More on Related Themes
2015-01-06 00:00:00 Hurts So Good: When Exactly Are Falling Prices Bad? by Peter Schiff of Euro Pacific Capital
The sudden fall in the price of oil provides a unique opportunity to examine the widely held belief that deflation is economic poison. As many governments and central banks have vowed to fight deflation at all costs in 2015, the question could hardly be more significant. While falling prices may strike the layman as cause for celebration, economists believe that it can kick off a nasty, and often inescapable, negative cycle, which many believe leads inevitably to a prolonged recession, or even a depression.
2015-01-06 00:00:00 2015: More Investment and Profits, Higher Rates, Dollar and Stocks by Brian Wesbury, Robert Stein of First Trust Advisors
Contrary to popular opinion, business investment is a key factor behind the current recovery. Productive investments have boosted profits to record highs and, in turn, those profits have driven stock prices to record highs. They should continue to do so.
2015-01-05 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly average of daily closes for the past month, which is 2,054.27.
2014-12-29 00:00:00 Adventures in Forecasting by Scott Brown of Raymond James
Every December, economists are asked for their projections for the coming year. Whats GDP growth going to be? How many jobs will be added? Whats the Fed going to do? How will the financial markets react? We build models of the economy models that we know are not precise. There are simply too many variables.
2014-12-22 00:00:00 A Look Back at 2014 (and a 2015 Preview) by Robert Doll of Nuveen Asset Management
At the beginning of this year, we had three broad thoughts about what it would look like. First, we expected U.S. economic growth would accelerate moderately. Second, we believed Federal Reserve tapering would occur slowly and that global monetary policy would remain accommodative. And third, we forecasted that the U.S. equity market would grind higher due to central bank liquidity, modest economic acceleration, solid corporate earnings, contained inflation and an improving fiscal situation. These views formed the basis for the predictions we made in January. And at this point, we can offer a
2014-12-21 00:00:00 Your Time is Gonna Come: From Considerable Time to Patient by Liz Ann Sonders of Charles Schwab
Regardless of the obsession around the specific words used, the statement is somewhat par-for-the-course; and supports our consistent view that rates should begin rising at some point in mid-year 2015, that the US dollar will remain strong, and that the yield curve should continue to flatten (as a result of benign inflation keeping longer-term rates fairly low). Although our view is that the stock market will be at the mercy of more frequent mood swings, the secular bull market we believe began nearly six years ago should persist in 2015.
2014-12-19 00:00:00 Tempting TIPS by Anthony Valeri of LPL Financial
Lower inflation expectations as a result of falling oil prices have weighed on TIPS prices during the second half of 2014. TIPS underperformance has led to the lowest market-implied inflation expectations of the past four years. We do, however, find TIPS an attractive high-quality option and certainly more appealing than Treasuries as a result of recent underperformance.
2014-12-19 00:00:00 5 Things To Ponder: Variegated Contemplations by Lance Roberts of Streettalk Live
Yes, it is that magical week leading up to Christmas and the subsequent low volume push into the new year. For individuals, it is "magic time" as hopes are high that "Santa Claus" will come to WallStreet.
2014-12-18 00:00:00 Tempting TIPS by Anthony Valeri of LPL Financial
Lower inflation expectations as a result of falling oil prices have weighed on TIPS prices during the second half of 2014. TIPS underperformance has led to the lowest market-implied inflation expectations of the past four years. We do, however, find TIPS an attractive high-quality option and certainly more appealing than Treasuries as a result of recent underperformance.
2014-12-17 00:00:00 Are Bonds Really Less Risky than Equities? by Patrick Rudden of AllianceBernstein
Its practically an investing axiom that government bonds are much less volatile than equities. But that depends on how you look at it. In fact, our research suggests that income streams from stocks are actually much less volatile than those of government bonds.
2014-12-16 00:00:00 High Anxiety by Scott Brown of Raymond James
Federal Reserve policymakers meet this week to set monetary policy. The key concern is the timing of policy normalization. Officials may be anxious to begin lifting short-term interest rates, but they need to be very careful about managing market expectations. The risks of tightening too soon or too late are not symmetric and with the financial markets in turmoil, the Fed will not want to add to the level of anxiety.
2014-12-06 00:00:00 Draghi Crosses the Rubicon while Juncker Peddles "Europhemisms" by John Beck of Franklin Templeton Investments
The announcement by newly installed European Commission President Jean-Claude Juncker of a package designed to secure 315 billion of investment for the eurozone garnered a lot of press interest in late November. However, John Beck, director of Fixed Income, London, and portfolio manager, Franklin Templeton Fixed Income Group, believes a speech by European Central Bank (ECB) President Mario Draghi at a bankers conference in Frankfurt earlier in the month offers more practical insight for investors. Here he outlines lessons to take from Draghis speech in the lions
2014-12-05 00:00:00 Monetary Policy Outlook by Scott Brown of Raymond James
The minutes of the October 28-29 Federal Open Market Committee meeting suggested that there is still no consensus opinion among senior officials regarding when the Fed will begin raising short-term interest rates. There is strong agreement that monetary policy moves will be data-dependent. However, policymakers differ in their views on the amount of slack in the job market.
2014-11-27 00:00:00 Pick and Mix: Fresh Ideas for Diversifying Bond Exposure by John Taylor of AllianceBernstein
Policy backdrops and growth trajectories around the world are showing increasing signs of divergence. Yet many bond investors continue to congregate in a few selected pockets of the fixed income universe. In our view, its a perfect time to reconsider diversification tactics.
2014-11-25 00:00:00 Monetary Policy Outlook by Scott Brown of Raymond James
The minutes of the October 28-29 Federal Open Market Committee meeting suggested that there is still no consensus opinion among senior officials regarding when the Fed will begin raising short-term interest rates. There is strong agreement that monetary policy moves will be data-dependent.
2014-11-24 00:00:00 Equities Benefit as U.S. Growth Solidifies by Robert Doll of Nuveen Asset Management
The dominant news story last week was President Obamas announcement of new executive actions on immigration policy, but investors chose to look past any political risks and focused on the positives. Specifically, markets reacted well to signs that the European Central Bank would expand its monetary easing and to a surprise interest rate cut in China.
2014-11-20 00:00:00 Outlook 2015: European Equities by Rory Bateman of Schroders Investment Management
Monetary policy remains loose in Europe but governments could do more to boost demand. Meanwhile, the weaker euro and stronger banking sector should help support European equities in the coming year.
2014-11-20 00:00:00 Japanese Recession and the Referendum on Abenomics by Team of Northern Trust
Early this week, Japanese Prime Minister Shinzo Abe announced that he will delay to April 2017 from October 2015 the next phase of his countrys consumption tax hike. In addition, he dissolved the lower house of Parliament and announced that elections will be held on December 14.
2014-11-20 00:00:00 The U.S. Labor Market - Show Me the Money by Marie Schofield of Columbia Management
The U.S. labor market data has improved in the last six months now that many measures have reached cyclical highs. For the Federal Reserve though, this is not enough. They want to see this data feed through to a broader rise in incomes and wages, and ultimately spending. This will be necessary to bend the economic trajectory toward sustainably higher growth.
