground.

2013-01-25 Resource Investors: Why You Can Expect Sunnier Days Ahead by Frank Holmes of U.S. Global Investors

During the current commodity supercycle, there have been occasionstoo many to countwhen investor psyche has been damaged by reports about slowing U.S. growth, a hard landing in China or a debt crisis in Europe. Yet just behind the gloom, significant and positive trends are taking hold, causing the storms to start dissipating.

2013-01-24 Searching for Growth in a Low-Growth World by Austin Graff of PIMCO

We believe corporate profit growth will fall short of sell-side consensus estimates. But companies with inflation-linked revenues and supply side advantages to drive revenue growth, and those with ample cost levers to improve margins, are positioned for sustained earnings growth in the New Normal.

2013-01-24 Emerging Asia Pacific: Regional Economic Review 4Q 2012 by Team of Thomas White International

Emerging Asia Pacific economies showed strong signals of a rebound in economic activity amidst generally rising exports and stabilizing inflation. While some major economies like China, which had cut interest rates throughout 2012 to stimulate the economy, saw a mild resurgence in inflation, many countries like South Korea, Taiwan, Malaysia and Philippines saw inflation stabilize significantly during the quarter. Still, India, the region's second largest economy, continued to be troubled by rising prices despite high interest rates.

2013-01-24 Get Your Funk Out by Jim Goff of Janus Capital Group

I manage investment professionals for a living. When an analyst gives me the positives on one hand and the negatives on the other hand, but offers no conclusion, I want to cut one of those hands off. The best analysts understand all the issues but come to well-founded views.

2013-01-24 Escape Velocity in the Economy by Scott Minerd of Guggenheim Partners

The broad improvement in U.S. economic data indicates that the economy is likely to continue to expand, supporting earnings growth and pointing to an eventual return of leveraged buy outs.

2013-01-23 The Year of the American Consumer by Philip Tasho of TAMRO Capital

It was an above-average year for stock returns across the domestic market cap spectrum. Ultimately, unconventional and accommodative monetary policy trumped investor concerns over fiscal policy, the Presidential election and weakness overseas. The Federal Reserve (the Fed) entered uncharted waters when it announced open-ended quantitative easing through the ongoing purchasing of government securities. Importantly, other central banks globally waded in by mimicking the Fed in word if not deed and the global liquidity cycle continued apace.

2013-01-23 It's What You Learn After You Know It All That Counts. by Jeffrey Saut of Raymond James

January is the time of year when strategists, economists, gurus, etc. all join in on the annual nonsense of predicting "What's going to happen in the markets for 2013?" For many, this ritual is an ego trip, yet as Benjamin Graham inferred forecasting where the markets will be a year from now is nothing more than rank speculation. Or as I have noted, "You might as well flip a lucky penny."

2013-01-23 Developed Asia Pacific: Regional Economic Review - 4Q 2012 by Team of Thomas White International

Developed Asia Pacific economies witnessed mixed economic fortunes during the fourth quarter of 2012. While the group's largest economy, Japan, suffered from stubborn deflation and slumping trade due to a bitter territorial dispute with China, Singapore and Hong Kong managed to fare better.

2013-01-22 Ten for '13 by Investment Strategy Group of Neuberger Berman

Last year, despite the noise surrounding the U.S. elections and the ongoing European debt crisis, the main drivers of asset prices arguably were the large-scale bond-buying programs put in place by global central banks to alleviate systemic pressures. In 2013, we anticipate fewer aggressive central bank actions as the pace of global growth gradually picks up. We believe the largest influential factors to our outlook are premature fiscal tightening in the U.S. and a potential resurgence of eurozone problems.

2013-01-22 Keep Your Eye On The Ball - 2012 Year End Letter by Team of Sloan Wealth Management

The members of the Portfolio Management Team at Sloan Wealth Management (SWM) coach two baseball teams, two soccer teams, one T-ball team and one basketball team for our collective young children. Thus, we find ourselves stressing the basics. Learning the fundamentals of how to catch a pop-up will eliminate some of the fear of getting hit in the face. In 2012, we found many parallels to the capital markets as our portfolios posted high double digit returns in the face of fear.

2013-01-18 Middle East/Africa: Regional Economic Review 4Q 2012 by Team of Thomas White International

According to the International Monetary Fund's Regional Economic Outlook report, countries in the Middle East and North Africa region are expected to grow at different rates. Oil exporting nations are cashing in on high energy prices and production, and are projected to expand 6.6 percent in 2012 before tempering in 2013. On the other hand, oil importers such as Jordan, Morocco and Tunisia among others are expected to clock growth just over 2 percent as the slowdown in the world economy and political tensions continue to hinder expansion for some of these countries in transition.

2013-01-18 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

The American Taxpayer Relief Act has lifted the immediate uncertainty of the fiscal cliff. Nevertheless, tax increases that are already in effect from this act, as well as the Affordable Care Act, impose a major obstacle to growth for the U.S. economy in the first half of 2013. The result of these taxes is considerable, especially in light of the poor trend in household income. In addition, these tax increases will continue to act as a drag on economic growth until late in 2015 and are unlikely to produce the revenue gains advertised.

2013-01-18 ECRI's Public Indicators Continue to Undermine Their Insistance That We're in a Recession by Doug Short of Advisor Perspectives (dshort.com)

For a few months, ECRI's indicators cooperated with their forecast, but that has not been the case in the second half of 2012 -- hence, I surmise, their switch to the traditional Big Four recession indicators. ECRI's December 7th article, The Tell-Tale Chart, makes clear their public focus on the Big Four.

2013-01-18 Are Central Banks Easing Off Prematurely? by Team of Northern Trust

Are central banks easing off prematurely? Washington is girding for another budget imbroglio; Inflation is contained, for now.

2013-01-17 International Equity Commentary December 2012 by Team of Thomas White International

International equity prices made robust gains in December, as further improvement in economic trends across most regions lifted the outlook for 2013. Policymakers in the U.S. managed to put together an agreement at the last minute and averted the 'fiscal cliff', one of the major risks that had restricted investor sentiment during earlier months. In Europe, though economic signals remain largely weak, the further fall in bond yields of the troubled countries has helped sustain optimism about resolving the region's fiscal crisis this year.

2013-01-16 The Rise of Asia's REITs by Sherwood Zhang of Matthews Asia

Real estate investment trusts (REITs) in Asia are following in the footsteps of their U.S. counterparts as they become an increasingly important asset class attracting investors looking to gain exposure to a diversified pool of real assets and relatively high yields. In the past decade, REITs have become a growing force in the regions investment universe. This month Sherwood Zhang, CFA, takes a look at just how far Asia's REIT markets have come, and what new opportunities as well as risks may still exist.

2013-01-16 The Big Four Economic Indicators: Real Retail Sales and Industrial Production Both Rise by Doug Short of Advisor Perspectives (dshort.com)

The charts don't all show us the individual behavior of the Big Four leading up to the 2007 recession. To achieve that goal, I've plotted the same data using a "percent off high" technique. In other words, I show successive new highs as zero and the cumulative percent declines of months that aren't new highs. The advantage of this approach is that it helps us visualize declines more clearly and to compare the depth of declines for each indicator and across time (e.g., the short 2001 recession versus the Great Recession). Here is my own four-pack showing the indicators with this technique.

2013-01-16 UK Economic Quagmire Adds Pressure for Monetary Policy Change by Darren Williams of AllianceBernstein

Bank of England governor-elect, Mark Carney, has raised hopes that the central bank may soon switch to a nominal GDP target. In our view, the costs outweigh the benefits, but the attractions of a radical new approach will grow if the economy remains stuck in the doldrums.

2013-01-15 Demographics and the Decline of Equity Mutual Funds by Paul Franchi (Article)

Until the last few years, mutual fund flows followed performance. Recently, however, money has flowed disproportionately into bond funds and out of US equity funds despite a strong rally in the equity markets. Changing demographics explain this shift, which has important implications for advisors and the mutual fund industry.

2013-01-15 Land of the Rising Dead by Christian Thwaites of Sentinel Investments

Yes, you knew we were going to talk about Japan. It's all the rage and the big standout in market performance in the last few weeks. Since November the broad Nikkei-225 average has risen 24% because there's new thinking in town. It's hard to describe Japan's 20 year malaise. Once proud companies shaken, the shattering of a property market and total collapse of stocks. Even if the market rises at the same level of the last few months, it will take six years to re-reach its peak. A more reasonable 10% growth rate will take 14 years. Weird things happen when economies enter deflation.

2013-01-15 Forecast 2013: Unsustainability and Transition by John Mauldin of Millennium Wave Advisors

As we begin a new year, we again indulge ourselves in the annual rite of forecasting the year ahead. This year I want to look out a little further than just one year in order to think about the changes that are soon going to be forced on the developed world. We are all going to have to make a very agile adaptation to a new economic environment (and it is one that I will welcome). The transition will offer both crisis and loss for those mired in the current system, which must evolve or perish, and opportunity for those who can see the necessity for change and take advantage of the evolution.

2013-01-15 What's Behind the Buyback Binge? by Milton Ezrati of Lord Abbett

The pace of stock repurchases says much about equity valuationsand companies' expectations for economic growth.

2013-01-14 The More Things Change... by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

One crisis averted...another one on the way? Of course, but we're still positive on the US economy and stock market.

2013-01-14 Equity Market Review & Outlook by Richard Skaggs of Loomis Sayles

While the S&P 500 Index posted a slightly negative fourth-quarter return, the Index's 16.0% return for all of 2012 was notable in the face of a long list of global fundamental concerns. Midcap and small cap stocks performed better during the ?nal three months of the year, posting gains of roughly 2.0%-3.0%. The fourth quarter outperformance of smaller stocks was enough to overtake the S&P 500 for the year, but just fractionally.

2013-01-14 The 'Dark Continent' is Shining Bright by Team of Thomas White International

From a recipient of aid, Africa has transformed itself into a magnet attracting capital and investment.

2013-01-11 Special Edition: The Outlook for 2013 by Team of Northern Trust

At this time of the year we typically get warm and generous wishes for the New Year and, of course, numerous questions about what our crystal ball has in store for 2013. While many economists publish their perspectives prior to January 1, we opted to wait in the hope of having a clear fiscal picture for the United States. A lot of good that did us...

2013-01-11 Invest In Equities: Your Future Self May Thank You by Frank Holmes of U.S. Global Investors

Investors have had an illusion about the stock market since the financial crisis. With the barrage of negative headlines and abhorrence toward risk, investors seemed to feel that equities would not improve going forward. This turned out to be a mistaken belief.

2013-01-11 Thanks, Everybody...We'll be Right Back! by Colin Moore of Columbia Management

The Washington Comedy Club has taken a brief intermission and will be back in session shortly to resume the show. Please enjoy the facilities of this great country, free of charge, while you wait. Ignore the "Nero" character in the far corner playing the fiddle. Apparently, he isn't part of the show. Economic uncertainty emanating from fears of the U.S. fiscal cliff has been deferred but not avoided.

2013-01-11 Abe's Return May Prod Japan Forward by Kenichi Amaki of Matthews Asia

Japan's politics have entered 2013 with a mixed freshness. Former Prime Minister Shinzo Abe has clinched a rare second shot at the prime minister's post. His first term, which began in late 2006, lasted only about a year and ended with his sudden resignation. But following its landslide victory last month, his Liberal Democratic Party (LDP) has secured a two-thirds majority in the 480-seat Lower House, giving it the constitutional power to override Upper House opposition, where no single party holds a majority, on almost all issues.

2013-01-11 ECRI's Imaginary Recession: Now in Its Seventh Month by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose in the latest public data. It is now at 128.3 versus the previous week's 126.6 (which is an upward revision from 126.4). Likewise the WLI annualized growth indicator (WLIg) rose, now at 5.1, up from last week's 5.0. WLIg has been in expansion territory since August 24th, although it is off its 6.0 interim high on October 12th.

2013-01-11 Winter Quarterly Commentary by John Prichard of Knightsbridge Asset Management

While a last minute compromise may have been reached on taxes, it represents only a brief rest stop on a required road of repair. On the positive side, we should see less annual wrangling with tax rates having been made permanent, meaning they will not automatically change at some future date (but rather only when Congress feels like changing them), with many areas also sensibly indexed for inflation.

2013-01-11 Fed Policy Update: Waiting for Clearer Criteria for Open-Ended Asset Purchases by Alan Levenson of T. Rowe Price

The FOMC's shift from dates to economic conditions as the basis for policy rate guidance clarified the criteria for beginning rate hikes. The criteria for ceasing open-ended asset purchases are not clear, and may reflect not only the evolution of the labor market recovery but also concerns about financial stability and the size of the Fed's balance sheet. We expect the Fed to try to clarify these criteria in the months ahead. Asset purchases will end a "considerable time" before policy rate hikes commence, and rate hikes will commence before asset sales.

2013-01-10 A Brighter Picture for Jobs and the Economy by Scott Minerd of Guggenheim Partners

Promising fundamental developments suggest that U.S. economic expansion is likely to continue and equities will rise in the first quarter.

2013-01-10 Defense as a Good Offense by Brian Frank of Frank Capital Partners

Oddly, defensive names that ordinarily trade at premiums to the market are trading at big value discounts. These companies that have the ability to grow in any economic environment are a part of the portfolio, as well as companies riding pockets of growth around the globe. There is a lot to be excited about in 2013 for value stocks.

2013-01-10 Will Emerging Market Earnings Rebound in 2013? by Morgan Harting of AllianceBernstein

For two years, emerging markets companies have delivered inferior earnings growth and investment returns compared to peers in sluggish developed market economies. Now, the consensus is that earnings growth will catapult from near-zero in 2012 to 13 per cent in 2013. Hopes were high at the end of 2010 and 2011, too, yet analysts were then forced to revise down their earnings estimates. Will 2013 represent another triumph of hope over experience? To answer that question, let's look at what investors got wrong about emerging markets in recent years.

2013-01-08 Crystal Ball Gazing by Team of Bedlam Asset Management

Several recent government announcements are likely to impact the global economy and equity markets over the medium term. In order of importance these are: the Federal Open Market Committee pledge to target zero interest rates until unemployment reaches 6.5%; the new government in Japan, under an increasingly monetarist LDP leadership; commitments by the new Chinese leadership to boost domestic infrastructure and consumption; and finally, the softening line of the Republicans on the fiscal cliff.

2013-01-08 Why China Won't Crack by Milton Ezrati of Lord Abbett

For the world's second largest economy, a hard landing scenario looks increasingly remote.

2013-01-07 Restricted Room for Higher Rates by Scott Minerd of Guggenheim Partners

Interest rates should rise through 2013, however, the level to which they can increase will be limited by the Federal Reserve's ongoing attempt to stimulate activity in the housing market.

2013-01-07 It's the Bond Vigilantes Stupid by Martin Pring of Pring Turner Capital Group

Most people are looking to the politicians in Washington to reign in the deficit by bringing spending under control. Based on their record this optimism seems severely misplaced. Nevertheless, the technical position of the bond market is suggesting that a more disciplined and powerful force is waiting in the wings. After a long 31-year vacation it may be time for the bond vigilantes (skeptical global bond investors who vote with their money) to return to town. The President has said a deal over the debt ceiling is non- negotiable but the non-partisan bond vigilantes may have a different view.

2013-01-06 And That's the Week That Was by Ron Brounes of Brounes & Associates

Welcome to a new beginning, a new yeara new optimistic investor, a new bipartisan Congress, (well, maybe not). The more things change, the more they stay the same. While investors embraced the budget deal (that is less of a deal than a procrastination), the pragmatists realize that very little has changed other than the "fiscal can" has been kicked down the road for two months. Stocks skyrocketed; bonds plunged; politicos bickered. Welcome to 2013.

2013-01-04 In 2013, Resolve to Follow the Money by Frank Holmes of U.S. Global Investors

During these first days of January, many adopt an out with the old, in with the new, approach to shed bad habits or extra pounds. Washington opted for its same ol strategy when averting the fiscal cliff, as the addictive nature of can-kicking is a transatlantic sport, according to The Economist. The short-term fix did nothing to control the unsustainable path of entitlement spending on pensions and health care nothing to rationalize Americas hideously complex and distorted tax code... and virtually nothing to close Americas big structural budget deficit.

2013-01-03 Another Look at Small-Cap Myths by Francis Gannon of The Royce Funds

A few years ago we wrote about several small-cap myths. As we begin the New Year, we thought it might be helpful to revisit some of the more prominent misconceptions about our chosen asset class and to examine how they have factored into recent performance.

2013-01-03 A Year on the Brink by Joseph Stiglitz of Project Syndicate

The two main surprises in 2012 were the slowdown in emerging markets, which was slightly sharper and more widespread than anticipated, and Europe's embrace of some truly remarkable reforms though still far short of what is needed. Looking to 2013, the biggest global economic risks are there and in the US.

2013-01-03 Grin and Bear It. by Scotty George of du Pasquier Asset Management

Without question, the financial markets yielded better in 2012 than what most had believed possible at the beginning of the calendar year. At that time, embroiled in a U.S. Presidential election and ongoing turmoil in the Middle East, many analysts would have been happy if we simply avoided catastrophe.

2013-01-03 2013 Forecast: Good Economy, Challenged Markets by Douglas Cote, Karyn Cavanaugh of ING Investment Management

We enter 2013 bombarded by conflicting signals. While fundamentals have been mixed of late, longer-term themes our "tectonic shifts" like the energy revolution are gaining momentum and promising to make positive contributions sooner rather than later. And while salutary measures taken by policymakers have eased global risks and lessened fears of Armageddon, there is considerable work yet to be done.

2013-01-02 Somewhere Over the Rainbow by John Mauldin of Millennium Wave Advisors

We are 13 years into a secular bear market in the United States. The Nasdaq is still down 40% from its high, and the Dow and S&P 500 are essentially flat. European and Japanese equities have generally fared worse. The average secular bear market in the US has been about 11 years, with the shortest to date being four years and the longest 20. Are we at the beginning of a new bull market or another seven years of famine? What sorts of returns should we expect over the coming years from US equities?

2012-12-28 Capitol "Cliffhanger": Thriller or Chiller? by Milton Ezrati of Lord Abbett

Whatever the outcome of the last-minute jockeying in Washington, meaningful fiscal reform remains unlikely.

2012-12-28 ECRI Update: Flunking Recession 101 by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose in the latest public data. It is now at 128.3 versus the previous week's 127.2. Likewise the WLI annualized growth indicator (WLIg) rose, now at 5.4, up from last week's 4.6. WLIg has been in expansion territory since August 24th, although it is off its 6.0 interim high on October 12th.

2012-12-28 Readers' Golden Nuggets Focused on Gold, Resources and Overcoming Negativity by Frank Holmes of U.S. Global Investors

The past few days Ive been counting down the most popular commentaries over the past year. China, commodities and bond fund popularity were big hits; so were the Surprises in Gasoline, Oil and Resources Stock Prices. Here are the top four.

2012-12-26 Gundlach's High-Conviction Investment Idea by Robert Huebscher (Article)

Count Jeffrey Gundlach among those who expect Japan's currency to collapse because it can't service its debt. Japan's challenges may parallel those that the US faces, and Gundlach feels strongly that they have created a compelling investment opportunity.

2012-12-24 Emerging Markets Equity - Monthly Product Commentary: November 2012 by Team of Thomas White International

Sustained domestic demand growth and a revival in export demand are anticipated to drive expansion next year.

2012-12-21 Year-End Capital Markets Forecast by Jason Hsu of Research Affiliates

What looks best for 2013? Given financial repression in developed marketspolicies that prolong negative real interest ratesemerging market local currency sovereign bonds are likely to outperform their developed market counterparts. For equities, both developed (ex-U.S.) and emerging markets offer more attractive valuations and better dividend yields than U.S. stocks.

2012-12-21 Egypt's Arab Winter by Mark Mobius of Franklin Templeton Investments

It's been almost two years since the "Arab Spring" swept North Africa and the Middle East, and with it, grand hopes for change. Sometimes, change doesn't happen as quickly as the people would like, and oftentimes it can be a messy process. That is certainly true in Egypt right now, a country that is still in the throes of shaping its future. The ousting of Hosni Mubarak in 2011 didn't instantly transform the nation into a model of democracy, and the country is currently deliberating the best way forward via public debates, protests and the election process.

2012-12-21 ECRI Update: The Recession Call Is Further Undermined by Doug Short of Advisor Perspectives (dshort.com)

TheWeekly Leading Index(WLI) of the Economic Cycle Research Institute (ECRI) slipped fractionally in the latest public data. It is now at 127.2 versus the previous week's 127.4. However, the WLI annualized growth indicator (WLIg) rose, now at 4.6, up from last week's 3.9. WLIg has been in expansion territory since August 24th, although it is off its high at 6.0 on October 12th.

2012-12-21 The Big Four Economic Indicators: Real Personal Incomes Improve Significantly By Doug Short by Doug Short of Advisor Perspectives (dshort.com)

The weight of these four in the decision process is sufficient rationale for the St. Louis FRED repository to feature achart four-packof these indicators along with the statement that "the charts plot four main economic indicators tracked by the NBER dating committee." Here are the four as identified in the Federal Reserve Economic Data repository. See the data specifics in the linkedPDF filewith details on the calculation of two of the indicators.

2012-12-21 Light at the End of the Tunnel for Gold by Frank Holmes of U.S. Global Investors

Intuition was telling me something was going on these past few days in the gold market. Our investment team was watching gold and gold stocks take a tumble for no obvious reason. It wasnt only us who felt this way: many analysts were caught off-guard. One comment from Barclays Research indicated that the week was unusually brutal with quite a few confused participants with some seemingly positive aspects of the market not having an impact.

2012-12-20 Don't Confuse Market Hiccups for Economic Heart Attacks by Matt Lloyd of Advisors Asset Management

The daily bombardment of moving toward an agreement on the fiscal cliff only to see a hesitation on the advancement is symptomatic of the tango that we have been bombarded with over the last several years. It does appear though that we are becoming a bit desensitized to the two-steps forward to two-steps back pattern we have been accustomed to in similar debt ceiling deadlines or budgetary standoffs. In looking at the markets move and comparing statements from the two parties involved, it does appear we are at least in the same ball field for negotiations.

2012-12-20 The Limits of Monetary Policy by Scott Minerd of Guggenheim Partners

With unemployment levels remaining stubbornly elevated, investors should not expect a reversal of quantitative easing by the Federal Reserve in 2013.

2012-12-19 PIMCO's Cyclical Outlook for Asia: Awaiting the Policy Breakthrough by Tomoya Masanao, Robert Mead, Ramin Toloui of PIMCO

Our base case for China includes incremental policy reform, but we also see an increased chance of a potential positive surprise on reform, resulting from the recent changes in leadership. Japan's new government will likely focus on reflating the structurally impaired economy, but policy effectiveness will remain questionable. Australia is being burdened by the unintended consequences of the policy responses of others, accompanied by the impending rebalancing of the Chinese economy.

2012-12-18 Jeremy Siegel on 'Dow 15,000' by Robert Huebscher (Article)

Jeremy Siegel was one of very few individuals to have correctly predicted the strong performance of the equity markets over the last year. The Wharton professor and author of the renowned book, Stocks for the Long Run, forecasts continued strong performance for the year ahead.

2012-12-18 The Fed's Giant Stride by Christian Thwaites of Sentinel Investments

FOMC: The news from this meeting was widely telegraphed (see Yellen, Evans, etc. last month) but produced some real and welcome developments. Here's the quick summary.

2012-12-18 The 2013 Geopolitical Outlook by Bill O'Grady of Confluence Investment Management

As is our custom, in mid-December, we publish our geopolitical outlook for the coming year. This list is not designed to be exhaustive. As is often the case, a myriad of potential problems in the world could become issues in the coming year. The lineup listed below details, in our opinion, the issues most likely to have the greatest impact on the world. However, we do recognize the potential for surprises which we will discuss throughout the year in the weekly reports.

2012-12-18 Energy Face-Off: North American Energy Independence vs. Canada's Export Plans by John Devir of PIMCO

President Obama's November 2011 postponement of a decision on whether to permit an oil pipeline from Canada's oil sands to the U.S. Gulf Coast caused a barrage of protests and negative press in Canada. Canada's new focus on building capacity to sell to Asia-Pacific could hinder U.S. ambitions of energy independence from overseas oil, since the U.S. imports roughly 30% of its crude oil from Canada. We see investor opportunities in rail transportation and pipeline systems that possess excess capacity.

2012-12-17 Fed Talks Louder, To Little Avail by Brian Wesbury, Bob Stein of First Trust Advisors

When someone doesn't speak your language, yet you must communicate, funny things can happen. At first, most just talk normally, hoping the message somehow gets through with a hand gesture or two. If that doesn't work, some people start talking really slowly. And if all else fails, how about saying it REALLY LOUDLY, and emphatically, to finally get our point across. That's where the Federal Reserve is today. In its own collective mind, it has a very important message to convey: that monetary policy is going to be as expansionary as necessary to get this economic recovery off the ground.

2012-12-15 Looking Back to Look Ahead by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Markets have been more focused on short-term forces; not least being Washington and the fiscal cliff negotiations. But taking a step back and gaining some longer-term perspective can help investors better weather short-term volatility. Even beyond the fiscal cliff, Washington and fiscal policy will likely remain in focus next year. Monetary policy is also front-and-center with the Fed maintaining its extremely accommodative policy and targeting specific economic conditions instead of providing calendar guidance. Europe managed to make it through the year, but challenges and risks remain.

2012-12-15 A Face-Off Between Passive and Active Investing by Frank Holmes of U.S. Global Investors

Exchange-traded funds continued to attract assets in 2012 while money has been exiting mutual funds. Still a majority of assets continue to be invested in actively managed products: As of the end of 2011, of the nearly $13 trillion invested in funds, index and exchange-traded funds comprise only about 8 percent, according to the Investment Company Institute.

2012-12-15 ProVise Bullets by Ray Ferrara of ProVise Management Group

So help us understandwhere did 2012 go? While we know time really fly, it sure feels like it does when we think that 12 months have almost passed. We want to wish you and your family the happiest of holidays! Please remember the women and men serving in our Armed Forces, especially those overseas.

2012-12-14 ECRI Weekly Update: Walking the Recession Plank by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose in the latest public data to its highest level since early August of 2011. It is now at 127.7, up from a downwardly revised 126.7 in the previous week. See the WLI chart. The WLI annualized growth indicator (WLIg) also rose, now at 4.4 from last week's 3.5. WLIg has been in expansion territory since August 24th, although it is off its high at 6.0 on October 12th.

2012-12-14 The Big Four Economic Indicators: Industrial Product and Retail Sales Brighten the Picture by Doug Short of Advisor Perspectives (dshort.com)

This morning I've added two more of the Big Four for November: Industrial Production from the Federal Reserve, the purple line in the chart below and Real Retail Sales, the green line.

2012-12-14 No Way Out by Peter Schiff of Euro Pacific Capital

By upping the ante once again in its gamble to revive the lethargic economy through monetary action, the Federal Reserve's Open Market Committee is now compelling the rest of us to buy into a game that we may not be able to afford. At his press conference this week, Fed Chairman Bernanke explained how the easiest policy stance in Fed history has just gotten that much easier. First it gave us zero interest rates, then QEs I and II, Operation Twist, and finally "unlimited" QE3.

2012-12-13 Decoupling From the Eurozone by Scott Minerd of Guggenheim Partners

Recent positive data releases from the U.S. and Asia seem to indicate that global investors should not expect to be severely affected by the ongoing problems in the eurozone.

2012-12-12 Low Volatility, Attention & Asset Growth by Matt Malgari of Knight Capital Group

Infused with the vicissitudes of quarreling politicians, growing mountains of debt and stagnant economies in much of the developed world, investors have been faced with a virtual bull market in "worry" and, oddly, an actual bull market in U.S. equities over the last couple of years. Chief among the beneficiaries of the newfound obsession with geometric returns appears to be "low-volatility" products which have begun showing up in force across the investment universe.

2012-12-12 To QE Infinity, and Beyond! by Brian Wesbury, Bob Stein of First Trust Advisors

The Federal Reserve made two big changes today, but changes that were mostly anticipated by the markets.

2012-12-11 The Death of Managed Futures? by Chris Maxey, Ryan Davis of Fortigent

Managed futures strategies, or systematic trend followers, have long been an important component of diversified high net worth portfolios. Because of their ability to go both long and short in more than 100 global futures markets spanning equities, currencies, commodities, rates, and bonds managed futures have historically generated very uncorrelated performance to traditional investments.

2012-12-11 PIMCO Cyclical Outlook: At Policy Crossroads by Saumil Parikh of PIMCO

The maturation of the global cyclical growth phase suggests we look to a handoff to more secular drivers of growth. But strong secular drivers remain elusive due to the continuation of New Normal headwinds.Policies are at important crossroads in every major economy. 2013 will be the year of policy change, with policymakers in major economies challenged to enact structural changes that spur private sector growth before government-balance-sheet-led growth is exhausted.

2012-12-11 Shared Sacrifice by David Rosenberg (Article)

Now that everyone is focused like a laser beam on Fiscal Armageddon, it may be more appropriate to look at what is happening on Main Street rather than Washington. Looking ahead, it is going to be more about the economy, and taking it a step further, at times like these, it is important to understand where the real economic power resides, and this is with the people.

2012-12-11 Loomis Sayles' Matt Eagan on the Macro and Fixed Income Outlook by David Schawel, CFA (Article)

In this interview, Loomis Sayles' Matt Eagan discusses the fixed income universe, Fed policy and issues facing the global macro economy. Eagan is the co-manager, along with Dan Fuss, of the Loomis Sayles Bond Fund and he manages the Loomis Sayles Strategic Alpha Bond Fund.

2012-12-10 Is QE4 Really Coming? by Brian Wesbury, Bob Stein of First Trust Advisors

The Federal Reserve meets this week. Analysts are supposing and predicting what the statement will say and if the Fed will change its economic projections.

2012-12-08 Weekly Economic Commentary by Team of Northern Trust

What are the margins of monetary policy? The November job report showed only modest improvement. Japan continues to struggle, with a change of government on the horizon.

2012-12-07 ECRI Weekly Update: More Recession Flag Waving by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose slightly in the latest public data. It is now at 126.8, up from an upwardly revised 126.2 in the previous week. See the WLI chart in the Appendix below. The WLI annualized growth indicator (WLIg) also rose, now at 3.5 from last week's 3.4. WLIg has been in expansion territory since August 24th, althout it is off its high at 6.0 on October 12th.

2012-12-07 3 Implications of a Fiscal Cliff Tax Hike by Russ Koesterich of iShares Blog

From the outside, its hard to find much evidence that Washington is getting closer to a fiscal cliff deal. Perhaps there is more going on behind the scenes than the headlines suggest, but as of today it is hard to find much evidence that the odds of a deal have risen. As the potential for fiscal drag rises, it is worth reiterating why this is so dangerous. From my perspective, the biggest risk to the economy, and to financial markets, comes from the tax side of the equation.

2012-12-06 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Now that the election is over, and the markets are oversold, the Mideast is again volatile, and the fiscal cliff is fast approaching, most market concern rests with whos going to be the first one in the pool? Interestingly, although the stars are aligned once again to make money in the equities markets, it is still a psychological, not financial, component that governs peoples capital deployment considerations.

2012-12-05 Market at Mercy of Fiscal Cliff Until Resolution by Liz Ann Sonders of Charles Schwab

Politics and the fiscal cliff are dominating market action and adding to the uncertainty factor. Sentiment is better, technicals are mixed and valuation is reasonable, but until we get past the cliff, fundamentals won't matter a lot. There are some coiled springs forming that could help offset any fiscal-cliff related contraction next year.

2012-12-05 Resilient Markets Mask Greater Concerns in Real Economy by Douglas Cote of ING Investment Management

Though equity markets have been calm, the real economy tells a different story. If our leaders in Washington arent able to arrive at a compromise, January 1 will mark the beginning of the countrys first scheduled recession, though third quarter corporate earnings suggest a global slowdown is evident. Dont be surprised to see a Christmas rally should Congress kick the fiscal can down the road and the Fed extend Operation Twist.

2012-12-04 The Big Picture by David Rosenberg (Article)

Our crystal ball says to stick with what works in an uncertain financial and economic climate - in other words, maintain a defensive and income-oriented investment strategy.

2012-12-04 High Uncertainty, Low Optimism by Francis Gannon of The Royce Funds

In these uncertain times, we continue to follow our discipline and to identify those ideas that we believe will be the beneficiaries of potentially better economic times ahead. Many of the economic events that the markets feared would pull the U.S. economy into recession have already occurred, including the rapid slowdown in China and the recession in Europe. As the saying goes, bull markets climb a wall of worrysurprisingly , the Russell 2000 gained 12.35% year-to-date, 13.09% over the one-year, 13.85% over the past three years, and 8.71% over the past 10 years through the end of November.

2012-12-01 The Significant Impact of U.S. Oil Production by Frank Holmes of U.S. Global Investors

The Eagle Ford shale formation lies south of our headquarters in San Antonio, Texas, giving the U.S. Global investment team a firsthand, tacit perspective on the oil and gas industrys growing natural resources phenomenon. Weve witnessed how the oil activity is boosting the local economy with solid-paying jobs, a healthy housing market and strong consumer sentiment, as oil giants such as Schlumberger and Halliburton take a bigger stake in the area.

2012-12-01 Weekly Economic Commentary by Team of Northern Trust

Many nations are being reminded that when times are tough, so is budgeting. Americas energy picture is changing for the better. The EU took an "extend and pretend" strategy with Greece.

2012-11-30 ECRI Weekly Update: Beating the Recession Drum by Doug Short of Advisor Perspectives (dshort.com)

TheWeekly Leading Index(WLI) of the Economic Cycle Research Institute (ECRI) rose slightly in the latest public data. It is now at 126.3, up from 125.4 in the previous week. The WLI annualized growth indicator (WLIg) declined to 3.4, down from last week's 3.6. WLIg has been in expansion territory since August 17th, although it is now at a six-week low, with the high at 6.0 on October 12th.

2012-11-28 A Turn in the Credit Cycle by Scott Minerd of Guggenheim Partners

Investors should understand the recent transition in the credit market and the implications it could have for the trajectory of asset prices over the long-term.

2012-11-27 Fixed Income Perspectives by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

A wise American once said "Life is hard; it's harder if you're stupid." A good example is when your pals in Washington are so busy pushing their partisan agendas that they lose sight of what could happen to the American economic Thunderbird if it goes all Thelma and Louise over the fiscal cliff. With the latest elections in the books, it remains to be seen if a Democratic president and acrimonious Republican House can put on their thinking caps to devise a way to delicately pump the brakes of fiscal restraint.

2012-11-26 Japan: After the Quake, After the Floods by Richard Mattione of GMO

Japan's recovery from the Tohoku earthquake and tsunami of March 11, 2011 has been so astounding that people rarely even think about the tsunami anymore. Even fewer remember that heavy rains in Thailand further disrupted the global production chain at the end of 2011. With so much accomplished, why do so few Japanese companies see bright days ahead?

2012-11-26 Overlooking Overvaluation by John Hussman of Hussman Funds

Presently, on the basis of smooth fundamentals such as revenues, book values, dividends and cyclically-adjusted earnings, the S&P 500 is somewhere between 40-70% above pre-bubble valuation norms, depending on the measure. That's about the same point they reached at the beginning of the 1965-1982 secular bear period, as well as the 1987 peak.

2012-11-26 Fiscal Cliff: An Emerging Markets' View by Mark Mobius of Franklin Templeton Investments

Now that the U.S. presidential election is over and President Barack Obama has been re-elected to serve a second four-year term, we're able to do what we always do after a major election or regime change, and that's examine the potential implications of policy changes on our investments. As our team sees it, there are two main factors for global investors to consider: the U.S. economy's future health, and President Obama's foreign policy stance toward key countries, particularly China.

2012-11-23 ECRI Weekly Leading Index: Index Rises, Growth Diminishes by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose slightly in the latest public data (released Wednesday in advance of the Thanksgiving holiday). It is now at 125.7, up from 125.4 in the previous week. See the WLI chart in the Appendix below. The WLI annualized growth indicator (WLIg) declined to 3.8, down from last week's 4.3. WLIg has been in expansion territory for thirteen weeks, although it is now at a seven-week low, with the high at 6.0 on October 12th.

2012-11-23 Five Amazing Global Consumer Trends by Frank Holmes of U.S. Global Investors

Fifth Avenue no longer the worlds most expensive retail location. China set to be the second largest luxury market by 2017. Viva Macau is gaming capital of the world. Inexpensive Indian Aakash 2 could revolutionize tablet industry. Emerging market residents don't need a bank account to pay with their mobile wallet.

2012-11-22 Emerging Asias Rising Productivity by Robert Horrocks of Matthews Asia

Per capita GDP in China has tripled in purchasing power parity terms in the last decade yet Chinese workers still likely have their most productive years ahead of them. Asia as a whole has seen consumption increase by a third since the global financial crisis, even as the West has languished. This month, Robert Horrocks, writes about what is key to the emerging opportunities in Asia: Productivity.

2012-11-20 Emerging Markets Equity -- Monthly Product Commentary: October 2012 by Team of Thomas White International

Economic data from major emerging markets suggested a moderate reversal from the weak trends of recent months.

2012-11-19 4 Reasons Not to Taiwan On by Russ Koesterich of iShares Blog

Russ K shares four reasons hes downgrading his view of Taiwan from overweight to neutral and shares potential single country solutions he prefers instead.

2012-11-19 Waiting for Godot by Charles Lieberman (Article)

Democratic and republican policymakers are actively negotiating over the fiscal cliff, as investors watch and wait with baited breath. They seem to be making progress, or so they suggest in their public comments. But until the situation is resolved, markets are likely to remain volatile. Other issues do seem to be moving towards resolution.

2012-11-19 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks continued their post-election selloff. The usual concerns about future tax increases and retrenchment by both consumers and business weighed heavily upon investor sentiment.

2012-11-19 The Seeds of Higher Market Volatility Were Sown by Mike Temple of Pioneer Investments

A paradigm shift in financial markets has taken place since 2008 into a more volatile investment environment that will demand different ways of managing risk. In an ironic twist of intention, today's higher volatility is the consequence of attempts by central banks to engineer a less volatile economic environment.

2012-11-17 Three Events That Sum Up the Week by Frank Holmes of U.S. Global Investors

India regained its title as the strongest performing market, overtaking the greater China area, as the country experienced a bounceback in demand due to improved sentiment during the festival season. The Federal Housing Administration reported that it has exhausted its reserves, possibly requiring a bailout from U.S. taxpayers for the first time ever in its nearly 80-year history. The global economic picture came into focus a little more this week with the announcement of Chinas new leadership.

2012-11-16 Obstacles to a Lasting Recovery: The Liquidity, Hesitancy & Solvency Traps by Thomas Fahey of Loomis Sayles

Those familiar symptoms are back again to start the summer: risk aversion; falling equity prices; rising volatility; record-low German and US government bond yields; wider credit spreads; a European country getting picked on; and a stronger US dollar. We have seen this bad movie twice before, during the summers of 2010 and 2011.

2012-11-16 ECRI Weekly Leading Index: The Slippage Continues by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) declined again in the numbers released today. It is now at 125.4, down from its interim high of 127.6 set five weeks earlier. The WLI annualized growth indicator (WLIg) also declined, now at 4.4, down from last week's downard revision to 5.0. WLIg has been in expansion territory for twelve weeks, although it is now at a five-week low, with the revised high at 6.0 on October 12th.

2012-11-16 The Big Four Economic Indicators: Real Retail Sales and Industrial Production by Doug Short of Advisor Perspectives (dshort.com)

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.

2012-11-13 Bank Loans: Looking Beyond Interest Rate Expectations by John Bell and Kevin Perry (Article)

Portfolio managers of Bank Loan Strategies, John Bell and Kevin Perry, outline the major advantages and risks of bank loan investing and the roles that a bank loan allocation can play in a fixed income portfolio.

2012-11-13 Quarterly Letter by Team of Grey Owl Capital Management

The multiple hurricanes of fiscal deficits and monetary malfeasance are headed our way. Unfortunately, financial market models that seek to assess the magnitude, direction, and timing of economic tempests are far less precise than those of our scientific brethren. So, we prepare for the worst, but we dont immediately evacuate. There are still plenty of opportunities for solid investment returns and we will describe two new investments in the pages that follow. Yet, the risks are real, as we have discussed frequently in these letters, so our overall portfolio structure remains conservative.

2012-11-13 China's Transition Occurring at a Critical Time by Chris Maxey, Ryan Davis of Fortigent

While the presidential election in the U.S. was on the forefront of most investors' minds, current events in China could be equally important to the global economy. China is going through a political transition at the same time as it seeks to re-balance its economy. Whether those efforts will be successful remains a great unknown.

2012-11-13 Scotland: The Same, Only Better? by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

As the Eurozone countries are trying to find the functional balance between national sovereignty and Eurozone-wide central control on the national level, fractures are also appearing within the nation states themselves. Additionally, the Northern European countries are questioning the extent to which they should be expected to bail out the Southern countries, while the wealthier regions of the nation states reason that they would be more efficient in managing their internal fiscal budgets.