2014-11-19 00:00:00 A Mixed Bag, But Optimistic on the Consumer by Scott Brown of Raymond James
Inflation-adjusted consumer spending growth, 70% of Gross Domestic Product, rose at a lackluster 1.8% annual rate in the advance estimate for 3Q14. That figure is likely to be revised higher, but the pace is expected to remain disappointing relative to job growth (this year, we are on track to post the largest increase in jobs since 2005). The main restraint on spending appears to be the weak trend in average wages. Until the job market tightens a lot more, were unlikely to see a significant pickup in wage growth.
2014-11-13 00:00:00 "Late Cycle" Markets by Jim Tillar, Steve Wenstrup of Tillar-Wenstrup
Late in the summer we sold several fully valued stock positions and kept the proceeds in cash. We had trouble finding attractively valued alternatives, were alarmed about the falling prices in everything except large capitalization US stocks, and worried about the high degree of optimism in the stock market.
2014-11-10 00:00:00 Three Reasons Why Commodity-Related Debt May Hold Value Under Pressure by Kathleen Gaffney of Eaton Vance
In this timely Insight, Kathleen Gaffney discusses how a flexible multisector bond strategy can be a great way to gain exposure to, and take advantage of, potential value opportunities in hard-hit commodity related debt.
2014-11-05 00:00:00 QE Worked, But Not As Advertised by Zach Pandl of Columbia Management
Last week the Federal Reserve announced the end of its bond-buying program, which has been running with only brief interruptions for the last six years. Besides its ultimate size and duration, the striking thing about the Feds experiment with quantitative easing (QE) is that there is still not a firm consensus on exactly how it worked. Academic economists will be busy with this question for years. But from a bond investors point of view, theres enough evidence to make a few tentative conclusions.
2014-11-04 00:00:00 International Equity Commentary: September 2014 by Team of Thomas White International
International equity prices corrected in September as investors became concerned about slower global growth and the continued withdrawal of monetary stimulus by the U.S. Federal Reserve. Stronger than expected U.S. growth could support the global economy in the coming quarters, but has made investors anxious of early interest rate hikes. The Euro-zone economic recovery is faltering yet again as growth has slipped in most large countries.
2014-11-03 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly average of daily closes for the past month, which is 1,937.27. The ratios in parentheses use the monthly close of 2,018.05. For the earnings, see the table below created from Standard & Poor's latest earnings spreadsheet.
2014-10-31 00:00:00 Financial Markets Review Third Quarter 2014 by Team of AMG Funds
Similar to earlier this year, the third quarter featured further evidence of a multi-speed economic recovery across the globe. Central banks reacted in a less-than-coordinated fashion compared to years prior, with the European Central Bank (ECB) and the Bank of Japan (BOJ) loosening monetary policy while the U.S. Federal Reserve (the Fed) retained more of its status quo as detailed further here.
2014-10-30 00:00:00 Income Inequality and Fed Policy by Scott Brown of Raymond James
Income inequality has been an important topic this year, but it is one that is mired in politics. That means it is a potentially treacherous debate for the Federal Reserve chair to wade into. To be fair, Yellen said that the purpose of her recent talk on income inequality and opportunity was not to provide answers to these contentious questions, but rather to provide a factual basis for further discussion. She provided a mountain of evidence from the Feds triennial Survey of Consumer Finances, and then got out of the way, as appropriate.
2014-10-29 00:00:00 Greenspan: Price of Gold Will Rise by Axel Merk of Merk Investments
Any doubts about why I own gold as an investment were dispelled last Saturday when I met the maestro himself: former Fed Chair Alan Greenspan. Its not because Greenspan said he thinks the price of gold will rise I dont need his investment advice; its that he shed light on how the Fed works in ways no other former Fed Chair has ever dared to articulate. All investors should pay attention to this. Let me explain.
2014-10-28 00:00:00 Under the Magnifying Glass by Brian Andrew of Cleary Gull
Recent market volatility has investors trying to sort through the little things to determine what is most important to the future of asset prices. Securities markets move up and down on a daily basis based on many different factors, some more relevant than others. The markets during October have proven that little things can lead to greater volatility as investors attempt to sort out the most relevant facts from those with less meaning. Our objective, and that of our investment managers, is to sift through these details to discern what has relevance and what is noise during the trading day.
2014-10-24 00:00:00 5 Things To Ponder: To QE Or Not To QE by Lance Roberts of Streettalk Live
Over the last few weeks, the markets have seen wild vacillations as stocks plunged and then surged on a massive short-squeeze in the most beaten up sectors of energy and small-mid capitalization companies. While "Ebola" fears filled mainstream headlines the other driver behind the sell-off, and then marked recovery, was a variety of rhetoric surrounding the last vestiges of the current quantitative easing program by the Fed. As I have shown many times in the past, there is a high degree of correlation between the Fed's liquidity programs and the advance in the markets.
2014-10-23 00:00:00 Risk and Uncertainty, Confidence and Fear by Scott Brown of Raymond James
In recent weeks, the financial markets appear to have been reacting less to weaker expectations of global growth and more to the increased downside risks that is, to the fear that things could get a lot worse. The downside risks to Europe are considerable, but America is much less dependent on exports than most other countries and the prospects for moderately strong growth into 2015 remain promising.
2014-10-23 00:00:00 3 Things Worth Thinking About: Inflation, the Current Rally and Faith in the Fed by Lance Roberts of Streettalk Live
What is quickly being realized on a global basis is that injecting the system with liquidity that flows into asset prices, does not create organic economic demand. Both Japan and the Eurozone's interventions have failed to spark inflationary pressures as the massive debt burden's carried by these countries continues to sap the ability to stimulate real growth.
2014-10-17 00:00:00 A Moody Market by Doug MacKay, Bill Hoover of Broadleaf Partners
For those that may not have noticed, stock market volatility has been on the rise in October, with more up and down 1-2% days and powerful intraday moves than we've seen since the Great Recession. Weak overseas economies, fears over what rapid declines in energy prices could mean, and Ebola are just a few of the factors that have been used to explain the disappointing action.
2014-10-14 00:00:00 Finally, a Five Handle! by Brian Andrew of Cleary Gull
Last Fridays jobs report was significant in that for the first time since July of 2008 the unemployment rate dipped below 6%. The September report indicated that the unemployment rate fell from 6.1% to 5.9%. While we have seen improvement in labor markets for some time now, the Fed still seems to want to take their time reducing stimulative policy.
2014-10-13 00:00:00 Venezuelas Spectacular Underperformance by Carmen Reinhart and Ken Rogoff of Project Syndicate
Venezuela is a major oil-exporting economy that is so badly mismanaged that real (inflation-adjusted) per capita GDP today is 2% lower than it was in 1970, despite a ten-fold increase in oil prices. Perhaps that is why its president is lashing out at academics who have the temerity to point that out.
2014-10-09 00:00:00 The Fed's Invisible Hand, and Other Things to Think About by Lance Roberts of Streettalk Live
I have not been a huge advocate of the Federal Reserve's QE programs for the simple reason that outside of inflating asset prices, it has done nothing for the broad swath of the American economy.
2014-10-03 00:00:00 Financial Repression (and How to Defend Yourself From It) by Mike Shedlock of Doug Short
I had the pleasure of being interviewed by Gordon Long last week. Gordon is publisher and editor of Gordon T Long Macro Analytics. The topic was "Financial Repression". What is financial repression? I defined it as "a set of fiscal and monetary policies for the expressed benefit of the ruling class: politicians, banks, and the already wealthy, at the expense of everyone else." In the video, I give numerous examples of repression, noting that central bank sponsored inflation is the epitome of financial repression. We also discuss what to do about financial repression.
2014-10-03 00:00:00 Is the Stock Market Cheap? by Doug Short of Doug Short
Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1993.23. The ratios in parentheses use the monthly close of 2003.37. For the earnings, see the table below created from Standard & Poor's latest earnings spreadsheet.
2014-09-22 00:00:00 A Lack of Surprises Helps Equity Markets Make Gains by Robert Doll of Nuveen Asset Management
Equity markets rose again last week, with the S&P 500 Index climbing 1.3% and reaching another record high. Bond yields and the U.S. dollar drifted higher, while emerging market equities and commodities struggled. Two major events that resulted in a continuation of the status quo helped market sentiment.
2014-09-19 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
The choice for Europe: coming together or breaking apart; Scotland votes nay; The dollar has been the beneficiary of global uncertainty
2014-09-18 00:00:00 A New Fed Playbook for the New Normal by Peter Schiff of Euro Pacific Capital
While many economists and market watchers have failed to notice, we have entered a new chapter in the short and checkered history of central banking. This paradigm shift, as yet unaddressed in the textbooks, changes the basic policy tools that have traditionally defined the sphere of macroeconomic decision-making.
2014-09-18 00:00:00 Mind Your Language! by Scott Brown of Raymond James
The Federal Open Market Committee is widely expected to take another trip to Taper Town on Wednesday, reducing the monthly pace of asset purchases by another $10 billion, one step closer to ending the program in late October. The more interesting issue is whether well see any change in the Feds forward guidance on short-term interest rates specifically, whether the FOMC will jettison the considerable time language.
2014-09-17 00:00:00 Don't Be Surprised by Surprises by Michael Kayes of Willingdon Wealth Management
We live in a complicated world of heightened anxiety. Read why this is good for stock prices.
2014-09-04 00:00:00 What's Next for the Dollar and Gold? by Axel Merk of Merk Investments
One reason markets tend to get a little nervous in September is that its time for investors to ponder about their asset allocation for the remainder of the year and beyond. With the markets at or near record highs and the US dollar on a roll, what could possibly go wrong? Lets look at whats next for the dollar, gold, and currencies.
2014-09-04 00:00:00 Global: Recovery Continues, but Headwinds Persist by Keith Wade of Schroders Investment Management
Keith Wade, Chief Economist at Schroders, discusses why Schroders has trimmed global growth projections for 2014 and 2015.
2014-09-02 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1,961.53. The ratios in parentheses use the monthly close of 2003.37. For the earnings, see the table below created from Standard & Poor's latest earnings spreadsheet.
2014-08-29 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
Flexible labor markets are key to recovering from recession; Wage trends present a challenge for the Fed; Bank settlements are sizeable, but the benefit to housing has been limited
2014-08-26 00:00:00 Yellen at Jackson Hole by Zach Pandl of Columbia Management
I must have heard it on the radio recently, because Janet Yellens speech at this years Jackson Hole conference brought to mind lyrics from one of my favorite Beatles songs.
2014-08-23 00:00:00 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Company
Sometimes, Im tempted to write same as last time. This is one of those times.
2014-08-21 00:00:00 Fed Revises Down Potential GDP In More Hawkish Minutes by Team of GaveKal Capital
In our latest quarterly presentation in July, we noted how spare capacity in the economy may be much smaller than is generally perceived. We found out today the FOMC came to similar conclusions in their latest FOMC meeting.
2014-08-14 00:00:00 Global Policy Divergence - Really?? by Axel Merk of Merk Investments
If you own dollars, the euro or gold, you might want to pay attention to this one.
2014-08-12 00:00:00 What a Credit-Shy Consumer Means for Growth by Kristina Hooper of Allianz Global Investors
Consumers have been cautious about running up credit-card debt since the financial crisis. But is that necessarily bad for the economy? Kristina Hooper breaks it down.
2014-08-07 00:00:00 Banking on the Trends by Pamela Rosenau of HighTower Advisors
As the Fed has continued to roll back (taper) its bond purchase program, which will end in October 2014, the question remains: when will the central bank hike rates and what will the impact of monetary tightening be on the broader markets? This uncertainty has contributed to some of the recent market volatility.
2014-08-06 00:00:00 What Asset Class Rallied Last Week amid the Sell-Off? by Luciano Siracusano III of WisdomTree
Last Thursdays sell-off in U.S. stocks (the Dow was down 317 points, the S&P 500 Index was down nearly 2%) marked the biggest stock market decline in nearly four months. The S&P 500 Index closed at 1,930 after it broke its 50-day moving average for the first time since April.
2014-08-05 00:00:00 Mixed Signals by Brian Andrew of Cleary Gull
Over the weekend I had the opportunity to take in baseball tryouts. I know you are thinking it is August so what tryouts would be taking place in the middle of the season? These tryouts were for U-8 boys. For the uninitiated, this is when boys aged 7 and younger try out for next seasons teams. My son spent two days at a baseball camp and then finished yesterday with team tryouts. During tryouts there were six stations covering the fundamentals of the game.
2014-08-05 00:00:00 So, What Did We Learn? by Scott Brown of Raymond James
The busy week of economic news left investors uneasy. The 4.0% GDP growth figure contributed to concerns that the Fed may be forced to raise short-term interest rates sooner rather than later. However, while the economic data reports, and even the Fed policy statement, had something for everybody, the outlook for monetary policy should be essentially unchanged.
2014-08-04 00:00:00 Mounting Pressure Weighs on Equities by Robert Doll of Nuveen Asset Management
U.S. equities experienced a sharp pullback last week, with the S&P 500 Index falling 2.7%, its largest weekly decline in over two years. A number of factors contributed to the downturn, including rising geopolitical tensions, concerns over Federal Reserve policy, Argentinas debt default, a slowdown in the housing recovery and a sense that the market rally has been getting tired. Not all of the news was negative, however, since we also saw some strong economic and earnings data and increasing merger and acquisition activity.
2014-07-31 00:00:00 Calling the Feds Bluff by Anthon Valeri of LPL Financial
Futures continue to indicate the bond market believes the Fed does not have an ace up its sleeve and that ultimately they will not raise rates as high as they project. A host of top-tier economic data may influence bonds more this week given the absence of new forecasts and a press conference following this weeks Fed meeting.
2014-07-19 00:00:00 Bull Stumbles by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab
Any near-term correction would be healthy in the context of an ongoing secular bull market. Trying to time the market is always difficult, even though the market is in a potentially weak phase, both in terms of the annual and election cycles. And while sentiment is elevated in the United States, both Europe and China provide opportunities to invest where the mood is decidedly less enthusiastic.
2014-07-17 00:00:00 Constraints of Convention - Does a Portfolio Design Have to Be Static? by Jeff Knight of Columbia Management
There was a charming story from the world of youth sports featured in Malcolm Gladwells book "David and Goliath: Underdogs, Misfits and the Art of Battling Giants."