2012-11-13 A Portrait of Two Presidents by Frank Holmes of U.S. Global Investors

Last Friday, President Obama addressed the two topics that have been on many equity investors' minds since election night: the economy and the dreaded "fiscal cliff." In his speech, he delivered his familiar plan to combine spending cuts with increasing revenue by raising taxes on the wealthiest Americans. That's "how we did it in the 1990s, when Bill Clinton was president," says the president.

2012-11-12 And That's the Week That Was by Ron Brounes of Brounes & Associates

"Four more years...Four more years." While those words may be music to the ears of Obama supporters worldwide, investors seemed less than impressed (at least initially). A second Obama administration brings plenty of question marks about the global economy, the tax code, the regulatory environment, Corporate America, and, of course, the financial markets. Stocks plunged on the first day post-election, but many analysts believe that is less a statement about the Obama victory and more a concern that the "fiscal cliff" is now clearly atop the news headlines.

2012-11-12 Surveying the Post-Election Landscape by Team of Lord Abbett

Of all the uncertainties facing investors over the past few years, the U.S. presidential election was among the most significant. And now that the election is over, asset managers are assessing the opportunities and riskssuch as the looming fiscal cliffwithin their respective markets. Indeed, the direction of fiscal policy remains investors' foremost concern, according to a recent survey of nearly 600 financial advisors conducted on Lord Abbett's postelection Web conference.

2012-11-09 ECRI Weekly Leading Index: Off Its Interim High by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) declined in the numbers released today. It is now at 126.2, down from its interim high of 127.6 set four weeks earlier. The WLI annualized growth indicator (WLIg) also declined, now at 5.1, down from last week's 5.9. WLIg has now spent eleven consecutive weeks in expansion territory, although it is now at a five-week low.

2012-11-09 Looking Past the Election by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

The election results are in, removing at least one area of uncertainty from the equation. For the near term, economic data in the United States may take a back seat. Growth around the world appears soft, but some pockets are more encouraging than others.

2012-11-09 A Portrait of Two Presidents by Frank Holmes of U.S. Global Investors

On Friday, President Obama addressed the two topics that have been on many equity investors minds since election night: the economy and the dreaded fiscal cliff. In his speech, he delivered his familiar plan to combine spending cuts with increasing revenue by raising taxes on the wealthiest Americans. Thats how we did it in the 1990s, when Bill Clinton was president, says the president.

2012-11-09 Americas: Economic Review 3rd Quarter 2012 by Team of Thomas White International

Economic trends in most countries across the Americas region saw a moderate recovery during the third quarter, though the pace of growth remains subdued. Slower global demand due to the ongoing European recession and the slower expansion in Asia continues to restrict exports from the Americas. At the same time, domestic consumption growth has been relatively more robust than expected and has helped most regional economies prevent a deeper slowdown.

2012-11-08 Make Way for Debt Mutualization in Europe by Scott Minerd of Guggenheim Partners

Hurdles and hold-ups are inevitable but recent policy developments in Europe indicate that the ECB and the Bundesbank are cooperating and greater federalization is likely.

2012-11-08 Emerging Asia Pacific: Economic Review 3rd Quarter 2012 by Team of Thomas White International

Emerging Asia Pacific economies faced a challenging third quarter in 2012 as exports to key developed markets such as the Euro-zone came under pressure. As the austerity policies implemented by many of the countries in the Euro-zone caused a significant slump in demand, emerging market economies, which serve as the workshop of the world faced significant difficulties. Almost all major export-dependent nations like China, South Korea, Taiwan and Malaysia faced pressure to export growth. Still, most of the economies possessed both monetary and fiscal ammo to overcome the slowdown.

2012-11-08 Developed Europe: Economic Review 3rd Quarter 2012 by Team of Thomas White International

Amid signs of a deepening economic slowdown in Developed Europe, three key events brought some cheer to the beleaguered region, raising hopes of a lasting solution to its debt crisis. In early September, the European Central Bank (ECB) announced its new Outright Monetary Transactions scheme, which is in effect a commitment by the ECB to buy unlimited quantities of sovereign bonds with up to three years in maturity, providing the bond-issuing member country agrees to a reform agenda.

2012-11-06 The Absolute Return Letter: The Era of Kakistocracy by Neils Jensen of Absolute Return Partners

We are now five years into a crisis that just doesn't want to go away. Paraphrasing Charles Gave of GaveKal who wrote a supremely succinct paper on this topic only last week, policy makers continue to tamper with interest rates, foreign exchange rates and asset prices in general. They continue to permit deposit-taking banks to operate like casinos. They issue new debt to pay for expenditures when we are already drowning in debt. They just don't seem to get it. Albert Einstein once defined insanity as doing the same experiment over and over again, expecting a different result.

2012-11-05 And That's the Week That Was by Ron Brounes of Brounes & Associates

Superstorm Sandy overshadowed most all newsworthy stories during the week as much of the East Coast (and beyond) suffered some ill-effects and many will be fighting to overcome challenges for many days (weeks, months) to come. The stock market closed over consecutive days to start the week and uncertainty (volatility) ensued with investors enjoying the best single day performance in a month-and-a-half, only to give up those gains a day later as many set portfolios in advance of the election. Soon the campaign will be a distant memory (but the "fiscal cliff" will become a near-reality).

2012-11-05 Commentary and Statistics by Team of ING Investment Management

U.S. equity markets were mixed during an abbreviated trading week in which Hurricane Sandy forced the longest weather-related shutdown of U.S. stock trading since 1888. While the S&P 500 eked out a small gain, the DJIA and Nasdaq closed slightly lower.

2012-11-05 Election's Impact on Investors by Chris Maxey, Ryan Davis of Fortigent

Next Tuesday's election will bring some clarity to the types of policies that will shape the fiscal and economic future of America. President Obama and Mitt Romney certainly share different visions on how the US should tackle middling growth, while addressing the longer-term issues of the US fiscal deficit and seemingly unsustainable entitlement programs.

2012-11-05 Day of Reckoning by Charles Lieberman (Article)

Tomorrow's election is too close to call according to the polls, while Friday's jobs report was decent, blemishes notwithstanding. Super storm Sandy was and remains a severely disruptive force to the Northeast, particularly New Jersey. A few thoughts on these issues follow.

2012-11-02 What's Troubling India? by Kenneth Rogoff of Project Syndicate

Just a couple of years ago, India was developing a reputation as an attractive investment location, with heads of state virtually tripping over one another to meet business leaders in Mumbai and pave the way for further trade and investment. Now their interest has faded, along with India's macroeconomic numbers.

2012-11-02 ECRI Weekly Leading Index: Still Jogging in Place by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) slipped fractionally in the numbers released today. It is now at 126.6, down from last week's 126.7 (revised from 126.8). Likewise, the WLI growth indicator (WLIg) slipped slightly, now at 5.9, down from last week's 6.0. WLIg has now spent ten consecutive weeks in expansion territory, although it is off its interim high of 6.1. But for the past six weeks the WLI has been jogging in place in a narrow range (126.2 to 126.7).

2012-11-02 Weekly Economic Commentary by Carl Tannenbaum, Asha Bangalore of Northern Trust

The October employment report paints a favorable picture of the labor market.

2012-11-02 Who Will Lead America Over the Next Four Years? by Frank Holmes of U.S. Global Investors

If President Obama is reelected, it could be a negative for certain energy companies involved in natural gas fracking, says International Strategy & Investment (ISI). Conversely, a Governor Mitt Romney win could be significant for energy companies. In its Romney Portfolio ISIs rationale is that Romney and the GOP will try to do more to promote traditional forms of energy, including offshore drilling, approving the Keystone pipeline, and exploiting the nations coal resources.

2012-10-30 Weekly Update: Commentary and Statistics by Team of ING Investment Management

U.S. equity markets fell back into decline during the week, as earnings reports and more specifically, forward outlooks inspired investor caution. Meanwhile, a potential "Frankenstorm" has the East Coast on edge for the coming week.

2012-10-26 ECRI Weekly Leading Index: Running in Place by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose fractionally in the numbers released today. It is now at 126.8, up from last week's 126.6 (revised from 126.7). However, the WLI growth indicator (WLIg) slipped slightly in expansion territory, not at 6.0, down from last week's 6.1. WLIg has now spent nine consecutive weeks of in expansion territory. But essentially the WLI has been running in place for the past five weeks.

2012-10-26 Don't Fear a Normal Gold Correction by Frank Holmes of U.S. Global Investors

Dont let the short-term correction fool you into selling your gold and gold stocks. The dramatic increase in money suggests that monetary debasement will continue, and in addition to all the above drivers, these are the positive dynamics driving higher prices for gold and gold stocks.

2012-10-26 What Now? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

The market appears to be in a "wait-and-see" mode in advance of the elections, but looking beyond November 6th is important for investors. The election is only one piece of the puzzle, and certain aspects of the political landscape likely won't be much clearer after Election Day. Earnings season has been somewhat disappointing, even though there was a relatively low bar to hurdle. We see more signs that the slowdown in the United States may be ending, however, with strength in housing particularly noteworthy.

2012-10-26 Weekly Economic Commentary by Carl Tannenbaum, Asha Bangalore and James Pressler of Northern Trust

Fiscal policy is a matter of multiplication. US GDP growth accelerated in the third quarter, but remains less than ideal. Recent reports out of China reassured the markets, but underlying trends are not so promising.

2012-10-25 Cheap Debt is Good News for Stocks by Scott Minerd of Guggenheim Partners

The eventual return of leveraged buy-outs (LBOs) and an uptick in mergers and acquisitions (M&A) should give investors further reason to be bullish on stocks.

2012-10-25 October 2012 Newsletter by Harold Evensky of Evensky & Katz Wealth Management

Oh the joys of driving to a baseball game; sitting in endless traffic four miles from the stadium, inching past full lot after full lot, or not finding your car when it's time to go home (was it D-4 or 404 Green?). Now you can streamline your parking experience with ParkWhiz, a Chicago-based company that's recently gone national. This and other missives from Harold Evensky.

2012-10-24 Policy at a Crossroads by Investment Strategy Group of Neuberger Berman

On September 13, the Federal Reserve announced a third round of quantitative easing, dubbed QE3, in the hope of providing an additional boost to the slow U.S. economic recovery. Although this latest policy action reinforces the notion that the U.S. is prepared to support its economy for as long as needed, some economists question whether the stimulus can really make a difference. In this issue of Strategic Spotlight, we consider the recent effects of loose monetary policy and whether the Fed has "reached its limit."

2012-10-24 Emerging Markets Local Currency Bonds: Reducing Risk and Improving Returns in a Global Fixed Income by Marcela Meirelles, Blaise Antin of TCW Asset Management

Emerging market (EM) local currency bonds broaden the scope for income generation and risk diversification in a global fixed income portfolio. The asset class offers a unique opportunity to access higher income and potential for capital appreciation through a basket comprised of mostly investment grade credits with an average yield spread of 475 basis points over US Treasuries.

2012-10-23 The Perils of the Fiscal Cliff by John Mauldin of Millennium Wave Advisors

In today's letter we'll peek over the Fiscal Cliff and see what economic models can tell us about government spending. And if we have time we'll quickly look at an interesting study that uses economics to predict the outcome of this US presidential election.

2012-10-22 Eggs Are Not Enough: The Truth About Diversification by Feifei Li of Research Affiliates

We learn in finance theory that diversification simply means not putting all your eggs in one basket. Simple as the idea is, most investors do not hold portfolios that are even close to being truly diversified. Two reasons make this sensible objective difficult to achieve. First, most investors are not disciplined enough to implement diversification. To illustrate my point, pause and check whether you are willing to reduce equities when the trailing 12-month return on stocks is 20+ percentage points higher than bonds?

2012-10-22 More traction...Just Look Through the Earnings by Christian Thwaites of Sentinel Investments

Last week saw an important debate on how the US has fared in the post recession recovery. The short answer is, "not well" if measured by a return to GDP growth trends or per capita income. But the counter, as explained by Reinhart and Rogoff, is "faster than you would expect." We're in the second camp.

2012-10-22 The Little Country That Could by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

In this geopolitical report we will take a brief look at Estonia's history, its economy after the break-up of the Soviet Union, its remarkable economic growth in the 1990s and early 2000s, and the ensuing downturn in 2008. The country stands out for choosing a different path to deal with the recession than many other European countries.

2012-10-22 Lessons from Black Monday by Peter Schiff of Euro Pacific Capital

25 years ago, on another Monday in late October, the financial world seemed to disintegrate in a heartbeat. Though the 205 point drop in the Dow last Friday (the technical anniversary of the '87 Crash) was somewhat reminiscent of its 108-point drop on Friday, October 16, 1987, the real action in '87 was on the Monday that followed. And while this Monday is not nearly as black, it is important that we use the opportunity to recall the circumstances that nearly sent the stock market into cardiac arrest.

2012-10-19 ECRI Weekly Leading Index: Index Slips, But Growth Rises by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index of the Economic Cycle Research Institute declined in the numbers released today. It is now at 126.7, down from last week's 127.6 (revised from 127.7). However, the WLI growth indicator rose further in expansion territory to 6.1, up from last week's 5.7. WLIg has now posted sixteen consecutive weeks of improvement and is at its highest level since May 20, 2011. The divergence between the WLI and its growth derivative is probably attributable to apparent anomaly in the BLS's weekly unemployment data over the past two weeks.

2012-10-19 Not by Housing Recovery Alone by Team of T. Rowe Price

Strong August-September housing starts are a clear bricks-and-mortar response to reports of rising buyer traffic, confirming a broad-based cyclical recovery in new housing construction. This trend will contribute 0.4 percentage points (pp) to real GDP growth directly through in construction activity, and perhaps another 0.2 pp indirectly through the consumer purchases of those newly employed in housing-related industries and via wealth effects related to the nascent recovery in house prices.

2012-10-19 ECB Needs to Rescue German and French Banks More than European Periphery: Global Macro View by George Bijak of GB Capital

Whenever we talk about rescuing overleveraged Europe it is always about Spain, Italy, Portugal, Ireland, and Greece the European periphery loaded with debt that they cannot possibly repay. But a closer look at the recent IMF data reveals that German and French banks need rescue more than anybody

2012-10-18 Quarterly Review and Outlook - Third Quarter 2012 by Hoisington and Hunt of Hoisington Investment Management

Entering the final quarter of the year, domestic and global economic conditions are extremely fragile. Across the globe, countries are in outright recession, and in some instances where aggregate growth is holding above the zero line, manufacturing sectors are contracting. The only issue left to determine is the degree of the downturn underway.

2012-10-18 Investment Outlook 2013: "ABCD" Investing: Anything Bernanke Cannot Destroy by Cliff Draughn of Excelsia Investment Advisors

The Ben Bernanke and Mario Draghi concert gave the markets a double shot of their love in the month of September by promising to print as much money as needed to finance the debts of their respective countries. Ever since the financial fraternity party ended in 2008 and the world began deleveraging its massive credit hangover, the global markets have been hooked on the next shot of love from the central bankers.

2012-10-17 Fuzzy Math from the Continent of Peace by Christian Thwaites of Sentinel Investments

Whoops! The IMF made two announcements last week that caught our attention. But to set up the joke in all this, it's worth remembering that for decades the IMF preached austerity economics to any country that needed balance of payments assistance.

2012-10-17 Emerging Europe: Third Quarter 2012 Economic Review by Team of Thomas White International

In its recent economic assessment, the European Bank for Reconstruction and Development (EBRD) said it expects growth to slow down during the year in member countries such as Russia, Poland, Hungary, and Turkey as the effects of the Euro-zone crisis spills over. The bank said many of these countries have already seen lower growth, but Russia especially is affected by falling commodity prices. Striking a similar note, the International Monetary Fund in its World Economic Outlook said emerging economies of the world are at risk should the developed economies experience a continued slowdown.

2012-10-17 Rise Up: US Soft Patch Appears to be Ending by Liz Ann Sonders of Charles Schwab

By definition, inflection points are characterized by maximum weakness. Many US economic readings are again suggesting notable signs of life. Will the improvement be enough to offset the "fiscal cliff"?

2012-10-16 Will Bonds Be ?Burnt to a Crisp?? by David Schawel, CFA (Article)

Bill Gross's recent monthly commentary painted a disturbing picture for investors - he foresees bonds being ?burnt to a crisp.? This isn't just hot air. Such a conflagration is possible, and investors in bond funds, especially those that are constructed similar to the widely followed Barclays bond index, need to heed risks inherent in today''s market.

2012-10-16 China's Pyramid of Power by Frank Holmes of U.S. Global Investors

China celebrated another achievement last week, as Mo Yan became the first Chinese citizen to win a Nobel Prize for literature. The selection of Mo was praised by a Chinese nationalist tabloid as a sign that mainstream China could "no longer be refused by the West for long."

2012-10-16 The Big Four Economic Indicators: Updated Real Retail Sales and Industrial Production by Doug Short of Advisor Perspectives (dshort.com)

The latest updates to the Big Four was today's release of the September Industrial Production, which rose 0.4 percent over the previous month following a 1.4 percent decline the month before. Yesterday the Census Bureau's Retail Sales number was released, and with today's release of the Consumer Price Index we can calculate Real Retail Sales. The latest 0.6% increase gives us a strong three-month upward trend after four months of flat or contracting data. Both indicators beat analysts' expectations.

2012-10-16 Bank of England Still Aiming at the Wrong Target by Darren Williams of AllianceBernstein

The UK is celebrating a near three-year low in consumer price inflation, but we think the Bank of England (BOE) should be more worried about the role that money and credit play in the inflation process.

2012-10-15 The United States: Stability or Complacency? by Alan Levenson of T. Rowe Price

The International Monetary Fund's updated World Economic Outlook foresees a modest pace of U.S. economic expansion in 2012-2013, emphasizing significant downside risks emanating from the euro area crisis and from the domestic fiscal cliff. Weakness in the euro area and slower growth in a secularly-restructuring Chinese economy are weighing on U.S. export trends, but sturdier growth in Canada and Mexico is providing an important offset.

2012-10-15 Equity Market Review & Outlook by Richard Skaggs of Loomis Sayles

Global equity markets performed well in the third quarter after posting modest losses in the second quarter. The soft second quarter, which followed back-to-back double-digit quarterly gains, proved to be a pause rather than a signal that the equity bull market was ending. Though defensive sectors garnered favor in the second quarter, economically sensitive sectors have generally led performance this year, with technology, financials and consumer discretionary topping the list year to date.

2012-10-15 QE3Back to the Future by Milton Ezrati of Lord Abbett

The broad scope and open-ended nature of the Federal Reserve's third round of quantitative easing raises questions about what exactly Fed chairman Ben Bernanke has in mind. Some insight, remarkably, emerges from a speech he gave in November 2002 to the National Economists Club in Washington, D.C., when he was simply a Fed board member. Taking his cue then from fears of a Japanese-style deflation, he laid out a path for monetary stimulus in an extreme situation, outlining nontraditional policy tools that have since become common.

2012-10-15 High Yield and Bank Loan Outlook by Scott Minerd of Guggenheim Partners

The leveraged credit market turned in an impressive Q3 with high yield bonds and bank loans returning 4.3 and 3.1 percent, respectively. Unprecedented accommodation from central bankers across the globe has alleviated much of the macroeconomic tail risk that we highlighted in last quarters publication. Presented with a seemingly insatiable demand for new issue bonds, issuers returned to the torrid pace of issuance that characterized the start of 2012 by raising a record $99 billion during the third quarter.

2012-10-15 The New Investment World is Not Near, It's Here by Russ Koesterich of iShares Blog

The recent pace and magnitude of economic change has left many investors disoriented, to say the least. Russ K explains why this new environment is unlikely to change any time soon, which may have implications for investors' current and long-term strategies.

2012-10-12 ECRI Weekly Leading Indicators: Time to Recant the Recession Call? by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) made a strong advance in the numbers released today. It is now at 127.7, up from last week's 126.2 (revised from 126.3). See the WLI chart below. The WLI growth indicator (WLIg) now marks its eighth week in expansion territory at 5.7, up from last week's 4.6. WLIg has now posted fifteenth consecutive weeks of improvement and is at its highest level since May 27, 2011.

2012-10-12 Teetering on the Edge? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Concerns about a possible US recession remain elevated in light of the pending "fiscal cliff," resulting in some lackluster stock market action. The fiscal cliff and uncertainty around tax and regulatory policy appear to be influencing business decisions to the detriment of economic growth. While worst-case scenarios for Europe may have been taken off the table by the ECB, Spain's reluctance to ask for aid is causing consternation. And although we see continued weak growth in China, signs indicate the global slowdown may be turning around.

2012-10-12 Chinas Pyramid of Power by Frank Holmes of U.S. Global Investors

We've been able to witness Chinas incredible growth, with GDP averaging 10 percent per year and more than 500 million people moving out of poverty over the past 30 years. Now after three decades of tremendous expansion, this new generation of leaders will have to carefully maneuver the country into the next decade, towing the line between maintaining the stability created during the previous Hu-Wen administration and continuing the political and economic reform necessary to adjust to the countrys slowing growth.

2012-10-12 U.S. Economic and Interest Rate Outlook - October 2012 by By Carl Tannenbaum and Asha Bangalore of Northern Trust

Budget negotiations in the US and Europe are attempting to balance austerity, prosperity, and posterity. US exports and imports are showing the strains of sluggish conditions overseas. Our updated economic forecast reflects some "cliff" effects, but not a renewed recession.

2012-10-12 The Golub Group Commentary by Team of The Golub Group

High-quality businesses that have the ability to pay and increase their dividends are even more attractive in this low yield environment and the valuations of these businesses are cheap on an historic basis and relative basis to the alternatives.

2012-10-10 Pacific Basin Market Overview by Team of Nomura Asset Management

Regional equity markets remained largely directionless and volatile during the third quarter amid the summer trading lull. Government policy action towards the end of the quarter triggered the biggest market moves. However, the euphoria was short lived following the announcements of the European Central Bank's Outright Monetary Transactions and the Federal Reserve Board's third round of quantitative easing.

2012-10-10 And That's the Week That Was by Ron Brounes of Brounes & Associates

Don't bury Candidate Romney quite yet. The man looks to be in come-back mode and he has some experience in this area. Remember when Republicans preferred anyone but Mitt (Perry, Bachmann, Cain, Gingrich, Santorum) and yet he emerged victorious from the primary season.

2012-10-10 Third Quarter Surge Caps 12-Month Relentless Risk Rally by Douglas Cote of ING Investment Management

Despite the rally of the past year, equity markets still look cheap. Weakening manufacturing data suggest the 12-quarter streak of positive earnings growth may come to an end in the third quarter. Housing has turned the corner, providing consumers with cause for confidence. Though fundamentals have wavered a bit, we are constructively bullish on risky assets, as "successful investing demands a choice between prudent risk control and outright risk avoidance".

2012-10-09 A Small Business Complex by Chris Maxey, Ryan Davis of Fortigent

Despite the release of the September labor report on Friday, small business owners seemed to take the biggest proportion of the spotlight last week. According to the Huffington Post, Romney and Obama mentioned the phrase "small business" a total of 29 times throughout the Presidential debate. The issues and importance placed on small business are unlikely to be as cut and dry as both candidates made them seem.

2012-10-09 Bibi Blinks by Bill O'Grady of Confluence Investment Management

On September 27th, Israeli PM Benjamin Netanyahu gave a speech before the U.N. General Assembly. Although it will be best remembered for his "looney toons" prop of a cardboard bomb which he used to describe when Iran crosses the "red line" (which, appropriately enough, was drawn on the bomb with a red marker), the real story of the speech was his apparent climb down from pressing for an attack on Iran.

2012-10-09 This Fortress built by Nature for Herself by Dennis Gibb of Sweetwater Investments

It has been some time since I have taken keyboard in hand in any attempt to inform anyone of my thoughts on the world of investing. I am taking the time to write now because we are embarked on some events that are, in my humble opinion, truly historic. As these events play out the United States may not be a fortress built by nature for herself. So hang on this could get rough and as usual it will be opinionated with a different perspective.

2012-10-08 Pliable Statistics by John Buckingham of AFAM

As Mark Twain once said, Facts are stubborn, but statistics are more pliable. More examples emerged last week in support of that center box quotation from this months edition of The Prudent Speculator. Indeed, Fridays monthly jobs report provided plenty of fodder for both the Obama & Romney election campaigns as the former was able to trumpet the eyebrow-raising dip in the unemployment rate to 7.8% (calculated from a survey of 60,000 individual households) while the latter could point to the less-than-stellar creation of only 114,000 jobs during September.

2012-10-05 ECRI Weekly Leading Indicators: Mixed Signals in Latest Data by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) slipped fractionally after eight consecutive weeks of growth. It is now at 126.3, down from last week's 126.6 (revised from 126.7). See the WLI chart below. However, the WLI growth indicator (WLIg) now marks its seventh week in expansion territory at 4.7, up from last week's 3.8. WLIg has now posted fourteen consecutive weeks of improvement and is at its highest level since June 3, 2011.

2012-10-05 How Helicopter Ben Helps Jobs and, Inadvertently, Gold by Frank Holmes of U.S. Global Investors

The world's central bank leaders continue to spike the monetary punch bowl, with investors imbibing on gold once again. This flurry of gold buying prompts many curious investors and doubting media to ask me two questions: 1) How can demand for gold and gold stocks continue; and 2) How high can the precious metal go? To answer these questions, we need to look at the intentions behind the economic and political decision-making across several developed countries, analyze the causes, the effects, and the possible ramifications.

2012-10-04 Monetary Mystification by Joseph Stiglitz of Project Syndicate

Central banks on both sides of the Atlantic took extraordinary monetary-policy measures in September, sending stock markets soaring. But politicians and markets in both Europe and America are mistaken if they believe that monetary policy can restore economic growth and boost employment.

2012-10-03 Understanding How "Debt Deleveraging" Works by Gary Halbert of Halbert Wealth Management

For many years, I have warned that our massive explosion in federal debt (up 50% just since Obama took office) would one day stifle economic growth. Obviously economic growth is currently stifled, what with the weakest post-recession recovery in decades. But the question remains as to whether our massive national debt and trillion-dollar budget deficits are the main reason for the disappointing recovery.

2012-10-02 Lessons from Scandinavia by Kaisa Stucke, Bill OGrady of Confluence Investment Management

During the late 1980s and early 1990s, Scandinavian nations suffered through balance sheet recessions. Commentators have suggested that U.S. policymakers could use the Scandinavian response to their crises as a roadmap for resolving the current U.S. situation. As part of our own analysis, we have studied several earlier events to understand the underlying similarities and differences to develop insights into the current event.

2012-10-02 QE and the Equity Market: Is the Fed Driving or Along For the Ride? by Patrick Lawler of PIMCO

Federal Reserve officials have said several times that among other benefits, its quantitative easing (QE) programs have helped boost U.S. equity prices. Based on our analysis, QE has not been the driving force behind rising equity prices in recent years. How does the Federal Reserve measure the success of its asset purchase programs, or quantitative easing (QE), since the 2008 financial crisis QE1, QE2, Operation Twist (OT) and QE3?

2012-10-01 U.S. Economy Prints 32-month Low: Recession Risks Escalate by Dwaine van Vuuren of RecessionALERT.com

It's been 4 months since the 3rd "Summer Swoon" in this expansion when many commentators were trotting out recession scares and imminent collapses in the stock market. Since then the SP-500 has risen over 9%, peaking at 12% gains some weeks back. There is now an interesting divergence developing between the leading data (stock market, money supply, credit spreads etc.) that is implying positive expansion ahead and the co-incident data that is implying a drift toward possible recession.

2012-10-01 And That's the Week That Was by Ron Brounes of Brounes & Associates

Bad news from Spain (no good news, no bad news.) Investors spent the week trying to make heads or tails about the headlines out of Europe, while analyzing the news from a suddenly resurging housing sector and a suddenly ailing manufacturing sector. For the most part, however, many were booking profits from a successful third quarter, while reallocating positions for the final stretch of the year. (Surely the Prez election and the "fiscal cliff" must enter into their decision-making moving forward).

2012-10-01 Moral Hazard. by Scotty George of du Pasquier Asset Management

Overall, equity market risk is dissipating. There appears to be a stronger momentum ameliorating a global tapestry of "ills." What may have been a domino effect when the credit crisis began has stopped short of a cataclysm and turned closer to equilibrium. As a result, equities might be poised to perform. The question is when?

2012-10-01 Quantitative EasingBernanke Sizes Up the Risks by Milton Ezrati of Lord Abbett

Bernanke acknowledged four potential pitfalls in policywith a fifth lurking in the shadows.

2012-10-01 If Its All About Macro These Days, Why Havent EM Stocks Done Well? by Morgan Harting of AllianceBernstein

It doesn't seem to make sense. Superior macroeconomic fundamentals in emerging countries have not led to stronger-or even positive-equity returns over the last two years. Since the beginning of 2011, the unhedged return in US dollars of the MSCI Emerging Markets (EM) Index has been (10)%, while the MSCI World Index has delivered 6.5%. What's going on?

2012-09-28 The Big Four Economic Indicators: Updated Real Personal Income Less Transfer Payments by Doug Short of Advisor Perspectives (dshort.com)

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process.

2012-09-28 ECRI Weekly Leading Index Growth at Highest Level Since June 2011 by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose for the eighth consecutive week, now at 126.7, up from last week's 125.3 (revised from 124.7). See the WLI chart below. The WLI growth indicator (WLIg) now marks its sixth week in expansion territory at 3.8 (up from last week's 2.7). It has now posted thirteen consecutive weeks of improvement and is at its highest level since June 10, 2011.

2012-09-28 The Housing Market: For Real or Fakeout? by Jeffrey Dow Jones of Jones & Company

Most of you guys know that I bought a new house last summer. I spent two years looking at properties with the lovely (and patient!) Mrs. Concord, and eventually we found one that had what we each were looking for. My #1 criteria was value. Not price, but value.

2012-09-28 Schwab Market Perspective: Disrespected RallyCan It Continue? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

US equities are trading near five-year highs but numerous measures show investors remain skeptical. The enthusiasm following the Fed's announcement of more quantitative easing was short-lived, although the summer rally in stocks could be at least partially attributed to anticipation of more stimulus. The enthusiasm following the Fed's announcement of more quantitative easing was short-lived, although the summer rally in stocks could be at least partially attributed to anticipation of more stimulus.

2012-09-27 How Can Balanced Investors Mitigate Their Equity Risk? by Daniel Loewy of AllianceBernstein

Over the past three decades, bonds have provided balanced investors with the best of both worlds. As 10-year Treasury yields fell from a high of 13.7% in 1980 to less than 2% today, bonds provided both strong returns and a great cushion in times when equities were weak. Bonds are still important, but investors shouldn't expect more of the same.

2012-09-27 PIMCO'S Cyclical Outlook for Asia: Structural Slowdown Shaping Near-Term Growth Dynamics by Tomoya Masanao, Robert Mead, Ramin Toloui of PIMCO

Rather than a hard landing for China, we foresee a structural downshift that could be called a "New Normal with Chinese characteristics." Australia has considerable scope for additional rate cuts and more expansionary fiscal policy to address regional weaknesses. The Japanese economy will be affected by weak economic growth in China, which will add more pressure for the Bank of Japan to respond.

2012-09-27 Going Private in China by Henry Zhang of Matthews Asia

Over the last three decades, China's embrace of capitalism has benefited its socialist society. The country's foundation for capitalism has been based on private ownership, as it has been in other capitalist economies. For China, this privatization occurred in two stages: the first being the privatization of agriculture in rural areas as the government implemented a "household responsibility system" to align the economic interests of farmers directly with the output of their own plots of land.

2012-09-24 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Certain studies commissioned by the securities industries governing bodies have recently concluded that terrible things happen to people who are too ignorant to know better. It's amazing that your confidence and trust could be so obfuscated as to propose that an economic tailspin was your fault.

2012-09-24 Trade Winds Shifting in America's Favor by Milton Ezrati of Lord Abbett

The improvement in the U.S. trade balance can be traced to the dollar's relative weakness and increasing domestic energy production.

2012-09-24 Some Parting of the Clouds by Charles Lieberman (Article)

The ongoing rally in the equity market and corresponding rise in Treasury yields mirror the slow improvement in financial market conditions in Europe and moderate gains in domestic economic data. This still leaves more progress to be made on both fronts, but uncertainty remains elevated over the fiscal cliff, the threat of military conflict in the Middle East, the upcoming election, and tax policy.

2012-09-22 QE Infinity: Unintended Consequences by John Mauldin of Millennium Wave

Last Monday an op-ed in the Wall Street Journal, penned by five PhDs in economics, among them a former Secretary of the Treasury and an almost-guaranteed Nobel laureate (and most of them former members of the President's Council of Economic Advisors) minced no words in excoriating the current QE policy. We will look at that op-ed in detail below. The point is that there are grave reservations about the current policy among some very serious policy makers.

2012-09-21 Growth for the Long Run by Jonathan Coleman, Brian Demain, Nick Thompson of Janus Capital Group

"I skate to where the puck is going, not where its been." Wayne Gretzky. Many investors would love to be as successful as The Great One when it comes to their portfolios. Yet investors are often heavily influenced by the past, losing sight of where they need to be going. This seems to be especially true today: mistrust of equities is running high after a decade of disappointing returns and excessive volatility.

2012-09-21 ECRI Weekly Leading Index Growth at Highest Level Since July 2011 by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose for the seventh consecutive week, now at 125.4, up from last week's 124.7 (revised from 124.9). See the WLI chart below. The WLI growth indicator (WLIg) now marks its fifth week in expansion territory at 2.7 (up from last week's 1.9). It has now posted twelve consecutive weeks of improvement and is at its highest level since July 29, 2011.

2012-09-21 About That Swiss Neutrality by Russ Koesterich of iShares Blog

Swiss stocks still merit a positive long-term outlook but on a short term basis, Russ is changing his allocation to underweight from neutral.

2012-09-20 QE n+1 What The Fed Is Really Up To by JJ Abodeely of Sitka Pacific Capital Management

As I survey the news stories and other analysis on the Feds recent announcement, most fall short of describing what the Fed is really up to. Here is a hint: it's not really about employment. It's not really about "price stability" or really about growth either.

2012-09-19 Farmland: The New Gold? by Randy Bateman of Huntington National Bank

Yes, it's just 'dirt', but life on this planet wouldn't exist as it does today unless it didn't comprise a third of the world's surface. Unfortunately much of that 'dirt' is in areas too wet, dry, rocky, salty, devoid of nutrients, or covered by snow for agricultural production. With only 14 percent of the world's landmass considered fertile, and that shrinking at a significant pace, there's a realization that increased farm production is essential to satisfy the increasing demand for food products.

2012-09-18 Still Broken After All These Years by Martin Weil (Article)

Four years ago this week, the financial crisis took the world's economies to the brink of collapse. September 15, 2008, the day Lehman Brothers failed and sent global financial markets into cardiac arrest, was my wedding anniversary. My wife and I were celebrating at the time on the Mediterranean coast of Turkey ? a memorable trip, to be sure. Reflecting back on that moment now, I?m struck by how little distance our nation has traveled since.

2012-09-18 Campaign Rhetoric and Our Energy Future by Michael Edesess (Article)

At their respective conventions, both President Obama and Mitt Romney spoke to a centrally important topic for America and the world: energy. Their positions ? political posturing aside ? are broadly similar. But rather than a coherent, sustainable vision for the energy future of the United States, both men's rhetoric reflected the usual exercise in political base-touching, apple pie-polishing, and third-rail avoidance. And two important, perhaps crucial, pieces of the energy puzzle were hardly mentioned at all.

2012-09-18 $4 Gas Could Put Brakes on Growth by Milton Ezrati of Lord Abbett

Reaction to the recent climb in gasoline prices appears surprisingly muted, but a sustained rise could result in a significant drag on U.S. growth.

2012-09-18 Fed Delivers another Big Dose of QE by Scott Colyer of Advisors Asset Management

Yesterday, the Fed delivered the much anticipated dose of Quantitative Easing (QE) announcing that it would continue to buy U.S. Agency Mortgage Backed Securities (MBS) in an effort to further drive growth in the U.S. economy and decrease the ranks of the unemployed. The monthly purchase rate of $40 billion will be in addition to the already $10 billion that is being reinvested from QE 1&2 in mortgage-backed securities. This new money balance sheet expansion by the Fed accompanies additional guidance that the Fed would stay low on interest rates likely until mid-year 2015.

2012-09-17 Global Overview: August 2012 by Team of Thomas White International

Signs of emerging political consensus in Europe over supporting further action by the European Central Bank (ECB) and a closer banking union helped sustain investor sentiment during the month of August. Germany and select other countries that were skeptical of open ended policy measures by the ECB now appear to be scaling down their opposition.

2012-09-14 The Big Four Economic Indicators: Updated Industrial Production and Real Retail Sales by Doug Short of Advisor Perspectives (dshort.com)

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process. They are: Industrial Production, Real Income, Employment and Real Retail Sales.

2012-09-14 The Cure for Baldness by Neel Kashkari of PIMCO

Rarely does one find market commentators offering moderate, balanced investment advice these days. More likely one will find extreme headlines designed to capture maximum attention. We believe it is worthwhile to take time to craft an investment strategy that can withstand a range of market outcomes. In a lower-return world, we look to buy companies that are attractively priced and that can grow faster than the market as a whole, and we actively manage downside risks.

2012-09-14 Surviving a Downturn by Michael Han of Matthews Asia

During my recent trip to Northeast Asia, many managers I met were concerned about the gloomy macroeconomic news still coming out of Europe and were curious to hear from me about the state of the U.S. economy. Given their concerns, companies were preparing for a worst-case scenario and continuing to leverage their competitive advantage as they have done during past downturns. Surprisingly, some companies I met with in more developed parts of Asia seemed to welcome this downturn.

2012-09-14 ECRI Defends Its Recession Call by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index of the Economic Cycle Research Institute rose for the 6th consecutive week, now at 124.9 from last week's 124.1. The WLI growth indicator now marks its fourth week in expansion territory at 2.1. It has now posted eleven consecutive weeks of improvement. The big news is yesterday's Bloomberg TV interview, in which Lakshman Achuthan, ECRI's COO, reasserted his company's recession call made a year ago on September 21st and his belief that the recession has already begun.

2012-09-12 On Uncertain Ground by Howard Marks of Oaktree Capital

I'm going to devote this memo to the uncertainty in the world and the investment environment and then offer my take on the appropriate strategy response. This will require me to touch on a large number of topics, but I will try to dwell less than usual on each of them.

2012-09-12 Will America Be Greece in Four Years? by Gary Halbert of Halbert Wealth Management

The US national debt topped $16 trillion last week, and it was almost as if no one paid attention. At the rate we are going, the national debt will top $20 trillion just four years from now in 2016. In my August 21 E-Letter, I pointed out just how mind-boggling a trillion dollars is. Lets revisit that analogy of a trillion in terms of time.

2012-09-11 The Winds of Market Change by Mark Mobius, Michael Hasenstab of Franklin Templeton Investments

As we cross the mid-way point of the year, you might say the equity and fixed income markets have been a lot like the recent weather in much of the world: uncertain, and tending toward extremes. The perception of a stormy economic climate has driven some equity valuations to extremely low levels, particularly in Europe, and investors have been pouring into fixed income despite extremely low yields.

2012-09-10 The Siren Song of Growth: Why Investors Willfully Set Sail for the Rocks by Matt Malgari of Knight Capital Group

Gaining an informational edge through more efficient and effective tools of fundamental company financial analysis and relative valuation is still a crucial goal for active equity managers. This should be even truer in a lower return world, particularly when investment returns may be under transition, driven in part by difficulties in maintaining long-term growth opportunities of a given company's own capital investments.

2012-09-10 As the Euro Tumbles, Spaniards Look to Gold by Peter Schiff of Euro Pacific Precious Metals

The unremitting deterioration of the eurozone's sovereign debt landscape continues to fuel uncertainties about the longevity of the euro as a strong currency. Such uncertainties are not only leading to capital flight from the EMU's periphery to the core and destabilizing markets worldwide, but they are also beginning to frighten southern European savers into seeking refuge outside their 10-year-old currency.

2012-09-10 The Case for Real Estate by Jeff Kolitch, David Baron, David Kirshenbaum of Baron Funds

We believe we are in the early stages of a multi-year real estate recovery fueled by improving cash flows, rising demand, a scarcity of new development projects, improving credit availability, and generationally low interest rates. We believe the outlook is promising for both residential and commercial real estate.

2012-09-10 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Does a powerful upcycle necessarily have to be followed by a downcycle? Well, yes, if one believes in the notion of parabolic quantitative market theory. Given that you can't fill up a phenomenon greater than 100%, nor empty it more than zero, what happens when you reach a statistical "saturation point", when the laws of probability no longer engender positive outcomes?