2014-07-09 00:00:00 Gut Wrenching by Scott Brown of Raymond James
The greater-than-expected downward revision to first quarter GDP was a shocker (even more of a surprise than Spain, Italy, and Portugal not making it out of group play in the World Cup). However, investors were willing to dismiss the bad first quarter performance. An inventory correction and a wider trade deficit subtracted 3.2 percentage points from 1Q14 GDP growth.
2014-07-08 00:00:00 Blowout Jobs Data Wont Trigger Quicker Rate Hike by Kristina Hooper of Allianz Global Investors
The markets are digesting a stellar jobs report, which may fuel debate over when the Fed will start raising rates. But its important for investors to understand the Feds holistic approach in order to avoid a kneejerk reaction, writes Kristina Hooper.
2014-07-01 00:00:00 LPL Financial Research Mid-Year Outlook 2014: Investors Almanac Field Notes by Jeff Kleintop of LPL Financial
At this years halfway point, we are pleased to offer the LPL Financial Research Mid-Year Outlook 2014: Investors Almanac Field Notes containing key observations and updates to our outlook for 2014. Similar to a farming almanac, our Investors Almanac is a publication containing a guide to patterns, tendencies, and seasonal observations important to growing. The goal of farming is not merely to grow crops, but to sustain living thingsinvesting shares the same goal.
2014-06-25 00:00:00 The Feds Outlook: Optimistic? Or Just Hopeful? by Scott Brown of Raymond James
As expected, Federal Reserve policymakers left short-term interest rates unchanged, did not alter the forward guidance on the federal funds target rate, and trimmed the monthly pace of asset purchases by another $10 billion (to $35 billion beginning in July). In its policy statement, the FOMC was a bit more optimistic about a pickup in growth. Fed officials forecasts of 2014 GDP growth were revised lower, but implicitly, forecasts for the final three quarters of 2014 remained strong.
2014-06-24 00:00:00 A Mosaic Approach to Raising the Fed Funds Rate by Kristina Hooper of Allianz Global Investors
The Federal Reserve is using a wide swath of economic data and anecdotal evidence to determine when to raise its benchmark interest rate. While prudent, it may stir up anxiety and volatility for equity investors, writes Kristina Hooper.
2014-06-19 00:00:00 The Euro Goes Negative by Dickson Buchanan Jr. of Euro Pacific Precious Metals
The European Central Bank's (ECB) decision to charge a negative interest on overnight deposits is not going to lead to a higher targeted inflation rate, despite ECB President Mario Draghi's insistence that it will. Like all cases of central planning, this decision will have unintended and costly consequences - some of which are already starting to play out. In this particular case, instead of stimulating business lending or higher prices, the decision will only stimulate the increased buying of insolvent government debt - leading us all one step closer to the economy's eventual unravelling.
2014-06-14 00:00:00 ECB Leaves the Door Open for Further Action by David Zahn of Franklin Templeton Investments
he European Central Bank (ECB) delivered a robust package of monetary policy measures on June 5 and promised more to come if needed to help stave off deflation and support the eurozones fragile economic recovery. Among the moves announced were interest rate cuts, including a negative interest rate on excess deposits that banks hold with the ECB, and new facilities to support bank lending to small businesses. We asked David Zahn, portfolio manager for the Franklin Global Government Bond Fund, for his thoughts on what these latest measures could mean for investors.
2014-06-13 00:00:00 ECB Leaves the Door Open for Further Action by David Zahn of Franklin Templeton Investments
The European Central Bank (ECB) delivered a robust package of monetary policy measures on June 5 and promised more to come if needed to help stave off deflation and support the eurozones fragile economic recovery. Among the moves announced were interest rate cuts, including a negative interest rate on excess deposits that banks hold with the ECB, and new facilities to support bank lending to small businesses. We asked David Zahn, portfolio manager for the Franklin Global Government Bond Fund, for his thoughts on what these latest measures could mean for investors.
2014-06-10 00:00:00 The Central Bank Divide: 3 Implications for Investors by Russ Koesterich of BlackRock
Major central banks are no longer moving in lockstep. While the Fed is pulling back, other central banks are maintaining very easy monetary policy. Russ explains three implications this new dynamic has for investors.
2014-05-27 00:00:00 Economy Begins to Accelerate While Equities Push Higher by Robert Doll of Nuveen Asset Management
U.S. equities finished higher last week as the S&P 500 advanced 1.3%, snapping a two-week losing streak and ending at a new record high. Markets seemed to lack conviction, but the path of least resistance appeared skewed to the upside as momentum for the economic recovery was positive.
2014-05-16 00:00:00 Concerned Optimism by Scott Brown of Raymond James
In her congressional testimony, Fed Chair Janet Yellen chose her words carefully. She indicated that if the economic outlook evolves as anticipated (growth picks up, the labor market tightens, and inflation moves toward the Feds 2% goal), then the Feds asset purchase program (QE3) will likely end in the fourth quarter. However, she refused to be pinned down on when the Fed would begin raising short-term interest rates. Global concerns and the housing sector will bear close observation.
2014-05-16 00:00:00 And That's The Week That Was by Ron Brounes of Brounes & Associates
Strike up the band! The Dow is now in positive territory for the year AND even set a record close. Who would have thunk that after the dismal January and the pessimism that reigned from the winter? The recovery continued as earnings season offered more surprises and the economic numbers show a country moving beyond the thaw of winter. Now if only China (Europe and Russia) could follow suit.
2014-05-13 00:00:00 Equity Markets Remain Mixed as Fundamentals Slowly Improve by Robert Doll of Nuveen Asset Management
U.S. equities finished mixed last week as the Dow Jones Industrial Average was the only major index to end in positive territory. The overall macro narrative appears favorable despite the lack of market direction. Scrutiny of beaten-down momentum stocks resurfaced, although broader market spillover remained muted.
2014-05-06 00:00:00 Weekly Market Update by Team of Castleton Partners
US Treasury yields declined across the entire maturity spectrum last week, as renewed geopolitical risk more than outweighed a strong employment report. With inflation remaining well below the Fed?s target rate of 2%, long dated Treasury yields continued to decline at a faster rate than shorter dated yields, further flattening the yield curve.
2014-04-24 00:00:00 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Company
Most of the economic and market trends we've been discussing for the past few years remain in place. Russia's action in the Ukraine/Crimea may have long-term implications, particularly for Europe, but the near-term economic implications are modest. It remains to be seen whether this gets added to our long-term worry list or not.
2014-04-24 00:00:00 And That's The Week That Was by Ron Brounes of Brounes & Associates
After a week of panic, investors focused on the positives and went bargain hunting throughout. Thus far, earnings are not as bad as expected; Chinas woes could mean new stimulus; labor and manufacturing seem to be in full fledge thaw. Hope the holiday season brings more good news.
2014-04-15 00:00:00 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.
2014-04-14 00:00:00 Economic Insight: Fed Policy Goes Back to the Future by Thomas Luster of Eaton Vance
We fully expected the strength the economy showed in late 2013 to carry over into 2014; however, that simply was not the case. Instead, we saw weaker-than-expected economic data across a wide range of economic indicators. Not surprisingly, interest rates fell modestly during the quarter rather than continuing their trend higher from last year, while U.S. stocks (as measured by the S&P 500) reacted similarly ? barely advancing after a 32% gain in 2013.
2014-04-12 00:00:00 In the End, Time is Everything by Doug MacKay of Broadleaf Partners
While some will claim that valuations are to blame for the large selloff in growth stocks, high growth stocks almost always have premium valuations. In some sectors of the market, weve found that it makes more financial sense to pay up for a company of the future than to pay down for one in the past. As Warren Buffet has said, "Price is what you pay, but value is what you get."
2014-04-11 00:00:00 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Co.
Most of the economic and market trends we?ve been discussing for the past few years remain in place. Russia?s action in the Ukraine / Crimea may have long-term implications, particularly for Europe, but the near-term economic implications are modest. It remains to be seen whether this gets added to our long-term worry list or not.
2014-04-05 00:00:00 The Lions in the Grass, Revisited by John Mauldin of Millennium Wave Advisors
Today we explore a few things we can see and then try to foresee a few things that are not quite so obvious. The simple premise is that it is not the lions we can see lounging in plain view that are the most insidious threat, but rather that in trying to avoid those we may stumble upon lions hidden in the grass.
2014-03-31 00:00:00 Will Jobs Benefit From a Spring Thaw? by Kristina Hooper of Allianz Global Investors
The upcoming jobs report, a bellwether for the health of the US economy, could reveal that the harsh winter has created a coiled spring in the labor market, writes Kristina Hooper.
2014-03-28 00:00:00 Fed on Target to Raise Interest Rates in the Spring of 2015 by Kevin Mahn of Hennion & Walsh
Last Wednesday, Janet Yellen presided over a press conference as the new Chairman of the Federal Reserve (Fed) following the conclusion of the Federal Open Market Committees (FOMCs) two day meeting and their release of the official FOMC statement. Markets hung on every word and some confusion was created afterwards as Yellen offered a more transparent look at the Feds timeline for raising interest rates.
2014-03-28 00:00:00 What Investors Should Know About Fed Forward Guidance by Zach Pandl of Columbia Management
Last week, at Janet Yellen?s first meeting as Fed Chair, the FOMC revised its forward guidance for the funds rate, dropping its reference to 6.5% unemployment and instead stressing the committee?s qualitative assessment of the economy. The change was a symbolically important step, but did not alter the broader outlook for policy rates, in our view.
2014-03-26 00:00:00 Yellen Speaks, Do the Financial Markets Listen? by Scott Brown of Raymond James
No surprise, the Federal Open Market Committee tapered the monthly rate of asset purchases by another $10 billion and altered the language in its forward guidance on the federal funds rate. In its policy statement, the FOMC indicated that ?it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.?
2014-03-25 00:00:00 A Slip and Fall? by Jerry Wagner of Flexible Plan Investments
Despite last week?s vernal equinox, signaling the first day of spring on Thursday, another arctic blast is hitting the Midwest yet again this week, and cabin fever has become an epidemic. So many of my friends and family are singing the same refrain; ?When will this winter be over??
2014-03-24 00:00:00 Stocks Rise as Economic Backdrop Slowly Improves by Bob Doll of Nuveen Asset Management
U.S. equities finished higher last week, with the S&P 500 increasing 1.4%. Ukraine seemed to be receding in investors? minds. Despite the volatility and sharp increase in bond yields on Wednesday, the hawkish takeaways from the FOMC meeting were not a lingering overhang.
2014-03-19 00:00:00 What if Grantham is Right? by Roger Nusbaum of AdvisorShares
There were two articles recently both exploring the same possible outcome; that investor returns from capital markets could be much lower in the coming years. No matter what markets end up doing, advisory clients and do-it-yourselfers still have financial plans that likely require some amount of growth over time in order to have a chance of succeeding without something, such as desired lifestyle or working longer than hoped for, having to give.
2014-03-17 00:00:00 And That's The Week That Was by Ron Brounes of Brounes & Associates
Remember when tiny Greece was a market mover? Well, now its tiny Crimea. With the growing global tensions and concerns about Crimeas secession from the Ukraine to Russia, investors chose to take a week off (for the most part) and take some equity profits, while moving back into the safe haven of treasuries. With little news on the domestic economic calendar, investors looked abroad and didnt care much for what they saw in China. (Still, the yuan must be better than the ruble these days.)
2014-03-16 00:00:00 Inequality and Opportunity by John Mauldin of Millennium Wave Advisors
Today we will continue our thinking about income inequality, and I will respond to some of your letters, as they make good launching points for further discussion of the topic.
2014-03-09 00:00:00 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 00:00:00 ECB Officials' Inflation Forecasts by of GaveKal Capital
The ECB announced that interest rates would be maintained at current levels earlier today, citing staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 1.0% in 2014, 1.3% in 2015, and 1.5% in 2016. Though few economists predicted a rate cut, there were rumors that Europe's central bank might discontinue the sterlization of bond purchases under its Securities Markets Program (SMP)-- an action consistent with the adoption of a more accomodative and active policy.
2014-02-28 00:00:00 Bounce Back by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab
US stocks have bounced and the markets still attractive and in the midst of a secular bull market. But there are likely to be bumps along the way; notably given that this is a midterm election year; which are known for first-half pullbacks. A diversified portfolio is important and both European and Chinese stocks appear to have upside, while Japan continues to frustrate with a two-steps forward, two-steps back sort of approach. And a final reminder not to replace fixed income assets with equities in search of higher income without recognizing the risk profile of a portfolio has changed.
2014-02-20 00:00:00 The Fed: Yellen's Tapering Tightrope by Milton Ezrati of Lord Abbett
In reducing quantitative easing, the Federal Reserve chairwoman faces a big challenge: preventing asset bubbles at home without pressuring developing economies.
2014-02-18 00:00:00 Equity Markets: How Much Energy Does the Bull Have Left? by Kurt Feuerman of AllianceBernstein
After another big year for stocks in 2013, many investors are questioning how much longer the bull market can run before it collapses from exhaustion. This doubt has intensified with the early 2014 selloff. However, based on what we see, its not time to worry about the markets stamina yet.
2014-02-15 00:00:00 The Economic Singularity by John Mauldin of Millennium Wave Advisors
Today, let’s think about central banks and liquidity traps and see if we agree that central bankers are driving the car from the back seat based upon a fundamentally flawed theory of how the world works. That theory helped produce the wreck that was the Great Recession and will have its fingerprints all over the next one.
2014-02-13 00:00:00 Equity Markets: How Much Energy Does the Bull Have Left? by Kurt Feuerman of Alliance Bernstein
After another big year for stocks in 2013, many investors are questioning how much longer the bull market can run before it collapses from exhaustion. This doubt has intensified with the early 2014 selloff. However, based on what we see, its not time to worry about the markets stamina yet.
2014-02-10 00:00:00 Growth and Policy Uncertainty Cause Choppy Markets by Bob Doll of Nuveen Asset Management
U.S. equities closed with modest gains last week, as the S&P 500 overcame Monday?s decline, the largest one-day percentage loss since June 2013. The weaker-than-expected ISM manufacturing and vehicle sales data drive the sell-off on Monday, exacerbating the focus on slowing momentum for the U.S. recovery. The impact of adverse weather complicates the picture. Also, although January non-farm payroll missed expectations, there were more upbeat indications for the household survey.