2012-09-10 Back to School: Summer Vacation Ends for Central Bankers by Andrew Boczek of Sentinel Investments

The heady days of "Maestro" Alan Greenspan may be long gone. Nonetheless, most of us still take for granted that similarly wise men and women, aloof from the pressures of politics and short term market fluctuations, have the capacity to set the proper price of our most precious commodity: time. Or said another way, to set an effective interest rate policy that encourages either savings or spending, today or in the future, to help manage long term economic stability.

2012-09-10 Are Labor Markets the Key to Fed Easing? by Chris Maxey of Fortigent

Widely reported last week was anemic labor market growth in August. Some talking heads took this news in stride, assuming this would guarantee further market intervention by the Fed, but there is a danger in assuming any form of quantitative easing will alleviate the intermediate-term concerns of the market.

2012-09-07 Economic Data Continues to Undermine ECRI's Recession Call by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose for the fifth consecutive week, now at 123.7 from last week's 123.5 (revised from 123.6). See the WLI chart below. The WLI growth indicator (WLIg) is in its second week in expansion territory at 1.0 (up from last week's 0.5). It has now posted ten consecutive weeks of improvement.

2012-09-07 The Fed's Campaign by Peter Schiff of Euro Pacific Precious Metals

This past Friday, as Fed Chairman Ben Bernanke delivered his annual address from Jackson Hole - the State of the Dollar, if you will - I couldn't help but hear it as an incumbent's campaign speech. While Wall Street was hoping for some concrete announcement, what we got was a mushy appraisal of the Fed's handling of the financial crisis so far and a suggestion that more 'help' is on the way.

2012-09-07 Chinas Next Act by Frank Holmes of U.S. Global Investors

World markets may not have to wait much longer for Chinese policymakers to act, as the government recently announced new infrastructure projects. According to Bloomberg, China approved 25 new subway construction projects, with related investments estimated to be more than 840 billion yuan. Railway, subway and construction stocks in China increased on the news. China is in much better shape than the rest of the world. A powerful rebalancing strategy offers the structural and cyclical support that will allow it to avoid a hard landing.

2012-09-07 Recent Speech Given by Lacy Hunt, Ph.D. by Lacy H. Hunt of Hoisington Investment Management

The most sensible recognition of budget policy came from David Hume, one of the greatest minds of mankind. In his 1752 paper Of Public Finance, Hume advocated running budget surpluses in good times so that they could be used in time of war or other emergencies. Such a recommendation would, of course, prevent policies that would send countries barreling toward the bang point. Countries would have to live inside their means most of the time, but in emergency situations would have the resources to respond.

2012-09-05 The Lending Lindy by Bill Gross of PIMCO

Our entire finance-based monetary system led by banks but typified by insurance companies, investment management firms and hedge funds as well is based on an acceptable level of carry and the expectation of earning it. In a New Normal economy where lenders dance to the Blue Danube instead of the Lindy, how should we move our own feet? Carefully, I suppose, and with recognition that historic returns are just that historic.

2012-09-05 Profit Motive: If Earnings/Margins Are Peaking, What About Stocks? by Liz Ann Sonders of Charles Schwab

Earnings growth has peaked, but don't necessarily assume the same about margins. Present pace of earnings growth has historically been accompanied by decent market performance. Margins are increasingly driven by domestic and foreign earnings, but peaking margins have historically been accompanied by strong market performance.

2012-09-04 All QE, All the Time by Chris Maxey of Fortigent

In a week of relatively light trading to wrap up the summer, equity markets trickled lower, as the Dow Jones Industrial Average lost 0.5% and the S&P 500 Index fell 0.3%. It was a mixed week of economic data in the U.S., but markets were clearly locked in on Ben Bernanke's speech in Jackson Hole, Wyoming. News on housing seems to confirm that a bottom is in place, while manufacturing data continues to move in all different directions.

2012-09-01 Schwab Market Perspective: Back to Work by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

As summer winds down, we expect things to heat up as policymakers get back to work, resulting in a challenging investment environment.

2012-09-01 And That's the Week That Was by Ron Brounes of Brounes & Associates

Isaac vs. Romney vs. Bernanke. Each took their turn in the limelight this week. While the Hurricane dropped plenty of rain and brought damaging winds into Louisiana, the devastation didnt compare to Katrina. Romney humbly accepted his party's nomination, while still trying to prove to T-Partiers (and women) that he should be their guy (and he can bash his opponents with the best of them.

2012-09-01 The Consequences of Easy Monetary Policy by John Mauldin of Millennium Wave Advisors

We heard from Bernanke today with his Jackson Hole speech. Not quite the fireworks of his speech ten years ago, but it does offer us a chance to contrast his thinking with that of another Federal Reserve official who just published a paper on the Dallas Federal Reserve website. Bernanke laid out the rationalization for his policy of ever more quantitative easing. But how effective is it?

2012-08-31 ECRI's Embarrassing Recession Call by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) rose for the fourth consecutive week, now at 123.6 from last week's 123.3. See the WLI chart below. The WLI growth indicator (WLIg) has risen into expansion territory at 0.6 after nine consecutive weeks of improvement.

2012-08-29 Is Inflation Returning? by Martin Feldstein of Project Syndicate

Inflation is now low in every industrial country, and the combination of high unemployment and slow GDP growth removes the usual sources of upward pressure on prices. Nevertheless, financial investors are increasingly worried that inflation will eventually begin to rise, owing to the large expansion of commercial bank reserves engineered by the United States Federal Reserve and the European Central Bank (ECB).

2012-08-28 Policymakers Hold the Key to Confidence by Bob Doll of BlackRock Investment Management

The Dow Jones Industrial Average fell 0.9% to 13,158, the S&P 500 Index slid 0.5% to 1,411 and the Nasdaq Composite lost 0.2% to close the week at 3,070. As August draws toward a close, US equities have hit four-year highs, corporate bond yields touched multi-year lows and many risk assets can look back on a pretty good summer. But despite plenty of investment and central bank activity, we continue to see a shortage of economic and financial market confidence.

2012-08-24 Gold: First Mover Advantage by Frank Holmes of U.S. Global Investors

This week, gold bugs were rewarded with the long-awaited positive momentum in the yellow metal, and on Friday, bullion rose to about $1,670. After falling below the 200-day moving average, gold had been stuck in quicksand for several months. With the jumps in the price this week, bullion swiftly rose above this critically important long-term moving average.

2012-08-23 No Recession Now - But When? by Lance Roberts of Streettalk Live

There have been a few calls as of late (Hussman, ECRI, Shilling) stating that we are currently in the next recession. Then there is everyone else. While the "optimistic" outlook is always more enjoyable to listen to - the problem is that the current "no recession" view is primarily predicated on current quarter growth rates looked at in isolation. These data points are then extrapolated into continuous future economic expansion.

2012-08-22 The Faustian Bargain by Scott Minerd of Guggenheim Partners

In Goethe's 1831 drama Faust, the devil persuades a bankrupt emperor to print and spend vast quantities of paper money as a short-term fix for his country's fiscal problems. As a consequence, the empire ultimately unravels and descends into chaos. Today, governments that have relied upon quantitative easing (QE) instead of undertaking necessary structural reforms have arguably entered into the grandest Faustian bargain in financial history.

2012-08-21 U.S. Equities After the Earnings Season: Is There Still an Opportunity? by Joseph Tanious of J.P. Morgan Funds

Now in its fourth year of recovery following the financial crisis, the S&P 500 is once again testing the 1400 level, having rallied over 100% from its March 2009 lows. Meanwhile, earnings have hit an all-time high, but it is becoming clear that earnings growth is slowing. All of this has occurred against a backdrop of global economic uncertainty, unprecedented central bank action, and the most polarized U.S. political landscape we have ever seen.

2012-08-20 QE3: Tackling the Big Questions by Milton Ezrati of Lord Abbett

Will the Fed launch another round of quantitative easing? If so, when? Here are the factors that could influence the central bank's decision.

2012-08-20 The Basis For Fear by Charles Lieberman (Article)

Last week, I wrote about how stocks are cheap historically and also with respect to other asset classes, such as bonds. This week, I want to focus on the reasons for this. Stocks are not cheap by accident. Investor concerns over Europe, renewed recession in the U.S., the fiscal cliff and the huge budget deficits provide ample reason for caution. However, not all of these concerns are well placed and some of the issues can be resolved favorably.

2012-08-17 Fiscal Cliffhanger by Brian Horrigan of Loomis Sayles

In the famous 1955 movie Rebel Without a Cause, troubled high school student Jim Stark (played by James Dean) winds up playing a game of chicken with his classmates. The US economy is at risk of driving, so to speak, over a "fiscal cliff" starting January 1, 2013, an event that threatens to wreck the economy. There are fewer than five months to avoid going over this cliff.

2012-08-16 The Chinese Hangover: As Infrastructure Spending Drops, So Does Demand for Chinese Steel by Raja Mukherji of PIMCO

The Chinese steel industry today shows many signs of serious economic difficulties brought about by the unprecedented size and speed of industry expansion. However, as the country's focus shifts away from public investments and toward tax cuts, it will be difficult for China to absorb this overabundance of domestically produced steel. Ripple effects of this oversupply may include softening iron ore prices, a possible drop in the Australian dollar, and potentially weaker global steel prices.

2012-08-16 The ECB Is Too Tight Absolutely and Relatively by Scott Mather, Dirk Jeschke of PIMCO

Looking at measures of the quantity of money and its transmission into the real economy reveals that ECB policy is quite tight. Growth hardly stands a chance under this scenario. Relatively tight monetary policy would perhaps be understandable if the eurozone were threatened by inflation. However, inflation is low and falling in the Eurozone. The ECB may be playing a game of chicken with European policymakers. If true, this is a dangerous strategy.

2012-08-14 The Eurozone Drama Continues by Bill O'Grady of Confluence Investment Management

In this report, we will review the political and economic structure of the Eurozone. From there, we will discuss the critical event that caused the reversal in safety assets and what this reversal likely means for the geopolitics of the Eurozone. As always, we will conclude with potential market ramifications.

2012-08-14 India: Good Growth, Bad Growth by Sunil Asnani of Matthews Asia

It goes without saying that areas of growth attract investors. But in a blind chase for growth, it is easy to forget that only growth accompanied by economic profits creates value. This month Sunil Asnani takes a look at some of the once-celebrated, top-down investment ideas that did not live up to expectations, comparing them to some less exciting ideas that actually did deliver.

2012-08-13 Double Dip? Doubtful by Milton Ezrati of Lord Abbett

The flow of economic news is hardly encouraging. Jobs growth remains disappointing. Recent readings on consumer spending and business activity show weakness as well. If the picture of the housing market has improved a bit, it still hardly portrays strength. Talk of an imminent recessionary dip has become common, for the third time now in as many years. While some recent economic reports have been discouraging, underlying fundamentals do not point to a return to recession.

2012-08-13 Commodities to Power Emerging Markets Higher by Dawn Bennett of Bennett Funds

In Latin America, Brazil leads as a natural supplier of copper and crude oil, which it is now able to extract and export on competitive terms. Nations rich with natural resources perform well during times of global economic expansion. In particular, countries rich with industrial commodities tend to outperform those without.

2012-08-13 The Fundamental Case for the 20,000 Dow by Seth Masters of AllianceBernstein

While some people deem stocks expensive relative to 10-year trailing earnings, we take a forward-looking approach. It starts with the premise that the stock market is not a casino and stock prices are not pulled out of thin air: they reflect the intrinsic value of companies' future earnings.

2012-08-13 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The rally in stocks which no one seems to believe in continued again last week. With Europe on vacation or celebrating the Olympic Games the macro background remained quiet and allowed stock prices to advance even as investor pessimism continues to grow.

2012-08-10 Schwab Sector Views: Cautiously Cautious by Brad Sorensen of Charles Schwab

We remain slightly defensive with our sector recommendations but admit that we're a bit concerned over doing so. While we certainly believe this is the appropriate positioning given the continued elevated uncertainty in the market, combined with sluggish economic data, we also acknowledge that some defensive areas appear extended and the possibility of a near-term cyclically-based rally exists.

2012-08-10 2012 2Q Economic - Capital Market Summary by Greg Hahn of Winthrop Capital Management

The single biggest driver for the economy and investment returns is the deleveraging process which we are currently struggling through. Arguably, we have successfully transferred debt from the financial sector to the U.S. government through the Fed's QE programs. As we move through the long process of reducing debt, economic growth inevitably moderates as resources are applied to debt reduction rather than fixed investment and consumption within the economy. As a result, expected returns on financial assets are lower.

2012-08-10 Dog Days by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

We now appear to be firmly in the dog days of summer. Low volume and little conviction may dominate but investors need to stay vigilant and now is a good time to prepare for the fall. The recent Fed meeting yielded no new action, but policy makers reiterated that they will act if necessary. We are skeptical that more stimulus measures will have a lasting impact. A waiting game has ensued in Europe as investors look for action following hopeful comments from various officials. But despite concerns over corn prices, central banks will continue to ease, helping to support global growth.

2012-08-09 Market Surge is Amplified by Low ExpectationsAs Expected by Matt Lloyd of Advisors Asset Management

European fears have subsided a bit as the European Central Bank's (ECB) president continued to offer words of support for a more comprehensive solutionthough he appeared to dampen the statements with concessions about the ECB's ultimate subservient role to the governments.

2012-08-08 Emerging Markets Equity Monthly Product Commentary: July 2012 by Team of Thomas White International

Emerging market equities made modest gains during the month of July, as global markets sustained the optimism from the last week of the previous month. Select markets in Asia, such as Indonesia, Korea, and Malaysia, as well as Turkey and South Africa outperformed during the month. Repeated assurances by European policymakers over further policy action helped assuage market concerns about the region's fiscal crisis worsening, though economic data continues to be relatively weak.

2012-08-08 Monthly Product Commentary: International Equity - July 2012 by Team of Thomas White International

International equities made modest gains during the month of July on repeated assurances from European policymakers that they will explore all possible steps to prevent a collapse of the monetary union and arrest further economic decline. Developed markets in Europe's Nordic region and the Asia Pacific, excluding Japan, as well as select emerging markets in Asia ended with healthy gains for the month.

2012-08-08 ECB Policy: Over-Promise and Under-Deliver, Investor Behavior: Over-Anticipate and Over-React by Colin Moore of Columbia Management

Last week was a good example. Investors anticipated a major announcement from Mario Draghi, President of the ECB on Thursday because of remarks he had made the previous week at a conference in London. When he did not announce any immediate monetary policy changes following the regular meeting of the ECB, the markets demonstrated considerable volatility, declining on Thursday and rising on Friday.

2012-08-07 Investing in Central Utility Stocks - Do Todays Valuations Make Sense? Part 3 by Team of F.A.S.T. Graphs

This is the third in my series on investing in utility stocks based on the sector's current valuation levels. The series was initially inspired by concerns that utility stocks may be overvalued because they had recently performed very well. When the series first started with Part 1, utility ETFs were showing the best one-year performance of any sector. By the second installment Part 2, the utility sector had fallen into second place (Utility Sector Performance July 31, 2012).

2012-08-06 And That's The Week That Was by Ron Brounes of Brounes & Associates

Action speaks louder than words. While the positive rhetoric coming from the mouths of center bankers brought optimism to the markets, their actions (or lack thereof) sent the indexes into a four day losing streak. Only a strong non-farm payroll release late in the week salvaged the market and a solid rebound left the major indexes in positive territory for the week (though the eternal pessimists believed the data was an aberration). Maybe Bernanke has more words of wisdom for them?

2012-08-06 Diamonds in the Rough by Mark Kiesel of PIMCO

The demand for most high-quality, income-producing assets continues to exceed supply due to a weaker growth outlook and aggressive policy action by global central banks. Yet we are still finding numerous opportunities globally through our bottom-up research that targets areas around the world where fundamentals are supportive and the outlook remains constructive.

2012-08-03 Real Assets Replication: Solving the Capital Call Conundrum by Andrew Hoffmann, Niels Pedersen, Mihir Worah of PIMCO

Risk factors help to identify the fundamental value drivers of real assets and explain differences in the reported returns of public and private equity investments that hold substantially similar assets. By combining the fundamentals of real asset valuations with the statistical tools required to unlock the component risk factors of asset classes, it is possible to replicate the returns of private real asset investments using liquid publicly traded instruments.

2012-08-03 Postcard from Japan by Yu Zhang of Matthews Asia

After spending a week crisscrossing Tokyo earlier this summer to meet with various companies, my general take-away was that the country, as a whole, has managed a rather swift recovery from last year's devastating earthquake. Japan seems to have been able to rebound from its nuclear crisis, showing great resilience. Most of the firms I met with were already plowing ahead to try to make up for last year's losses.

2012-08-01 Real Estate Portfolio Construction for Individual Investors by Casey Frazier of Versus Capital Management

Commercial real estate is an asset class that includes many different strategies and approaches. Investors segment real estate investments into a few categories. This segmentation is done by several key factors including income profile, leverage, operational risk and potential returns. The most important segmentation is core versus non-core, or properties with stable income versus properties that have unstable or no income.

2012-08-01 Italy - The Next Chapter in the Eurozone Debt Crisis by Greg Hahn of Winthrop Capital Management

After recently returning from Italy and France and analyzing the economic data coming out of Italy, we have a higher conviction that Italy will be stuck in a severe recession and has an elevated probability of requiring a bailout. Our main theme, which is similar to our view of the United States, is that Italy has too much public debt and is lacking the political will to make the necessary expense cuts and stimulate its economy to successfully navigate the deleveraging that is required.

2012-07-31 Expect Headwinds for Stocks If Hoisington is Right about Bonds by Keith C. Goddard, CFA (Article)

Might today's historically low interest rates in the U.S. persist for years to come? The latest Quarterly Review and Outlook from Hoisington Investment Management forces readers to consider that possibility, refuting the reversion-to-the-mean mindset that causes many people to expect higher interest rates in the not-too-distant future. If the Hoisington model for the economy turns out to be right, the implications for the stock market are unfavorable.

2012-07-31 The Young General Emerges by Bill O'Grady of Confluence Investment Management

On July 16th, the official North Korean media reported that General Ri Yong Ho, the militarys Chief of the General Staff, had been dismissed of all duties. Reports suggested that the general had been removed due to illness. General Ri was a close confidant of the late Kim Jong Il and was thought to be tasked with smoothing the transition of the new leader of North Korea, Kim Jong-un, the Young General. Ri's exit, along with other events, suggests changes in the Hermit Kingdom.

2012-07-30 Turkey: 'Sick Man of Europe' No Longer by Team of Thomas White International

Despite the invasion of modern retail formats such as supermarkets, corner stores still account for 40 percent of retail sales in Turkey. Since the mid-19th century, Turkey has carried the unfortunate moniker 'Sick man of Europe'. Though still not considered in the same league as the BRICS countries, Turkey has enjoyed healthy economic growth over the last decade.

2012-07-27 Equity Implications for a Modest-Return World by Andrew Pyne of PIMCO

With equities likely to see modest returns over the secular horizon, we believe that capturing alpha will be critical for investors seeking to meet target portfolio returns. Equity valuations appear reasonable, but volatility is likely to remain elevated amid slowing global economic growth and macroeconomic risks. As macro events drive markets, the probability of fundamental mispricing increases, providing opportunity for active managers to add value.

2012-07-27 Challenging the Paradigms of Investing by Frank Holmes of U.S. Global Investors

Global investors constantly need to be watchful of individual biases, impaired thinking and emotional reactions that can have an adverse effect on a portfolio. One of our values at U.S. Global Investors is to always be curious to learn and improve, and the Investor Alert was borne from a belief that shareholders want to understand the very subtle nuances of biases and misconceptions. I have selected a few that I believe challenge the paradigms of investing.

2012-07-25 An Excess of Reserve by Carl Tannenbaum of Northern Trust

Bank credit has expanded nicely over the past two years, yet financial institutions continue to hold substantial pools of excess reserves with the Fed. Some suggest that this extended conservatism is hindering the economic expansion, and are calling on the Fed to lower the rate it pays on excess reserves. The ECB has already taken this step. We think that a cut in the interest rate on excess reserves is unlikely.

2012-07-25 Top Line Growth Stalling Amid Global Weakness by Chris Maxey, Ryan Davis of Fortigent

At this juncture, positive catalysts seem few and far between. According to FactSet, 18 of 22 companies have already guided lower for the third quarter. Analysts are also ratcheting down forecasts quickly, with flat earnings growth expected in Q3. While growth is expected to pick back up in the fourth quarter, analysts have not cut those estimates aggressively yet. If the economic picture does not improve in the next few months, expect a pattern of downgrades to follow suit.

2012-07-25 Economic Review: Americas - 2Q 2012 by Team of Thomas White International

Among the developed economies in the region, growth forecasts for both the U.S. and Canada have been revised lower. Though the U.S. outlook has weakened, the Mexican economy has so far remained unaffected, as manufactured goods from the country remain competitive in export markets. Brazil is yet to see a recovery even after a series of monetary and fiscal measures taken since the second half of last year to support the economy.

2012-07-25 If You Own Utility Stocks, Consider Selling The Overvalued Ones - Part 1 by Team of F.A.S.T. Graphs

Recently, I've come across several discussions by dividend growth investors as to whether the utility sector is overvalued or not today. Therefore, I decided to look into the sectors relative valuation as a whole to see what I could find. The only way to efficiently conduct this kind of research is to rely on a broad statistical array utilizing traditional valuation metrics. However, before I report my findings there are some caveats and clarifications that I feel are very appropriate.

2012-07-25 One More Dance by Neel Kashkari of PIMCO

We are witnessing a synchronized slowdown worldwide that is beginning to affect corporate profits. The most likely right-tail event is the Federal Reserve launching another round of quantitative easing. We dont believe liquidity alone can engineer sustainable, real economic growth in the context of a secular deleveraging cycle. But we acknowledge that equity portfolios would likely benefit should the Fed keep the music playing a little longer.

2012-07-24 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

I want to dispel the notion that I am an investment bear. There is nothing wrong with expressing an opinion, bullish or bearish, particularly when the consensus says its alright. Proof of one's courage, though, lies at the margins, during undetectable inflection points, before the consensus has arrived. My track record versus the benchmarks demonstrates a successful delineation between bearishness and being opportunistic.

2012-07-24 Fed Outlook: An Itchy Trigger Finger by Scott Brown of Raymond James

Fed Chairman Bernanke's monetary policy testimony to Congress was not expected to be a big deal. The economic projections of senior Fed officials were already published and the minutes of the June 19-20 policy meeting showed the Fed in a wait-and-see attitude However, most of the economic data released since the Fed policy meeting were weaker than expected. While Bernanke did not signal that policy action was imminent, the tone of his testimony was clearly concerned.

2012-07-24 Investment Review & Outlook by Team of Cohen & Steers

The headlines in Europe were dominated by political uncertainty and prospects for a prolonged recession, amid signs of deteriorating economic conditions around the globe. The U.S. economy decelerated, as the positive effects of the mild winter wore off and both hiring and spending slowed. Treasury yields fell to all-time lows and oil prices plummeted roughly 30% from their February peak.

2012-07-24 Litman Gregory Mid-Year Commentary by Team of Litman Gregory

High debt levels in developed countries create headwinds that are likely to hamper global economic growth in the years ahead. Europe's debt woes raise the risk of a damaging financial crisis, and global stock markets reflected these concerns in the second quarter. Why are we discussing this now? It is partly a reflection on having reached a quarter of a century in business and thinking about how we have conducted our business.

2012-07-23 Emerging Asia Pacific: Economic Review 2nd Quarter 2012 by Team of Thomas White International

Emerging Asia, which posted strong results during the first quarter of 2012 on optimism that Europe's sovereign debt problems would be solved quickly, returned to struggling ways during the second quarter of 2012 as prospects for Europe continued to wobble throughout the period. The uncertainty about Greece's fate in the European Union and the destiny of the single market itself kept industrial firms in Europe guessing for the most part of the second quarter.

2012-07-23 Economic Review: Developed Europe Second Quarter 2012 by Team of Thomas White International

Developed Europe remained on tenterhooks for the greater part of the April-June quarter, but ended the period on a high note. At their Brussels summit on June 28-29, European leaders chalked out two crucial policies. They decided that the monetary unions permanent bailout fund or European Stability Mechanism (ESM) would be allowed to provide capital to ailing banks directly rather than through the governments of the countries in which they are located.

2012-07-23 China's Economy - A Great Wall of Worry? by Milton Ezrati of Lord Abbett

The population of China bears seems to keep growing. This already large colony of doomsayers can point to any number of legitimate troubles facing China today, and they glibly do so, from slowing exports growth to an aging population, from real estate excesses to a moribund consumer sector. Bears think China is in for a "hard landing," but their pessimism is overdone. Here's why.

2012-07-20 Long Journey, Map Provided by John Gilbert of GR-NEAM

It is almost four years since the Lehman bankruptcy. In the periods of economic contraction that were typical of the postwar period, the clouds would be parting by now. Income growth would have resumed and necessary balance sheet repair would be more or less complete. By any standard, the current episode is a balance sheet recession of historic proportion. Previous downturns were initiated by central bank rate increases, which occurred this time as well.

2012-07-19 Quarterly Review and Outlook by Hoisington and Hunt of Hoisington Investment Management

Long-term Treasury bond yields are an excellent barometer of economic activity. If business conditions are better than normal and improving, exerting upward pressure on inflation, long-term interest rates will be high and rising. In contrary situations, long yields are likely to be low and falling.

2012-07-19 Equity Investment Outlook by Team of Osterweis Capital Management

In the politically correct atmosphere that permeates many of our college campuses, the euro-centric view of world history is regarded as hopelessly anachronistic, small-minded and possibly even racist. In the last year, they have become hopelessly euro-centric, rising or falling in concert with the news coming from the eurozone. A few years ago the markets focused on growth in emerging markets. Today, they focus on problems in the developed world.

2012-07-19 Developed Asia Pacific: Economic Review 2nd Quarter 2012 by Team of Thomas White International

Developed Asia Pacific economies experienced significant headwinds during the second quarter of 2012. While optimism about business conditions in the Euro-zone helped sustain export growth during the first quarter of 2012, significant challenges from the Euro-zone hampered both investor and consumer sentiment in most developed Asian economies during the second quarter.

2012-07-18 Global Overview by Team of Thomas White International

The new agreement reached by European policymakers during the last week of June has helped ease some of the fears over a breakup of the monetary union and more bank failures. It has been agreed that the regions financial crisis fund may be used to provide capital support to the troubled banks and also to try and lower the bond yields of countries such as Spain and Italy.

2012-07-18 Peaks and Valleys by Carl Tannenbaum of Northern Trust

Second quarter economic activity disappointed on many fronts. The drama in Europe has taken its toll on exports, markets, and confidence. The 2012 election is starting to take shape, amid the approach of a huge fiscal "cliff" at the national and local level. The negativity and uncertainty which often surround Presidential campaigns may hinder economic and market performance. This months special focus is on the Fed's recent Survey of Consumer Finances, and what it means for our economy.

2012-07-17 How to Forecast Future Stock Returns: Part 3 by Chuck Carnevale of F.A.S.T. Graphs

A lot of what Part 1 & Part 2 attempted to convey is the logical and common sense nature of valuation in regards to sensible stock investing. Once you have determined that fair valuation, plus or minus, exists, then the prudent investor should look to future earnings growth as the likely source of future long-term returns. By applying the same principles that we presented and discussed in Parts 1 & 2, we can calculate within a reasonable range of predictability what our future returns might be.

2012-07-17 Obstacles to a Lasting Recovery: The Liquidity, Hesitancy & Solvency Traps by Thomas Fahey of Loomis Sayles

Those familiar symptoms are back again to start the summer: risk aversion; falling equity prices; rising volatility; record-low German and US government bond yields; wider credit spreads; a European country getting picked on; and a stronger US dollar. We have seen this bad movie twice before. If this is indeed another rerun, we should expect central bank and other policy responses to help limit the fallout. As we see it, hesitancy and solvency traps are the main obstacles to recovery.

2012-07-17 Game of Thrones by Cliff Draughn of Excelsia Investment Advisors

An economy consists of a gazillion simple transactions, all working together; and our economy used to be grounded is such factors such as supply and demand, growth, and imports and exports. But today the economy is driven by the political rhetoric of our elected officials as it relates to regulations, taxes, and anticipation of QE3. We are in global slowdown mode, and to understand how we should invest we need to better understand what deleveraging will mean over the coming couple years.

2012-07-17 The Mystery of Chinese Capital Flight by Bill OGrady of Confluence Investment Management

Capital flight is defined as the rapid withdrawal of assets out of a country for political, economic or geopolitical reasons. Since late last year, there have been steady reports indicating that capital flight has been occurring in China. China restricts its capital account; inflows of foreign capital are carefully regulated and private outflows face significant restrictions. Chinese citizens can legally transfer only $50k per year out of the country.

2012-07-16 High Yield and Bank Loan Outlook - July 2012 Sector Report by Team of Guggenheim Partners

After a strong first quarter for high yield bonds and bank loans, the mixed performance of the second quarter has conjured up memories of 2011s volatility. While the lack of clarity in Europe and the looming U.S. fiscal cliff will continue to weigh on the economy, the current macro-induced price dislocations present attractive long-term opportunities for investors with patient capital.

2012-07-12 Equity Market Review & Outlook by Richard Skaggs of Loomis Sayles

Following back-to-back double-digit quarterly gains, US stocks took a breather in the second quarter, with the S&P 500 Index declining 2.8%. It could have been worse. At the quarters low point in early June, the Index had declined 10.0% from the first-quarter close. June was a strong month for stock performance, leading to a welcome recovery from the early quarter decline. However, positive returns from the first quarter prevented the Index from becoming negative on a year-to-date basis.

2012-07-12 Bond Market Review & Outlook by James Balfour of Loomis Sayles

The liquidity-driven rush into riskier assets that dominated the first quarter faded during the second quarter. The European sovereign debt and banking crisis was once again the primary catalyst, but softer economic data in the US and China also fed negative investor sentiment. Global liquidity suffered following the end of the European Central Banks (ECBs) long-term refinancing operation (LTRO).

2012-07-12 The Intersection of Monetary Policy and Volatility Markets by Josh Thimons of PIMCO

When the Fed exhausted the power of its traditional monetary policy tools, it turned to increasingly creative and innovative policy measures. During periods of Fed balance sheet expansion, both interest rate and equity implied volatility experienced significant declines. The opportunities presented by the intersection of monetary policy and volatility markets are often compelling, because most options market participants are not looking at the world through a policy lens.

2012-07-11 The Ascent of South Korea by Michael Oh of Matthews Asia

One country in Asia that seems to attract less attention than it might deserve, considering its modern-day achievements, is South Korea. While index provider MSCI this year (once again) left South Korea classified as an emerging market, both FTSE and Standard & Poors have placed Korea in the developed market camp for several years now.

2012-07-11 China Fueling Auto Sales by Mark Mobius of Franklin Templeton

The picture postcard image many western travelers may have of Chinas city streets is one besieged with bicycles and empty of cars, but China is no longer pedaling its way into the futureits firmly in the drivers seat as autos rapidly replace human-powered transit. Motor vehicle sales have been booming in China, a reflection of the growing middle class. In 2009, car sales in China exceeded those in the United States, and in 2011, China led world auto production at 18.4 million units.

2012-07-10 Recession is Not Imminent by Dwaine van Vuuren (Article)

Perma-bears are bombarding us with alarm bells, sounding the doom of the US economy. We find ourselves in yet another 'summer slowdown scare,' for the third year running. In 2010 and 2011, the purported slowdowns turned out to be soft landings. Investors who ran to the sidelines stared in disbelief as the stock market roared ahead, leaving them behind. We are likely in the same position now.

2012-07-10 No Jobs Rebound in June by Ryan Davis of Fortigent

Equity markets started the third quarter in negative fashion, with a poor government jobs report sparking the decline. Following an astoundingly poor May jobs report, market participants were hopeful that June would bring about at least a normalization of labor data. Thursdays ADP employment report increased optimism that May was an anomalous reading.

2012-07-09 What if the Fed Throws a QE3 and Nobody Comes? by John P. Hussman of Hussman Funds

When we look around the globe, we find that the impact of quantitative easing is rarely much greater than the market decline that preceded it. Investors seem to be putting an enormous amount of faith in a policy that does little but help stocks recover the losses of the prior 6 month period, with scant evidence of any durable effects on the real economy.

2012-07-09 Economic Insights: U.S. Exports: A Lower Gear, but Still Cruising by Milton Ezrati of Lord Abbett

The growth of exports at times has added as much as two percentage points to the overall pace of the economys expansion and is a major reason why American manufacturing has staged a comeback in recent years - a renaissance some have called it. But of late, with the dollar rising against both the euro and the yen, and with growth overseas slowing or, in Europes case, falling, questions have arisen about the sustainability of U.S. export strength.

2012-07-09 Equity Investing in a Lower-Return, Volatile World by Charles Lahr, Brad Kinkelaar, Maria (Masha) Gordon of PIMCO

Company balance sheets in developed markets are generally in good health and many are well positioned to generate growth even in difficult times. We expect growth to moderate in emerging markets, although still outpace the trajectory in the developed world. Certain companies may temporarily face lower capacity utilization. A focus on quality is invaluable. We define quality by clean balance sheets, high operating margins and access to high-growth markets with barriers to entry.

2012-07-09 Mixed Picture for the Consumer, ISM Numbers Weak Data on Factory and Service Sectors by John Buckingham of AFAM

While the major market averages ended in the red, though only modestly so, there was plenty of volatility in a holiday-shortened trading week that was replete with the release of quite a few economic statistics.

2012-07-09 The Supreme Court Rules on Health Care Reform: What It Means For Investors by Andy Friedman of Washington Update

The Supreme Court has now upheld the individual mandate, the controversial part of the health care reform law (The Patient Protection and Affordable Care Act) that requires individuals to carry health insurance. At the same time, the Court struck down the requirement that states expand their Medicaid coverage to include more low-income families. These rulings will have significant implications on the countrys fiscal situation.

2012-07-06 Are You Limited by Linear Thinking? by Frank Holmes of U.S. Global Investors

Dont be limited by linear thinking in your portfolio. As an alternative to low yielding Treasury bonds, consider resources stocks that pay dividends. Weve found that most materials, utilities and energy stocks in the S&P 500 Index pay a dividend higher than the 10-year Treasury: Materials and utilities companies yield an average of 2.3 percent and 4.1 percent, respectively, while energy stocks pay an average yield of 2.2 percent. Nonlinear thinkers have historically benefited from the inclusion of natural resources as part of a balanced portfolio.

2012-07-05 Reconnaissance: Strategy Notes by Douglas Clark Johnson of Codexa Capital

Investors focused on emerging markets may be well positioned to benefit from a "barbell" strategy, favoring sukuk and Southeast Asian equities. While in Afghanistan, were more inclined to tilt toward optimism than despair in the wake of military right-sizing. Both India and some Middle East countries are set to be active there. We offer other comments on high dividend yields in GCC stock markets and emerging trends in Ghanas timber industry.

2012-07-02 This film is rated "R" by Scotty George of du Pasquier Asset Management

This is not your fathers stock market. Nor really is it yours, the one you envisioned two decades ago. Instead we may have leveraged, in a literal sense, all the financial details to our heirs. The bad news is that we have become marginalized. Our goals and expectations have been sequestered, postponed, for another time.

2012-07-02 Economic Insights: U.S. Exports - A Lower Gear, but Still Cruising by Milton Ezrati of Lord Abbett

Amid a rising dollar and sluggish global economies, exports should continue to bolster U.S. growth, although the pace will slow. Exports have remained one of the few consistent bright spots in this otherwise subpar economic recovery. The growth of exports at times has added as much as two percentage points to the overall pace of the economys expansion and is a major reason why American manufacturing has staged a comeback in recent yearsa renaissance some have called it.

2012-07-02 The Virtue of Necessity by Jeffrey Saut of Raymond James Equity Research

The call for this week: In my opinion, last week the Commodity Index bottomed and the Dollar Index topped. If so, recession fears should abate in the months ahead. Moreover, if a recession was really on the horizon "junk" bond yields would be rising on worries of increased defaults and that is not happening with the iShare High Yield Fund (HYG/$91.29) attempting to make a new reaction high (i.e., lower yields).

2012-06-29 A Strategy to Navigate the Housing Cycle by John Burns of John Burns Real Estate

The memories of 2007 through 2011 are clouding too many people's vision. There are plenty of legacy problems from the housing boom that have yet to clear, and plenty of risk to the downside, but the demand, supply and affordability measures are in place to help us put the housing downturn behind us and move forward. We are leaving stage one of the recovery and moving into stage two. Don't miss the ride.

2012-06-29 Step Two - Going Backward - Election More Important Than Ever by Brian S. Wesbury and Robert Stein of First Trust Advisors

In one of the least likely outcomes in Supreme Court history, Chief Justice Roberts, who was widely considered a conservative voice on the Court, proved to be the swing vote in one of the largest expansions of US government involvement in the economy ever.

2012-06-29 Unmasking the Asian Giant by Frank Holmes of U.S. Global Investors

China is far from perfect: While actors can perfect their lines and use masks to captivate an audience, smart investors know better to use a wealth of information across numerous sources to guide investment decisions. Weigh the evidence and judge for yourself. As my friend, Investment Strategist Keith Fitz-Gerald recently said in an interview, A powerful China is coming, and we have two choices. Either we're at the table, or we're on the menu. To him this means, Good news from China is good news for the U.S.; bad news from the Chinese economy is bad news here.

2012-06-26 Running on Empty by Marie Schofield of Columbia Management

In a move that was more anti-climax than comforting, the Federal Reserve (Fed) satisfied the minimum expectation of the markets and extended Operation Twist, or the MEP (Maturity Extension Program), through the end of the year thankfully taking us beyond the election period.

2012-06-25 And That's the Week That Was by Ron Brounes of Brounes & Associates

Ahthe doldrums of summer. Sure Greece just completed crucial elections that could have dramatic impact on the euro-zone and the global economy; AND Spain just saw its interest rates rise above the key seven percent level into traditional bailout territory; AND JP Morgan, of failed hedging fame, just received a major ratings downgrade by Moodys Investors Services; AND Facebook disappointed the investment world with its disastrous IPO, a comedy of errors for most everyone involved

2012-06-25 Enter, the Blindside Recession by John P. Hussman of Hussman Funds

The joint evidence suggests that the U.S. economy has entered a recession that will eventually be marked as having started presently. In recent months, our measures of leading economic pressures have indicated the likelihood of an oncoming U.S. recession.

2012-06-25 Perspective; or where you stand is a function of where you sit! by Jeffrey Saut of Raymond James Equity Research

Perspective is the capacity to view things in their true relations or relative importance. And last Thursday the stock markets perspective changed abruptly. The day started out well enough with an opening 20-point pop to the upside, but from there the Dow Dive commenced. The causa proxima for the dive was more softening economic reports from China and Germany followed by a lame Philly Fed report, which saw that index accelerate its swoon from Mays -5.8 reading to -16.6.

2012-06-25 12 Reasons US Recession Has Arrived (Or Will Shortly) by Mike "Mish" Shedlock of Sitka Pacific Capital Management

I am amused by the Shadow Weekly Leading Index Project, which claims the probability of recession is 31%. I think it is much higher. When the NBER, the official arbiter of recessions, finally backdates the recession, May or June of 2012

2012-06-25 Market Breadth Pretty Good, Save for Thursday by John Buckingham of AFAM

It would have been a nice week if it wasnt for the big plunge on Thursday as that days 250-point drop in the Dow Jones Industrial Average interrupted a solid stretch in which market breadth had been quite favorable. In fact, the other four days last week saw more advancing stocks than declining stocks, looking at the New York Composite Daily Breadth statistics from this weekends Barrons Magazine.

2012-06-25 Jilted Investors Unsure Where to Turn by Chris Maxey and Ryan Davis of Fortigent

Institutional and individual investors are at an uncertain juncture, waiting to see what the next shoe to drop is. With an important series of events occurring soon, such as the US Presidential election this fall and the fiscal cliff facing the US at years end, investors may need to wait to get more clarity on the market outlook.

2012-06-22 Dont Expect A Double Dip This Year by Russ Koesterich of iShares Blog

Renewed fears of a US double dip are making the rounds. While Russ gives four reasons why the United States is not likely to tip back into recession this year, he has a word of caution about a risk looming over 2013.

2012-06-21 Will Quantitative Easing Lead to Higher Inflation? by Keith Wade, James Bilson of Schroder Investment Management

In certain circles, talk of Quantitative Easing (QE) immediately triggers thoughts of Weimar Germany and Zimbabwe. The only beneficiaries of turning to the printing presses, it is suggested, will be wheelbarrow salesmen. Whilst extreme inflation seems an exceptionally low risk event, there are legitimate concerns over the impact of the huge expansion of the monetary base on future inflation. In this Talking Point, we examine the key signals to watch out for in assessing future inflation risks.

2012-06-19 Is China Running Out of Steam? by Matthew Rubin, Ing-Chea Ang, Justin Gaines of Neuberger Berman

The Chinese growth story is especially impressive. At a time when many economies have struggled, China has continued to expand rapidly, helped by its dominant position in manufacturing, growing middle class and, after the 2008 credit crisis, its successful injections of capital and stimulus to ward off recession. Nevertheless, recent data have suggested that the Chinese expansion is now slowing more quickly than most investors expected.