2014-02-08 00:00:00 International Equity Commentary - December 2013 by Team of Thomas White International
International equity prices saw marginal gains in December as investors weighed the improved global economic outlook against the reduction in monetary stimulus from the U.S. Federal Reserve. Economic trends have become more positive across most regions, helped by the improving business environment and consumer sentiment in the U.S. as well as in Europe. Japan continues to see stronger export gains as demand revives in its major markets and the cheaper yen remain supportive.
2014-02-05 00:00:00 The Fed's Forced Feeding Will End Badly by Dawn Bennett of Bennett Group Financial Services
This financial market reminds me of when we were kids sitting at the dinner table and the one thing almost all of us heard back in the 1970s was "that plate better be clean by the time I get back or else." This left us with images of torture that would follow the "or else."
2014-02-05 00:00:00 The Importance of Taking a Long-Term Perspective by Jeffrey Knight of Columbia Management
For asset allocation decisions, we find great value in maintaining a long-term outlook for major asset classes. Twice a year, in fact, we conduct an extensive update of our five-year return forecasts for several asset classes. The purpose of this exercise is two-fold. First, taking a longer term perspective helps us to set strategic asset allocations and design portfolios for diverse investment goals.
2014-02-03 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poors "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1824.35. The ratios in parentheses use the monthly close of 1782.59. For the earnings, see the table below created from Standard & Poors latest earnings spreadsheet.
2014-02-01 00:00:00 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.
2014-01-30 00:00:00 FOMC Sticks With the Tapering Plan by Team of Northern Trust
The Federal Open Market Committee (FOMC) at the conclusion of its meeting today announced a further $10 billion reduction in its monthly rate of asset purchases. The increment was similar in size and composition to the first tapering step taken in December.
2014-01-30 00:00:00 The Path to Becoming an Emerging Market by Henry D'Auria, Morgan Harting of AllianceBernstein
Why have some equity markets in the developing world flourished more than others? Its a pivotal question for investors hoping to stake an early claim to the potential emerging-market (EM) success stories of the next decade.
2014-01-28 00:00:00 Emerging Market Issues Weigh on U.S. Equities by Bob Doll of Nuveen Asset Management
U.S. equities finished lower last week as the S&P 500 declined 2.6% and suffered the largest weekly pullback since June of 2012. U.S. stocks are down approximately 3.0% both year to date and from all-time highs. In 2014, lack of direction in the market has been a focus, and the waning influence of macroeconomic news caused a notable shift late last week.
2014-01-23 00:00:00 Economic Growth is Likely to Improve in 2014 by Derek Hamilton of Ivy Investment Management Company
We believe a global economic upturn is likely in 2014, although the overall growth rate will remain sluggish. We think developed countries will show the largest improvement, which in turn will help support growth rates in emerging markets.
2014-01-18 00:00:00 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.
2014-01-16 00:00:00 A Flight to Quality by Ben Fischer of Allianz Global Investors
CIO NFJ Ben Fischer delivers his 2014 outlook, focusing on the Feds tapering of its bond-buying program and how high-quality, dividend-paying stocks should respond.
2014-01-16 00:00:00 Let the taper begin! Fixed Income Investment Outlook by Team of Osterweis Capital Management
At the December meeting, the Federal Reserve (the Fed) decided to reduce its purchases of Treasury and mortgage securities (a.k.a. quantitative easing/QE) beginning in January 2014. This answered the question of when the taper would begin, and the markets reacted predictably. Two questions remain, however: How long until the Fed completely winds down QE; and when will short rates begin to reflect the improving economy? We feel it may be sooner on the former and could be quite some time on the latter.
2014-01-15 00:00:00 The Haves and the Have Nots by Scott Migliori of Allianz Global Investors
CIO Equity US Scott Miglioris 2014 outlook calls for moderate growth, an accommodative Fed and a stock-pickers market, favoring areas of the economy that are insensitive to growth.
2014-01-15 00:00:00 Investment Insights from a Road Warrior by Frank Holmes of U.S. Global Investors
As part of our investment process, we often take the explicit knowledge learned from our statistical models and overlay them with global travel.
2014-01-13 00:00:00 Stocks Rise Modestly in First Full Week of Trading by Bob Doll of Nuveen Asset Management
U.S. equities finished mostly higher for the first full week of the year, with the S&P 500 gaining approximately 0.6%. There were no meaningful directional drivers behind the price action, which is a dynamic that has been prevalent so far in 2014.
2014-01-10 00:00:00 Yellen's Inheritance: Monetary Policy in Flux by Joseph Carson, Darren Williams of AllianceBernstein
Evolving economic challenges are transforming central banking around the world. The new monetary-policy doctrine is likely to put greater emphasis on asset-price developments. But, without a true monetary anchor, central banks could still risk a repeat of the recent boom/bust cycle.
2014-01-07 00:00:00 The World of Thinking Machines by Bill O'Grady of Confluence Investment Management
The New York Times recently published an article that discussed a new version of a computer chip that will be released later this year that is expected to automate tasks that currently require direct programming. In this report, we will open with an examination of the philosophy of learning. We will then discuss the potential dangers of such machines, including the ability to perform humanlike actions without a moral sense. We will also examine the potential economic and social side effects. As always, we will conclude with potential market ramifications.
2014-01-06 00:00:00 2014 Housing Predictions by Logan Mohtasham of AMC Lending Group
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".
2014-01-04 00:00:00 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.
2014-01-02 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poors "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1807.78. The ratios in parentheses use the monthly close of 1848.36.
2013-12-24 00:00:00 Fed Taper Brings Us Back to the Future by Kristina Hooper of Allianz Global Investors
A return to normal economic conditions is now more palpable following the Feds decision to start unwinding QE and early signs of a revival in consumer spending, growth and jobs, writes Kristina Hooper.
2013-12-23 00:00:00 Risk Assets Take Fed Taper Announcement in Stride by Roger Bayston of Franklin Templeton
The US Federal Reserve (Fed) delivered an early holiday surprise to some market participants, announcing at its December 18 policy meeting it would start slowing its asset purchase program known as quantitative easing in January. For some thoughts on what this may mean for the markets in the new year, we turned just after the announcement to Roger Bayston. He believes the markets should be able to take the Feds tapering in 2014 in stride, although investors should prepare for the proposition of higher Treasury yields.
2013-12-21 00:00:00 Start Me Up: Fed Announces a Much-Anticipated Taper by Liz Ann Sonders of Charles Schwab
The Fed decided to begin tapering its QE-related bond purchases with a reduction of $10 billion; split evenly between Treasuries and mortgage-backed securities. In a sign that tapering was already priced in, the stock market surged on the announcement; while bond yields remained quite tame. The Fed announced slightly sunnier economic forecasts, suggesting quantitative easing could wind down within a year.
2013-12-21 00:00:00 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?
2013-12-19 00:00:00 A Dovish-Bullish Taper by Brian Wesbury, Bob Stein of First Trust Advisors
They finally did it. At Chairman Bernankes next to last meeting, the Federal Reserve announced a modest tapering of quantitative easing, reducing its monthly purchases of Treasury securities and mortgage-backed securities by $5 billion each ($10 billion total) to $75 billion starting in January. As a result, the size of the Feds balance sheet will continue to rise, but slightly more slowly than before.