2012-06-19 Cohen & Steers European Real Estate Securities Strategy by Team of Cohen & Steers

We would like to share with you our review and outlook for the European real estate securities market as of May 31, 2012. For the month, the FTSE EPRA/NAREIT Developed Europe Real Estate Index had a total return of 7.5% (in U.S. dollars, net of dividend withholding taxes). By comparison, U.S. REITs had a total return of 4.5%, as measured by the FTSE NAREIT Equity REIT Index. Year to date, the indexes had total returns of +3.0% and +8.8%, respectively.

2012-06-19 South Africa: Opportunities in the Rest of Africa Beckon by Team of Thomas White International

The signs are evident all across Africa, from Kenya in the east to Ghana in the west. South African businesses are increasingly looking at opportunities in their own backyard on the African continent with newfound enthusiasm. Though South Africa still lags the U.S. and China in total investments in the rest of Africa, in recent years, the growth in investments by the countrys companies has been the highest.

2012-06-18 A Brief Primer on the European Crisis by John P. Hussman of Hussman Funds

Europe has repeatedly been successful at addressing its recurring liquidity crises with the help of other central banks, but its still an open question whether they can durably solve the solvency crisis without more disruption and more restructuring of both government debt and troubled banks. In my view, the hope for an easy solution is misplaced, and the likelihood of recurring disruptions from Europe will remain high.

2012-06-18 Health Care - Will the Supremes Keep Us Hangin On? by Milton Ezrati of Lord Abbett

As of this writing, the Supreme Court has yet to announce its decision on Obamacare. It has not even announced when it will reveal its decision. Still, if much about the Courts conclusion remains a mystery, two things about it are fairly clear: 1) the Court will almost surely hand down something complex, and 2) whatever it decides, uncertainty will continue to plague business and investment decision making.

2012-06-18 What Happens In Greece Must Stay In Greece by Charles Lieberman (Article)

Greeks has seemingly elected a leadership to work with Europeans to help them balance their budget. Nonetheless, Greece is too dysfunctional a country for another round of credit to accomplish much. It must become a law abiding nation by paying taxes, it must severely reduce government spending by decreasing social programs, including employing far fewer Greeks, and it must restructure its restrictive labor and business laws to enable firms to grow.

2012-06-18 Cohen & Steers Large Cap Value Strategy by Team of Cohen & Steers

We would like to share with you our review and outlook for the U.S. large cap value market as of May 31, 2012. For the month, the Russell 1000 Value Index had a total return of 5.9%, compared with a total return of 6.0% for the S&P 500 Index. For the year to date, the Russell 1000 Value Index had a total return of +3.5%, compared with +5.2% for theS&P 500 Index.

2012-06-18 Secrets to Brand Building in China by Sherwood Zhang of Matthews Asia

The topic of Chinas consumer market tends to conjure up the catchphrase 1 billion customers and companies from around the world have flocked to cater to this market. As consumers in many developed countries have increasingly become overleveraged from years of easy credit, Chinas consumers have remained mostly underleveraged. Even as Chinas consumption growth has slowed recently, it is still expected to remain on a positive trajectory.

2012-06-15 Falling Equity Prices Reflect the European Crisis and Slower Economic Growth by Team of Thomas White International

Heightened concerns over the European fiscal crisis and slower economic growth dragged down emerging market equity prices during May. The emergence of political parties opposed to short-term austerity measures in recent elections in countries such as France and Greece has upset the political consensus that paved the way for an agreement on tackling the crisis last year. Borrowing costs of some of the troubled countries such as Spain have increased substantially, while countries that are in better fiscal health such as Germany remain hesitant about the issuance of common euro bonds.

2012-06-15 Equity Prices Reflect Concerns over Global Growth Slowdown by Team of Thomas White International

International equity prices corrected in May on heightened worries over a further global growth slowdown as the European fiscal crisis worsened. Political consensus on ways to address Europes fiscal problems dissipated after political parties opposed to austerity measures gained popularity in countries such as France and Greece earlier this year. However, Germany and select other countries continued to insist that structural reforms agreed as part of last years pact should be adhered to.

2012-06-15 Global Outlook Dampened Further by the European Crisis by Team of Thomas White International

Apprehensions over a worsening European fiscal crisis and concerns about slower growth in the emerging economies continued to dampen investor sentiment in May. Europes political leadership is yet to find a common ground that would accommodate the opposition to short-term austerity measures expressed in recent elections in countries such as France and Greece. There is growing expectation of a possible Greek exit from the monetary union while borrowing costs of troubled countries such as Spain have increased further, following credit rating downgrades.

2012-06-15 Schwab Market Perspective: Time for Action by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

With escalated uncertainty, sitting back can be an easy choice, but we believe investors and policymakers alike need to take action. Equities bounced off of what appeared to be oversold conditions but although the US economy appears to be holding its own, a renewed sustainable uptrend may be hard to come by until some substantive policy actions are taken around the globe. The time for decisive action in the eurozone appears to be quickly approaching as short-term solutions are no longer satiating the market.

2012-06-15 Obstacles to a Lasting Recovery: The Liquidity, Hesitancy & Solvency Traps by Thomas Fahey of Loomis Sayles

Those familiar symptoms are back again to start the summer: risk aversion; falling equity prices; rising volatility; record-low German and US government bond yields; wider credit spreads; a European country getting picked on; and a stronger US dollar. We have seen this bad movie twice before, during the summers of 2010 and 2011. If this is indeed another rerun, we should expect central bank and other official policy responses to help limit the fallout. As we see it, hesitancy and solvency trapsnot a liquidity trapare the main obstacles to a lasting economic recovery.

2012-06-15 Every Economists Career Ends in Failure - The Irony of Hyman Minsky by John Gilbert of GR-NEAM

The economist Hyman Minsky held that capitalist economies are inherently unstable because investments are financed with debt, and the financial markets pricing of debt is volatile. Economies are prone to booms and busts as the cost of financing falls too far, or rises too much, revealing poor investment decisions. This has always been obvious to observers of business cycles, of which Minsky was one. Too many of his colleagues in economics ignore this, which we have found puzzling.

2012-06-15 Cohen & Steers Global Real Estate Securities Strategy by Team of Cohen & Steers

We would like to share with you our review and outlook for the global real estate securities market as of May 31, 2012. The FTSE EPRA/NAREIT Developed Real Estate Index had a total return of 6.4% for the month (net of dividend withholding taxes) in U.S. dollars. Year to date, the index returned +7.9%.

2012-06-15 Cohen & Steers International Real Estate Securities Strategy by Team of Cohen & Steers

We would like to share with you our review and outlook for theinternational real estate securities market as of May 31, 2012. The FTSE EPRA/NAREIT Developed ex-U.S. Real Estate Index had a total return of 8.0% for the month (net of dividendwithholding taxes) in U.S. dollars. By comparison, U.S. REITs returned 4.5% for the month, as measured by the FTSE NAREIT Equity REIT Index. Year to date, the indexes returned +7.3% and +8.8%, respectively.

2012-06-14 Patient But Vigilant Fed by Asha Bangalore of Northern Trust

Chairman Bernanke failed to offer broad hints about an imminent round of financial accommodation or an extension of Operation Twist (Maturity Extension Program) in his testimony on June 7. There were three key takeaways pertaining to the near term economic outlook from Bernanke's testimony and response to questions.

2012-06-14 Chart of the Week: Growth Dichotomys Diminished Influence by Team of American Century Investments

Despite weaker-than-expected U.S. employment data for May (released June 1) and other signs of slow economic growth, the Fixed Income Macro Strategy Team at American Century Investments does not believe the U.S. economy is headed toward another recession (though the marginal possibility of recession has increased). Rather, the team believes the economy remains on a sub-par recovery/slow (1-3%) growth path, with headwinds.

2012-06-13 The Tip of the Iceberg For Dividend Stocks by Team of Columbia Management

Post-crisis equity investors seek to lower portfolio volatility. Dividend stocks have provided higher returns with less risk compared with non-dividend payers. Baby boomers are retiring now with much smaller nest eggs than they had anticipated. They need reliable sources of income and growth. Cash-rich companies are in a position to pay and potentially grow dividends, while dividend payout ratios are historically low. Active managers leverage in-depth research to uncover promising opportunities among companies likely to initiate or raise dividends.

2012-06-12 Kingdoms of the Blind by Michael Lewitt (Article)

Recent events offer a rare illustration of the combined effects of the failure of monetary, fiscal and regulatory policy to coordinate a meaningful response. Rising budget deficits, record low interest rates, J.P. Morgan's proprietary trading blunder and the botched Facebook IPO process speak to abject policy failures in virtually every aspect of finance. It's not even a question of not having learned our lessons; our collective policy intelligence actually appears to have diminished.

2012-06-12 Europe Is Near Term Driver of Market Movements by John Buckingham of AFAM

Though the dates do not coincide, as there is a lag in the Investment Company Institute data, last weeks rally in stocks was accompanied by word that for the first time in seemingly forever, mutual fund investors actually put more money into domestic equity funds than they took out, while the reverse was true for bond funds. Because it is only one week and Memorial Day was part of those ICI numbers, we hesitate to say that the tide is finally turning in terms of investor sentiment.

2012-06-12 Frontier Markets: The New Emerging Markets by Allan Conway, Edward Evans of Schroder Investment Management

In this paper, we summarise the attractive investment case for frontier markets both over the long term but also for an investment today. Frontier markets provide access to some of the most dynamic and fastest-growing economies in the world, supported by strong secular growth drivers. The investment opportunities are similarly benign as market liberalisation is accelerating and valuations look attractive in absolute terms and versus the developed and emerging world.

2012-06-11 Atlas Shrugged?! by Jeffrey Saut of Raymond James Equity Research

The call for this week: Over the weekend the eurozone agreed to lend Spain up to 100 ($126 billion) to shore up its teetering banks. That decision prompted this from my friend David Kotok, captain of Cumberland Advisors: The fact is the absence of banking collapses is good news. That is correct. Good news! We establish that good news by what we DO NOT see on TV. We do not see banks collapsing and failing to pay depositors. This means we may not witness the euro system collapsing and failing. Bank runs and deposit failures are symptoms of liquidity constraints.

2012-06-11 China Toes a Delicate Balance by Chris Maxey and Ryan Davis of Fortigent

Markets posted their best returns of 2012 last week as investors anticipated additional policy action from global central banks. A series of events during the week heightened optimism that central banks would once again step in to support financial markets. In a Wednesday release, the European Central Bank did not cut its policy rate, but ECB President Mario Draghi said the bank was ready to act in response to the deteriorating state of the Eurozone.

2012-06-08 The Global Debt Crisis by Greg Hahn of Winthrop Capital Management

The Financial Crisis of 2008 represented a turning point for the capital markets, financial regulation and global central bank policies. For the twenty years leading up to the Financial Crisis, accommodative monetary policies of the developed countries resulted in prosperity, higher wages, increased asset prices and an overall higher standard of living. However, this false sense of perpetual prosperity resulted in unbalanced social service and pension benefits that are now more difficult to rationalize in the economic environment following the Financial Crisis.

2012-06-08 The Default Delusion - Inevitable....and Desirable by Jonathan Compton of Bedlam Asset Management

The many tortuous what if articles on the eurozones financial problems address the risks of collapse and contagion together with the inchoate political responses. Inevitably they conclude catastrophic consequences. There is no gain in further exaggerating this fairy tale, which is repeated to frighten voters into submission. Every scribbler had got there apart from those for whom it became a quasi-religious cult. The current cacophony of commentary remains backward looking so will again miss the key issue: default is good.

2012-06-07 Remarks to the 12th Annual International Seminar on Policy Challenges for the Financial Sector by Mohamed A. El-Erian of PIMCO

Let me start with what I will refrain from doing specifically, I will not pre-empt the detailed discussions that you may have on such topical issues as regulatory principles, SIFIs, market infrastructure, stress testing and, of course, the rapidly changing nature of sovereign risk in advanced countries. Instead, I will try to touch on three more general topics that, in addition to your critical detailed analysis, I believe are important in assessing the potential impact of regulatory reform in terms of the past, present and future.

2012-06-07 Real Challenges in Brazil by Mark Mobius of Franklin Templeton

Brazil, the B in the emerging markets entities known as the BRIC countries (Brazil, Russia, India, China), has entered what I think can fairly be described as a rough patch of sluggish growth. Since my last update on Brazil, the country has experienced heightened economic challenges that threaten its competitive position to slip. In 2011, Brazils growth eased to 2.7% after having reached 7.5% in 2010.1 The Eurozone crisis and the impact of a stronger Real on the competitiveness of Brazilian industry are partially to blame for this growth slowdown.

2012-06-06 Our House: Is the United States the Best House in a Bad Neighborhood? by Liz Ann Sonders of Charles Schwab

I won't try to put lipstick on the pig that was last Friday's May jobs report, but I will try a little lip gloss. Somewhat lost in the mire of the dire reaction to the report were several other more-positive readings on the economy. That's testament to the likelihood that there are many more drivers to today's malaise than just jobs growth, or lack thereof. It seems clear we're in the midst of the third consecutive mid-year economic slowdown, driven by similar forces, most dominantly the eurozone debt crisis.

2012-06-05 Letters to the Editor by Various (Article)

A number of readers respond to our article, Can Krugman Fix Our Economy?, which appeared last week.

2012-06-05 When OK is Good Enough by Team of BondWave Advisors

The US economy continues to grow, but in recent months manufacturing and employment indicators have remained positive but have been flagging. While there might not be a lot to get excited about economically here in the US, OK is better than elsewhere, like Europe. We discuss the situation in the US and Europe and provide a commentary of the US Treasury, Corporate and Municipal bond markets.

2012-06-04 It's All Relative by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

Equities have pulled back and are flirting with correction (-10%) territory. We believed this was a needed process, and remain modestly optimistic that economic data will rebound and the market will eventually resume its move higher over the next several months. The Federal Reserve has made clear that it stands ready to act should the US economy deteriorate, or the European debt crisis escalate, but we remain skeptical. The more important issue in our view is how the coming "fiscal cliff" is addressed.

2012-06-04 Run of the Mill by John P. Hussman of Hussman Funds

The awful behavior of the market in recent weeks is very run-of-the-mill in terms of how similarly unfavorable conditions have usually been resolved historically, and there is no evidence that this awful prospective course has changed much. Investors should expect no easy solutions to the fiscal and global challenges ahead. They should instead expect market valuations that adequately reflect the fact that there are no easy solutions. In my view, those valuations remain miles below present market levels.

2012-06-04 More Muddling Along by Charles Lieberman (Article)

It appears that economic growth has slowed a bit once again, although a relapse into recession seems fairly unlikely. Consumer spending, business investment and a recovery in housing should support growth at a moderate pace. Europe remains a dark cloud hanging over better prospects. Budget deficits at the sovereign level and bank capital needs at the corporate level must be resolved before markets can breathe easily. So volatility in our markets is likely to continue. Since we can exert very little control over Europe, policymakers here must remain focused on maintaining growth domestically.

2012-06-04 And That's the Week That Was by Ron Brounes of Brounes & Associates

Nothing good to report here so why even try to spin it. (Effective politicians may beg to differ.) The once promising labor picture just turned from bad to worse; manufacturing is no longer the one staple in the economy; Spain may be replacing Greece as the poster child for what ails the EU (and thats not because things are looking up in Greece). Stocks suffered their worst day of the year to end the week and the gains of the first quarter have been long forgotten. (Even the Astros stink again.)

2012-06-04 Job Drought, Greece Wipe Out 2012 Gains by Kristina Hooper of Allianz Global Investors

The U.S. employment report dominated headlines and put investors on watch for further threats to the recovery. In Europe, Ireland's adoption of the fiscal pact was not enough to counter worries about the escalating banking problems in Spain. But as long as the U.S. savings rate, which currently stands at 3.4%, continues to decline, the downside risk to U.S. economic growth is limited. In addition, the substantial drop in the price of oil should also help boost the economy. We maintain the view that the United States will achieve 2% economic growth this year.

2012-06-04 Negatives Intensify, but Panic Isn't Warranted by Bob Doll of BlackRock Investment Management

For some time, we have been suggesting that the US economy had been holding up relatively well compared to the rest of the world. While we are not changing that view, last weeks data (particularly Mays employment report) provided a negative jolt and pushed stock prices down sharply. Our summary view of the US economy is that while the United States appears to have entered another slowdown phase with the data growing more disappointing in recent weeks, the case for a renewed recession still looks flimsy.

2012-06-02 Will the ECB and Fed Follow Where China Leads? by Frank Holmes of U.S. Global Investors

Every month, policymakers track purchasing managers indices (PMI) around the world as they consider fiscal and monetary actions. To us, a PMI is a measure of health of companies around the world, because it includes output, new orders, employment and prices across manufacturing, construction, retail and service sectors. Historically, weve seen Chinas PMI number leading the year-over-year change in exports by three to four months, so when the PMI has increased, a few months later, Chinese exports have historically risen, and vice versa.

2012-06-01 Our Take on Todays Payroll Numbers by Doug MacKay of Broadleaf Partners

This mornings payroll numbers were disappointing, a fact that is being reflected in the performance of todays stock market, now down nearly 2%. Total non-farm payrolls were expected to show a gain of 150K, but increased only 69K, while the total unemployment rate edged up to 8.2% from 8.1% previously. While still in positive territory, the numbers just werent encouraging in the face of so much global uncertainty coming out of Europe and China. A client sent us a short email exclaiming Yikes and then asked us if the world was coming to an end. This was our unedited response.

2012-05-31 The Global Industrial Sector: Have Profit Margins Peaked? by John Longhurst of PIMCO

Factors driving profit margin expansion in the industrial sector include globalization, EM capital expenditures, a focus on profitability and global labour arbitrage. Potential headwinds include a slowdown in global growth drivers, rising labour rates and global deleveraging. We believe profit margins are most at risk in product areas where EM companies are benefiting from state capitalism and seek to take local advantages global.

2012-05-31 Wall Street Food Chain by Bill Gross of PIMCO

Soaring debt/GDP ratios in previously sacrosanct AAA countries have made low cost funding increasingly a function of central banks as opposed to private market investors. Both the lower quality and lower yields of such previously sacrosanct debt represent a potential breaking point in our now 40-year-old global monetary system. Bond investors should favor quality and clean dirty shirt sovereigns (U.S., Mexico and Brazil), for example, as well as emphasize intermediate maturities that gradually shorten over the next few years.

2012-05-30 Delayed Entitlement: The Changing Economics of Retirement by Tom Streiff of PIMCO

Its a foregone conclusion that Baby Boomers retirements will be very different from the retirements of their parents. To understand how, we need to explore the impact of the most recent financial events on Baby Boomers. The conventional wisdom is that as the leading edge of Boomers converged on age 65, their associated retirements are well underway and the economic and societal effects of this demographic-driven, transfer-payment-promised contingent are just beginning. In the next three to five years we should face a rapid and unprecedented expansion of entitlement expenditures.

2012-05-30 U.S. Dollar and Euro - Review and Outlook by Axel Merk of Merk Funds

The 12-month period ended March 31, 2012 (the Period) could be described as one of contrasting halves. News emanating from Europe dominated market gyrations for the majority of the Period. During the second half of the Period, the market appeared to ascribe a more optimistic assessment to the European situation and the global economy. Regarding the U.S. dollar, we consider the more dovish FOMC voting member composition to be a negative for the currency, as it will likely lead to more expansionary policies relative to global central bank counterparts

2012-05-29 Unraveling the Mess in Europe by Charles Lieberman (Article)

There is considerable nonsense written about the European debt crisis. Greece must balance its books, whether they remain inside the Euro or not. There are major benefits and costs to both remaining inside the Euro and to exiting. There is no silver bullet that will solve their problems easily. More broadly, banks need to be recapitalized all across Europe. This has not been done as yet, perhaps for political reasons, which only compounds the economic problems and allows them to fester. It seems like the Europeans are working towards solutions, but painfully slowly.

2012-05-29 The Spending versus the Austerity Debate by Jim Tillar of Tillar-Wenstrup Advisors

There is a very important debate taking place on the best way to fix our economy between those who favor more spending versus those who favor austerity. Recently the spending camp has been very vocal in promoting their theory, including recent papers by Larry Summers, Brad DeLong and Paul McCulley, Zoltan Pozsar and a new book by Paul Krugman. What is not in dispute in the debate is that the private sector is deleveraging as an aftermath of the financial crisis, negatively impacting growth. What is in dispute is the appropriate response.

2012-05-29 Amid Uncertainty, What is an Investor to Do? by Chris Maxey and Ryan Davis of Fortigent

Markets rebounded last week after a two-week slide. The S&P 500 and Dow Jones Industrial Average rose 1.7% and 0.7%, respectively, in a choppy trading period. Discussion of a potential Greek exit from the Eurozone rattled investors, while economic data in the US was modestly positive.

2012-05-29 Canada: Untangling Pipeline Projects to Realize Energy Export Potential by Team of Thomas White International

Oil production in Canada is set to increase to 6 million barrels a day by the end of this decade, but the country lacks pipeline infrastructure to facilitate exports. For a country richly endowed in natural resources, and with growing energy production, Canada has been facing a perplexing problem in recent years. While its producers are supplying oil and gas to U.S. refineries at prices below the international market, Canadian refineries on the east coast are paying higher international prices for the oil they import.

2012-05-24 Jumping Into The Abyss: A Bull Case for Gold Mining Stocks by JJ Abodeely of Sitka Pacific Capital Management

Gold mining stocks, as measured by the AMEX Gold Bugs Index (HUI), are down nearly 40% from their August 2011 high. Representative ETFs such as GDX and GDXJ as down similar amounts, if not more. Mining company stock prices look to be falling into the abyss. While buying mining stocks here could certainly look foolish in the near-term, NOT accumulating positions, or selling them for that matter, is likely to be the bigger mistake over the long term.

2012-05-24 Why Invest in Asian Credit? by Showbhik Kalra of PIMCO

Asian sovereign and corporate credit offer more attractive yields than a number of other global fixed income sectors as investors take on additional risk. Given Asian markets diversity and the global macroeconomic environment, investors may wish to consider investment managers with a strong global macro process coupled with strong relationships with local stakeholders and experience in local portfolio management and markets.

2012-05-24 Pocket of Strength: Turkey Retail Stocks Rally by Frank Holmes of U.S. Global Investors

To add alpha, we believe investors need to continually seek pockets of strength amidst todays mire of pessimism. One bright spot weve seen lies just east of Greece: Turkey. Many investors believe banks are the only investment play in Turkey. The sole question for those investors is to hold or not to hold banks. Heres what we think is a better strategy: Invest in undervalued, diverse, smaller companies that will benefit from a resilient consumer, low unemployment rate and sound government policies.

2012-05-24 Through the Economic Lens: 2012 Looks More Like 2010 by Robert Stein of Astor Asset Management

The recent selloff in the market, with nervous investors made all the more so because of the medias obsession with financial issues in Europe, is renewing talk about bear markets and recessions as people head for cover. In the midst of their misguided fears of a contagion effect, there is also concern about the fiscal cliff, spending cuts and higher tax rates that, at this point, will take effect on January 1. (Funny how that sounds like it would be a good idea for our debt problem.)

2012-05-23 Is Quantitative Easing the Silver Bullet to Economic Recovery? by Joseph Giulitto of Trust Company of America

I saw this quote recently while researching another topic. I found it to be appropriate to capture the challenge that professional money managers have in finding investments appropriate for the current domestic economic and geopolitical environment. The rules (that apply to what makes an investment good or bad) that have been established over the previous 40 years of investing are no longer relevant, and those investments that typically would struggle during a massive global recession have been successful in achieving a rising valuation.

2012-05-23 Global Investment Outlook by Mike Turner of Aberdeen Asset Management

Investors continue to focus on the global macroeconomic backdrop, which is still relatively positive despite slightly disappointing data recently. There are signs that some of the imbalances within the Eurozone are starting to ease as competitiveness is improving in some of the peripheral countries and this is beginning to be reflected in trade figures. Looking further ahead, we feel that global consumption should be supported by falling headline inflation.

2012-05-22 Investing Through a Bumpy Ride by David Kelly of J.P. Morgan Funds

Its been a tough quarter so far. The U.S. economy is still growing, but not at a sufficient pace to excite anyone. Meanwhile, investors have had plenty to worry about including a fiscal cliff in the United States, a slowdown in China and, right now most ominously, further turmoil in Europe. Despite plenty to worry about, the realities of a U.S. economic recovery, very conservative allocations and relatively attractive valuations suggest that investors should still consider adding stocks and other risky assets to their portfolios.

2012-05-22 Return to Normalcy: The False Argument of "Austerity" vs. Growth by Team of Institutional Risk Analyst

To rescue Europe, to reinvigorate the United States, and to set the global economy on a sustainable path toward expansion, the current debate offers a so-called "choice": either slash government spending or spend your way to growth. In Europe, German Chancellor Angela Merkel is one of the most prominent proponents of fiscal restraint -- in part because Germany is picking up the tab for the continent's debt crisis. And in the United States, economist and New York Times columnist Paul Krugman is the fullest-throated supporter of more government spending.

2012-05-22 Weekly Commentary and Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Last week saw the worst week for stocks of the year, caused by the continued fears over the impending break-up of the European Monetary Union as well as the colossal flop of the IPO of Facebook, and the burgeoning horror at the trading losses at JP Morgan. Sad to say that the fears of the past several months, as expressed in these weekly commentaries, seem to be materializing. The circus act known as Europe is back in recession, as political leadership is simply not possible given the pressures of seventeen sovereign nations.

2012-05-22 The Case for Community Banks by Ryan Issakainen of First Trust Advisors

The most difficult decisions for investors often involve overriding the emotional residue of past mistakes, and reconsidering the merits of a stock or industry with which one has had negative experiences. This was the case for many investors following the bursting of the technology bubble in the early part of the last decade, as they avoided or severely underweighted tech stocks, and ultimately missed out on the tremendous growth experienced by the sector over the last decade.

2012-05-22 The Harsh Realities of Bond Math by Mark Oelschlager of Oak Associates

Shortly after I graduated from college my father sat me down and tried to teach me about bonds. He proceeded to explain that prices and yields. He tried to explain the difference between a bonds yield and its coupon as well as the effect that time to maturity has on the sensitivity of a bonds price to changes in interest rates. It all sounded so complex, and there were intertwining effects. This, combined with its counter-intuitive nature, made the concept of bond pricing difficult to grasp in a short lesson.

2012-05-21 Liquidation Syndrome by John P. Hussman of Hussman Funds

Presently, the market remains richly valued on normalized earnings, and is coming off of a speculative peak with an abrupt and persistent initial decline. All of this reflects what might be called a "liquidation syndrome" that is selective for awful drops that began in 1969, 1972, 1987, 2000, 2007, and the more moderate but still steep losses in 1998, 2010, and 2011.

2012-05-21 Global Shipping: Any Port in a Storm? by Sai Devabhaktuni and Gregory Kennedy of PIMCO

With the exception of LNG tankers, all three major shipping categories have been suffering from a supply glut. This, combined with higher fuel costs, has led many shipping companies into financial distress. Although banks have worked with ship owners through this down cycle, they have also pulled back from financing the industry. We believe downside risks are likely minimized in the shipping industry for new lenders and investors. Vessel values are depressed by rates that are sometimes below owners' operating costs and by an oversupplied market that suppresses secondary market values.

2012-05-21 Facebook IPO Not a Flop; Underwriters Priced it Right by John Buckingham of AFAM

he social media giant ended its first day of trading up a measly 23 cents, or 0.6% from its $38 offering price, and technical difficulties at Nasdaq delayed the opening of trading and impacted market activity throughout the day, I give kudos to the underwriters for actually pricing the deal as best they could to match the relatively limited supply to the unprecedented demand. Certainly, Facebook could eventually grow into its lofty valuation, but it is eye-opening to think the disappointing first day of trading still left the company with a $100 billion+ market capitalization.

2012-05-21 Gilead Sciences Inc Strong Growth At An Unreasonably Low Price by Team of F.A.S.T. Graphs

Gilead Sciences Inc (GILD) is an innovative healthcare company with a strong record of historical earnings growth and expectations for above-average growth into the future. Nevertheless, Mr. Market seems unwilling to recognize the past and future earnings power of this niche pharmaceutical growth stock. Consequently, the company trades at a single digit PE ratio that we believe significantly undervalues both the companys past and future potential. Therefore, investors seeking high growth at a reasonable level of risk might want to look further into this undervalued growth opportunity.

2012-05-18 Sublime to Ridiculous by John Gilbert of GR-NEAM

There was a time when governments were held to account for the long-term consequences of their financial habits. Those days appear to be long gone, of course, to policymakers frenzied at the political urgency of producing rising employment. But there must be a price to pay for thumbing our noses at lessons previously learned. We look here at just how far government husbandry of the financial system has strayed over time, and how important the consequences are likely to be in years to come.

2012-05-18 U.S. Large Cap Value Investment Commentary As of April 30, 2012 by Team of Cohen & Steers

The economic expansion is likely to continue, but at a pace that is modest both in absolute terms and relative to previous recoveries. Many stocks are still attractively valued, in our view, and they have the potential to advance in the coming months. At the same time we are watchful of global economic developments, particularly in Europe and the Middle East. A winding down of monetary stimulus (such as the Federal Reserves Operation Twist program) could create headwinds.

2012-05-17 You should worry about EM inflation. Not US inflation. by Richard Bernstein of Richard Bernstein Advisors

Investors seem overly concerned about US inflation. Both market-derived expectations and actual rates of US inflation remain very subdued, yet we are consistently asked about inflation and whether our investment strategies are adequately structured for high US inflation. Across the board, these data do not support structuring investment strategies for the US inflation that investors, oddly enough, feel is inevitable. The data do, however, suggest that investors recent rush into emerging market debt is much riskier than they anticipate.

2012-05-15 Ponzi's Children by Michael Lewitt (Article)

Europe, whose economic condition is nothing less than terminal, is about to receive what physicians refer to as a 'zetz' of morphine in the form of M. Hollande. A 'zetz' is the final dose that doctors give to dying patients to hasten their passage to the afterlife. In Europe's case, however, the medicine is not going to be painless, and its administration is not based on mercy but on resentment and stupidity.

2012-05-15 Austerity Its All In The Timing by Scott Brown of Raymond James Equity Research

One problem with designing fiscal stimulus is determining how rapidly to move back toward fiscal balance. The U.S. economy has already faced some degree of austerity. According to the National Income and Product Accounts, government consumption and investment subtracted 0.6 percentage point from GDP growth over the last six quarters, where in normal times, it would have added about 0.3 percentage point (consistent with population growth). Real GDP averaged 1.8% growth over the last six quarters. It would have been nearly a full percentage point higher if not for the contraction in government.

2012-05-14 Brazil: Compelling Opportunities for the Long Term by Brigitte Posch of PIMCO

Although economic growth has moderated somewhat in recent years, Brazils growth story remains compelling. Underpinned by favorable GDP growth, Brazilian bank fundamentals are solid; banks are closely regulated and well-capitalized. PIMCO believes several key corporate sectors oil, gas, utilities, infrastructure and major banks will dominate the outlook for Brazil over a secular horizon thanks to stronger pricing power and improved profitability.

2012-05-14 The Bull Market Has Not Yet Reached Its Highs by Bob Doll of BlackRock Investment Management

It has been the case for some time, but recent events serve as a reminder that the primary risk to the global economy and markets is the ongoing debt crisis in Europe. Confidence over policymakers' ability to deal with the crisis took a hit recently given that the election results in Greece and France signal a shift away from governments' willingness to move forward with unpopular austerity measures. The resulting political uncertainty and investor confusion has put downward pressure on stocks and other risk assets. Unfortunately, the reality is there is no quick fix for Europe's problems.

2012-05-14 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Celebrations normally reserved for heroic events or political ascension have been breaking out during earnings season, as first quarter (2012) portfolio valuations accelerated and year-over-year comparisons show margin expansion. Doing what they do best, market pundits have been turning flax into gold, proclaiming that the recovery has begun. Another anecdotal elixir. One always wonders whether the chicken or the egg comes first. In this case, proclaiming it to be so precedes the actual fact.

2012-05-11 Spring Quarterly Commentary by John G. Prichard of Knightsbridge Asset Management

U.S. GDP rose at a disappointing 2.2% annual rate during the first quarter of 2012; so far this recovery has been too weak to reduce relative government debt levels through growth. A step toward austerity is next years fiscal cliff which features automatic spending cuts and tax increases. We have been told one-third of the entire tax code is expiring at the end of this year, with payroll, income, capital gain and dividend tax burdens all set to increase. Simultaneously, automatic cuts to defense and other discretionary areas of the Federal budget are set to take effect.

2012-05-11 Here We Go Again....or Not? by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

Softer economic data has prompted concerns that the market may be headed for a summer swoonsimilar to the previous two years. We believe the backdrop is decidedly different (and better) this time around but investor and business confidence will continue to be important. Some appear to be hoping for weaker data in order to spur the Fed to enact QE3. We believe the bar is much higher and that the Fed should look to return to a more normal monetary stance. Complicating the overall picture and the Feds job is the coming "fiscal cliff" out of Washington at the end of this year.

2012-05-10 International Equity: Monthly Product Commentary April 2012 by Team of Thomas White International

International equity prices remained subdued during the month of April as concerns over the European fiscal crisis continued to cloud market sentiment. Accordingly, price declines were the greatest in Europe while select markets in Asia and Latin America outperformed. As expected, the economies of both the U.K. and Spain contracted during the first quarter, and underscored the mild recession the region is facing at the moment. Bond yields of some of the troubled countries such as Spain and Italy have increased in recent weeks, and investor response to new bond issues remains lukewarm.

2012-05-10 Staying Bullish by Herbert Abramson and Randall Abramson of Trapeze Asset Management

We believe we are in a new bull market, and bull markets thrive on climbing that proverbial wall of worry. Bullish sentiment is low and bearish sentiment high. Anxious retail investors, having suffered two ugly bear markets since 2000, continue to shun stocks, with money flowing out of mutual equity funds now for more than 5 consecutive years. The public is hugely underinvested. Cash on the sidelines is enormous. The fuel to ultimately power stocks higher as confidence returns.

2012-05-09 It's All About the Fraud: Madoff, MF Global & Antonin Scalia by Team of Institutional Risk Analyst

In this issue, we return to the Lehman Brothers, Madoff and MF Global bankruptcies to talk about how the largest banks have wired US bankruptcy laws to their own advantage. Specifically, the 2005 changes to the bankruptcy code, combined with the traditional American caution regarding pre-judgement restraint on the parties surrounding a bankruptcy, has provided American banks with a free pass to facilitate fraud with no accountability. But first, Ally Financial has received the blessing of the US Treasury to file a bankruptcy for the ResCap real estate unit. This is a profoundly bad idea.

2012-05-08 Q2 Outlook: "Sell in May" May Not Work This Year by OppenheimerFunds (Article)

Chief Economist Jerry Webman explains why he believes the U.S. economic recovery is real and CIO Art Steinmetz talks about how stocks are as cheap compared to bonds as they have been in decades.

2012-05-08 Mohamed El-Erian and David McWilliams: The Key to Resolving Europe's Crisis by Robert Huebscher (Article)

Dealing with a crisis requires three things, according to Jack Welch, General Electric's former CEO. Define your reality - not as you would like it to be, but as it is. Do something about it. Then, third, acknowledge that the crisis wasn't half as difficult as you thought it was. Germany is the key player in Europe's crisis today, and it is still struggling to accurately define its reality.

2012-05-08 Sentiment Readies for a Tumultuous Fall by Chris Maxey and Ryan Davis of Fortigent

Market sentiment has oscillated quite rapidly in recent months on the heels of dramatic market intervention by the ECB and shifting views of global economic stability. Sentiment is likely to remain unstable in the months ahead as investors grapple with any number of events, from elections in Europe and the US to the end of recent monetary easing efforts domestically. While markets have rallied substantially over the past six months, retail investors are maintaining a somewhat neutral view on their allocations.

2012-05-07 The Labor Market Outlook by Scott Brown of Raymond James Equity Research

The April Employment Report disappointed stock market participants. However, it really wasnt a bad report. Private-sector job growth has been moderately strong this year. The Household Survey data suggest that the economic expansion has been strong enough to absorb the growth in the working-age population, but not enough to take up much of the labor market slack that was generated during the downturn. These figures tell us nothing about where the labor market is headed. Job growth over the next six months will have important implications for investors and for the November election.

2012-05-07 Mixed Data and Patience is a Virtue by John Buckingham of AFAM

The labor report issued by the U.S. Bureau of Labor Statistics found that nonfarm payroll employment rose by 115,000 in April, and that the unemployment rate dropped to 8.1%. The improvement in the jobless rate came about only because 342,000 folks left the workforce, so there was little cause for cheer, even though the rate stood at 9.0% in April 2011 and 9.9% in April 2010. Employment increased in professional and business services, retail trade and health care, but declined in transportation and warehousing, while the private sector added 130,000 jobs and government payrolls fell by 15,000.

2012-05-07 Economic Insights: Earnings GrowthIs It Enough? by Milton Ezrati of Lord Abbett

After two-plus years of exceeding expectations, earnings this year seem poised to reflect the plodding nature of this economic recovery. In 2010 and 2011, even as the real economy managed only a paltry 2.4% average annual rate of expansion, the earnings of S&P 500 companies soared, rising more than 47% in 2010 and almost 20% in 2011. This year, the slow fundamentals will surely assert themselves. There is nothing ominous in the pattern. It is, after all, well-established historically that earnings should come into line with slower-growing revenues in this, the third year of economic recovery.

2012-05-05 Late Bull Stampede Turns Bears Into April Fools by Douglas Cote of ING Investment Management

April should have derailed the market, but it didnt; a temporary pullback was the best the bears could muster. The bears normally make money by betting against the crowded trade; by being on the sidelines, the bears now are the crowded trade and in foolish fashion. The bulls, meanwhile, find themselves in the odd position of being seen as contrarians, even though fundamentals are setting records and equity market performance over the last two quarters has been spectacular. Let the stampede continue!

2012-05-05 A Graphic Presentation by John Mauldin of Millennium Wave Advisors

The job market is still in a deep hole. At April's rate of job gains, it would take well over three years to return to December 2007's employment level, without adjusting for population growth; at the average rate of the last six months, it would take about two years. Earnings are weak, and the strongest sectors aren't those of which economic miracles are spun. QE3 looks like more of a possibility than it did a few days ago.

2012-05-04 Stocks Cheap? Not so Fast! by Mike Paciotti of Integrated Capital management

Markets seem to have forgotten that which ailed us just 4 months ago. Talk of another Lehman style meltdown by a major financial institution has given way to positive earnings results, record profit margins and a much publicized recovery in the US. Equities, have now taken center stage once again with many major asset management firms proclaiming their attractive nature. Over the course of the next few paragraphs, we will examine this argument in greater detail by deconstructing equity market returns into component pieces.

2012-05-04 Back In by Mark Kiesel of PIMCO

U.S. housing may be a decent place to put money over the next several years due to improved absolute and relative valuations. U.S. housing fundamentals have improved significantly, led by lower prices, record low mortgage rates, improving inventory and delinquency trends and a gradually improving labor market, which in combination are helping homebuyer confidence and potential demand. While the outlook for U.S. housing has improved, several headwinds remain, including tight credit, potential supply from the shadow inventory and weak household formation due to a subpar economic recovery.

2012-05-04 Watchful Waiting by Tony Crescenzi, Ben Emons, Andrew Bosomworth and Lupin Rahman of PIMCO

Today, the Federal Reserve itself faces an unusually uncertain period because it lacks a complete understanding of the potential side effects of its unconventional policy actions; in particular the elongated timeline of its zero interest rate policy and its massive money printing. What matters in shaping market expectations about inflation and deflation are the credibility of fiscal policy, the prospect for real economic growth and the central banks commitment to step back from the punch bowl.

2012-05-03 And Thats The Week That Was by Ron Brounes of Brounes & Associates

Earnings season continues (with the likes of Humana, AIG, Kraft), though investors may shift gears to focus on the economy next week as the new month brings key releases from manufacturing and labor. The recent jobless claims release has cast some doubt on the employment picture and last months lower-than-expected nonfarm additions have worried some analysts for the past month. (At least, it should look better than the picture in Spain?)

2012-05-03 A Troika of Problems by Team of BondWave Advisors

The troika of the International Monetary Fund (IMF), European Union (EU), and European Central Bank (ECB) has continued to prescribe austerity. But at the end of what is now a lengthy cycle of agreements and ever-increasing austerity measures, the debt still remains significant and much of the region has either been plunged into recession or is heading that way. We discuss these ongoing problems and provide additional insight on the US Treasury, Corporate and Municipal Bond Markets.

2012-05-03 Rebutting Paul Krugman: The Rest of the Story by Chris Turner of Advisor Perspectives (dshort.com)

I recently read an interesting article over at Barry Ritholtz's blog triggered by one of Paul Krugman's recent commentaries, The Secret of Our Non-success. Krugman showed the chart from the Federal Reserve Economic Data (FRED). Since data-miners and hobby chartists like me relish the opportunity to present data to readers so they can make their own decisions, I zipped over to FRED to recreate Krugman's chart.

2012-05-02 Inflation Anxiety is Spooking Investors by Matt Tucker of iShares Blog

Investors are spooked. They are so spooked that they are buying an asset that currently has a negative yield. What is the culprit causing so much concern? Curiously, its inflation. Investors appear to be so concerned about inflation that they are seeking protection against it without much regard to the cost of that protection. This phenomenon is playing out in the market for Treasury Inflation Protection Securities, or TIPS. In the last few auctions, the demand for TIPS by investors has been oversubscribed by almost 3X.

2012-05-02 Digbys Umbrella and a Dinner to Remember by Christian Thwaites of Sentinel Investments

The US economy is on a painfully slow road. It is recovering. Jobs numbers are better, even though some hiring in the first quarter may have been brought forward by mild weather. Production, manufacturing and exports, all signs of regained competitiveness in the US, are showing steady improvements. And the government sector is contracting. Not on purpose mind you, but jumping off a cliff and letting inertia do the work result in the same end. Above all of this, we have a Fed using every monetary policy at their disposal to try and promote growth and employment.

2012-05-01 Is Now The Time To Brace For Another Volatile Summer? by Chris Maxey of Fortigent

In the latest week, the Federal Open Market Committee reiterated its stance that economic conditions are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. While rates will remain low for now, the Fed will need to fend off other challenges in the months ahead, ones that could send investors racing for the beach sooner than normal. The biggest challenge for the Fed and the economy in the coming months is in the form of Operation Twist. The hope was that such actions would drive down interest rates and encourage borrowing of all forms.

2012-05-01 A Wake-up Call on the Economy by Milton Ezrati of Lord Abbett

Economic statistics seem at times to have their own ebb and flow, sometimes overstating and sometimes understating the underlying fundamentals. Sadly, these often meaningless data variations can create false feelings about economic possibilitiesenthusiasm, when the statistical flow leans toward the strong side, or despair, when it leans on the soft side. Investors, in particular, succumb to such swings in attitude, but, to a lesser extent, so do businesspeople. So, it was with a string of insupportably good numbers late in 2011 and earlier this year.

2012-05-01 Bernanke: Be Humble! by Axel Merk of Merk Funds

To Bernanke, being humble means to keep strong monetary policy support to avoid deflation. This humbleness creates a lot of debt whether that be out of thin air on the Feds balance sheet, or across the economy as consumers, businesses and the government alike are enticed to borrow evermore money. What we consider monetary largess, as well as fiscal unsustainability, may ultimately lead to deterioration of the US purchasing power. We have encouraged investors to take a diversified approach to cash. A basket of hard currencies or gold might serve to mitigate the risks of a declining dollar.

2012-05-01 Q2 Outlook: by OppenheimerFunds (Article)

Chief Economist Jerry Webman explains why he believes the U.S. economic recovery is real and CIO Art Steinmetz talks about how stocks are as cheap compared to bonds as they have been in decades.

2012-04-30 Growing Concerns by Scott Brown of Raymond James Equity Research

Real GDP rose less than expected in the advance estimate for 1Q12. However, the details were a mixed bag. The report added little to the debate about where the economy is headed. The first thing to remember about the advance GDP report is that the figures will be revised, and revised again. There is often a larger difference between the advance estimate and subsequent estimates. However, the underlying story behind the numbers typically does not change much. Consumer spending, which accounts for about 70% of GDP, helped by mild weather. Yet, the personal income figures suggest caution.

2012-04-30 Truth or Consequences? by Jeffrey Saut of Raymond James Equity Research

When youre wrong you say youre wrong; at least thats what the pros do. Clearly, I have been somewhat wrong by being conservative, but not by much because the INDU is actually 70 points lower than at the April 2, 2012 intraday high. Given the aforementioned litany of cautionary indicators, my sense remains the S&P 500 (1403.36) will spend some more time below 1425 while the short-term overbought condition is alleviated and the stock markets internal energy is rebuilt. Fridays market action only reinforced that belief with the indices gapping higher and then closing well below those highs.

2012-04-30 Housing Recovery Now Underway by Charles Lieberman (Article)

Many focused on the slower than expected pace of growth in first quarter GDP, but the stronger rise in housing activity merited little more than passing mention. However, housing construction is gathering steam, as inventories are now severely depressed and demographic trends require a resumption in new construction. Autos were another significant contributor to growth. We expect both sectors to continue as key sources of demand in the ongoing expansion.

2012-04-27 High Yield and Bank Loan Outlook April 2012 Sector Report by Team of Guggenheim Partners

The leveraged credit market began the year strong with yields across the credit spectrum approaching historical lows. Investors should realize that it is no longer early in the credit market rally. We are coming into the seventh inning stretch and it is getting tougher to find opportunities. It is also important to watch for signs of overheating and to remain focused on fundamental credit work and security selection. As we look ahead, we continue to see room for further price appreciation as investor demand should remain robust, while new issue supply wanes from its record first quarter pace.

2012-04-27 Roller Coaster Returns by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

Despite an earnings season that has been much better than expected so far, investors appear to be again focusing on more macro concerns. Europe and China are dominant concerns but US growth sustainability is also being questioned. We remain optimistic on the ultimate direction of the stock market. The Fed meeting provided no changes but did show a slightly more hawkish tilt in their economic forecasts. Meanwhile, the US government continues to play a dangerous game of chicken as election season is already in high gear and the so-called "fiscal cliff" looms.

2012-04-26 The Global Fiscal & Monetary Policy Shift Moves Markets by George Bijak of GB Capital

The powerful macro forces that drive global economy and move stock markets have changed direction post the peak of the Global Financial Crisis. Governments are tightening their Fiscal Policies and Central Banks are expending their Balance Sheets (also known as quantitative easing or money printing) as part of globally synchronized deleveraging process. The two opposing forces pull the global economy in different directions. The fiscal cuts are slowing economic growth but are counter-balanced by a stimulative nature of the Central Banks easing.

2012-04-25 Developed Europe: Economic Review 1st Quarter 2012 by Team of Thomas White International

The first quarter of 2012 witnessed several comforting developments in Europe. Greece fulfilled the pre-condition for securing its second bailout by convincing its private creditors to accept a 53.5 percent write-off on its debt. The deal eased concerns about a disorderly default by Greece on its sovereign debt. Following up on the liquidity-infusing program it introduced late last year, the ECB carried out another round of its Long-Term Refinancing Operation (LTRO), this time handing out to about 800 banks a total of 529.5 billion in 3-year loans at a very low interest rate of 1 percent.

2012-04-24 Bruce Greenwald on Structural Imbalances in the Economy by Eric Uhlfelder (Article)

Bruce Greenwald likes to say that he is constituted to disagree with everybody about everything, and he was true to his word at the recent Hyman P. Minksy Conference in New York. Taking immediate exception with the virtually unanimous characterization of the economic crisis as a balance-sheet recession, Greenwald, a professor of finance at Columbia University, argued that, far from being unusual, balance-sheet recessions can in fact be found at the heart of almost all business cycles.

2012-04-24 Is 2012 the Year for Hedge Funds? by Chris Maxey of Fortigent

Prior to the financial crisis, hedge funds were largely viewed as alpha generating, high return seeking, portfolio diversifiers. In 2008, that model came under attack from multiple angles fraud, illiquidity, and poor returns being the primary culprit. Ever since that time, the value proposition of hedge funds and alternative investments remains in question, causing some to wonder if this is a make or break year for the space. There is reason to think the environment for hedge funds and active managers is improving.

2012-04-24 Chinas Growing Pains by Milton Ezrati of Lord Abbett

Among all the fears discussed in the financial community these days, worries over Chinas expansion loom large. The government in Beijing has revised down its growth expectations to 78% a year from the former breakneck pace of 1012%. Private groups, such as the American Chamber of Commerce in China, have made similar downward adjustments in their expectations. Though there is good reason to anticipate a slowdown in the pace of Chinese growth, it would be a mistake to exaggerate the risks, and especially to do so by drawing easy parallels to Americas real estate debacle.

2012-04-23 Middle East/Africa First Quarter 2012 Economic Review by Team of Thomas White International

While the Middle East and Africa (MEA) region continues to weigh the impact of the tumultuous Arab Spring uprisings, the area is facing against another challenge yet again. In addition to the existing domestic instability, a strained external environment (the Euro debt crisis) is proving to be a major threat to the regions trade, tourism, remittances and other exports receipts. According to the World Banks Global Economic Prospects report, the economic recovery seen in Morocco, Jordan and Tunisia in late 2011 is likely to stall in 2012.

2012-04-23 Spring 2012 Quarterly Commentary by Jonathan A. Shapiro of Kovitz Investment Group

Theres an old adage about a six-foot tall man who drowned crossing a stream that was five feet deep on average. We believe the lesson here is well worth heeding. In investing, its not enough to survive on average. Investment survival depends not on how well one performs during periods of market euphoria, but how well you navigate through the rocky episodes. One of the byproducts and, indeed, one of the most important aspects of investing scared is that it obliges us to make sure the downside risk of our portfolios is limited in bad times.

2012-04-23 Blowin in the Wind by Scott Brown of Raymond James Equity Research

Recent economic data have been mixed, but generally consistent with moderate economic growth. The recovery continues, but has failed to gather much steam and remains relatively fragile. Were on our way, but weve a long way to go. Over the last year, the economy has faced a number of headwinds, capping the pace of improvement. Those headwinds appear to be lessening to some extent although there are uncertainties, particularly as one looks to 2013.

2012-04-23 Americas: Economic Review First Quarter 2012 by Team of Thomas White International

Optimism over economic prospects increased across the Americas regions during the first quarter of the year, as economic data showed sustained improvement and global risks eased somewhat. Despite costlier fuel, consumer spending climbed in most countries across the region, especially in the U.S. The European fiscal crisis now appears less worrisome when compared to last year, while the slowdown in Asia has turned out to be milder than expected earlier. Commodity prices have recovered after the correction during the second half of last year, on an improved outlook in global demand.

2012-04-23 Run, Don't Walk by John P. Hussman of Hussman Funds

One way to gauge your speculative exposure is to ask the simple question - what portion of your portfolio do you expect (or even hope) to sell before the next major market downturn ensues? Almost by definition, that portion of your portfolio is speculative in the sense that you do not intend to carry it through the full market cycle, and instead expect to sell it to someone else at a better price before the cycle completes. With respect to those speculative holdings, and when to part with them, my own view is straightforward. Run, don't walk.

2012-04-23 Global Policy Remains a Critical Catalyst by Bob Doll of BlackRock Investment Management

The economic backdrop continues to be mixed, but the overall trend continues to be one in which the US economy appears to be growing slowly. One interesting pattern that has emerged is that the US household sector has been picking up at the same time that the industrial side has been weakening. While an improving household sector is critical to ensuring long-term growth, there are some caveats to this trend. First, households have been dipping into their savings to boost spending, which is clearly not sustainable. Additionally, some of the growth may have been "borrowed" from summer quarter.

2012-04-20 Monthly Investment Commentary by Team of Litman Gregory

Stocks and other risk assets surged in the first quarter, continuing the strong run that began in the fourth quarter of last year. In each of the past two quarters, domestic stocks gained about 12%, marking one the strongest runs over the October-March span going back to the 1920s. Developed foreign stocks increased nearly 12% in the quarter, emerging-markets stocks gained 14, small-cap U.S. stocks were up 12%, high-yield bonds rose 5%, and emerging-markets local-currency bonds added 8%.

2012-04-20 Whats Ahead for the Fed? by Team of Neuberger Berman

Although growth could slow from here, we do not believe economic conditions will deteriorate enough to provoke further accommodative measures from the Fed. The Fed may be on hold for the time being, but we also believe that Bernanke is acutely aware of the potential consequences of reversing monetary policy too quickly. As a result, interest rates may stay lower for longer. In this type of yield-constrained environment, we continue to favor segments like high yield fixed income and emerging market debt, which both offer attractive sources of income and upside potential.

2012-04-20 Release Oil from the SPR? Better to Take the Long View by Greg E. Sharenow and Mihir P. Worah of PIMCO

A temporary release aimed at influencing short-term prices could actually send an unintended bullish signal to the market that long-term spare capacity in OPEC producers is insufficient to meet supply losses. After the release of oil from the SPR in 2011 prices initially fell by 7%, but quickly rebounded as the market priced in the challenge of redelivering the oil to the SPR in the future. With few options, governments have limited ability to influence oil prices and so should focus instead on policies that impact the medium to long term.

2012-04-20 Outsized Outsourcing Opportunity in the Philippines? by Frank Holmes of U.S. Global Investors

Our investment team has reported in the weekly Investor Alert about a number of positive trends coming out of the Philippines lately, including a narrowing of the budget deficit, easing inflation and rising export numbers. In addition, CLSA reported last fall that, the Philippines increasingly looks like it could be where Indonesia was five years ago in terms of the potential for a multi-year credit and investment cycle to kick in after years of post-Asian Crisis de-leveraging.

2012-04-20 Equity Investment Outlook April 2012 by Team of Osterweis Capital Management

We think stocks are reasonably priced on an absolute basis and extremely attractive relative to bonds. Bonds have performed well over the past three decades, but with interest rates at record lows, there is not much room for bonds to continue outpacing stocks on a total return basis. Meanwhile, companies are steadily increasing dividends. Even Apple recently instituted a dividend. For some time, investors have been lowering their exposure to U.S. equities. We believe this trend should reverse, especially once interest rates start to rise and bond market returns turn negative.

2012-04-20 Fixed Income Investment Outlook April 2012 by Team of Osterweis Capital Management

The Feds easy money policy will likely not reverse in the near term, but may do so before 2014, if economic growth strengthens meaningfully; some inflation is also acceptable to the alternative deflation. We are seeing some economic strength in the U.S., which is translating into higher equity prices (and hopefully higher capital gains). We are still generally avoiding exposure to interest rate risk found in Treasuries and investment grade bonds. We believe the easy money has been made there and we are not currently being compensated for the risk of rising interest rates.

2012-04-19 Huge Dilemma: Do You Protect Your Job or Your Clients' Money? by Mike "Mish" Shedlock of Sitka Pacific Capital Management

I feel like a broken record. Jeremy Grantham, John Hussman, and Lance Roberts of Streettalk Live surely feel the same way. I have been preaching the "low returns for a decade" concept for quite some time. It is very tough preaching caution, when caution is routinely tossed to the winds. Yet history has proven time and time again, that such times are precisely when caution is warranted, even though timing the precise moment is simply impossible.

2012-04-19 Price and Waistline Stability Prove Elusive as Inflation Creeps Up by Scott Colyer of Advisors Asset Management

The long-time trends are firmly in support of consistent price inflation during the history of the US. Inflation is a natural inclination for people, businesses, politicians and central banks. Given the Feds ultra-easy monetary policy aimed at creating inflation, we will eventually see it. Higher inflation requires investors to rethink where they invest. Cash and fixed income do little to cope with inflation and actually can be losers if held at times of higher than normal inflation rates. We think investors should take advantage of current bargains in real estate and equity asset prices.

2012-04-18 Forget about Spring, it Feels Like Summer by Philip Tasho of TAMRO Capital

Stocks sizzled in the first three months of 2012, delivering the best first quarter return since 1998, as measured by the S&P 500. Last month we suggested that perhaps we have seen this movie before; a strong first quarter in the markets followed by a sharp correction as fundamentals weakened. Is it different this time? We are optimistic the economic expansion will follow through. Why? We see consumers slowly waking up from their four-year slumber. Looking at retail sales growth, consumer spending has improved, while U.S. unemployment has receded to 8.2% as of March.

2012-04-18 Emerging Market Brands: From Backstage to Center Stage by Mark Mobius of Franklin Templeton

If the growth of the emerging market consumer class persists, it should translate into more clout for local consumer brands. The global emerging markets middle class is anticipated to grow from 430 million in 2000 to 1.2 billion by 2030.3 By some estimates, China and India are expected to account for two-thirds of the expansion in emerging markets.2 Its not a given, but such a large group of people with diverse tastes in consumer goods could be a boon to emerging brands over the long term.

2012-04-18 Ride the Wave of Crude? by Brad Sorensen of Charles Schwab

Crude-oil prices have moved steadily higher over the past several months, but the move may not be sustainable. Geopolitical tensions are unpredictable, but the response in demand to rising prices has become more rapid, and we see other downside risks. Investing directly in the energy sector may not be the best way to try to benefit from rising oil prices, given new investing options, along with companies' various costs and sources of revenue.

2012-04-18 Global Overview: March 2012 by Team of Thomas White International

Select indicators showing a possible worsening of the European fiscal crisis and slower domestic demand growth in some of the emerging economies have dulled the global economic optimism in recent weeks. After Spain faced difficulties in finding enough buyers for a new issue of bonds, several distressed European countries have seen their bond yields rise. Inflation and retail sales data from China for the month of February suggested weaker than expected consumer demand, and slower growth in March imports strengthened these concerns.

2012-04-17 Muppet Capers by Michael Lewitt (Article)

Investors enjoyed strong stock market and credit market gains during the first quarter of the year, but storm clouds may be forming on the horizon. Corporate profits have likely peaked. Stocks may be the best house in a bad neighborhood, but houses in that neighborhood appear to be fully priced for now. There are also some troubling signs in the bond markets, particularly the long end.

2012-04-17 Earnings on a Hot Plate by Chris Maxey of Fortigent

While the economy has displayed fits and starts of entering a sustained recovery over the past several years, there has been no doubt about the ability of companies to reshape their balance sheets and refocus their businesses. In the midst of first quarter earnings season, there are some concerns that the corporate hot streak will come to an abrupt end, but the reduction in earnings expectations since late last year appears to be favoring another positive earnings season.

2012-04-17 Asia-Pacific Portfolio Committee on PIMCOs Cyclical Outlook by Robert Mead, Tomoya Masanao and Ramin Toloui of PIMCO

We do not expect to see aggressively expansionary policy to combat the incremental economic slowdown in China. We believe that most countries in emerging Asia will continue to put their currency appreciation on hold, as inflation is expected to remain subdued over the cyclical horizon. We are concerned about the sustainability of Japans economic growth beyond 2012, as the governments reconstruction spending will fade in 2013. Relatively speaking, Australia is indeed a beneficiary of higher commodity prices as a result of the strong demand for coal, iron ore and liquid natural gas.

2012-04-17 Quarterly Review and Outlook First Quarter 2012 by Van R. Hoisington and Lacy H. Hunt of Hoisington Investment Management

From both economic theory and historical experience the answer is clear; austerity is the solution to too much debt. McKinsey Global Institute examined 32 cases where extreme leverage caused financial crises since the 1930s. In 24, or 75% of these cases austerity was required, which McKinsey defines as a multi-year and sustained increase in the saving rate. Public and/or private borrowers took on too much debt because they lived beyond their means, or they consumed more than they earned. Thus, to reverse the problem spending had to be held below income, increasing the saving rate.

2012-04-13 Schwab Market Perspective: Concern or Correction? by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

Economic data has softened a bit lately but still indicates growth in the US. After a long stretch of relative calm in the markets, we've seen the markets pull back, possibly fulfilling the correction that was overdue. We believe the longer-term trend is higher but near-term risks continue to be elevated and earnings season could bring more volatility. The minutes from the most recent meeting of the Fed seemed to solidify that another round of quantitative easing (QE3) is not in the offing. Although the stock and bond markets initially reacted negatively, we are heartened by the rhetoric.

2012-04-12 Newtonian Profits by Neel Kashkari of PIMCO

Today many equity investors are asking whether corporate profit margins can stay strong. Stock prices today are anchored on strong profits, hence investors intense focus on the sustainability of those profits. If they fall, stock prices are likely to follow. No doubt individual companies and sectors will face margin pressure. But for the equity market as a whole, our central scenario is for corporate margins to remain strong in the near future. We are buying individual companies we like based on our analysis of their own fundamentals in the context of the economic environment they are in.

2012-04-12 Global Investment Outlook - March 2012 by Team of Aberdeen Asset Management

Global economic growth sustains its momentum for now. Fiscal policy remains a global focus. Further monetary policy accommodation should support markets. Recent positive momentum within the U.S. economy is driving the global economic recovery, overwhelming the negative sentiment emanating from peripheral Europe. Real incomes, boosted by employment growth and easing inflation, are showing signs of turning positive in the U.S., feeding through to the broader economy.

2012-04-11 Time to Exit Emerging Markets? by Russ Koesterich of iShares Blog

Is it time to sell emerging market equities? Thats what many investors are wondering given that emerging market stocks are up significantly since fall lows and have modestly outperformed developed markets year to date. Despite emerging markets strong recent performance, I believe there are two major reasons why investors should still consider overweighting select countries relative to their weight in the MSCI ACWI benchmark. Cheap Valuations and Falling Inflation.

2012-04-10 Super Macro - A Fundamental Timing Model by Theodore Wong (Article)

Rather than endure losses in bear markets - as passive investors must - I have shown that a simple trend-following model dramatically improves results, most recently in an Advisor Perspectives article last month. Now it's time to extend my approach by showing how this methodology can be applied to fundamental indicators to further improve performance.

2012-04-10 Jobs 'Stunner' Not Much of a Surprise by Kristina Hooper of Allianz Global Investors

The number of new jobs created last month was downright disappointing, but maybe it should not have come as such a surprise. Job growth and improvements in the unemployment rate had been moving at a faster clip than modest economic expansion could support, a phenomenon that seemed to defy history and economic theory. Okun's Law suggests that the job market will be depressed for some time because GDP growth has been less than robust. The pullback we are seeing is not cause for alarm, however. The economy is growing and jobs are being created, but there will be fits and starts along the way.

2012-04-10 Which Stocks Win on Main Streets Comeback? by Bill Smead of Smead Capital Management

We are very excited about the next three to five years because we believe it is likely that Main Street will start to compete with Wall Street for capital and economic growth will accelerate. Unemployment rates would fall in that scenario and pent-up demand for goods and services could come out of the woodwork among average American households. What we mean by saying this is that capital will begin being demanded for business activities. As capital gets demanded for business activities ranging from housing to business expansion, the cost of capital will rise and bond prices would fall.

2012-04-09 And That's The "QUARTER" That Was... by Ron Brounes of Brounes & Associates

Europe hopes the latest (bailout and reg) moves will help it get its act together. (Good luck with that.) China applies the brakes. Labor looks strong, but can it continue? The Fed debates the need for more stimulus (without any consensus). Facebook moves closer to IPO (and investors beg to participate). The world lectures Iran and finally takes harsh measures (stand by to help Saudi). Investors hope to keep the mo going for another quarter, while being tempted to take profits along the way. Can we finally start focusing on Obama vs. Romney?

2012-04-09 And Thats The Week That Was by Ron Brounes of Brounes & Associates

Investors return to work after much-deserved R&R and face a equity market at a crossroads. Was the pullback this week a temporary blip or was it the start of a longer-term trend representing the true fundamentals of the economy and the corporate climate? Futures predict that Mondays opening may be weak due to labor data. The dreaded I word highlights the weekly data as higher energy prices may have taken a toll on the key inflation gauges. Still experts like Bernanke do not see many price pressures on the long-term horizon and any rise in crude and gasoline due to Iran may be short-lived.

2012-04-09 The Global Debt Crisis by Gregory Hahn of Winthrop Capital Management

A major part of our investment thesis is that the developed countries in the world have too much debt relative to the size and historical growth rates of their economy. However, the costs of continued borrowing have risen as the amount of debt has increased. Furthermore, the economies of these developed countries are growing too slowly for revenues to offset the burden of increased expenditures. We expect that these countries will have significant difficulty reducing their debt burdens through continued stimulus initiatives as they attempt to inflate their economies.

2012-04-09 Strong Fundamentals Drive Best First Quarter Since 1998 by Douglas Cote of ING Investment Management

The best first quarter since 1998 was marked by strong fundamentals and reduced volatility and global risk.Could it be that the vicious cycle of the past few years has been broken? Could we have entered into the type of virtuous cycle in which positive data beget more positive data, as has marked prior sustained bull markets? Sell in May and go away and other bear strategies that have worked in prior years will likely be ineffective this year, driven in large part by strong fundamentals and global risks that have been excessively discounted.

2012-04-09 Policy, Numbers and Markets. Still good. by Christian Thwaites of Sentinel Investments

Commentary continues to use pre-2008 data as a baseline, whether for economic data, household behavior or corporate prosperity. This is a mistake. We remain in a liquidity trap. This happens 1) when asset prices fall 2) the private sector delevers 3) credit demand becomes inelastic, i.e. immune to price 4) savings increase 5) income balances between the private, corporate, net export and government sectors distort and vi) the reluctant leakages destroy aggregate demand. Throw in higher credit standards and necessary re-regulation and you can see why austerity economics is the final bullet.

2012-04-09 An Update on U.S. Manufacturing by Team of Neuberger Berman

On April 2, the Institute for Supply Management reported that the ISM Manufacturing Index had increased to 53.4 in March from 52.4 in February, slightly ahead of consensus forecasts. Although this often-watched indicator has flirted with contraction territory (below 50) at different points throughout the economic recovery, it has now expanded for 32 consecutive months since August 2009 and continues to point to strengthening economic growth. Here, we discuss our expectations for the manufacturing sector and its potential impact on financial markets.

2012-04-07 It's All About Jobs by John Mauldin of Millennium Wave Advisors

Friday's employment numbers were decidedly soft, but the unemployment rate went down anyway, and that is about the best you can say. And this being a holiday weekend, it provides us an opportunity to look deep into the employment numbers, while we put off thinking about Spain for at least a week. And who knew that being an unmarried Asian-American in the US was a risk for unemployment? Plus a few other interesting items will make for an interesting letter.

2012-04-06 Managing Expectations: Why Gold Should Thrive by Frank Holmes of U.S. Global Investors

Its been a challenging week for gold investors. As I often say, investing, like life, is about managing expectations. Over the past 11 years during golds spectacular bull run, investors should remember that price action can go both ways. What helps is to look at the historical rise and fall of gold. For example, looking at the past decade of one-day 5 percent drops in gold, you can see that this event is pretty rare. In 2006, gold dropped more than 5 percent in a day only two times. In 2008, there were three such events. Another one occurred at the end of this February.

2012-04-05 NewsLetter - April 2012 by Harold Evensky of Evensky & Katz

Although we continue to believe in the tenets of Modern Portfolio Theory, the concept is Buy-and-Manage not Buy-and-Forget. As a consequence, we made numerous adjustments to our strategic allocations over the years. And, consistent with our buy-and-manage philosophy, for the last few years weve been studying investment markets and have come to believe that long-term future returns are likely to be even lower then we estimated in 2002, market risk will be higher and the benefits from diversification less (i.e., correlations will be higher).

2012-04-05 CACI - Growth at a Ridiculously Low Price by Chuck Carnevale of F.A.S.T. Graphs

We believe that CACI it is extremely high-quality Defense Company with a niche that is currently being unfairly discounted by Mr. Market. The company possesses a predictable and consistent opportunity for continued double-digit earnings growth that is significantly in excess of the average company. Nevertheless, it can currently be purchased at a significant discount to the average company. This company pays no dividends; it is purely an opportunity for growth that can currently be purchased at a significant discount to its True Worth.

2012-04-05 You Cant Handle the Truth by Niels C. Jensen of Absolute Return Partners

The UK may not be facing the same set of challenges as many other European countries but that does not mean that the next few years will be plain sailing for the British. Households are overextended, banks are highly leveraged and the pension model is deeply flawed. Meanwhile, the British government, obsessed with keeping the coveted AAA rating, is pursuing a fiscal policy which is well intended but entirely inappropriate.

2012-04-05 Calm After the Storm by Richard Michaud of New Frontier Advisors

The Fed has announced that it stands ready to promote economic growth with all the tools at its disposal. The Fed policy of low interest rates and cheap credit may still be needed to help the job market heal for some time to come. However, the inevitability of a rise in interest rates at a foreseeable point may encourage investors to avoid fixed income securities. The financial reality is that markets clear and prices depend on buyers as well as sellers. Time horizons and global forces are always considerations. The importance of diversification is always prudent for long-term investors.

2012-04-04 Economic Update by Richard Hoey of Dreyfus

We believe that a full-scale global recession is unlikely, assuming that there is no major oil price spike from a disruption of the flow of Middle East oil. We believe that a key cause of global economic expansion will be the easy monetary policy prevailing in many regions and countries worldwide. We expect a global growth recession in 2012, with declining economic activity in Southern Europe, an economic stall or temporary declines in the U.K. and much of Northern Europe, a moderate slowdown in emerging markets and a U.S. expansion at a near-trend pace in 2012, somewhat faster than last year.

2012-04-04 Time Heals All Wounds by Robert Stimpson of Oak Associates

The US stock market enjoyed a strong first quarter of 2012. Fueled by better economic data and a calming of fears over Europe, the stock market surged higher. For the first quarter, the S&P 500 rose 12.6%. Oak Associates accounts did much better, gaining on average more than 17%. The strongest performing sectors of the market were financials, technology, and consumer discretionary. These three groups are the most cyclical and their strong performance bodes well for a broader economic recovery through 2012.

2012-04-04 Kasriel's Parting Thoughts - Has the Fed Boosted the Stock Market? by Paul Kasriel of Northern Trust

The Feds actions have benefited the stock market as well as aggregate demand for goods and services in the U.S. economy. Would you have preferred that the Fed sit idle as it did in the early 1930s, with likely similar results for the stock market and the economy in recent years as occurred at that time? The Fed has simply provided some of the credit to the economy that the private MFI system would have had it not been crippled with loan losses. And even with the Feds additional credit creation, total MFI credit growth has fallen short of the long-run normal credit creation of private MFIs.

2012-04-03 Fewer, Richer, Greener: Why Jeremy Grantham is (Partly) Wrong by Laurence B. Siegel (Article)

Is the human experience getting better or worse? This is a big question investors are rarely asked to confront, yet its answer has profound consequences for market returns.

2012-04-03 Comfortably Numb: Have Investors Become Too Complacent? by Liz Ann Sonders of Charles Schwab

The market has had its best first-quarter start in 14 years! But with the rally has come elevated optimism, a contrarian indicator. The market may be vulnerable in the short term, but we think optimism longer-term remains warranted. Let's get right to the point: It was the best first quarter for the stock market since 1998. The total return of the S&P 500 index was 12.6% for the quarter; up nearly 30% from the October 3, 2011 low. What was particularly notable about the surge since then has been the attendant plunge in volatility.

2012-04-03 Have Investors Moved Past Europe? by Chris Maxey of Fortigent

At the end of 2011, the Long-Term Refinancing Operation brought a modicum of stability to financial markets in Europe.When coupled with the orderly default of Greece, the situation in Europe is seemingly on a road to more pleasant ground. Just as soon as investors place Europe in their periphery, however, problems once again begin bubbling to the surface.In recent weeks, the spotlight has turned to Spain, where unemployment is near 24% and the government is expected to run a 5.9% budget deficit for 2012.

2012-04-02 It's All Data (Jobs) Dependent by Charles Lieberman (Article)

The performance of the economy has improved quite substantially over the past several months, with very significant implications for policy and politics. A healthier labor market is sufficient to insure a healthier economy, which supports the rally in the stock market, the decline in bond prices, and the rise of President Obama in the polls. Numerous issues will affect the political polls in the coming months, but the outlook for the economy remains one of continued improvement.

2012-04-02 When Will Corporate Cash Flow? by Milton Ezrati of Lord Abbett

One of the great constants in this otherwise inconstant environment is the strength of corporate finances. Financial excesses and the need to de-leverage concern governments and households, not the corporate sector, which actually came out of the 200809 financial crisis and recession with its finances in good order, and has only strengthened them since. The question now is how and when companies will deploy these impressive financial resourceswhether on capital spending, hiring, or, especially, on the mergers and acquisitions (M&A) that typically proceed from strong corporate finances.

2012-04-02 The Manufacturing Renaissance by Kristina Hooper of Allianz Global Investors

While unemployment remains elevated, the U.S. manufacturing sector has quietly staged a dramatic turnaround, one that could be a pillar of support for the economic recovery. Jobs shipped overseas decades ago are now returning home. Productivity has grown significantly thanks to advances in technology and favorable exchange rates with Americas trading partners. The cost of labor per output in the United States has decreased. Manufacturing in this country may never return to its golden years, but it is certainly experiencing a rebirth of sorts.

2012-03-30 Shifting Winds-Turbulence Ahead? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Treasury yields have moved somewhat higher, while stocks have largely continued to rise. Recent correlations appear to be breaking down, which could lead to increased volatility but we remain relatively confident in equities. Perception as to the next moves by the Fed appeared to be shifting, but Bernanke reiterated their easy monetary stance. Uncertainty is rising and the Feds goal of increased clarity through more transparent communication is under scrutiny. Liquidity concerns in Europe have eased but economic risks remain, while Spain and Italy face deal with their ongoing debt crises.

2012-03-30 Does China Hold the Winning Ticket? by Frank Holmes of U.S. Global Investors

Some bears may think the odds of China being the winner among emerging markets in 2012 are also remote. Over the past few years, Chinese stocks have lagged compared to its emerging market peers. However, the Periodic Table of Emerging Markets perfectly illustrates: last years loser can be this years winner. Historically, every emerging country has experienced wide price fluctuations from year to year. Over time, though, each country tends to revert to the mean.

2012-03-29 China's Gravity-defying Economy: How Hard Will It Fall? by Team of Knowledge @ Wharton

As China's high-octane economy shifts into lower gear, virtually everyone agrees that the double-digit, super-charged boom years are drawing to a close. Speculation over the possibility of a so-called "hard landing" for the country flourishes with each boom and bust cycle, only to die down as China's growth revs up again. This time, however, both external and internal factors -- including global conditions, domestic politics and financial trends -- are reinforcing the downturn. Many experts warn that without some painful reforms, there will be worse trouble to come.

2012-03-27 Investors Still Not Showing Stocks Much Love, U.S. Numbers Pretty Good by John Buckingham of AFAM

Given that the equity markets have been overdue for at least some sort of a pullback, we cant complain too much about the modest three-day selloff that occurred midweek, especially when stocks bounced back nicely on Friday. True, the Dow Jones Industrial Average fell over 150 points on the week, but losses in the other major indexes were generally smaller and with the equity futures on Sunday night signaling that trading in the new week will get off to a decent start, we might argue that last weeks action was a pause that refreshes as opposed to a warning shot across the bow.

2012-03-27 The Great Escape: Delivering in a Delevering World by Bill Gross of PIMCO

When interest rates cannot be lowered further or risk spreads significantly compressed, the momentum begins to shift, gradually yields moving mildly higher and spreads stabilizing or moving slightly wider. In such a mildly reflating world, unless you want to earn an inflation-adjusted return of minus 2%-3% as offered by Treasury bills, then you must take risk in some form. We favor high quality, shorter duration and inflation-protected bonds; dividend paying stocks with a preference for developing over developed markets; and inflation-sensitive, supply-constrained commodity products.

2012-03-26 Economic Insights: Fear, Bank Lending, and Fed Frustrations by Milton Ezrati of Lord Abbett

The Fed recently released the results of its latest survey of senior bank officers. Like the economy, the bankers' attitudes were mixed. Things have improved over the past year. Bankers on balance have shown a greater willingness to extend credit. But still, they remain very cautious. Understandable after the losses of 200809, this lingering reluctance to lend offers yet another explanation as to why this economy's recovery has proceeded so slowly to date, and will likely continue to do so for some time to come. Still, there are tentative signs that the environment is easing.

2012-03-26 Did Steve Jobs Despise Shareholders? by Charles Lieberman (Article)

Last week, Apple announced it will initiate a $2.65 per share quarterly dividend and a $10 billion share repurchase program. Clearly, since the passing of Mr. Jobs, management has focused more of its attention on shareholders, something uninteresting to Mr. Jobs. He wanted to make "cool things" and everything else was secondary. Mr. Jobs didn't have much patience for people, as revealed in his recent biography; I would imagine the same went for shareholders. For a man who seized on technological opportunities, Steve Jobs' ignorance for shareholders missed some great financial ones.

2012-03-26 Postcards from the Edge: Central Banking in the Age of Policy Extremes by David Kelly, David M. Lebovitz and Brandon D. Odenath of J.P. Morgan Funds

Major developed world central banks have taken extraordinary action over the last few years, leaving us in uncharted territory, close to the edge with little experience or history to rely on. The move to todays extremes was forced by the impotence of conventional monetary policy tools, as well as the breadth and depth of the crisis-causing issues. Uncertainty about the probabilities and range of possible outcomes resulting from current extremes has, and will, impact both capital markets and decision making in the real economy.

2012-03-23 Closed End Funds - February 2012 Review and Outlook by Team of Cohen & Steers

The U.S. economic picture has brightened since the fall of 2011, and we expect the trend to continue. We are also encouraged by progress in Europe, as economic austerity measures will likely weigh meaningfully on the regions growth. In this period of extended easy monetary policy by the Fed, we believe the yield advantage of leveraged closed-end funds will continue to draw investor interest. The success of recent IPOs should bode well for closed-end fund issuance in 2012, although we do not believe new supply will pressure pricing in the secondary market or impede discount narrowing.

2012-03-23 Eye on Myanmar by Xin Jiang of Matthews Asia

Since the U.S. declared that the Asia-Pacific region is America's new priority, its strategic moves in Southeast Asia have included the notable visit to Myanmar in December by U.S. Secretary of State Hillary Clinton. The visit was generally viewed as an endorsement of the reform processes that Myanmar has slowly begun to roll out over the past year or so. On my recent trip there, I was able to take a first-hand look at some of these developments.

2012-03-23 Regressing to the Mean Asset Values Returning to Low Correlations by Robert Stein of Astor Asset Management

Asset values are finally marching, once again, to the beat of their own drummers. This is a welcome change of tune. Among the many investing challenges of the past few yearsbeyond the aftermath of a near-meltdown of the financial system and a global economy that went into a deep recessionwas the high degree of correlation among different assets. Assets moved in tandem, whether in lockstep or with inverse moves, based largely on risk on/risk off investment decisions. Concerned about Europe? Sell stocks, buy bonds. Think the EU ministers will reach a deal? Buy stocks, sell bonds.

2012-03-23 Whats Next for Equities? by Matthew Rubin and Justin Gaines of Neuberger Berman

In 2011, the S&P 500 finished essentially flat on a price-return basis. That return, however, would not have been achieved without a 15% gain over the last three months of the year. Equities have since picked up where they left off and, year-to-date, most major indices are up by double digits. Front-of-mind for investors is whether this momentum can be maintained. We offer the bear and bull cases as well as our thoughts on what may lie ahead.

2012-03-23 A Random Walk Through the Data Minefields by John Mauldin of Millennium Wave Advisors

We are once again to a point in Europe where there are no good choices, only very bad ones. But this time it is with a country that actually makes a difference. (No slight intended to Greece, but you are just small.) Spain has no good way to cut its deficit without things getting worse. But Europe must be willing to then fund Spanish debt, even if "only" through more LTRO actions by the ECB.

2012-03-23 Gold and China: Where the Bulls and Bears Square Off by Frank Holmes of U.S. Global Investors

To paraphrase the great Steve Martin, todays investors are very passionate people and passionate people tend to overreact at times. An overreaction is exactly whats happened in gold and global markets in recent weeks. While market bulls have been sniffing out data points to support their case, market bears have continued to take a glass-half-empty approach. Gold and China are two areas that have been caught in the bear trap this week, but we believe the gold and China bulls still have room to run.

2012-03-23 Where is the Unemployment Rate Headed? by Mike "Mish" Shedlock of Sitka Pacific Capital Management

I have a pretty cool interactive map below that will let you graph the unemployment rates based on parameters that you can choose. First let's take a look at the current unemployment rate and a discussion of the parameters that define it.

2012-03-22 Regulated Energy: Rise and Shine by Josh Olazabal, John Devir and Jennifer Seo of PIMCO

Regulated energy companies natural gas pipes, gas utilities and electric utilities have generally been seen as the sleepy cousins of more exciting energy subsectors like exploration and production, or coal extraction and production. But we have witnessed a number of events and regulatory developments in recent years that we believe are re-energizing the regulated energy subsector, more clearly distinguishing it from other members of the energy sector family and providing the potential for an abundance of opportunity for astute investors.

2012-03-22 The American Recovery by Mohamed A. El-Erian of Project Syndicate

The US has gone through an arduous period of intervention and rehabilitation since the global financial crisis in 2008 sent it to the economic equivalent of the emergency room. The question now is whether the US economy is ready not just to walk, but also to run and sprint.

2012-03-22 Brazil Retail Sector Riding the Wave of Middle Class Growth by Team of Thomas White International

Even in the late 1990s, Brazil was just like any other emerging economy, characterized by extremes of wealth and abject poverty with no social class dividing the bridge between. A decade and more down the line, the effervescence in the middle cannot be missed. Yes, the great Brazilian middle class defined as those who earn between $690 and $2,970 a month has arrived and is here to stay. If Brazil has made a name in the global retail sector, it had better thank these late comers, empowered with good purchasing power and access to credit.