2013-12-19 00:00:00 Is Your Inflation Protection Really Protecting You? by Thomas Luster, Stewart Taylor, Kevin Dachille of Eaton Vance
Many investors who own Treasury Inflation-Protection Securities (TIPS) and TIPS mutual funds don’t realize that they may be taking a significant amount of interest-rate risk in exchange for their inflation protection, which may result in losses when rates begin to rise rapidly. Shorter-maturity TIPS carry the same inflation adjustment as longer-term TIPS, but have less sensitivity to interest rates, which may be helpful in times of rising interest rates like what investors experienced in spring 2013.
2013-12-17 00:00:00 2013 A Pretty Good Year by Mike Temple of Pioneer Investments
This time last year we were bullish about equities and positive on the slow but steady strengthening of the economy. The market did not disappoint. The economy was almost heroic, you might say, with its performance enduring government sequestrations and higher taxes almost a 2% drag on GDP but comporting with our expectations of 2 - 2.5% growth. 2013 is ending with GDP and the markets coming fairly close to what we thought theyd achieve. Now the year is almost out, so lets take stock of 2013 but look ahead to 2014.
2013-12-17 00:00:00 5 Takeaways from the Mini-Budget Deal by Kristina Hooper of Allianz Global Investors
The bi-partisan budget agreement inked last week has real implications for investors, including its impact on consumers, the stock market and the Fed, writes Kristina Hooper.
2013-12-17 00:00:00 Taper Time? by Scott Brown of Raymond James
There are many arguments for and against an initial reduction in the Feds monthly rate of asset purchases, but the balance has shifted toward a December taper. It appears to be a very close call, but even if the Fed decides to delay again, we all know (or should know) that QE3 is going to wind down in 2014.
2013-12-17 00:00:00 Housing Market Index Is Up, Should Help Buoy CPI by Team of GaveKal Capital
The NAHB Housing Market Index increased to 58 to post the highest number since August, which is also the highest level of the recovery. The HMI correlates pretty well with house prices.
2013-12-10 00:00:00 Fiscal Policy and Monetary Policy - Update by Scott Brown of Raymond James
Market participants expected the November Employment Report to be the deciding factor on whether the Federal Reserve would begin to slow its rate of asset purchases this month. However, officials arent going to react to any one piece of data. The best argument for tapering is that it has to start sometime. However, the key factors that delayed the tapering in September and October are still with us to some extent.
2013-12-09 00:00:00 Pessimists Get Desperate by Brian Wesbury, Bob Stein of First Trust Advisors
Payrolls keep growing. Economic data stays positive. The stock market makes new highs. Its been consistent for nearly five years. And so has the pessimism. In fact, the pouting pundits of pessimism get more determined each month, trying to prove that things are really bad out there.
2013-12-07 00:00:00 Interview with Steve Forbes by John Mauldin of Millennium Wave Advisors
For whatever reason, Steve Forbes seems to bring out the passion in me. When I think about what central bank policies are doing to savers and investors, how we are screwing around with the pension system, circumventing rational market expectations because of an untested economic theory held by a relatively small number of academics, I get a little exercised. And Steve gives me the freedom to do it.
2013-12-06 00:00:00 Weekly Economic Commentary by Team of Northern Trust
The U.S. employment report puts taper onto the table. Dont expect further rate cuts from the ECB or the Fed. Auto sales have been a bright spot amid sluggish consumer spending.
2013-12-03 00:00:00 Looking Out on the Horizon for Equities by Bob Doll of Nuveen Asset Management
U.S. equities finished higher for an eighth consecutive week as the S&P 500 increased 0.1%, representing the longest positive streak since 2004. Inertia may have carried markets forward in a relatively quiet trading week without major headlines. Retail news appeared fairly positive in anticipation of a strong start to the Thanksgiving shopping weekend. Economic data was mixed.
2013-12-03 00:00:00 High Quality and Time-Horizon Arbitrage by Bill Smead of Smead Capital Management
At Smead Capital Management, we love to acknowledge financial journalists who really demonstrate an understanding of the underlying truths associated with high-quality and long-duration common stock investing.
2013-12-02 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poors "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1783.54. The ratios in parentheses use the monthly close of 1805.81. For the earnings, see the table created from Standard & Poors latest earnings spreadsheet.
2013-11-28 00:00:00 Five Reasons Inflation Is Still Missing by Chun Wang of Leuthold Weeden Capital Management
Apart from a couple of market-oriented drivers that could reverse course on a short-term basis, we are not seeing convincing evidence of an imminent pick-up in inflation. Let us be clear. There is most definitely inflation in the financial markets, but that does not seem to benefit the average person in the U.S. The liquidity injected by various central banks went mostly into the financial markets first and foremost; only a small fraction of it trickled down to the average person. That is why all this money printing has not been reflected in various inflation measures.
2013-11-25 00:00:00 Solving the Income Puzzle by Christopher Remington, Michael Cirami, Kathleen Gaffney, Scott Page of Eaton Vance
Income needs may be as high as they’ve ever been, while the yield potential from many traditional investment classes has dwindled to generational lows. Investors who remain in high-priced, low-yielding core bond strategies could experience loss of principal (and mounting retirement shortfalls) if interest rates revert toward their mean. We advocate creating an integrated, multi-pronged income plan that may offer yield potential that meets investor needs, while managing key risks found in the typical core fixed-income allocation.
2013-11-24 00:00:00 Game of Thrones - European Style by John Mauldin of Millennium Wave Advisors
The Eurozone crisis is not over, and it will not end quickly or soon. Even if it seems to unfold in slow motion - like the slow build-up in a Game of Thrones storyline to violent internecine clashes followed by more slow plot developments but never any resolution, the Eurozone debacle has never really gone away. The structural imbalances have still not been fixed; politicians and central bankers have still not agreed to solve major fiscal problems; the overall economy still disintegrates; unemployment is staggeringly high in some countries and still rising; and the people are growing restless.
2013-11-22 00:00:00 What is the Current Market Reality? by Giordano Lombardo of Pioneer Investments
At this years Global Investment Forum, the discussion among Pioneer investment professionals was generally positive. Of course, everyone was conscious of the current market reality: that the major force behind recent positive, though benign, market trends is the unprecedented creation of liquidity and extremely loose stance of monetary policies around the world. Monetary policy alone cannot be the only conduit to a new economic model of income growth and job creation.
2013-11-22 00:00:00 Dividend Season Scorecard by Don Taylor of Franklin Templeton
As consumers gear up for the upcoming holiday shopping season, many investors in individual equities are eagerly anticipating another season that, instead of draining their wallets, might actually fatten them-dividend season. Don Taylor, portfolio manager of Franklin Rising Dividends Fund, is on the lookout for companies which not only have a track record of paying regular dividends, but increasing them. Here are some of Taylors thoughts on the early dividend season scorecard.
2013-11-21 00:00:00 Looking Beyond Inventories by Team of Northern Trust
Inventories have the habit of offering surprises in reports of real gross domestic product (GDP). The third quarter GDP report was one such occurrence, with inventories making an unexpectedly hefty contribution. A reversal of this event is most likely to influence the headline GDP number in the final three months of the year.