2012-03-21 The Scarcity of Income: A Hobsons Choice by Alan Dorsey, Juliana Hadas and Leah Modigliani of Neuberger Berman

The post-global financial crisis environment has resulted in rock-bottom yields for U.S. Treasuries and other sovereign debt deemed to be either liquid or low risk. This situation leaves income seekers in some markets with a negative real yield (inflation adjusted), which could become more manifest during periods of rising interest rates in eventually recovering global economies. Alternatively, these investors may want to consider migrating a portion of their asset allocation to less senior income-producing securities.

2012-03-20 Bob Rodriguez on the Dangers in Today's Markets by Robert Huebscher (Article)

Bob Rodriguez is the managing partner and chief executive officer of Los Angeles-based First Pacific Advisors. In this interview, he discusses how the challenges faced by the US economy will impact the capital markets.

2012-03-20 The Wages of Denial by Michael Lewitt (Article)

Europe is insolvent, and hopelessly so. Her procurer - the European Central Bank (ECB) - can front her some money for a while, but in the end she is either going to have to repay him or suffer a very rough consequence. In the meantime, however, she can continue to entertain her customers, in this case those willing to extend her credit in one form or another. Sooner rather than later, however, these creditors are going to grow tired of her tricks and turn their attention otherwise. At that point, she will be left to deal with the ECB because nobody else will have her.

2012-03-20 A Turning Point by Christian Thwaites of Sentinel Investments

Bottom Line: Bonds are now outside of the recent range, especially in the 30-year. We could see another 10bp retrace to 3.50%. Equities have had a good run but still have reasonable valuations. New money goes to IG bonds. Spreads are approaching their long-term mean but demand from natural buyers is high.

2012-03-19 An Angry Army of Aunt Minnies by John P. Hussman of Hussman Funds

The steepest market plunges on record (e.g. those following the 1973-74, 1987, 2000 and 2007 peaks, among others) have generally followed an overvalued speculative blowoff coupled with divergent interest rate pressures. This is why we take the "overvalued, overbought, overbullish, rising yields" syndrome so seriously. Indeed, the outcomes are usually negative on average even without rising yields, but the yield pressures tend to add immediacy. Notably, the emergence of this syndrome has provided accurate warning of oncoming losses both historically, and also as recently as 2010 and 2011.

2012-03-16 February Leaps to a Multi-Decade Market Open by Doug Cote of ING Investment Management

The markets YTD success has been fueled by a dramatic reduction in global risk and upbeat economic data. The fence to contain the euro crisis has been definitively established. Oil prices are a concern, but the real economy has the wind in its sails. Though equity fund outflows continue, its never too late for investors to do the right thing.

2012-03-15 Market Update: A Real Recovery, or a False Start? by Team of Knowledge @ Wharton

The Dow has hit its highest level in years, loan rates are at record lows and the U.S. economy appears to be gaining momentum. Even the housing market is starting to look inviting. But is this a real recovery -- or a false start like last year's? Wharton's Jeremy Siegel and Scott Richard think the economy is showing signs of a true rebound, and predict that stocks should do well in the next 12 months. But bonds, they warn, are in dangerous waters, and economic growth will be in jeopardy if oil prices keep rising and the European credit crisis worsens. (Video with transcript)

2012-03-15 Why Our Recession Call Stands by Lakshman Achuthan and Anirvan Banerji of ECRI

Many have questioned why, in the face of improving economic data, ECRI has maintained its recession call. The straight answer is that the objective economic indicators we monitor, including those we make public, give us no other choice.

2012-03-15 And Thats The Week That Was by Ron Brounes of Brounes & Associates

The Fed gets together next week as analysts eagerly await the (more transparent) recap of the behind-the-scenes discussions between the (dissenting) parties. Rumors have policymakers debating a new type of bond buying program (sterilized QE) in which the Fed would print money to purchase long-term securities, but investors would face certain restrictions over how those proceeds can be used. As always, the Feds aim is to keep rates low and encourage more spending and investing by consumers and biz.

2012-03-15 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Instead of playing old fashioned fundamentals, gamblers are trying to pre-empt the true north of the markets by risking cash on dangerous bets about real estate, commodities, energy and bonds. In the meantime, the game continues for those who seek cover from the mayhem. Right now, there is little support for bonds or stocks. Yields are too low, and equity valuations have gone through a dangerous cycle. Thus, one might expect turmoil to continue. My risk rankings suggest that there is still more potential for the secular (bear) cycle to continue than there is momentum to reverse that course.

2012-03-14 No QE3 Yippee! by Liz Ann Sonders of Charles Schwab

The Fed made no major changes to its policy statement and announced a continuation of Operation Twist, but did not hint at or announce further quantitative easing. The Fed's assessment of the economy did improve somewhat. Richmond Fed President Lacker's dissent and Dallas Fed President Fisher's pronouncements ring true.

2012-03-13 Europe's ?Back-door QE?: Good News for Global Bond Investors by OppenheimerFunds, Inc. (Article)

By restoring confidence in the global financial system, the European Central Bank's Long Term Refinancing Operation has allowed global bond investors to participate in attractive opportunities around the world.

2012-03-13 The Gutenberg Economy by Michael Lewitt (Article)

As commentators near and far speculate on what 2012 will bring to the global economy and markets, there is little question that one factor will be decisive: the central banks' printing presses. Both the Federal Reserve and the European Central Bank (ECB) will keep printing dollars and euros around the clock until their presses run out of ink.

2012-03-13 Will he? Won't he? by Christian Thwaites of Sentinel Investments

Will oil prices hurt the economy? No Recent good news on the economy has come with warnings of possible demand destruction from higher oil. First, lets stress that QE does not cause higher oil prices. There are too many iterations between increasing bank reserves and the trading firepower needed to drive spot oil prices sharply higher. And while we have seen an increase since September, we're no higher than a year ago. During that time economic prospects dimmed then brightened MENA troubles flared, receded and then grew, and Asian demand steadily rose. But there are reasons to be sanguine.

2012-03-12 An Overweight to Stocks Is Still Warranted by Bob Doll of BlackRock Investment Management

We believe the macro environment remains equity-friendly and we would argue that it still makes sense to retain overweight positions in stocks. The economic expansion should continue, inflation remains muted and central banks around the world are hyper-focused on maintaining easy monetary policy. Add to this backdrop the fact that stock valuations remain attractive, and the case for sticking with stocks gains strength.

2012-03-12 The Bears' Five Stages of Grief by Brian S. Wesbury and Robert Stein of First Trust Advisors

The economic bears have had it rough the past few years. They keep bashing the economy, but it keeps recovering. Watching them fight through the five stages of grief is educational. First there was denial, then anger (some are still in this stage), now its bargaining.

2012-03-12 Are the Jobless a Coiled Spring? by Kristina Hooper of Allianz Global Investors

Putting pink-slipped workers back on the job could provide a big boost to the U.S. economy. But while the recent steady job growth we have seen has fueled optimism that the pace of the recovery is quickening, market watchers may be ignoring a red flag. There is still a high percentage of unemployed people who have been out of the work force for 27 weeks or more. Yet repressed spending for such a prolonged period could be a coiled spring that could deploy with some force as they return to the work force. Why unemployment may be a short-term hurdle and a long-term catalyst for the economy.

2012-03-09 The Healing Powers of a Weaker Yen by Kenichi Amaki of Matthews Asia

In mid-February, the Bank of Japan surprised markets with an expansion of its Asset Purchase Program, Japans version of quantitative easing. At the same time, the BOJ reworded its stance regarding inflation, revising its quantitative easing understanding to a goal and formally adopting an inflation target of 1%. Equity markets reacted positively, prompting foreign investors to pour more than US$5 billion into Japanese stocks and futures over just a 2-week period. The yen weakened to levels not seen since May 2011, and the currency seems to have broken from its 5-year appreciation trend.

2012-03-09 Appreciating China to its Fullest by Frank Holmes of U.S. Global Investors

While most analysts dont expect another moon shot rise in China's GDP this year, a 7.5 percent growth rate still exceeds most emerging economies and all developed nations. Advanced economy growth is expected to be meager, slowing from 1.6 percent to 1.3 percent in 2012, according to The Conference Board. For long-term investors learning to appreciate the finer points of the country, we believe China is somewhat like fine wine; it only gets better with age.

2012-03-09 Market Fatigue? by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

Market action has been relatively muted, notwithstanding the first 1% down day of this year. After the strong run to start the year, another pause or pullback would not be surprising but we continue to believe the upward trend will largely stay intact. Uncertainty abounds as to whether the Fed will unleash a new round of easing but liquidity remains abundant. Rhetoric continues in Washington but any substantial fiscal or tax policy action this year seems unlikely, despite the many challenges that are looming.Europe has stabilized somewhat but risks remain elevated.

2012-03-08 Oil and Gasoline Prices Rise Again: How High and How Long? by Team of American Century Investments

One year ago, we wrote on the recent up-tick in crude oil and gasoline prices which was caused by turmoil and revolution in the Middle East. A year later, were experiencing a similar rise in crude and gasoline prices. Last week, the average national cost for a gallon of unleaded regular gasoline was approximately $3.75 per gallon. One contributing factor has been the increase in tensions between Western countries (and Israel) with Iran over its continuing work to produce nuclear fuel which could be used in atomic weapons.

2012-03-08 Bernanke Spooks Gold by John Browne of Euro Pacific Capital

Regardless of who wins the reserve currency race, a key issue will be the gold conversion price. To accommodate the world economy without being recessive, many have concluded that the price of gold would need to be far higher than it is today. In any case, if China continues to pursue a path towards a fully convertible Yuan, investors might be wise to pursue a buy and hold strategy. This of course discounts the possibility that their holdings are not confiscated by debtor governments with plummeting fiat currencies.

2012-03-08 Inflation Inferno? Maybe in 2013 and Beyond by Russ Koesterich of iShares Blog

In a controversial new paper, a staff economist at the Federal Reserve Bank of St. Louis warns that conditions are ripe for a spike in inflation. While Russ shares many of the economists concerns, he explains why its too soon to make significant changes to a portfolio based on inflation fears.

2012-03-08 And Thats The Week That Was by Ron Brounes of Brounes & Associates

New week; same old story. EU ministers continue debating the Greek bailout package which should (hopefully) come to resolution next week. Unemployment highlights a busy economic calendar as investors look to see how the solid weekly jobless claims releases translate into the key labor rate and nonfarm payroll data. Bring on Super Tuesday, right Mitt?

2012-03-08 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

What constitutes a recovery? Is it simply the absence of negative news, or must it also imply a robustness of capital, capital gains, and euphoria. It seems to me that we are currently in rejoice only because the steady drumbeat of negative noise has abated somewhat. While it may foretell the redirection of a bear market/economy, we cannot yet proclaim the regeneration of a secular bull cycle.

2012-03-07 Winning the War in Europe by Scott Minerd of Guggenheim

Given my view on the global liquidity glut, it probably will come as no surprise that I remain bullish on U.S. investments, including equities, high yield bonds, bank loans and other risk assets, as well as art and collectibles. I believe the United States has entered a period of self-sustaining economic expansion, driven primarily by the aggressive monetary policy of the Fed, which is now being reinforced by the ECB. U.S. growth is necessary to reduce domestic unemployment and to provide support to the struggling economies in Europe and Asia.

2012-03-06 The Recovery of the US Economy Continues by John Buckingham of AFAM

The Dow Jones Industrial Average closed above 13,000 on Tuesday for the first time since May 2008. While there is no significance to the number from where we sit, The LA Times devoted front-page real estate in Wednesdays paper to the accomplishment and The WSJ ran a story titled, Dow, on A Tear, Leaps to 13000. One might think that the media coverage would perhaps provide a little prodding to get back into the market for those sitting on the sidelines, but the 3% pullback on the week in the Russell 2000 small-cap stock index suggests instead that many saw it as a reason to reduce risk.

2012-03-06 Continued Struggle Between Borrowing and Lending by Chris Maxey of Fortigent

Nonfarm payrolls and the unemployment rate headline the weeks economic data. Consensus expects another 200K+ gain in payrolls and no change in the unemployment rate. Other major economic data of note includes the ISM Non-Manufacturing index and the US trade balance. Abroad, there are important releases on tap including Q4 EU GDP and EU retail sales. Both the ECB and Bank of England meet this week, but neither is expected to adjust their key interest rates. Other central banks meeting include Russia, Australia, Brazil, Poland, New Zealand, Indonesia, South Korea, Canada, Peru, and Malaysia.

2012-03-06 Why Buy the Cow? by Peter Schiff of Euro Pacific Capital

The communist revolutions in the 20th century sought to nationalize the wealth generated by privately held industries back to the exploited workers on whose backs the profits were supposedly derived. America has made the rejection of this idea and its support of free market principles the centerpiece of its economic narrative. However, as a result of our current and proposed tax policies towards corporate shareholders, our government collects a portion of industrial output that would inspire envy in even the most rabid Bolshevik.

2012-03-05 Sound Fundamentals, Scary Geopolitics by Charles Lieberman (Article)

Data revisions indicate that household income grew more strongly than reported earlier, so consumers are far better able to sustain growth in spending, particularly as job gains are also increasing. Housing is recovering too, adding a new source of demand to the economy. Thus, the economic underpinnings to growth appear distinctly healthier. At the same time, the threat of conflict in the Middle East has pushed up oil prices, which eats into disposable household income. An actual conflict would chill discretionary spending, at least temporarily.

2012-03-02 TARGET2: A Channel for Europe's Capital Flight by Andrew Bosomworth of PIMCO

The Eurosystem's TARGET2 transaction system introduces elements of fiscal union via the back door. The large TARGET 2 positions developing among national central banks in the eurozone reflect capital flight from the periphery to the core and de facto introduce transfer and burden sharing elements of a common fiscal policy. Monetary policy ends up substituting for fiscal policy without going through the same democratic channels that governments' expenditure and taxation decisions entail. Taxpayers in the eurozone are contingently liable for losses incurred by monetary policy operations.

2012-03-02 Will Oil Continue Heading Higher? by Frank Holmes of U.S. Global Investors

We expect there to be corrections in the price of oil throughout 2012, just like the ups and downs commodities experience from year to year. While the world is hungry for energy, theres no free lunch on the Periodic Table of Commodities, and historically, from year to year, commodities fluctuate. Crude oil, for example, has seen its share of ups and downs: In 2008, oil lost 53 percent; in 2009, it increased a substantial 78 percent. While oil may remain elevated, use these higher prices to your advantage by owning natural resources companies that benefit from higher prices.

2012-03-01 2012: A year in US bonds by David Harris of Schroder Investment Management

There are two new factors that came to the forefront in late 2011 and which are set to influence investments throughout 2012. Indeed, it appears the collective bond market had a series of epiphanies in Q3 that should frame investment activity for some time to come, and these factors are by no means isolated to the US. The first factor is the broad recognition that debt expansion will not be the large driver of economic growth as it has been for the past several decades. The second factor is that political policy pronouncements will often trump economic and credit fundamentals.

2012-03-01 Waiting for Eighty by Doug MacKay and Bill Hoover of Broadleaf Partners

A significant shift in investor psychology is underway after many years of prolonged and painful drought. Just as a stronger economy engenders hope about the future, it also has the benefit of smothering the noxious fumes of political division. The biggest risk to the economy right now may be rising gas prices. At the same time when gas prices were at similar levels last year, mortgage rates were higher, consumer confidence was much lower, and employment trends were moving in the wrong direction. Can the United States reassert its leadership in the global economy? We believe it is and it can.

2012-02-29 Dirt Economics: Demographics Matter! by Shane Shepherd of Research Affiliates

Generations ago, people had large families, ensuring an adequate supply of labor to work the farm and provide a comfortable retirement. Now, families are small and we face a mountain of debt and soaring deficits. This months Fundamentals examines the implications for the economy and investors portfolios.

2012-02-27 And Thats The Week That Was by Ron Brounes of Brounes & Associates

Earning season plods along with consumer-driven companies like Walt Disney and Coca Cola highlighting the calendar. Investors get a break on the economic front as the mad rush of releases slows, allowing them time to digest this weeks data, particular the news from the labor front. (Surely consumers should be more confident after the favorable developments?)

2012-02-27 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Historically, its difficult to have economic expansion without job growth, fiscal expansion, and consumer confidence. And yet, despite low interest rates, and a leveling-off of unemployment, we find ourselves in the middle of an economic recession. Of course, phrases like recession, expansion, and depression do not represent points in time, but, rather, periods during which these phenomena occur. So to suggest that we might be in any one of these economic cycles also implies that we must define the time line, the trends direction and magnitude, and our place within it.

2012-02-27 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Spread amongst positive innuendo about the Eurozone austerity discussions and strength in the global oil markets, was consternation about contentious earnings reports and a build up in selling pressure upon equities whose values are bumping up against relative strength resistance points. The state of the financial markets is net-neutral. The most important characteristic of the markets today is the aging of intermediate recovery trends and the high number of equities that amble along laterally. Any entry into long term probabilities would be done today at high risk.

2012-02-27 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

As I have written, the early-season rally is growing tired and overextended. While there is nothing specific which might have accounted for last weeks stall, the evidence is clearer that relative strength quotients in equities are growing outside sustainable levels. Usually, such valuations precede a reversal in equity direction. Last week also saw a continuation of mediocre earnings acceleration patterns. The number of companies that actually beat analysts estimates is at its lowest since the credit crisis in 2008.

2012-02-27 Game Changer by Mark Kiesel of PIMCO

In addition to strong secular tailwinds supporting the energy sector, highly expansionary global monetary policies from many central banks are adding cyclical support to globally traded commodities like oil. In the U.S. energy sector, we believe that onshore natural gas shale and oil shale developments are creating opportunities to invest in energy companies that may grow significantly faster than the overall U.S. economy.

2012-02-27 No Inflation and Plenty of Money by Christian Thwaites of Sentinel Investments

We are still fighting: worldwide fiscal drag (aka the dogma of expansionary austerity) with accommodative money polices. The PBOC joined in with some RRR cuts, although these do not mean much in the Chinese loan-quota system. And the BOJ took steps to weaken the yen. CBs are in control. Government fiscal policies remain ineffectual. Bottom Line: US government bonds remain in a tight band of 190-210. The New Issue Market is strong with low end investment grade names trading at less than 314 over GT10s. We continue to like US equities.

2012-02-24 Global Real Estate Securities - January 2012 Review & Outlook by Team of Cohen & Steers

We are encouraged by the recent trend of U.S. economic data showing measured improvement, including steady employment gains. With funding costs remaining low and demand showing signs of strengthening, we believe U.S. real estate fundamentals will continue to gradually improve in 2012. Importantly, new supply remains scarce in most sectors, due in large part to banks continued reluctance to finance speculative development projects.

2012-02-24 International Real Estate Securities - January 2012 Review & Outlook by Team of Cohen & Steers

International real estate securities rallied along with stocks broadly in January amid an easing of macro risk concerns. Positive developments in Europe significantly reduced the risk of a liquidity crisis, while data from China suggested the country was successfully navigating a soft landing to its economy. Meanwhile, the U.S. economy continued to show evidence of modest yet self-sustaining growth.

2012-02-24 Schwab Market Perspective: Two Steps Forward... by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

US stocks and economic data appear to be moving at least two steps forward for every step back, which we believe leads to a strengthening trend for bothalthough there are inevitable bumps along the way. We believe the agreement in Washington to extend the payroll tax through 2012 may be the last substantial economic-related agreement before the election, but there are major issues looming. The Fed continues to believe another round of easing may be appropriate, which we think could be dangerous and that they should be looking to move in the other direction.

2012-02-24 Seeking Rewards in China by Winnie Phua of Matthews Asia

The muted performance of Chinas equity markets in 2011 has left many investors a bit wary. Since last year, concerns over Chinas slowing macroeconomic environment coupled with some corporate governance scandals left many investors on the fence about investing in China. And, even considering a robust underlying business landscape, many Chinese businesses are finding the tight credit environment challenging. With all these factors in mind, market analysts have turned more cautious on the growth outlook for Chinese firms and the market has subsequently seen a number of earnings downgrades.

2012-02-22 Closed End Funds - January 2012 Review and Outlook by Team of Cohen & Steers

The U.S. economic picture has brightened meaningfully since December, and we expect the trend to continue, albeit at a modest pace. We are also encouraged by progress in Europe, but continue to monitor developments closely, as the issues there are complex and will take considerable time to resolve, while economic austerity measures are likely to weigh on growth. In this period of extended easy monetary policy by the Federal Reserve, we believe the yield advantage of leveraged closed-end funds will continue to draw investor interest, as demonstrated by the IPO in January.

2012-02-22 Tick, Tock Goes the Inflation Clock by Chris Maxey of Fortigent

Despite this short-term good news, the cloud hanging over Europe promises to remain for some time. As expected, the first glimpses of fourth quarter GDP reveal a region under severe economic pressure. Growth in the European Union contracted 0.3%, the first such decline since the recession. Most member countries saw their economies shrink, including Germany (-0.2%), Italy (-0.7%), and Spain (-0.3%). On the bright side, France actually surprised consensus with a 0.2% expansion.

2012-02-21 Woody Brock on Solving America's Fiscal Problems by Robert Huebscher (Article)

Dr. Horace 'Woody' Brock is the founder Strategic Economic Decisions, an economic research and consulting service. In this interview, he discusses his recently published book, American Gridlock, and how America can grow its economy through 'good' deficit spending.

2012-02-21 Inflation Held in Check by Fear by John Browne of Euro Pacific Capital

Out of control money supply creates inflation. In light of the trillions of synthetic dollars that have been injected into the economy by the Fed over the past five years, most observers had expected prices to spiral upward. But in making these determinations, many of us forgot to factor in the supply side of the supply/demand equation. Inflation remains low now because of game changing events that have reduced the demand for money. So beware of the recovery. Any wakening of animal spirits in the U.S. will likely stir the threat of inflation, which may very well short-circuit the recovery.

2012-02-21 International Equity - January 201 by Team of Thomas White International

International equity prices recorded strong gains in January on increased optimism that the global economy is not headed for a significant downturn this year. Markets across all regions, led by Asia, recovered during the month. Emerging markets, which had seen price declines during the second half of last year, outperformed the developed markets. Economic indicators from most regions, except Europe, have been relatively healthy and suggest expansion. EU leaders have now agreed to set tighter fiscal rules for member countries, including limits on fiscal deficits and aggregate public debt.

2012-02-18 The Enduring Popularity of Gold by Frank Holmes of U.S. Global Investors

For thousands of years, pharaohs, explorers, rulers and investors have been attracted to gold, as the precious metal has been a vital tool in building and protecting wealth. While gold naysayers focus on the day-to-day fluctuations in price, I believe gold equities and bullion will continue to enjoy maximum popularity, as the Oracle of Omaha puts it, for years to come. The allure of goldwhether it is from Fear or Lovecannot be underestimated.

2012-02-18 Danger: Caution Ahead by Bob Rodriguez of First Pacific Advisors

I know many of you would like more actionable ideas but principal protection is uppermost in my mind. Patience is required now. Many investors underestimate the potential risks and disruptiveness from high global financial leverage. We are in phase 2 of a continuing and expanding economic and financial market instability. Flexibility, high liquidity, and concentrated asset deployment, when appropriate, will be key elements in attaining superior investment performance. The era of being fully invested and adjusting portfolio weights relative to an index has been over for more than a decade.

2012-02-17 Economic Insights: Around the World of Investing Opportunity by Milton Ezrati of Lord Abbett

Europe seemingly creates new financial and economic concerns daily, while in the United States, fiscal questions and election uncertainties trouble the outlook. Still more dangerous issues surround the military and diplomatic maneuvering in the Persian Gulf. And these are just a sample of the sources of investment concern. But even as all this prompts people to hide in cash and the usual safe havens, such as U.S. Treasury bonds, these investment choices pay such poor yields that presumed safety comes at tremendous cost. Investors, then, must consider riskier investments.

2012-02-16 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Historically, its difficult to have economic expansion without job growth, fiscal expansion, and consumer confidence. And yet, despite low interest rates, and a leveling-off of unemployment, we find ourselves in the middle of an economic recession. Of course, phrases like recession, expansion, and depression do not represent points in time, but, rather, periods during which these phenomena occur. So to suggest that we might be in any one of these economic cycles also implies that we must define the time line, the trends direction and magnitude, and our place within it.

2012-02-16 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Last weeks performance was distracting. Spread amongst positive innuendo about the Eurozone austerity discussions and strength in the global oil markets, was consternation about contentious earnings reports and a build up in selling pressure upon equities whose values are bumping up against relative strength resistance points. The state of the financial markets is net-neutral.The most important characteristic of the markets today is the aging of intermediate recovery trends and the high number of equities that amble along laterally. Entry into long term probabilities would be high risk.

2012-02-14 Recession: Just How Much Warning is Useful Anyway? by Dwaine van Vuuren (Article)

In December 2011, ECRI dialled down the urgency of the timing of their call to 'within six months.' That raised the question of just how much recession warning is useful when it comes to forecasting equity market performance.

2012-02-14 Savers Are Not A Special Class by Christian Thwaites of Sentinel Investments

The self-reinforcing struggles between risk appetite and liquidity continued this week. Since the FOMC meeting, LTRO kicking in, easier policies from the ECB and a run of good economic numbers, we're in rally territory for equities here and abroad. The good news is that this has not come at the expense of other asset classes...so gold, bonds, US$, commodities are all holding up well. The liquidity push cannot have come at a better time. Private sectors are still building precautionary savings and public deficits are closing...

2012-02-14 What a Difference 3 Years Make by Kristina Hooper of Allianz Global Investors

Three years removed from the Styxian depths of the financial crisis, investors are now in much better shape. Back in 1980, when Ronald Reagan was running for president, he struck a chord with the voting populace by asking the seminal question, Are you better off now than you were four years ago? Much of the electorate ran through a mental checklist and decided that they were worse off. As a result, voters pulled the proverbial ripcord, ousted the incumbent and Reagan was elected our 40th president. Investors should be asking themselves a similar question today.

2012-02-13 Bill Gross vs. Warren Buffett and Larry Fink by Charles Lieberman (Article)

While bonds seem frightfully overvalued, stocks are cheap because investors are so hell bent for safety. Investors continue to shift capital out of stock funds and into bond funds virtually every month. This behavior suggests that they are fixated on the zero risk of default and fail to appreciate how they will be hurt by the loss of buying power.

2012-02-13 Around the World of Investing Opportunity by Milton Ezrati of Lord Abbett

Among those choices, credit-sensitive fixed-income instruments would seem to offer superior returns with reasonable security. Opportunities also present themselves in the equity markets. In the developed markets, North America seems to offer the best risk/reward balance. Though stock valuations are better in Europe and Japan, the former still needs to deal with its debt crisis and the likelihood of recession, while the latter faces the very fundamental matter of severely aging demographics as well as the immediate adverse impact of an expensive currency.

2012-02-12 Hot Potato by John P. Hussman of Hussman Funds

A hot potato has been repeatedly passed from speculatively overvalued, overbought, overbullish market conditions driven by massive central bank interventions, to credit strains and emerging economic weakness nearly the instant those interventions are even temporarily suspended. The same speculators who have historically accompanied major and intermediate market peaks have emerged, followed by the emergence of credit strains, economic pressures, and a flight to safe-havens. The market is in an extended game of hot potato which will be resolved by the eventual removal of both conditions.

2012-02-10 Nike (NKE): Just Do It - Sell by Chuck Carnevale of F.A.S.T. Graphs

A close examination of the earnings and price correlated graphs, coupled with the historic valuations that the market has applied to Nike shares, it becomes clear and obvious that Nike shares are overpriced today. Even with its high expected future earnings growth, the headwind of such overvaluation seems likely to make it extremely difficult to achieve any acceptable long-term rate of return. On the other hand, its also obvious that the market has decided to price Nike at todays rich valuation, and therefore, its at least possible that it can continue to do so.

2012-02-10 A Stock for its Dividends - Revisited by Jesper Madsen of Matthews Asia

Since investors often turn to Asia looking for growth, they may overlook that the region offers a well-diversified universe of dividend-paying companies in terms of sectors and countries. This month Jesper Madsen revisits the notion that the Asia Pacific region should play an essential role for investors seeking yield and growth in income.

2012-02-10 Does Inequality Mean Slower Growth? by Team of Neuberger Berman

As the November election inches closer, taxes are as always a key element of the political debate. This time out, however, the issue of income inequality has become more prominent, altering the typically partisan argument over tax rates. Below, we take a closer look at the dynamics of income inequality, how it could affect the long-term outlook for U.S. economic growth and what that implies for tax policy.

2012-02-10 Missed Opportunities? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Investors eased back into stocks to start the year. This is the start of a sustainable trend, but equities rarely go up in a straight line and near-term caution may be warranted. Another deadline is approaching for Congress and the President to make a deal. Something will get done, but any hopes for substantial action remain dim. Markets appear to be more comfortable with the European debt crisis and the risks associated with it. Central banks around the world are easing, which could help support international stocks in the coming months.

2012-02-09 Economic Update by Richard Hoey of Dreyfus

For 2012, we have three themes and three risk concerns. The three main themes are (1) global growth recession, (2) lower inflation for now and (3) monetary ease. The three main risk concerns are (1) the European financial stresses, (2) the Chinese property market and (3) the Middle East risks, with oil supply vulnerabilities as the main concern. We expect a global growth recession in 2012, rather than either a strong global expansion or a fullscale global recession.

2012-02-07 Compelling Valuation, or Value Trap? by Jeffrey Saut of Raymond James Equity Research

Remember all those Negative Nabobs that caused you to panic and sell-out at the August lows? Or, the Bear Boos who told you the undercut low of October 4, 2011 was the start of a whole new leg to the downside? Then there was the Cowering Crowd that insisted the first half of 2012 was going to be terrible. Such rants have left the world profoundly underinvested in U.S. equities. Revenues and earnings are at all-time highs, yet the SPX is ~13.5% below its October 2007 high; indeed, Strange brew trying to get through to you (Cream 1967; Eric Clapton at his finest).

2012-02-07 Fed Policies Pay Off by Christian W. Thwaites of Sentinel Investments

The forces of disillusion have glowed recently. We have had unsubtle debates on the Fed debasing money, the ECB providing unwarranted support and threats that the economy was going to lurch into a double dip (a reasonable but narrow view) or accelerate into hyperinflation (yes, really). So this was a week of unequivocal good news.

2012-02-07 Corporate Earnings Hit a Rough Patch by Chris Maxey of Fortigent

The week started slow, however, with a mixed personal income and outlays report from the Bureau of Economic Analysis. While consumer spending was flat in December, incomes grew 0.5% above expectations and the biggest gain since March. The lack of spending growth is concerning, but somewhat expected given stagnating wage growth. Spending to this point has largely been financed through savings, making Decembers income boost a much welcome improvement for consumers.

2012-02-06 Notes on Risk Management - Warts and All by John P. Hussman of Hussman Funds

Presently, there seems to be an unusually wide gap between hindsight and foresight, both in the financial markets and in the economy. In both cases, forward-looking evidence suggests weak outcomes, but recent trends encourage optimism and risk-taking. Rather than sugar-coat these uncertainties and minimize the messy divergences in the data, I think the best approach is to review the evidence, warts and all, including economic risks, market conditions, and the strengths and limitations of our own investment approach.

2012-02-06 The Coulds Are Parting by Charles Lieberman (Article)

It is fast becoming hard to dispute that an increasingly solid economic expansion is underway and that hiring is accelerating. The healthier economy has dispelled fears of recession and the stock market has been advancing at a strong clip, almost 16%, since the interim low at the end of November. With slow progress being made in Europe to contain the debt crisis, there should be fewer depressants holding back stocks and, with valuations still low, despite this sharp recent rally, there is still plenty of upside for long term investors.

2012-02-06 The Value in Fear by Milton Ezrati of Lord Abbett

It is hardly an insight to note that markets today are beset with fears. What is less widely acknowledged and critical to investment strategy, however, is that the level of anxiety has driven market segments to different extremes of valuation. On the one side, widespread fear has driven up the prices of the usual safe havens, such as U.S. Treasury bonds, gold, even the debt of other presumably stronger governments. On the other, the anxiety has severely held back relative pricing on equities and credit-sensitive bonds. This divergence presents potentially remarkable investment opportunities.

2012-02-06 Markets Continue Their Winning Ways by Bob Doll of BlackRock Investment Management

Notwithstanding the strong performance of the last month, we believe markets are still pricing in a more negative economic backdrop than what we are predicting. Investor confidence remains low and many are still sitting on large amounts of cash. It is important to remember that stock prices have not completely recovered from the significant drawdown that occurred in the summer of 2011, suggesting that markets have further room to run. We are not expecting to see uninterrupted smooth sailing from here, but we do believe that the trends for stocks are pointing in the right direction.

2012-02-06 Time to Get in the Game by Kristina Hooper of Allianz Global Investors

Recent data on job growth, unemployment and manufacturing activity offer compelling reasons for investors to get off the sidelines. Private job growth continued with a gain of 257,000 jobs, signaling a very constructive trend weve seen for a number of months. Public sector job shrinkage also continued and should be a welcome sign given the need to reduce government debt. The unemployment rate fell to 8.3% in January. Arguably, investors should be willing to take on more risk when they feel their employment is more secure. And the feeling of greater job security might soon be on the horizon.

2012-02-03 The U.S. Economy Marches On To An Unsteady Beat by Team of BondWave Advisors

Despite the misgivings by the Fed about the recovery, and with much of Europe teetering on recession, domestic economic data continues to suggest moderate expansion in both output and employment. We discuss this situation along with the positive performance of the Treasury, Corporate and Municipal bond markets.

2012-02-03 Thunderstorm First, Then Rising Pressure by John Gilbert of GR-NEAM

The developed world is riskier than it was, and should be valued accordingly. That is a dour conclusion, but avoiding it does not mean that one can outrun it. Perceptions of what makes risky assets attractively valued need to be adjusted for the context. Valuation levels that were attractive when the world was less indebted are attractive only at lower levels since valuations have not yet anticipated eventual inflation. Those that will do the best are those that benefit from inflation and the negative real interest rates that result, since ultimately that is the choice governments will make

2012-02-03 In the Bullring With Gold by Frank Holmes of U.S. Global Investors

We anticipated that the Year of the Dragon would spur an increase in the buying of traditional gifts of gold dragon pendants and coins. Gold buying did hit new records, says Mineweb, with sales of precious metals jumping nearly 50 percent from the same time last year, according to the Beijing Municipal Commission of Commerce. This should serve as a warning to all of golds naysayers. Gold bullfighters bewareyou now have to fight the gold bull while fending off a golden Chinese dragon.

2012-02-01 Life and Death Proposition by Bill Gross of PIMCO

When interest rates approach zero they may transition from historically stimulative to potentially destimulative/regressive influences. Recent central bank behavior, including that of the U.S. Fed, provides assurances that short/intermediate yields will not change, and therefore bond prices are not likely threatened on the downside. Most short to intermediate Treasury yields are dangerously close to the zero-bound which imply limited potential room, if any, for price appreciation. We can't put $100 trillion of credit in a system-wide mattress, but we can move in that direction by delevering.

2012-01-31 2012 Tale of Two Bond Markets Handicapping the Bull and Bear Case for Bonds by Scott Colyer of Advisors Asset Management

2012 will likely be the tale of two bond markets. You have the high-grade debt market that has been the recipient of a huge flight to quality and fear trade. The prices of these obligations have skyrocketed and yields plummeted. Additionally, the Fed has turned out to be the biggest buyer of longer-dated Treasuries in the markets today. It is rumored that they might engage in a mortgage buying campaign later this year. That would have the effect of lowering mortgage rates further than the record lows where they are at. In short, the world has sought refuge in the U.S. bond high-grade market.

2012-01-31 America's Economic Engine Still Healing by Chris Maxey of Fortigent

A thin week of economic data and renewed focus on the European sovereign debt crisis may have prompted profit taking by some investors. Arguably, the biggest development last week was the Federal Open Market Committees (FOMC) press release on Wednesday. For the first time, the central banks decision makers released forecasts for the federal funds rate and the timing for the first rate increase. In that release, the FOMC unexpectedly announced that it expected to hold rates near zero until at least late 2014. This far exceeded previously stated expectations of a mid-2013 rate hike.

2012-01-31 To Fight or Not to Fight the Worlds Central Banks by Tony Crescenzi, Ben Emons, Andrew Bosomworth, Lupin Rahman and Isaac Meng of PIMCO

We are skeptical that fiscal austerity alone is sufficient for all eurozone countries to grow and remain solvent. We thus expect the ECB to continue supporting the euro area with liquidity in 2012. Recent central bank policy in China is oriented toward stabilizing growth in a political succession year, while balancing lingering inflation and medium-term systemic risks. Investors may want to hedge portfolios by looking to select emerging markets with the ability and willingness to cut policy rates both from a cyclical as well as structural perspective.

2012-01-31 The ECB to the Rescue by Milton Ezrati of Lord Abbett

Though a good deal of concern over European downgrades has emerged, markets actually have received reason to anticipate relief in Europes financial crisis. The old risks and fears remain, of course, but the ECB has at least changed the equation, signaling that it had jettisoned its former hands-off policy and begun, at last, to support European financial markets. The remarkable nature of the change received only a few headlines, and even less commentary, but it deserved then and deserves now more attention. The ECBs help is crucial.

2012-01-30 And Thats The Week That Was by Ron Brounes of Brounes & Associates

As January goes, so goes the market for the year. Can we keep these gains for two more days? A few key bellwethers post earningsExxon Mobil looks to set new records; Amazon shows the effects of the holiday season; and UPS provides new signs about the strength of the overall economy. Labor and manufacturing highlight a very busy week on the economic calendar as investors hope to see continued positive trends from the ISM (manu), nonfarm payroll, and the unemployment rate. And, of course, Europe is never too far from the weekly headlines. (The more things change) Go Giants (a week early).

2012-01-30 Sector Insights Focus: Consumer Staples by Mark H. Dawson and Daniel M. Brewer of Rainier Funds

After steadily rising in terms of market capitalization in the 1980s, the consumer staples sector shrank in the 90s as technology shares swelled in market value. Over the most recent decade, staples representation has crawled back to about 10% in the large growth and value indices, while inclusion in small-cap indices ranges between a mere 3-6%. The theme of consolidation within industries continues today and the sector is increasingly dominated by a small number of mega-cap corporations often seeking to acquire small- and mid-cap companies.

2012-01-30 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The New Years rally continued last week. Solid earnings reports, for the most part, along with the belief that the Federal Reserve Board will offer up some policy changes this week served to support stock prices across the board. As the charts above illustrate the Dow Jones Industrial Average gained 2.4% and the NASDAQ Composite jumped 2.8% last week to extend their early year gains.

2012-01-30 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

In recent discussions with clients, I have answered questions about good new versus bad news and short-term versus long-term probabilities. As my readers are aware, I have become increasingly bearish in my asset allocations, a factor which derives from a combination of very short-term information along with macro, secular data. In short, my analysis quantifies policies, valuations, and fundamentals which have dragged down the prospects for global earnings acceleration (in the near-term). Notice that I refer to these statistics as decelerators, not necessarily absolute impediments.

2012-01-30 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Time is a luxury many investors seem not willing to indulge. A stop/start economy, seemingly moving valuations laterally, has them on the edge of their seat, hoping that something exciting happens to their net worth. Ominously, however, the recently completed holiday season comes replete with its own set of hangovers. Some economists now worry that households took on too much debt, and might cause spending in the ensuing months to contract. More foreboding is that banks and brokerages are reporting that some cash for our holiday expenditures was withdrawn from retirement fund accounts.

2012-01-30 Don't Fight The Fed, Part Three by Charles Lieberman (Article)

Growth is improving slowly, but insufficiently to satisfy the Fed. So Fed officials are reviewing new initiatives to promote growth, including buying mortgages in the market. The Fed's latest press release suggests that policy may remain unchanged for even longer than suggested earlier. But the Fed's willingness to remain so staunchly committed to growth remains "data dependent", as any significant increase in GDP growth could cause the Fed to backtrack. At the end of the day, the Fed is committed to an outcome, not to the calendar. And right now, it is committed to growth.

2012-01-28 The Transparency Trap by John Mauldin of Millennium Wave Advisors

We look at the shift in Fed policy, and at the balance sheets of central banks, US GDP, Portugal and the ECB, the LTRO policy, and yes, theres even a tidbit on Greece. Unemployment will be higher than we are comfortable with; it is just a product of the current environment and simple math. The US economy is in a Muddle Through range of around 2%. If not for a potential shock coming from a serious European crisis and real recession, the US should not slip into outright recession this year.

2012-01-27 Global Infrastructure Investment Commentary - December 2011 by Team of Cohen & Steers

We are entering 2012 with a positive outlook for infrastructure securities based on better-than-expected U.S. economic data and credit conditions in Europe that show some signs of stabilizing. Even so, we recognize that it will take time for the global economy to achieve sustained growth. We will continue to monitor global monetary policies, having already seen the beginning of the next easing cycle. Despite the fact that the sector still carries meaningful political and regulatory risk, we believe infrastructure companies should perform well in 201

2012-01-27 12 Trades for 2012 by Komal Sri-Kumar of TCW Asset Management

Earlier this month, I suggested that investors closely watch 12 macroeconomic and financial indicators in deciding whether the world economy is improving or worsening (12 Indicators for 2012, January 3, 2012). Some readers wrote to ask if I would discuss what those indicators would mean for investment strategies. That was the genesis of the present piece which is intended to be consistent with expectations on the economic and financial fronts.

2012-01-27 Slow Road to 'Normal?' by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

Market volatility has fallen and tight correlations have loosened, indicating to us some calming of fears and increased attention on more traditional economic and earnings-related news. This is a good sign for stocks in the foreseeable future. The Fed unveiled its new communication strategy after its most recent meeting, reiterating that interest rates will likely remain extremely low for some time. The European picture is brightening slightly and there may be a glimmer of hope for stock market investors. After a soft patch, global growth may be turning around.

2012-01-27 Heart of China Bull Beats Strong by Frank Holmes of U.S. Global Investors

With rising incomes and increasing urbanization, we believe China is pursuing the American Dream, and the government has shown great determination to build the necessary infrastructure along with a robust urban labor market. On a purchasing power parity basis, Chinas share of world GDP has risen significantly, from around 3 percent in 1985 to a current world share of nearly 16 percent.

2012-01-25 Rise of the Dragon by Mark Mobius of Franklin Templeton

With the debt situation in Europe continuing to further unravel and dim economic prospects in the U.S., many have come to believe that the star of the dragon descendants has the potential to rise even further in the coming years. Chinas GDP growth is expected to moderate to around 8.2% in 2012, which is high compared to developed economies. In this highly connected world, China is unlikely to be immune to the global slowdown, but I believe the Chinese government will utilize their substantial reserves and banking system to stimulate the domestic economy, as they did in 2009.

2012-01-25 Closed End Funds Investment Commentary December 2011 by Team of Cohen & Steers

The U.S. economic picture has brightened in recent weeks, a positive for equities and credit markets, and we expect slow sustained growth. However, Europe remains a risk. While recent fiscal, political and central bank initiatives to address the credit crisis in Europe are encouraging, the political landscape remains uncertain, and economic austerity measures will weigh on growth. With interest rates likely to remain near historical lows for an extended period, we believe that attractive spreads should continue to benefit the income-generating potential of leveraged closed-end funds.

2012-01-24 Contrarian Concern Too Much Bullishness? by John Buckingham of AFAM

While we expect volatility to remain elevated this year, and we have to concede that the markets have come a long way quickly, we see no reason to alter our 1400 year-end S&P 500 price target. Of course, that level actually might be a little low, considering where we stand today, but we focus our attention on the companies in which we are invested. After all, we own businesses like International Business Machines (IBM - $188.52), Intel (INTC - $26.38) and Microsoft (MSFT - $29.71), all of which posted impressive Q4 results last week, and not index funds.

2012-01-24 Economic Update by Richard Hoey of Dreyfus

The most likely outlook for the world economy in 2012 is a global growth recession. The economic outlook reflects disparate trends in different regions: a full-scale recession in Europe, stagnation or moderate recession in the nearby U.K., near-trend growth in the U.S., continued expansion in Japan and moderate slowdowns in China and most other emerging market countries. While European financial stresses are serious, the global shift towards monetary ease should help mitigate the spillover effect. The result should be a global growth recession rather than either a full-scale global recession.

2012-01-24 Risk Off, Risk On...? by Chris Maxey of Fortigent

Since the start of 2012, global risk markets have all but ignored the overhang of pessimism that frustrated the markets in 2011. For the most part, equity indices already surpassed their gains for all of last year. While such gains may ultimately prove sustainable, there remains a modicum of uncertainty that could rear its head quite suddenly, and quite viciously. In the meantime, an assessment of the investment landscape shows investors may have a legitimate reason for bullishness in the short term.

2012-01-24 The Plain Facts by Herbert Abramson and Randall Abramson of Trapeze Asset Management

We believe that, while Europe will suffer a recession in 2012 on its painful path to recovery, with or without Greece, the U.S. and Canada will likely see accelerating growth this year, as will China, India and Latin America. In fact, global growth should be above 3%, supported by record high total household wealth in the world, which has doubled since 2000. China and India provide half of the worlds economic growth. And manufacturing in India and China grew in December and should continue to do so from renewed government stimulation.

2012-01-23 Dodging a Bullet, from a Machine Gun by John P. Hussman of Hussman Funds

The interpretation best supported by the data is that recession risk remains very high based on the leading evidence and the typical outcomes that have resulted, but that the rate of deterioration has eased significantly, and it is simply unclear whether this is a temporary pause or a reversal. Rather than overstating the case one way or another, we remain strongly concerned about recession risk, but recognize the recent stabilization and the potential for a low-level continuation of that.

2012-01-23 The Path of Least Resistance Is Up by Charles Lieberman (Article)

There is so much skepticism with respect to stocks that most everyone who might be scared out of the market has already exited. Investors fear a credit meltdown in Europe following a Greek default. They also fear a weakening domestic economy. As a result, stock prices are depressed, despite solid earnings growth and a healthy corporate sector. If investor's fears are not fulfilled, stocks should move higher.

2012-01-23 Debt and Deleveraging: A Five-Pronged Solution by Mike "Mish" Shedlock of Sitka Pacific Capital Management

Citing the latest report on "Debt and Deleveraging" by the McKinsey Global Institute, Ambrose Evans-Pritchard proclaims a light at the end of the tunnel and that America overcomes the debt crisis as Britain sinks deeper into the swamp. However, there is a big difference between alleged "light at the end of the tunnel" and "America Overcomes Debt Crisis" as Pritchard claims. US consumers may be one-third of the way through, but US debt-to-GDP ratios are low only because unsustainable government spending has taken up the slack.

2012-01-23 Who's Afraid of the Big Bad Sovereign Debt Wolf? by Monty Guild and Tony Danaher of Guild Investment Management

Last Friday, the sovereign debt of nine European nations was downgraded by S&P. Now, there are only four European nations whose sovereign bonds carry the highest AAA rating: Finland, Germany, Luxemburg and the Netherlands. Since the sovereign debt refinancing and potential default problem still goes unsolved, we foresee the markets having to keep digesting more waves of bad news. Yet the fear created by such news is diminishingnot because of a shortage of negative news headlinesbut because European banks are more protected by the many lifelines that central banks keep throwing them.

2012-01-23 Focus Shifts from Fear to Fundamentals by Kristina Hooper of Allianz Global Investors

Kristina Hooper, head of portfolio strategies, highlights last week's rally in stocks as a launching point for investors to overcome anxiety and regain focus on valuations, corporate earnings and improving macroeconomic conditions.

2012-01-20 Equity Investment Outlook by John Osterweis and Matt Berler of Osterweis Capital Management

We believe that 2011 was an aberration in terms of stock market correlations and that gradually stocks will once again perform based more on their individual results and outlooks and less on the markets en masse risk on, risk off vacillations. Despite our near-term caution, which reflects a very uncertain economic and political climate, we are increasingly convinced that equities are poised for solid longer-term returns. Over the past ten years, stocks generally underperformed bonds. This is highly unusual. Stocks are now reasonably priced and profits are expected to expand.

2012-01-20 The Debate Over "One China" by Sherry Zhang of Matthews Asia

Taiwans recent presidential race, which saw the re-election of President Ma Ying-jeou, generated much mutual interest both in Taiwan and in mainland China, where millions reportedly used social media networks to comment on the developments. The Kuomingtang (KMT) partys control for another four years brings up the topic of One China that so often dominates headlines and online chatter.

2012-01-20 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Relative strength integers are congesting at resistance points each time our New Year rally attempts to gain traction. I am skeptical that we can sustain an upcycle. Although short cycle rallies are tempting, the dominant secular theme always prevails. We have a lot of work to do to dismantle the negative fundamentals which precipitated our current bear market. Thats not to suggest that portfolios cannot make money in here. Our portfolios have found success in mid-maturity corporate bonds, as well as trading with a shorter pulse in utilities, basic materials and technology shares.

2012-01-20 It May Take a Dragon to Breathe Fire into Markets by Frank Holmes of U.S. Global Investors

Ive found many people are particularly energized about predicting a hard landing for Chinas economy, but I believe the country is no sinking ship. China isnt fast-approaching an iceberg in the dark of the night like the Titanic. Beijing has long been anticipating the ice chunks and subtly adjusting the rudder around inflation without steering the economic ship too far off course.

2012-01-19 Asia-Pacific Portfolio Managers Discuss PIMCOs Cyclical Outlook by Robert Mead, Isaac Meng and Raja Mukherji of PIMCO

We expect emerging Asia growth below the market consensus due to its less aggressive policy responses compared to 2008-2009. The Asia-Pacific region is less affected than others by eurozone turmoil but contagion is still a risk through direct trade and the regional production chains that characterize Asias export-oriented economies. In this environment, we favor Australian government bonds for their high credit quality, low-beta currencies such as the Chinese yuan, corporate issuers that have delevered, covered bonds and mortgage-backed securities.

2012-01-18 Americas Economic Review: Fourth Quarter 2011 by Team of Thomas White International

As the year 2011 ended, the clouds of pessimism about the economy lightened across the Americas region, as key data trends suggested that earlier fears of a steep downturn were unfounded. Financial markets stabilized as investors turned more optimistic about the outlook for 2012. Concerns over external risks, particularly about the European fiscal crisis, also calmed down as hope was renewed that enduring political solutions will be found for the fiscal challenges facing the developed countries.

2012-01-18 The Bigger the Base, the Higher the Space by Pamela Rosenau of Hightower Advisors

Overall, people around the globe are underinvested or invested in the wrong asset classes. As data point continue to strengthen, coupled with the fact that income (and sustainability of income) are becoming a scarce commodity, a significant rally in the equity markets could ensue. As some technical analysts may suggest, the bigger the base, the higher the space. As U.S. blue chip stocks have lagged for more than ten years, they have built a base that has prepared these stocks for liftoff.

2012-01-17 Martin Wolf on the Eurozone and Beyond by Robert Huebscher (Article)

Martin Wolf is widely considered to be one of the world's most influential writers on economics. Since joining the Financial Times in 1987, where he is chief economics commentator, he has received numerous awards for excellence in financial journalism. In this interview, he discusses the Eurozone crisis and prospects for global economic growth.

2012-01-17 GMO: Something's Fishy in China by Robert Huebscher (Article)

A wide gulf separates the two most prominent views regarding China's future. Faced with slowing economic growth, one side says its leaders will deftly navigate a soft landing, while the other claims it will face an implosion similar to those that befell Japan 20 years ago and the US in 2008. Count GMO, a firm that has built its reputation on its ability to identify a bubble about to pop, in the latter camp.

2012-01-17 An Essential Client Conversation ?Will I be able to pay for my hip replacement at age 85?? by Dan Richards (Article)

Advisors face a big challenge in planning for boomers. Your assumptions about how long they'll live and the nature and cost of their lifestyle as they age will dramatically impact your planning decisions. Conversations with boomers about those topics and about the implications of funding health care are difficult but important.

2012-01-17 A Nobel Laureate?s View on the US A Debt Problem, but an Unemployment Crisis by Dan Richards (Article)

Peter Diamond is a professor emeritus at MIT and the winner of the 2010 Nobel Prize in Economics for his work on unemployment and labor market policy. In this interview, he discusses the degree to which US unemployment is a structural problem and whether it can be reduced through fiscal stimulus. This is the transcript of the interview.

2012-01-17 Dwelling In Uncertainty by John P. Hussman of Hussman Funds

When unseen states of the world have to be inferred from imperfect and noisy observable data, there are a few choices when the evidence isn't 100%. You can either choose a side and pound the table, or you can become comfortable dwelling in uncertainty, and take a position in proportion to the evidence, and the extent to which each possible outcome would affect you.

2012-01-17 Good News or Cheap Stock Prices, but Not Both by Charles Lieberman (Article)

Investors often fail to appreciate that they can have either good news or cheap stock prices, but not both. It is good news that provides confidence and elevates stock prices to high valuations. Bad news undermines confidence and depresses stock prices. This maxim, first expressed by Joe Rosenberg, Chief Investment Officer for Loews Corp., and repeated in Barron's, applies most appropriately to prevailing stock valuations and implies an exceptional buying opportunity for those who can take a longer term investment perspective.

2012-01-17 Thinking About the Implications of Rising Euro-Exit Risks by Myles Bradshaw of PIMCO

Even if the euro survives this crisis intact, the market will price in uncertainty as the crisis evolves. Scenario planning is indispensable for investors. Politics may prevent the European Central Bank from buying government bonds, but it could provide funding support via a special government or banking intermediary. This balance sheet expansion could be a negative for the euro. Within the eurozone we believe investors should look at alternatives to the government sector, including agency, regional government and covered bonds.

2012-01-17 Q4 GDP - No Recession In Sight by Brian S. Wesbury and Robert Stein of First Trust Advisors

Three months ago, we added up the major components of real GDP for the third quarter and predicted a solid annualized growth rate of 3.5%. Instead, the advance report came in at 2.5% and was later revised down to a tepid 1.8%. We were too high on inventories as well as government purchases, and that made our overall forecast too high. However, our estimates of consumer spending, business investment, home building, and the trade balance were all pretty darn close to the mark. Final sales (GDP excluding inventories) grew at a 3.2% annualized rate.

2012-01-17 Global Overview by Team of Thomas White International

Fears of a recession in developed economies such as the U.S. have receded as recent data releases indicate that economic activity has not weakened as much as thought earlier. Though European economies are still expected to see a decline, there is now increased optimism that the monetary union and the common currency will survive the crisis. Large European countries such as Spain and France have been able to sell new bonds at relatively affordable costs and the European Central Bank has cut its benchmark rate again, besides extending additional liquidity support to the regions banks.

2012-01-17 In Praise of Radhanath Sikdar by Christian Thwaites of Sentinel Investments

This week we saw: France and Austria downgraded, Greece take a step closer to default, new bond auctions from Spain and Italy that, while below last month's, had pitifully low bid/cover ratios and Hungary lurch again in its bond prices and currency...down 11% and 22% in last 3 months. On the other side of the trade, Germany auctioned 6-month paper at a negative 0.012%. So this is what happens: fiscal consolidation hits private consumption and investment without (because of a pegged exchange rate system) a rise in net exports or higher lending. Mr. Sikdar would have figured this out long ago.

2012-01-17 The Impact of the Falling Dollar by Jonathan A. Shapiro of Kovitz Investment Group

Regarding the progress of the businesses we own, a useful metric we track is the Price-to-Value ratio. Conceptually, this statistic measures the current price of a portfolio company to its intrinsic value, conservatively estimated through our multiple valuation techniques. For example, Wal*Marts current P-to-V Ratio is 80%, determined by taking its roughly $60 stock price divided by our current fair business value estimate of $75. This implies, based on what we know today, Wal*Mart is roughly 20% undervalued, providing approximately 25% upside from current levels (not including dividends).

2012-01-17 An Unhappy New Year in Europe by Milton Ezrati of Lord Abbett

Though the most intense pressure from Europes financial crisis will likely abate in the coming year, its lagged effects seem poised to put the continent into recession. Even if in the next few months the governments of the EU and the leadership of the ECB act with more resolve than they did last year, any favorable economic effect will take time to develop, leaving Europes economies to suffer in the interim. The most optimistic forecasts on Europe expect negligible growth. More pessimistic forecasters look for a 23% drop in the continents real GDP.

2012-01-13 What the Next Decade Holds for Commodities by Frank Holmes of U.S. Global Investors

What will happen over the next 10 years? I believe the supercycle of growth across emerging markets will continue with rising urbanization and income rates. This bodes well for commodities, especially copper, coal, oil and gold, and well continue to focus on companies that will benefit the most from these much-needed resources.

2012-01-13 Pocket of Strength: Bright Economic Lights of Texas by Frank Holmes of U.S. Global Investors

The Milken Institute released its 2011 list of Best-Performing Cities Index and topping the list of 200 large U.S. metropolitan areas was San Antonio, Texas, home of U.S. Global Investors. The Alamo City jumped to the No. 1 spot from last years 14th place. Milkens index measures U.S. cities economic performance based on job creation, retention and quality as well as where businesses are growing and thriving.

2012-01-13 Euro Fears by Richard Michaud of New Frontier Advisors

Global investing is likely to be very challenging in the year ahead. While the euro has so far been resilient, many eurozone countries face substantive debt refinancing in the coming year. Given the current political, structural, and economic reality there is no simple cure to the euro crisis. The ECBs evolving pursuit of liquidity policies and potential interest rate cuts may be helpful, but major political changes may be necessary. Beyond Europe, the remainder of the global economy may be very dependent on a continuing expansion of the American economy and improving consumer demand.

2012-01-13 Time to Climb? by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

The US economy continues to expand and has recently picked up momentum. Investors have been focused on European and US debt problems, but that may set up an environment for stocks to move higher. Many challenges await Congress. We're not optimistic that much progress will be made, but the rhetoric will almost certainly heat up as late-year elections loom. Recent policy decisions in Europe provide some hope but the region's banks continue to struggle and are pulling back on lending, which likely impedes growth. In China, policymakers attempt to keep growth from dipping below healthy levels.

2012-01-13 Quarterly Review and Outlook, Fourth Quarter 2011 by Van R. Hoisington and Lacy H. Hunt of Hoisington Investment Management

As the U.S. economy enters 2012, the gross government debt to GDP ratio stands near 100%. Nominal GDP in the fourth quarter was an estimated $15.3 trillion, approximately equal to debt outstanding by the federal government. In an exhaustive historical study of high debt level economies around the world, it was demonstrated that when a countrys gross government debt rises above 90% of GDP, the median growth rates fall by one percent, and average growth falls considerably more. This study sheds considerable light on recent developments in the US.

2012-01-12 Equity Market Review & Outlook by Richard Skaggs of Loomis Sayles

We recognize that fundamental conditions in the euro zone and the aging US economic recovery make the 2012 earnings outlook somewhat less clear and less robust than it was in 2011. While equity valuation appears supportive and US economic data is moderately improving, unexpected events can upset the balance making for greater than desired volatility, as seen in 2011. We believe equity performance for 2012 will hinge as much on macroeconomic developments as on company-specific business execution. A trading range both above and below current levels should be expected for 2012.

2012-01-12 Global Investment Outlook by Team of Aberdeen Asset Management

Policy makers globally face the challenge of supporting growth while managing debt levels, and still remaining aware of inflation. The Eurozone crisis is a further complication, and has the potential to make matters more difficult. That being said, there is still growth in the world economy, though perhaps more disparate than in previous cycles. Given the inter-connected nature of countries in the globalized world, there are few areas truly insulated from turmoil. However, there are safer-havens where clearer policy frameworks and the ability to enact solutions more robustly are helpful.

2012-01-12 Emerging Europe: Fourth Quarter 2011 Economic Review by Team of Thomas White International

The European Bank for Reconstruction and Development was established in 1992 to help the former communist states in their transition to market-based economies. The EBRDs mandate includes investments in Russia and its satellite states such as Poland and Hungary. The Czech Republic, which was the first country to complete the transition process successfully, has come out from under the EBRD umbrella. According to the banks latest forecasts, GDP growth in the central and eastern European region will be approximately 4.5 percent in 2011 and about 3.2 percent in 2012.

2012-01-12 A Look Back (2011) and Forward (2012) by Team of American Century Investments

The major US equity markets ended 2011 not far from where they began in terms of their index values. Now that the New Year has arrived, the question is where these markets might be headed in 2012. Three important considerations behind this question are: 1. How key macro-factorse.g. the EU debt crisisare or arent addressed 2. Can U.S. corporations continue to deliver the earnings growth they have for the past three years 3. What are the prospects for US consumers and householdsan increasingly important consideration as the global recovery slowed in the fourth quarter of last year.

2012-01-11 Emerging Asia Pacific: Economic Review 4th Quarter 2011 by Team of Thomas White International

Emerging Asia Pacifics economic expansion slowed considerably beginning in October 2011. In many economies, export growth along with investments grew at their slowest pace since the summer of 2009. Although the Purchasing Managers Index improved across key economies in November the index was still under the 50 mark, which generally means a contraction in manufacturing activity. Almost all the countries in emerging Asia Pacific posted slower third quarter expansion over the year-ago period.

2012-01-11 Aberdeen Chile Fund, Inc. Fund Manager Interview by Team of Aberdeen Asset Management

Chile has developed a middle class quicker than many of its Latin American peers and consequently, more robust domestic consumption trends. Chile has formed close ties with China in recent years and in 2005 became the first country in Latin America to sign a Free Trade Agreement with the Asian nation. Chile has proven to be a model to the Latin American region in regards to good corporate governance and transparency. Though Chile will not be fully insulated from the global downturn, the countrys longterm fundamentals remain sound.

2012-01-11 And That's The Week That Was by Ron Brounes of Brounes & Associates

After a meaningless breakeven year, the S&P 500 looks to better its performance in 2012.A recent CNNMoney survey speculates the benchmark index will gain 7% in the current year.While the economic data has been positive as of late, all eyes shift to corporate earnings and Alcoa kicks off the season in the coming days. Retail sales highlight the economic calendar and investors get a better feel for the true results of the holidays.While sales looked strong throughout, mass discounting undoubtedly cut into profits and some retailers are now rethinking the success of the markdown strategy.

2012-01-10 Gundlach on the Key Risk for Bond Investors by Robert Huebscher (Article)

Watch out if you own a bond fund that underperformed its benchmark by 2% or more last year, as most did. Rather than put their careers at risk by suffering a second year of poor performance, those fund managers will turn to indexation, according to DoubleLine?s Jeffrey Gundlach. And since the Barclay?s Aggregate Index holds nearly 35% of its assets in Treasury bonds with near-zero yields, its investors will endure poor returns.

2012-01-10 Using the ECRI WLI to Flag Recessions by Dwaine van Vuuren (Article)

In September 2011, the ECRI proclaimed a new U.S recession would begin sometime in the coming year. It based its prediction on a host of its own internal long-leading indexes, together with its widely followed weekly leading index (WLI). I want to focus on the proper use of the WLI and examine its accuracy in recession dating, in order to put this current recession call into context.

2012-01-10 The Dollars Lucky Streak by Peter Schiff of Euro Pacific Capital

All self-perpetuating virtuous cycles are vulnerable to a sudden break in the positive feedback loop. When reality rears its ugly head, and the spell breaks, the reverses can be vicious. It happened with dot com stocks, it happened with real estate, and I believe it will happen with the dollar and Treasuries. Even if Europe does not resolve its problems, the day of reckoning will still eventually arrive. The unfortunate truth is that the longer it takes, the worse it will be, as we will have that much more debt to reckon with.

2012-01-09 Structurally High Unemployment for a Decade by Mike "Mish" Shedlock of Sitka Pacific Capital Management

Since 2008 I have been stating the US would have "Structurally High Unemployment for a Decade". Indeed, based on historical trends in labor force growth, the expected unemployment rate for the number of jobs created during the recovery would be well north of 11%. Yet, the unemployment rate is currently an artificially "low" 8.5% (not that 8.5% is anything to brag about). To show how difficult it will be to bring that rate down, let's take a look at job growth (or losses), for the last three decades (numbers in thousands).

2012-01-09 Employment Disappointment by Milton Ezrati of Lord Abbett

Employment gains of late have taken the edge off peoples worst recessionary fears, but they nonetheless remain fundamentally inadequatefar short of historical norms and the very human needs of the now-huge army of unemployed. In the coming year, continued economic growth should improve the situation, but only marginally. Employment will increase only slowly. By the end of 2012, still more than 8% of the work force likely will remain unemployed.

2012-01-09 Lots of Bulls, Few Bears by John Buckingham of AFAM

The market goes down and investors become bearish, the market goes up and they become bullish. Seems like folks will one day wise up as buying stocks on sale should make shoppers more excited than waiting to pick them up after theyve advanced, but this is evidently not the time to break the spell. While we do worry that the rally, albeit modest, in stocks heading into Q4 earnings reporting season, which kicks off this week, could succumb to a little selling (buy the rumor, sell the news), we remain upbeat in our view for the equity markets in 2012.

2012-01-09 Will Housing Follow Job Growth? by Kristina Hooper of Allianz Global Investors

An improving job market and increased manufacturing activity suggest a stronger economy, but the housing sector remains weak. However, low interest rates, less debt and more affordable homes could turn housing into a positive catalyst.

2012-01-09 Steady As She Goes Into Early 2012 by Scott Brown of Raymond James Equity Research

Much like the situation last year, the economy appears to be poised for improvement. Again, there are still some headwinds and a number of downside risks to the growth outlook and much will depend on developments in Europe and in the oil market over the next few months. Theres still some prospect for further accommodation from the Federal Reserve we may see another round of asset purchases announced later this month.

2012-01-09 Corporate Profits Hit a Wall, But Stocks a Buy? by Chris Maxey of Fortigent

Equity markets finished their first week of the New Year with positive gains, with the S&P 500 and Dow Jones Industrial Average rising 1.6% and 1.2%, respectively. Those gains, and more, occurred in the first 30 minutes of trading on Tuesday, the first trading day of 2012. From there, markets traded choppily through the remainder of the week, as lingering problems in Europe dampened risk appetites. Investors returning from holiday break received more positive news regarding the US economy, particularly within manufacturing and employment.

2012-01-09 Middle East/Africa Fourth Quarter 2011 Economic Review by Team of Thomas White International

Weakening global activity and further political uncertainty are the foremost risks that are likely to affect the Middle East and Africa (MEA) regions performance. The IMF report notes that oil exporting nations of the MEA region have benefited from continued high energy prices and are slated to finish off 2011 clocking in a GDP growth of 5% before easing to 4% in 2012. However, these countries do face a downside risk in the likelihood of fiscal and debt challenges in the developed nations that could adversely impact global activity and international oil prices.

2012-01-06 Doing Nothing Nothing Done by Cliff W. Draughn of Excelsia Investment Advisors

Somehow, this is about the only time of year when most people reflect on the past, ponder the present, and plan/predict the future. There are several themes we have identified that will affect our asset-allocation discipline for 2012. As I commented in November, the market risks are geopolitical and the sentiment is driven by government policies. Our themes for 2012: Germanys Euro, Inflation versus Deflation, Election Year and It Isnt All Bad . For the year 2011, stocks basically broke even, although the 37 days where the Dow was plus or minus 200 points certainly made for a wild ride.

2012-01-06 Euro Fears by Richard Michaud of New Frontier Advisors

The euro crisis has dominated financial headlines and threatened global economic growth for the last two years. The European Union (EU) has repeatedly failed to articulate an effective plan to address Europes debt problems and deteriorating finances. German demands for austerity and economic rectitude by eurozone members, while politically popular in Germany, ignore basic principles of orthodox Keynes-Samuelson macroeconomics for dealing with a financial slump. There is no historical example of austerity leading to growth.

2012-01-06 And Thats The Year/Quarter That Was... by Ron Brounes of Brounes & Associates

Global geopolitical events continue to impact all investments markets. Just when Europe seemed to be taking positive steps to move passed crisis mode, along come Spain, Italy, and Hungary to remind investors that the road to recovery will be paved with many bumps along the way. A nuclear Iran presents huge concerns and additional sanctions could cause new crude supply challenges that may prompt inflation to resurface. The recent favorable labor releases woke the consumer from hibernation in time for the holidays, but will the enthusiasm last once the season ends?

2012-01-06 Dividend Champions a Rare Undervalued Opportunity by Chuck Carnevale of F.A.S.T. Graphs

We believe that based on earnings, 2012 is starting out with the stock market undervalued. We believe in the long-term ownership of great businesses purchased at sound and attractive valuations. Consequently, we view the stock market as merely the store that we shop at in order to buy the businesses we want to own.

2012-01-06 Have Winds Shifted to Provide Relief to Investors? by Frank Holmes of U.S. Global Investors

We believe the winds are shifting to bring needed relief to global investors. Weve seen improving economic data from the U.S. lately, and this positive news from the worlds largest economy, along with an improving Chinathe worlds most populated countryoffsets the negativity in Europe.

2012-01-05 Flight 2012, Cleared to Hold? by Mike Boyle of Advisors Asset Management

Commercial air travel can be pretty frustrating these days, but nothing compares to the call from the cockpit as you approach your destination that the flight is entering holding. Immediately many questions enter travelers minds including: Why? How long? Where will we land? Given the S&P 500 essentially experienced a holding pattern in 2011, many investors must be asking themselves similar questions right now. Specifically the S&P lost .04 points last year as it began 2011 at 1257.64 and ended the year at 1257.60.

2012-01-05 U.S. Dollar & Currencies: Review and Outlook by Axel Merk and Kieran Osborne of Merk Funds

In 2012, policy makers around the world may be driven by the realization that the theme of 2011 was not a Euro-specific crisis, but simply another stage in a global financial crisis. Central bankers may ramp up their printing presses in an effort to limit contagion concerns. As such, the currency markets may be the purest way to take a view on the mania of policy makers. Market movements may continue to be largely driven by political rhetoric. We dont believe this trend will abate over the foreseeable future, especially given the likely leadership changes throughout several G-7 nations.

2012-01-05 New Year, Old Worries by Team of BondWave Advisors

2011 was a volatile year where the old guard of the global economy was plagued by weak economies, bloated debt levels, tight credit, and action against normally stellar credit ratings. Europe dominated the headlines, both in December and 2011 overall, and continues to struggle. We discuss these issues and provide additional insight into the US Treasury, Corporate and Municipal Bond Markets.

2012-01-04 Fundamentals March on Despite Global Risks in 2012 by Douglas Cote of ING Investment Management

The two primary drivers of market performancefundamentals and global risksacted in opposition in 2011. It is critical to understand the hierarchy of influence of these drivers in order to understand the current market and to forecast its future direction. Although spikes in global risk may make headlines and cause temporary shocks to investor confidence, the markets path ultimately comes down to the strength of the underlying fundamentals. We expect 2012 will mark the third consecutive year that fundamentals relentlessly march forward despite ample global risks.

2012-01-04 Towards the Paranormal by Bill Gross of PIMCO

The New Normal, previously believed to be bell-shaped and thin-tailed in its depiction of growth probability and financial market outcomes, appears to be morphing into a world of fat-tailed, almost bimodal outcomes. A new duality credit and zero-bound interest rate risk, characterizes the financial markets of 2012, offering the fat left-tailed possibility of unforeseen policy delevering or the fat right-tailed possibility of central bank inflationary expansion. Until the outcome becomes clear, investors should consider ways to hedge their bets.

2012-01-04 On Tap for 2012: More Bond Market Transparency by Matt Tucker of iShares Blog

In 2011, 102 new fixed income funds launched across exchanges in Europe, Canada, Asia and the United States. How will the landscape continue to evolve in 2012? Matt Tucker is here to provide a few insights, including his expectation that new fund launches will help to make the bond market more transparent.

2012-01-03 US Recession - An Opposing View by Dwaine van Vuuren (Article)

A large number of reputable analysts and companies are forecasting a new U.S recession on the immediate horizon. Attracting the most attention is ECRI, which made a public recession call on September 30th and several television reaffirmations since. But an examination of a broader range of other composite economic indicators shows that sole reliance on ECRI's forecast would be misplaced.

2012-01-03 The Triumph of Optimism by Scott Minerd of Guggenheim

Over the course of history there is a certain triumph of optimism. Betting against the column of progress of human history and the innovation of mankind has always proven to be a losing proposition. In the short run, there are times to become cautious, as the past five years have exemplified. Broad-based economic expansion and its attendant outsize investment returns follow contraction and panic just as the day follows the night. As dark as the current environment may seem, the sun will come up tomorrow. When it does, I believe it will shine favorably on the optimists of today.

2012-01-03 The Right Kind of Hope by John P. Hussman of Hussman Funds

We enter the year with great hope. But our hope is not for continued speculation and the maintenance of rich valuations (that only look reasonable because long-term cyclical profit margins are at a short-term peak about 50% above their historical norms). Our hope this year is for a return to a proper investment opportunity set - where saving is encouraged and rewarded by sufficiently high prospective returns, and the cost of capital is high enough to discourage high-risk, low-return investments and unsustainable fiscal deficits.

2012-01-03 Good Defense, Slow Progress a Win for 2011 by Kristina Hooper of Allianz Global Investors

The stock market finished flat for the year, but an absence of loss in the face of a wave of negative news coupled with improving economic conditions are cause for optimism in 2012. While the stock market took us on a wild ride to nowhere, investors are better off than they were a year ago.

2012-01-03 Thoughts About 2012 by Charles Lieberman (Article)

Major issues cloud the outlook for 2012. Fiscal policy remains in limbo, while the country revs up the presidential campaign. Finances in Europe remain a work in progress, yet the risk of a globally troublesome misstep remains. There is also no shortage of geopolitical risks around the world, including Iran, the entire Middle East, and a new regime in North Korea. Domestically, the economy is gathering some upward momentum. But will the economy be permitted to build on these trends, or will some external factors undermine the recovery? The answer is unclear, which is why market is so cheap.

2011-12-31 Remarkable Resilience by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

Despite a remarkable series of crises, the stock market was roughly flat on the year. Earnings increasing, inflation decreasing, and economic data improving, the environment for a renewed upward move may be in place to start 2012. There seems to be little hope from DC for any relief in the near term, but 2012 brings an election cycle that will likely have a major impact on the future of the US. A near-term implosion in Europe seems to have been avoided but real solutions remain absent and the risks for a greater economic pullback are growing, which would likely have global implications.

2011-12-30 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Leave it to global austerity to bring confidence in markets to a grinding halt. Our global credit crisis allows for very little wiggle room in addressing both a moral and economic bankruptcy that has now engulfed the worlds financial markets for four years specifically, and nearly two decades, generally. In recent weeks, efforts to create multinational solutions worldwide, and bipartisan solutions domestically, have erased some doubt that the problem of overspending will be addressed, but only quenched an immediate taste for something positive to occur.

2011-12-30 Case for Sustained $100 Oil by Frank Holmes of U.S. Global Investors

China, along with other emerging markets, and the European Central Bank are in the early stages of a global easing cycle, primarily by cutting interest rates to spur growth. Also, the Federal Reserve should remain stimulative. These government actions set the stage for sustained, or perhaps higher, demand for oil. Geopolitical threats remain on the horizon, and could also be a positive catalyst for oil.

2011-12-29 On the Sharia and Islamic Finance by William Maeck of Seafarer Capital

The practice of banking according to Islamic principles, or the Sharia - the moral code and religious law of Islam - is relatively unknown within developed nations. However, in many parts of the developing world, Islamic banking is a burgeoning industry. It deserves closer scrutiny not only because it is bringing new and otherwise un-banked customers into the fold, but also because it serves as an alternative model for finance and it may manage certain types of risk better than conventional Western models.

2011-12-29 2012 Offers Few Reasons for Optimism by John Browne of Euro Pacific Capital

In 2011, politicians of the U.S. and EU set their economies on a rendezvous with economic and financial disaster. If one assumes as I do that no leader on either side of the Atlantic has the courage to face the music, then there can be little reason for optimism in 2012.

2011-12-28 Delayed LDI Implementation: Making it Worth Your While by Rene Martel of PIMCO

With interest rates so low, many defined benefit plan sponsors have delayed implementing or expanding LDI programs, often using intermediate duration bond portfolios instead. Traditional intermediate duration portfolios may not offer the most attractive yields or the best credit match for pension liabilities, and may make the transition to long-term bonds difficult later. We believe plan sponsors in a waiting mode should consider switching to long duration portfolios with a synthetic overlay in an effort to reduce duration exposure.

2011-12-28 Was the 2011 Economy a Miracle? by Brian S. Wesbury and Robert Stein of First Trust Advisors

Government spending may be falling as a share of GDP, but it is still very high. This limits job creation and holds back real GDP growth from its potential. Excessive regulation does the same.And while an easy Fed boosts growth, it also creates inflation, which will become more of a problem in the years ahead. Netting all this out, the scale is still tilted toward growth.New US technologies and the productivity that they create are so powerful that they are overwhelming the drag from bad government policies.Compared to forecasts of recession, its a miracle.Look for another one in 2012.

2011-12-28 Debt, Default, and Delinquency by Milton Ezrati of Lord Abbett

This column looks at how the household and business sectors have lightened their debt burdens and how delinquency rates have improved as a result. The record is plain. As the 2008 crisis broke, the American private sector moved dramatically to reduce its dependence on debt. From mid-2008 to the quarter just ended, the household sector cut its overall debt burden by a cumulative $689 billion or about 5%. Mortgage debt, naturally, fell the most, in part because of foreclosures, but also because households voluntarily reduced their exposure.

2011-12-23 Should the Definition of the Central Bank Lender of Last Resort Function Be Expanded? by Paul Kasriel of Northern Trust

If the ECB needed to expand its balance sheet to maintain the specified rate of growth in combined ECB and MFI credit, the ECB could purchase in the open market the requisite amount of pan-euro bonds rather than individual-country sovereign debt. In this way, the ECB could fulfill its expanded lender-of-last resort function without taking on individual-country sovereign-debt credit risk.

2011-12-23 Outlook 2012: Living In Interesting Times by Victoria Marklew, Asha G. Bangalore, James A. Pressler, and Ieisha Montgomery of Northern Trust

Setting aside the debate over the appropriateness of various policy directives, this Outlook considers which countries or regions are vulnerable as we head into 2012. Not surprisingly we start off with Europe, then go through the U.S., industrialized Asia, and Latin America, finishing with a brief discussion of the political powder keg that is the Middle East.

2011-12-23 Rebalancing Resurrected, Part 3 by Adam Butler and Mike Philbrick of Butler Philbrick & Associates

This is a 'Canadian-ized' version of anarticlewe published on Monday, December 19, 2011, which featured a study of US equity and fixed-income markets. As we are located in Canada, we were motivated to see how well the same techniques work in our home market using the S&P/TSX Composite. As expected, it turns out that they work quite well.

2011-12-23 Banking Reform: Hopefully Britannia Creates A Wave by Monty Guild and Tony Danaher of Guild Investment Management

The British government has set in motion this week a future overhaul in the way that individual banks do business. British banks will be required to separate their basic lending and deposit operations from investment activities involving trading and speculation on behalf of clients and the banks themselves. This should mean that the deposits of retail customers will be shielded and protected from bank investment and trading ventures.

2011-12-23 Emerging Markets Real Estate by Team of Cohen & Steers

Emerging markets real estate securities had a negative return in November following an exceptionally strong October. Worries about the global economy and Europe continued to weigh on equities broadly, while signs of slowing growth in China were of particular concern to developing countries. A sharp rally in the last few days offset some of the decline, as China cut its reserve requirement ratio for the first time in three years and central banks announced a coordinated effort to provide much-needed liquidity to European banks.

2011-12-23 Global Infrastructure Investment Commentary by Team of Cohen & Steers

The investment environment is likely to continue to be characterized by heightened risk, including political risk as governments institute austerity measures and posture ahead of upcoming elections. The delay in the Keystone XL pipeline in the United States and Canada and the challenge faced by Central Japan Railway in confirming government financial assistance underscore these risks. Positive fundamental trends do continue, such as in the North American pipeline space, where companies continue to benefit from the need to reshape the regions energy grid.

2011-12-22 The Corporate Cash Myth by Neeraj Chaudhary of Euro Pacific Capital

Despite huge amounts of cash on their balance sheets, America's largest companies are as broke as the rest of the country, and not only are they in no position to hire workers, but higher interest rates could result in more layoffs at a time when the nation can least afford it. Given these factors, economists, journalists and politicians should be applauding corporate cash reserves not deriding them. Given that a real recovery will not come until America as a country has paid down some of its debt, we should not be urging our corporations to throw caution to the wind.

2011-12-21 Rebalancing Resurrected, Part 2 by Adam Butler and Mike Philbrick of Butler Philbrick & Associates

This is a 'Japan-amized' version of an article we published on 12/19, which featured a study of US equity and fixed-income markets. The Japanese experience since 1993 was dramatically different than the U.S. Japanese investors endured a seemingly endless series of intermediate term extremes of hope and despair as markets oscillated wildly above and below their long-term negative trend. Japans multi-decade crash and stagnation is unique among modern market economies (so far), so we wanted to see how well our volatility adjusted rebalancing framework worked in this difficult environment.

2011-12-20 Dennis Gartman Explains His Call on Gold by Robert Huebscher (Article)

Dennis Gartman has been publishing his daily commentary, The Gartman Letter, since 1987. He's been in the news lately because of a call he made last week on the price of gold. In this interview, he discusses the reasons behind that forecast.

2011-12-19 When "Positive Surprises" Are Surprisingly Meaningless by John P. Hussman of Hussman Funds

How much importance should we put on the fact that economic data has delivered positive surprises in recent weeks? Don't all these surprises significantly short-circuit the risk of probable recession? As economist John Williams observes, "starting in October, a divergence developed: Whereas year-to-year change in BLS estimated payroll earnings continued at a more-or-less constant, positive level, tax receipts fell quite markedly. Where the Treasury numbers reflect full reporting, the BLS data are sampled..modeled and..revised...the BLS has overstated average earnings..in recent months."

2011-12-19 AA Is the New AAA by Charles Lieberman (Article)

The U.S. was downgraded to AA some months ago. France, as expected, was downgraded to AA this weekend. China is AA. Europe's six remaining AAA countries are under review and will likely also be downgraded to AA shortly. It hardly matters. AA is the new AAA. The markets understood well before the rating agencies that European sovereigns were mismanaging their finances and rendered their judgment that these budget deficits need to be reduced. Europe must do so before its credit problems spread. Progress is being made, albeit painfully slowly.

2011-12-19 Rebalancing Resurrected by Adam Butler and Mike Philbrick of Advisor Perspectives (dshort.com)

This is part 1 of a 3 part series that explores optimal methods of dynamic rebalancing between stocks and bonds. This study examines these methods in the context of a US equity / Treasury basket. The next 2 posts will explore the impact of our proposed techniques on Japanese and Canadian equity / bond baskets. The investment community is in the midst of an identity crisis, though admittedly many in the industry don't know it yet. At the heart of the matter is the following misconception: Investors perceive that investment professionals add value via security selection and market timing.

2011-12-19 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

I expect that the year-end will be rife with psychological mania of this kind, yielding to an extremely volatile attention span. Despite the numbers, a new landscape is emerging which trades upon hype, happiness, and expectation. It could cost us the opportunity to tune in to dormant themes that might be next years capital gains winners, or, possibly, to overlook them altogether while wallowing in excess negativity.

2011-12-19 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

I expect that the year-end will be rife with psychological mania of this kind, yielding to an extremely volatile attention span. Despite the numbers, a new landscape is emerging which trades upon hype, happiness, and expectation. It could cost us the opportunity to tune in to dormant themes that might be next years capital gains winners, or, possibly, to overlook them altogether while wallowing in excess negativity.

2011-12-17 The Center Cannot Hold by John Mauldin of Millennium Wave Advisors

We'll leave aside the politics of the payroll tax extension and look at the economic implications, and then go on to examine the deficit in the US. That will give rise to some thoughts about Europe and what would have to happen for a country to leave the euro. We'll finally close with some thoughts and graphs about the more controversial part of the tax cut extension, the Keystone XL Pipeline. Just how radical is it to build such a pipeline in the US? And what are the implications for the deficit?

2011-12-16 Making Sense Of The European Chaos by Monty Guild and Tony Danaher of Guild Investment Management

Developments in Europe have dominated the worlds economic headlines in recent days and have obscured some good news from China. In this weeks newsletter, we will cover the background of these important events and their meaning to global investors. We are recommending using the gold market decline to add to gold positions, we continue to hold other long term positions.

2011-12-16 Growth and Value: Esterline Technologies - a Leading Defense Contractor by Chuck Carnevale of F.A.S.T. Graphs

With the amount of volatility seen in the equity markets today, many people seem to believe that the old proven practices of investing in solid businesses for the long run no longer apply. But its important to remember that there is a significant distinction between true investing and speculating. And its even more important to recognize that the level of risk taken by speculators is significantly greater than the amount of risk assumed by investors.

2011-12-16 Early Santa Arrival? by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

Stocks have continued their seesaw pattern around developments in the European debt crisis. The major indices remain in the wide range we've been in for the last two years. Factors are setting up for a potential break above that range in the coming year. Expectations about progress in Washington are extremely low and near-term the biggest issues are the proposed extensions of the payroll tax cut and unemployment insurance. The increasing populist rhetoric is not helpful and any chance of major debt-reducing legislation occurring before the 2012 election seems remote.

2011-12-16 Striking Portfolio Balance with Gold Stocks by Frank Holmes of U.S. Global Investors

Back on August 22, I wrote that gold was due for a correction and that it would be a non-event to see a 10 percent drop in gold. I wrote, This would actually be a healthy development for markets by shaking out the short-term speculators. This mornings gold price of $1,590 is about 15 percent from the high, which is a little greater than predicted, but a non-event just the same. I believe the long-term story remains on solid ground.

2011-12-15 The European Overhang and Odds of a Meltdown by Russ Koesterich of iShares Blog

Earlier this week, I noted that very elevated Italian and Spanish bond yields remaina short-term risk for both the European and global economies.Several other major European-related risks also continue to threaten markets.1)In the short-term, a key risk remains European banks. While bank funding needs have been addressed by European leaders, capital adequacy still is an issue. 2)A broader risk remains in the form of the interplay between economic policy and domestic politics. In efforts to solve Europes debt problems, domestic political considerations have too often trumped economics.

2011-12-15 Asia: Diverging Outlooks Going Into 2012 by James A. Pressler of Northern Trust

With most of the industrialized world focusing on all things European, we thought it might be worthwhile to see just what was happening on the other side of the Ural Mountains. Asia has not become embroiled in the debt problems sweeping through the likes of Greece and Italy, and its exposure to the euro is contained. However, what happens in Europe will inevitably drift into Asia, so a look at its major economies might provide insight into what awaits the region in 2012. In particular, we are focusing on the two most populous countries in the world China and India.

2011-12-13 Self Sustaining by Jeffrey Saut of Raymond James Equity Research

Last week the ECBs interest rate cut took center stage, but that cut should be viewed within the context of the 40 world wide interest rate cuts that preceded it. Clearly, there is a global easing cycle underway; and, we think you will see more such news this week when the FOMC announces it policy statement Tuesday. Stocks will continue to grind irregularly higher driven by portfolio managers trying to play catch-up, the upside seasonal bias, low valuations, still depressed sentiment readings, and the knowledge that we have now entered the best performing six months of the year for stocks.

2011-12-13 What Happens If A Rising Tide Sinks Some Ships? by Chris Maxey of Fortigent

A multi-day summit in Brussels by European policymakers yielded an expected fiscal union between euro member countries. However, a key refusal by Britain undermined the credibility of the pact. Without unanimous agreement, the original European Union treaty cannot be altered, so a new intergovernmental agreement was created. Some question whether such an arrangement has the teeth to enforce budgetary discipline.

2011-12-13 Tale of the Tape U.S. Markets Back on Top by Philip Tasho of TAMRO Capital

As investors say goodbye to a year that will be remembered in the history of financial markets for its volatility and investors obsession with it one of the most battered, bruised and, yes, volatile, markets has quietly reclaimed its spot as the worlds best performer. It is, of course, the U.S. Through November 15, the S&P 500 is up 1.8% year-to-date; the Dow Jones Industrial Average has risen 6.9%; and the NASDAQ, 1.3%. Meanwhile, the rest of the worlds major equity indices are covered with red arrows, all pointing down.

2011-12-12 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Markets continue to be whipsawed by headlines out of Europe which much of the time are confusing and contradictory. Overall, however, the stock market here in the United States continues to outperform other global markets, and as evidenced by the charts below showed gains for the week. Last week saw the Dow Jones Industrial Average gain 1.4% while the NASDAQ Composite moved higher by three quarters of a percent.

2011-12-12 Obama's 8%: Sounds Right by Brian S. Wesbury and Robert Stein of First Trust Advisors

Given his advisers track record, you would think President Obama would be very cautious when making predictions about the unemployment rate. As we all now know, even though the stimulus bill was fully implemented, the jobless rate kept heading north, peaking at 10.1% in October 2009 and never once falling even remotely close to 8%. Nevertheless, President Obama is doing it again and predicting unemployment will be 8% around Election Day. This time, we think hes right.

2011-12-09 Markets Rolling Look For More Of The Same by Monty Guild and Tony Danaher of Guild Investment Management

During the last two weeks, global markets have moved their way to higher ground and indications point to a healthier finish than expected to an otherwise sickly 2011. We see several developments supporting a continued equity market rally. They have to do with measures taken in China, Europe, and by central bankers around the globe. The Canadian and Singapore dollars are well-managed currencies in countries with conservative banking systems. They are good candidates for continued long- term appreciation versus the Euro and U.S. dollar.

2011-12-09 You Can't Print More Gold by Frank Holmes of U.S. Global Investors

As central banks print money and increase supply, currencies become devalued. Whereas in the recent past, one currency may be reduced in value compared with other currencies, this time there is global competitive devaluation as excess liquidity is put into the system. Historically, this excess liquidity has made its way to riskier assets, i.e. stocks and commodities. Gold is generally a benefactor of this flight to riskier assets as many investors see it as a store of value. This chart illustrates the interconnectivity of gold and global money supply growth.

2011-12-08 Global Economy and Market Summary Third Quarter 2011 by Stephen Hammers of Compass EMP Funds

The world economy has continued to slow during the last few months. The next several quarters are likely to be weak for three reasons. First, fiscal policy will continue to be restrictive as plans to trim excessive federal budget deficits continue to unfold. Second, private sector demand looks gloomy because households will continue to deleverage from high debt levels while unemployment remains a problem. Third, the uncertain future of the Euro-zone debt situation remains a major setback to future economic growth.

2011-12-08 2012: A Gut Check for Global Markets by Andreas Utermann of Allianz Global Investors

We are clearly facing a significant slowdown in economic activity in 2012, but we do not expect most developed economies to fall into recession. However, growth risks are increasingparticularly in Europe, where a recession is becoming increasingly likely. We do not expect a return of deflationary fears despite weakening growth, nor is inflation likely to be a threat in the foreseeable future. We expect rates to come down further in the euro zone and emerging markets; in the U.S., U.K. and Japan, we expect extremely low interest rates to continue.

2011-12-07 Waiting for All In by Mark R. Kiesel of PIMCO

Without a more forceful and coordinated policy response, Europe now faces an increasing risk of a hard landing. In this uncertain environment, volatility will likely remain high, liquidity poor, risk premiums wide and the global economy fragile as financial and credit conditions tighten. Easier monetary policy as well as the potential for more balance sheet support from a larger consortium of global central banks is now needed over our cyclical horizon. If these actions are coordinated and timely, investors and risk takers would be more likely to move off the sidelines.

2011-12-06 What Are Investors Up To? by Chris Maxey of Fortigent

With markets ebbing and flowing and making it virtually impossible to differentiate up from down, it has become all the more difficult to determine what qualifies as an attractive investment. While equity markets rallied into the end of November, volatility remains well above its long-term average, causing most investors to question their equity allocations. It should come as no surprise, then, that individual investors are anything but confident in the latest rally. Macroeconomic headlines and excessive volatility are dampening even the most hardened investors faith in financial markets.

2011-12-06 Adding Some Holiday Gloss to a Not-So-Super Month by Team of BondWave Advisors

November began with a European shakeup that did little to bolster the confidence of investors. Fear raged as Greece and Italy threatened to roll back efforts made by the ECB and IMF. In the US, all eyes were on the supercommittee, which was tasked with reducing the deficit over the next 10 years. BondWave Advisors discuss the US economic indicators that brought a coat of gloss to the pessimism and provide additional insight into the US Treasury, Corporate and Municipal Bond Markets.

2011-12-05 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Any euphoria about last weeks intermittent triple-digit rallies has to be couched in a context of longer-term developing downtrends and a desire to see any positive news as bear-busting. Alas, the ongoing downcycle persists and is likely to be the primary determinant to market performance for the foreseeable future. As junctures go, last week represented a few days of post-holiday welcome relief, but hardly the initiation of a change in secular direction. The headwinds are too daunting when analyzing market and sector relative strength quotients.

2011-12-05 And That's The Week That Was by Ron Brounes of Brounes & Associates

One week does not make a trend, especially since politicos across the globe have been more than capable of messing up a good thing in the past. Black Friday came and went, but hopefully the holiday spirit remains and shoppers still frequent the malls. The grand plan in Europe surely could ease the recurring tensions of the past few years, but grand plans have had a way of fizzling in the past. Dont put it past Congress to rain on the market parade. Do all investors celebrate the Santa Clause rally, regardless of religious affiliation?

2011-12-05 Five Reasons to Buy Equities by Milton Ezrati of Lord Abbett

Amid all the risks today, and given the spotty history of stocks during the last 10 years or so, it is easy to understand why both retail and institutional investors continue to avoid the U.S. equity market. But understandable as their reluctance is, there are at least five good reasons to consider equities now: 1) There is good value. 2) There will be no double-dip recession. 3) Europe should survive. 4) Washington will not implode. 5) Nobody is buying equities.

2011-12-05 Solid Improvement by Charles Lieberman (Article)

The latest employment report showed significant improvement. Job growth is still not strong enough, but the gains are sufficient for the expansion to continue without faltering, as long as the financial crisis in Europe is addressed. And finally, it appears that the Europeans are closer to resolving their debt issues.

2011-12-05 Year of the Living Dead Stock Market by Kristina Hooper of Allianz Global Investors

Stocks have been acting like a pack of zombies this year: wandering around aimlessly, frightening off everyone, but not really getting anywhere. However, recent data suggest an awakening.

2011-12-05 Treading Water by Scott Brown of Raymond James Equity Research

The good news is that the economy does not appear to be contracting. The bad news is that its still not growing fast enough to make up much of the ground lost during the downturn. The unemployment rate fell to 8.6% in November, from 9.0% in October and 9.8% a year ago. However, more than half of that drop was due to a decrease in labor force participation. The data suggest an economy that is growing just enough to absorb the growth in the working-age population.

2011-12-03 December Monthly Economic Update by Justin Anderson of Cambridge Advisors

While the improving domestic economic picture seems to be pointing to continued slow growth, the markets are focused on Europe as they continue the tumultuous process of finding a resolution to their debt crisis. Until a long-term solution is found, we will likely continue to experience above average market volatility. In this environment we continue to favor a diversified mix of asset classes with an emphasis on yield.

2011-12-03 Time to Bring Out the Howitzers by John Mauldin of Millennium Wave Advisors

It is now common to use the term bazooka when referring the actions of governments and central banks as they try to avert a credit crisis. And this week we saw a coordinated effort by central banks to use their bazookas to head off another 2008-style credit disaster. The market reacted as if the crisis is now over and we can get on to the next bull run. Yet, we will see that it wasn't enough. Something more along the lines of a howitzer is needed (keeping with our WW2-era military arsenal theme). And of course I need to briefly comment on today's employment numbers.

2011-12-02 The Markets are Encouraged by the Actions of the Worlds Central Banks by Thomas S. White, Jr. of Thomas White International

Six of the worlds major central banks, led by the Federal Reserve, this week announced an expansion of a program to increase the availability of U.S. dollars to European banks and lower their cost of borrowing these funds. While this action was not designed to solve the central challenge the European governments are experiencing - the spiking interest rates they must pay when issuing their sovereign debt - it will likely calm the tangential problems this has caused within the European banking system.

2011-12-02 Are Stars Aligned for a Year-End Rally? by Frank Holmes of U.S. Global Investors

Correlations will decrease along with volatility as we get more clarity on the eurozone crisis and see signs of stability in the global economy. Volatility fell this week, with the CBOE Volatility Index (VIX) declining 20 percent. This could be related to the news that November U.S unemployment unexpectedly dropped to 8.6 percent, U.S. auto sales in November were the strongest in more than two years, and preliminary data on holiday retail sales appears to be strong. According to Bloomberg News, Black Friday sales hit a record high this year, with consumers spending $11.4 billion.

2011-12-01 On Money and Confidence by Andrew Foster of Seafarer Capital

At this moment, the worlds central banks have undertaken what appear to be coordinated efforts at relief, easing liquidity by boosting money supply. This is a welcome move, as liquidity has been strained. My concern is that while this monetary stimulus is necessary, it is not sufficient to achieve financial stability. Unless confidence is restored specifically, by repairing balance sheet solvency growth will remain tepid, and markets range-bound.

2011-11-28 And That's The Week That Was by Ron Brounes of Brounes & Associates

While traders, investors, and politicos prepare for their Thanksgiving travel plans, the week should be anything but dull. HP highlights the earnings reports as shareholders try to figure out the future of its PC biz. The Fed releases minutes from the last policy meeting so economists can view the dissension in its midst in determining if and when Bernanke and Co. will act again. GDP headlines the economic releases and some analysts expect a slight downward revision to the initial 2.5% reported expansion rate in the third quarter.

2011-11-28 And That's The Week That Was by Ron Brounes of Brounes & Associates

Black Friday results take center stage as retailers report sales data and analysts extrapolate what one days business means for the season. A rebound in consumer activity could bring new confidence to the markets. A positive showing from manufacturing and labor would also help sentiment. Then again, any newfound confidence may be overshadowed by the super-committee. Any sane politicos left? What say you, Newt, for your 15 minutes in the limelight?

2011-11-28 Multiple Focal Points by Charles Lieberman (Article)

Europe remains the markets focus, but the domestic economy also merits attention, particularly with another payroll report due on Friday. The data have come in consistently better than expected, including Black Friday sales, despite the distractions of Europe and the inability of the Super-Committee to reach a budget deal. Left to its own devices, it seems entirely possible that the economic expansion would slowly gather momentum. Unfortunately, it seems like a sure bet that the market will remain highly sensitive to developments in these other arenas.

2011-11-28 The Global High Yield Opportunity by Matt Eagan, Kathleen Gaffney and Elaine Stokes of Loomis Sayles

The shifting characteristics of US, European, Asian and emerging markets high yield assets have contributed to an expanding opportunity set. This has prompted many institutional investors to broaden their high yield investment guidelines, often giving portfolio managers the ?exibility to include exposures to these markets within one portfolio. The days of silo investing, in which non-US investors sought exposure to US high yield and emerging market debt through separate mandates, may be giving way to an era of sector allocation driven by investors.

2011-11-26 Innovation Always Trumps Fear by J Michael Martin of Financial Advantage

While the stock market is behaving fearfully, we want to examine the thesis that the human capacity for innovation is an inexhaustible source of power that routinely topples seemingly intractable challenges. Our genius for betterment has flourished in the social arrangement known as democratic, free-market capitalism. Its promise of rewards for our efforts tends to subdue our baser instincts of fear and envy, and to stimulate the powerful creativity with which we are endowed. Capitalism has raised the standard of living wherever its been tried.

2011-11-26 The Case for Optimism: Our Top 25 Dividend Growth Stocks are Dirt Cheap by Chuck Carnevale of F.A.S.T. Graphs

Within each challenge there has also been accompanying opportunity.And in most cases, the opportunities tend to dwarf the risks. The opportunities that we believe our recent challenges are bringing us are unnecessarily low valuations on some of our highest-quality companies.Yet, it is a fact that investors are flocking to bonds in droves at precisely a time when the risk of owning bonds is perhaps the greatest it has ever been. Most investors want to defy the cardinal rule of investing-buy low, sell high.

2011-11-26 With Rising Wages, Will China Remain a Manufacturing Hub? by Frank Holmes of U.S. Global Investors

In 2010, countries such as Hong Kong, Japan, South Korea and Germany depended on China for data processing, apparel, and iron and steel exports. Chinas largest import partners in 2010 were Japan, South Korea, the U.S., Germany and Australia. For those companies not already doing business in China, theres one dominant factor that shows they should start: the vast domestic market. Companies may be able to find a cheaper workforce in Bangladesh, India or Sri Lanka, but being located in China allows convenient access to what is rapidly becoming the worlds largest consumer market.

2011-11-23 Giving Thanks by Michael Dana of Dana Investment Advisors

It has been a tumultuous decade starting with 9/11, the wars in Iraq and Afghanistan, natural disasters (hurricanes, earthquakes, floods, tornados and fires), the financial crisis starting in 2008, and upheavals in the Middle East and the continuing financial problems in Europe. All these events have combined to cause worldwide recession and slow economic growth particularly in Europe and the US. With the mortgage meltdown and the continuing high unemployment rate, you would think that there is little to be thankful for this holiday season, but you may not be seeing the forest for the trees.

2011-11-22 Debt Story by Scott Brown of Raymond James Equity Research

Loan growth plays a key role in economic expansion. Simply put: no loan growth, no economic growth. However, theres a downside. Debt doesnt matter until it does. Debt has played a key part in the economic downturn and in the gradual recovery. Europes sovereign debt crisis has continued to escalate, with no easy way out. In the U.S., the government has borrowed more, but the markets have not punished it for doing so. Theres no sign that that is going to change anytime soon.

2011-11-22 The Joy of Cooking by Jeffrey Saut of Raymond James Equity Research

Last Friday CNBCs Maria Bartiromo asked me what was going to happen with this weeks Super Committee decision? After jokingly responding that if past is prelude if the Super Committee doesnt arrive at a decision they will appoint a SuperDuper Committee, I then stated, I dont think the Super Committee will reach a consensus.I also opined, I believe there is a wink and a nod between President Obama and Speaker John Boehner to not implement the mandatory cuts and let the 2012 Presidential election resolve the debate between increased taxes and spending cuts.

2011-11-21 Investment Outlook: November 2011 by Team of Aberdeen Asset Management

Financial crisis continues to dominate the political agenda: a credit crunch looms as Europes banks shrink balance sheets, growth momentum is diverging among different regions, investor focus on global fiscal policy will intensify in 2012 and abundant liquidity via central bank easing is likely to prevail for some time. Economic data has tended to surprise analysts over the last few weeks, encouraging the view that growth may not be as weak as some were predicting only a month ago. However the picture is very different among different regions around the world.

2011-11-17 U.S. Earnings Update by Joseph S. Tanious of J.P. Morgan Funds

As 3rd quarter earnings season winds down, more than 90% of the S&P 500 market cap has reported, and it appears were headed for another quarter of record-breaking results. However, whats even more impressive is the revenue growth weve observed across all 10 S&P 500 sectors. The index is currently tracking revenue growth of roughly 13% year-over-year, a clear indicator earnings have been boosted by more than cost cutting. To be sure, margins have also widened out, which has helped fuel earnings growth over the past two years, something well touch on in more detail in the coming pages.

2011-11-17 A Risk Lurking in Octobers Retail Sales by Russ Koesterich of iShares Blog

October retail sales are the latest sign that the US economy is likely to avoid another recession and is experiencing what Im calling The Great Idle. But a look behind the retail numbers also reveals a major risk facing the US economy. With unemployment still high and wages growing so slowly that hourly workers are losing purchasing power at the fastest rate in 20 years, you may be wondering where consumers are getting the money to buy new cars or the latest iPhone. It turns out that surprisingly brisk retail spending is being supported by lower savings and by help from the government.

2011-11-17 Its All Very Taxing by Howard Marks of Oaktree Capital

But what is the fair share? How is it to be determined, and by whom? When Senator Reid says, its time for millionaires and billionaires to pay their fair share, he implies they havent been doing so thus far. How does he know? Whats the standard? If theres an objective standard for ones fair share, why does it only seem to be those from the left side of the political spectrum who say its not being paid? And if there isnt an objective standard, how can the fair share be determined? The truth is, fairness is almost entirely in the eye of the beholder.

2011-11-15 Capital Flows: Asias Quiet Revolution by Gerald Hwang of Matthews Asia

As markets evolve, so do regulations. The reflexive rebuke of capital controls once voiced by Western regulators has given way to a more flexible approach in times of extreme volatility. Asias regulators have observed the efficacy of volatility-dampening measures, and thus far, appear to have avoided the worst excesses. As fears continue over diminishing U.S. dollar power, Asias bonds remain attractive diversifiers for their yields and good credit ratings. However, one should never forget the volatile history of currencies in Asia.

2011-11-15 An Endgame for Japans Debt? by Bryce Fegley of Saturna Capital

The Japanese government's ability to extract itself from two decades of runaway debt has become all the more challenging in the face of its shrinking tax base, rising interest payments, and social security obligations, not to mention the aftermath of its earthquake, tsunami, and nuclear disasters. The recent precedent of the country's dysfunctional political system does not bode well for making tough choices necessary to stabilize the debt. Of the possible consequences of the runaway debt, eventual monetization, high inflation, and currency devaluation are the most likely outcomes.

2011-11-14 Act and Learn Versus Debate and Wait by Mohamed A. El-Erian and Michael Spence of PIMCO

Signs of disappointing policy outcomes are, unfortunately, all around us. Over the last two years, American policymakers have failed miserably to lower persistently high unemployment despite a series of stimulus measures, fiscal and monetary, conventional and unconventional. In Europe, the debt crisis has spread despite numerous summits, declarations, policy actions and political changes. In both cases, policymakers identified and sometimes mis-identified the problems and took highly publicized steps to solve them. Yet to no avail. The identified problems not only persisted, they deepened.

2011-11-14 And Thats The Week That Was by Ron Brounes of Brounes & Associates

Retailers continue to showcase their prior quarters as Home Depot, Wal-Mart, Staples, Gap, and Ann Taylor take turns reporting profits. Additionally, October retail sales give investors one final look at the picture before the mad rush of Black Friday. The inflation data is also reported though the latest push upward in crude will not be reflected quite yet. Europe continues to be the talk of the town and all eyes will remain on Greece and Italy as the world watches the transitions of power in those two struggling economies.

2011-11-14 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Incredibly low interest rates are telling us a story that few seem able to decipher. For well over a year, interest rates on cash deposits have been near zero, while the reward for being a long-term Treasury investor has hovered below 3%. The last time rates coalesced around 2% was more than a generation ago. Concurrently, the economy has lost buying power, jobs, and valuation. As every global bourse in my universe struggles to gain upside traction, a worldwide decline in sentiment, earnings acceleration, and pricing power has diminished the foundation of free-exchange and capital markets.

2011-11-14 Improving Recovery Prospects by Charles Lieberman (Article)

Europe is moving slowly towards resolving its financial issues, but the performance of the domestic economy is looking significantly better. A domestically originated recession is looking ever more unlikely. Europe may take a while to resolve its financial and budget issues, but the adverse effect of a recession in Europe, even a severe one, on our domestic economy should be negligible. So while tremors from Europes financial turmoil may disrupt our market temporarily, they are unlikely to derail our expansion. This suggests that the equity market should continue its recent recovery.

2011-11-10 Aflacs (AFL) Fair Value PE Ratio Should Be Double, and So Should Its Price by Chuck Carnevale of F.A.S.T. Graphs

This is the third in a series of articles that have been designed to provide investors greater insights into the proper understanding and utilization of the PE ratio as a valuation measurement tool. With this iteration were going to look at Aflac to identify significant undervaluation. The first article in this series looked at Amazon as an example of overvaluation. Our second article looked at SCANA Corp. and Darden Restaurant Group as examples of fairly valued companies; however, we further introduced the concept of the earnings growth rate as a relative component of future return.

2011-11-08 Bill Gross' Revised Paradigm: The New Normal Minus by Robert Huebscher (Article)

Following the financial crisis of 2008, PIMCO articulated its 'new normal' forecast of slow growth and mediocre capital market returns. Appending the even drearier modifier 'minus' to that outlook, Bill Gross said that expectations now appear worse than even he previously feared. Gross was pessimistic in both the near and long terms, and he startled the audience with his premonition that 'capitalism is at risk.'

2011-11-08 Troubles Not Shrinking by Christian Thwaites of Sentinel Investments

US employment was unequivocally better in October despite the headline NFP of 80,000. Revisions in recent months mean that since June, the economy created 466,000 new jobs against first estimates of 318,000. Since March in 2010, the private sector created 3.9m new jobs while the government sector lost 1m. The ratio of government to private jobs is back to where it was in 2002. This is not a jobless recovery. It is a slow recovery with the private sector doing well under contorted and aimless fiscal drag. Corporate Profits: Productivity rose again in Q3.

2011-11-08 Known Unknowns by Neel Kashkari of PIMCO

We believe investment managers can analyze numerous data sources and apply lessons learned from past economic cycles to make assessments about the global economic outlook. These managers can make reasonable judgments about asset classes over the long term and, through rigorous bottom-up research, develop an edge regarding the outlook for individual companies. However, the market is much better at aggregating all the information that could affect any of the thousands of companies in the stock market than any investor could possibly be. Hence predictions are likely to be wrong.

2011-11-08 Ignore Egan-Jones at Your Peril by Niels C. Jensen of Absolute Return Partners

The ink on the Greek rescue agreement has barely dried, and the feeling in financial markets is sombre yet again. However, investors have changed their focus away from Greece towards Italy - a change which could prove disastrous for the eurozone given the size of the Italian bond market. In this edition of The Absolute Return Letter we take a closer look at Italy's refinancing needs and suggest corporate bonds as an alternative to government bonds.

2011-11-07 And That's The Week That Was by Ron Brounes of Brounes & Associates

Any more surprises, Prime Minister Papandreou? Then again, will you even still be in office next week (is lame duck supposed to be hyphenated?). Europe, unfortunately, continues to earn more than its fair share of global headlines and rest of the world seems content to stand back and watch. With the G-20 meeting now in the rearview mirror, the sales tactics must move to a different venue as Europe seeks much-needed investments in its rescue fund. A slow week on the domestic economic calendar gives investors too much time on their hands to dissect the mindless gibberish out of Europe.

2011-11-07 Euro Drama Offsets Winning Earnings Season by Kristina Hooper of Allianz Global Investors

Stocks gave back gains last week with help from Europe, but there are ample reasons to stay upbeat on equities: 7 out of 10 U.S. companies are beating earnings estimates so far in the third quarter, and the private sector continues to add jobs. Stocks finished the week downbut definitely not outas a strong earnings season is cause for optimism in the face of a pervasive European debt crisis.

2011-11-05 Welcome to the Great Idle by Russ Koesterich of iShares Blog

First, there was the Great Depression. Then, there was the Great Recession. Now, the US economy is stuck idling along in neutral, temporarily unable to move beyond sluggish growth, high unemployment and a general lack of confidence.

2011-11-05 Two High-Yield Choices by Chuck Carnevale of F.A.S.T. Graphs

This article is the second in a series of articles designed to elaborate on the proper utilization and understanding of the PE ratio as an important investing metric. Our first article in this series looked at how the PE ratio could be used to determine overvaluation. With this article we are going to review two companies where each is fairly valued and each has similar current PE ratios. Moreover, both companies offer yields above 3 % which is greater than is available on the 30-year Treasury bond (current yield 30-year Treasury bond 3.02%).

2011-11-04 3 Drivers, 2 Months, 1 Gold Rally? by Frank Holmes of U.S. Global Investors

Combine the central bank purchases of gold with the fact that we are now entering the strongest months of the year for gold. While the spot gold price has differed from the S&P/TSX Composite Index of gold equities during the first 10 months of the year, their historical pattern is very similar during the last two months. November has historically been the strongest month of the year for gold equities, with mining stocks increasing 8.1 percent.

2011-11-03 Dressing Up a Default for Halloween by Team of BondWave Advisors

Politicians in Europe spent October trying to juggle three balls: 1) avoiding an unavoidable Greek default, 2) keeping a Greek default from cascading into Italy and Spain, and 3) shoring up the European banks before a Greek default. BondWave Advisors discuss the details of the Greek situation in our November Fixed Income Report and provide additional insight into the US Treasury, Corporate and Municipal Bond Markets.

2011-11-02 Born in the USA: A Look at What Could Go Right by Liz Ann Sonders of Charles Schwab

The expectations bar has probably been set low enough to be easily hurdled as the big market rally may be indicating. Not only is recession risk fading in the near term, a very positive longer-term story is emerging, even though very few are in tune (yet). Investors have gotten used to digesting worst-case scenarios maybe it's time to ask what could go right.

2011-11-02 Could America Turn Out Worse than Japan? by Mohamed A. El-Erian of PIMCO

There was a time when America looked down on Japan for the latters inability to deal with its economic problems. No more. Like Japan, America is now realizing how difficult a post bubble economy can be. The fear is that it will also find out that that it lacks some of Japans attributes needed to cope with long years of economic stagnation. The US has no time to waste to build on the important, albeit small progress that has been made in recent weeks. If it does not, there is a risk that the countrys economic fate could end up being even worse than what Japan has experienced.

2011-11-01 Will the U.S. and Europe Rise Again -- or Sink Together? by Team of Knowledge @ Wharton

In today's highly interconnected global economy, problems in one country often lead to difficulties in another. The United States and Europe are experiencing that reality up close as leaders try to deal with debt problems, investment-shy business sectors and seemingly intractable unemployment. At a recent presentation attended by Wharton board members, professors Franklin Allen, Richard Marston and Kent Smetters warned that a true recovery for either region will take time, and that conditions could get worse before they get better.

2011-11-01 Just When You Thought Europe was Rescued, New Skeletons Emerge by Chris Maxey of Fortigent

Economic data in the US will receive plenty of attention this week. On Tuesday, the ISM Manufacturing Survey is released, with economists anticipating continued expansion in the manufacturing sector. Wednesdays ADP private payroll employment report will offer a taste of what is to come in Fridays nonfarm payroll employment report for October. Consensus expectations are for job growth of slightly less than 100,000 and an unemployment rate of 9.1%.

2011-11-01 The Market Drivers: European Debt, Chinese Inflation, and the U.S. Economy by Ron Muhlenkamp of Muhlenkamp & Co.

We remain concerned about Europe. In fact, the two sources of capital closest to the problem, Germany and the ECB, have stated they will not provide any additional assistance, preferring to try to incent others to provide capital instead. As the concerns about the U.S. economy and China have diminished, we have put some cash back to work, but still have a bit over 15% in cash. We anticipate putting more cash to work when it becomes apparent that the Chinese Central Bank stops constricting its money supply, and we continue to watch Europe.

2011-10-31 And That's The Week That Was by Ron Brounes of Brounes & Associates

Europe apparently has solved all of its financial challenges While Greek protests continue daily, the EU leaders held a contentious summit that teetered between storming out with nothing and completing a breakthrough deal. In the end, the group agreed to significantly write-down Greeces sovereign debt held by private investors, recapitalize the banking system, and expand the bailout fund. The ministers hope that China and Japan will embrace the new deal and even throw a few bucks their way as an investment in the global economy, but nothing definitive has been determined at this time.

2011-10-31 Whipsaw Traps by John P. Hussman of Hussman Funds

Current market conditions cluster among a set of historical observations that might best be characterized as a "whipsaw trap." Though last week's rally triggered several widely-followed trend-following signals, the broader ensemble of data suggests a high likelihood of a failed rally. In this particular bucket of historical observations, less than 30% of them enjoyed an upside follow-through over the next 6 weeks. So while the expected return/risk profile of the market remains negative here, we have to be somewhat more tentative about taking a "hard" defensive position.

2011-10-31 Pennies from Heaven by Bill Gross of PIMCO

Growth is the commodity that the world is short of at the moment. Once interest rates inch close to zero and discounted future cash flows are elevated in price, it's difficult to generate much more return if economic growth doesn't follow. Equity markets should be dominated by dividend yields and the return of capital via share buybacks, as opposed to growth. In fixed income assets, we suggest that portfolios should avoid longer dated issues where inflation premiums dominate performance.

2011-10-31 Rally Continues on Positive News from Europe by Bob Doll of BlackRock Investment Management

Investor sentiment has certainly improved over the past several weeks, and while it is much too early to declare victory over the European debt crisis, last weeks deal is certainly a positive step. The easing of the risks associated with Europes issues, along with a brighter outlook for the US economy than was the case a couple of months ago does create a more solid footing for risk assets. Given the sharp advance markets have seen over the past month, we may be in for a period in which markets need to "digest" these gains, but the longer-term outlook for stocks does appear to be improving.

2011-10-29 Missing the Forest for the Trees? by Liz Ann Sonders, Brad Sorensen, and Michelle Gibley of Charles Schwab

Earnings season was good and economic data in the US has improved. Robust growth is unlikely in the near future, but the economy is improving. Investors appear to be unconvinced that the picture may be brightening. Inflation continues to run higher than we'd like to see but sustainable price gains are unlikely. The Fed continues to be extremely accommodating. Italy has the potential to be a much bigger problem than Greece. A tentative agreement has been reached for Europe, but hopes for a true long-term solution remain thin. China is likely to suffer no worse than a soft landing.

2011-10-29 European Summit: A Plan with No Details by John Mauldin of Millennium Wave Advisors

The market reacted like yesterdays announcement was the Second Coming of the Solution to End All Solutions. But if you look deeply there is more to the market "melt-up" than simple euphoria and relief. What you find is a very disturbing unintended consequence that will come back to haunt us. The finger points to derivatives and credit default swaps. This week, we look at gamma and delta and other odd entities that may be behind the real reason for the market response, as we march inexorably toward the final chapters of the Endgame.

2011-10-28 America's Other 87 Deficits by Stephen S. Roach of Project Syndicate

The US runs a huge trade deficit with China, but it also runs deficits with 87 other countries. These deficits cannot be fixed by putting pressure on one of the bilateral components but try telling that to Americas growing chorus of China bashers.

2011-10-28 How China Drives the Global Economy by Frank Holmes of U.S. Global Investors

The Chinese economy is not a bubble, but that does not mean a significant slowdown wouldnt affect the global economy, especially natural resources. This is because Chinas economic transformation over the past few decades has cast the country into the forefront of demand. PIRA Energy Group says that, in 1990, Chinas share of oil and GDP was less than 5 percent; its share of world energy was just under 10 percent. Since then, Chinas share of energy, GDP and oil has risen dramatically, with each expected to be approximately 28 percent, 21 percent and 16 percent, respectively, by 2025.

2011-10-27 Outlining the U.S. Economys Growth Dichotomy by Team of American Century Investments

David MacEwen describes the growth dichotomy that has developed during the recovery from the Great Recession, and how its restricted the recovery, softened consumer sentiment, influenced the fixed income teams macroeconomic outlook, and shaped some of the teams sector outlooks. One of the key characteristics of the subpar, slow-growth recovery we have experienced since the Great Recession has been the clear divide between the recovery rates of the business and consumer sectors. Businesses have bounced back faster and stronger than the U.S. consumer who buys their goods and services.

2011-10-27 Asia-Pacific Portfolio Committee Discusses Cyclical Outlook for Globe and Region by Robert Mead, Tomoya Masanao and Isaac Meng of PIMCO

China will likely focus more on rebalancing of the investment-focused domestic economy this time, rather than on reflating of the economy to engineer higher growth as it has done in 2008 to 2009. Japans fiscal policy will need to be expansionary to facilitate reconstruction efforts. We believe Australian government bonds have the potential to outperform U.S. Treasuries on a local currency basis, particularly in a left-tail global economic scenario.

2011-10-24 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

The Fed, and a majority of global state treasuries, have made the decision that keeping money inexpensive is at least one of the tools they can use both to sustain economic growth. This policy has been a boon to those with money, and a severe hindrance to those without. A vexing conundrum exists when monetary policy is designed to promote the flow of money into dynamic expansion but the spigot gets blocked because psychology and momentum are running in the opposite direction. In the meantime savings rates have nearly disappeared, along with whatever savings the losers in this game had.

2011-10-24 Looking A Bit Healthier by Charles Lieberman (Article)

Important uncertainties remain, but our domestic economys performance appears to be improving. Third quarter GDP, which will be reported this week, is expected to be the strongest of the year, suggesting that growth held up despite battles over the budget that scared investors and induced a downgrade by S&P. Nonetheless, job growth remains anemic and Europe is still working to contain its sovereign debt crisis and the damage it could inflict on its banks. So, more progress is necessary to restore confidence and enable growth to pick up to more desirable levels.

2011-10-24 The Valley of Debt: Will You Walk Away from the Fed and Its Money? by Tad Rivelle of TCW Asset Management

Regardless of your philosophy, financial crises do test the mettle of the investor and judged this way, the past three years have been among the most challenging period in decades. Perhaps because crises mean different things to different groups of investors, we have lived with the ultimate traders market, one alternately characterized by the risk on or the risk off. Interestingly, the level of the Dow Jones is within just a few points of where that index started the year. Had you just returned from the Antarctic, you might have concluded that 2011 was a snoozer.

2011-10-21 Why Fannie Mae And Freddie Mac Were (And Are Still) A Disaster Waiting To Happen by Monty Guild and Tony Danaher of Guild Investment Management

For several years we have been pointing out that the U.S. is experiencing a banking system contraction much like Japan has experienced for two decades. Now, we are seeing the same phenomenon happening in Europe. A credit contraction is another name for a banking system contraction. Credit contractions lead to declining business activity. To put it another way, as our friend Larry Jeddeloh of the Institutional Strategist likes to say, we are in a credit cycle not a business cycle, and that is why the traditional stimulus measures are not having much of an effect.

2011-10-21 How to Succeed at Auctions by Herbert Abramson and Randall Abramson of Trapeze Asset Management

We believe weve suffered more from the illiquidity and greater volatility of many of our smaller cap holdings, but thats where we are finding the best values with the greatest potential. When the markets recover, that same illiquidity should boost performance on the way up. Maybe sooner than is believed.

2011-10-21 Do Bullish Investors Have an Ace in the Hole? by Frank Holmes of U.S. Global Investors

You may not be able to count cards at the blackjack table, but counting historical trends of the stock market and discovering inflection points are not only legal strategies, they are essential to successful investing. One card worth counting is the Purchasing Managers Index (PMI), which measures the manufacturing strength of any given country. A rising PMI indicates a growing economy and is considered a leading indicator.

2011-10-19 Equity Investment Outlook by Team of Osterweis Capital Management

During the third quarter, the stock