2013-11-20 00:00:00 Yellen: Farther To Go by Scott Brown of Raymond James
Janet Yellen gave a balanced assessment of how monetary policy will be conducted during her tenure as Fed chair. However, the financial markets perceived a dovish tilt. She stressed that conditions in the labor market are still far from normal and noted that inflation has been running below the Feds goal of 2% and is expected to do so for some time. However, Yellen noted that there were risks of removing support too late as well as too soon. QE3 cant go on forever.
2013-11-19 00:00:00 A Glimpse of a Yellen-Led Fed by Kristina Hooper of Allianz Global Investors
Kristina Hooper highlights some key takeaways from incoming Federal Reserve chair Janet Yellens testimony before the Senate last week, including when the Fed is likely to taper its bond-buying program.
2013-11-17 00:00:00 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.
2013-11-13 00:00:00 Fed Research on Policy Rules by Zach Pandl of Columbia Management
In a paper for last weeks IMF annual research conference, William English (head of the Federal Reserve Boards Monetary Affairs division) discussed current monetary policy strategy, with a focus on threshold rules and forward guidance. The paper caused a stir in markets but we do not think it signals a fundamental change in Fed communication. Small changes to the so-called Evans Rule are possible, but the basic framework will probably remain in place even as QE tapering begins.
2013-11-12 00:00:00 Markets Vacillate Between Stronger Economy and Fed Accommodation by Bob Doll of Nuveen Asset Management
U.S. equities finished mostly higher last week as the S&P 500 increased 0.6%, ending higher for the fifth straight week. The return of central bank action was a primary concern. The European Central Bank (ECB) surprised investors with a 0.25% rate cut, while the debate over the Federal Reserves impending tapering decision continued in earnest.
2013-11-12 00:00:00 Taper Talk by Brian Wesbury, Bob Stein of First Trust Advisors
Taperingplease bring it on. We wanted it yesterday, or last month, or even years ago. We never thought QE helped the economy and certainly dont think keeping it around is a good idea. Its created uncertainty at an unprecedented level.
2013-11-12 00:00:00 Will 39% Hike in Minimum Wage Tank The Economy? by Gary Halbert of Halbert Wealth Management
President Obama called for a whopping 39% increase in the minimum wage from $7.25 to $10.10 per hour last Thursday. There is already a bill working its way through in the Senate to do the same thing. If this legislation passes, the minimum wage will be increased 95 cents each year for the next three years starting this year, to bring it to $10.10 by 2015.
2013-11-11 00:00:00 Surprise, Surprise, Surprise! by Scott Brown of Raymond James
The economic data were mostly stronger than anticipated last week. GDP growth exceeded expectations, although the details were a bit troublesome. With everyone anticipating some impact from the partial government shutdown, nonfarm payrolls accelerated in October. Moreover, revisions to August and September, painted a much stronger picture of job growth. What does this mean for the Fed and its decision to taper?
2013-11-08 00:00:00 Weekly Economic Commentary by Team of Northern Trust
The ECBs rate cut signals concerns about deflation. The U.S. job numbers provide an upside surprise. How reliable are the U.S. employment data?
2013-11-05 00:00:00 Even Economists Get Stuck Looking in the Rearview Mirror by Bill Smead of Smead Capital Management
Will the US economy grow in an above-average way in the next ten to twenty years or do we need to resign ourselves to an era of anemic economic growth? Two pieces of information came out this week, adding to existing information on the subject and speak to this core debate in the US stock market. The first piece was called Slowing to a Crawl by Jonathan Laing from Barrons.
2013-11-04 00:00:00 More #PlowHorse in Q3 by Brian Wesbury, Bob Stein of First Trust Advisors
Despite the shutdown, the sequester, talk of tapering, and meteors in the night sky, the US economy just keeps plowing along. Reported later this week, we expect Q3 real GDP grew right on trend at a 1.9% rate another, #PlowHorse report.
2013-11-01 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
ere is a new update of a popular market valuation method using the most recent Standard & Poors "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1720.03.
2013-10-31 00:00:00 A Bit More Hawkish, All Things Considered by Brian Wesbury, Bob Stein of First Trust Advisors
Todays statement from the Federal Reserve was almost a carbon copy of the last one in September. No changes to the pace of quantitative easing or interest rates, which is exactly as the consensus expected. The Fed made only minor changes to the text of the statement, making it slightly more hawkish in one spot and slightly more dovish in another.
2013-10-29 00:00:00 Is This the New Normal'? by Sam Wardwell of Pioneer Investments
Markets Settle into a New Normal All sorts of economic data were released last week, but volatility has dropped: rightly or wrongly, market forecasts about the pace of quantitative easing (QE) and earnings growth in the U.S. appear to have coalesced around an outlook for slow growth with ongoing QE.
2013-10-26 00:00:00 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.
2013-10-23 00:00:00 Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management
The portfolio enjoyed another index-beating month with a gain of 0.9% versus 0.6%, so improving further the long term numbers. As noted in previous Bulletins, correlations between growth and equity market returns are low. Investors remain fixated otherwise, but some confusion is reasonable given that growth in earnings per share is also slowing. Yet strong equity markets can be justified by the Free Lunch Theory.
2013-10-21 00:00:00 Europe Turning a Corner? by Brandon Odenath of J.P. Morgan Funds
Since late last year, investors have seen periods of strong outperformance by assets from the most impacted parts of Europe, leaving many observers wondering if Europe is turning a corner. Intervention by the ECB and the ability of those liquidity injections to stop the bleeding in the economy has helped. The reduction of austerity and drag coming from fiscal policy should be the key to faster economic growth.
2013-10-16 00:00:00 Economic Assessment Without Government Reports by Team of Northern Trust
The very near-term economic outlook is unclear and will remain so until the political impasse in Washington over the government shutdown and debt ceiling is settled. If differences are resolved in a day or two, the damage could be about 0.2 percentage points to fourth quarter real gross domestic product (GDP). A failure to raise the debt ceiling would more of a calamity, which we hope not to encounter.
2013-10-08 00:00:00 Listen to the 10th Man by Kristina Hooper of Allianz Global Investors
Theres no shortage of short-term risks in todays market or conventional wisdom on how they will play out. But prepping for the unexpected could limit the number of surprises and better insulate investors portfolios, writes Kristina Hooper.
2013-10-04 00:00:00 The Fed and Its Big Thumb by Ron Muhlenkamp of Muhlenkamp & Co.
Weve seen what happens when prices get ahead of the economy reality. The bubbles in the dot-coms in 2000 and the housing market in 2007 were such effects. We fear that the apparent Fed desire to continue to manipulate interest rates may engender more bubbles.
2013-10-01 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Click to viewHere is a new update of a popular market valuation method using the most recent Standard & Poors "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1687.17. The ratios in parentheses use the monthly close of 1681.55. For the earnings, see the table below created from Standard & Poors latest earnings spreadsheet.
2013-09-25 00:00:00 Surprise! No Tapering and More Budget Progress than Meets the Eye by Sam Wardwell of Pioneer Investments
On Monday, Larry Summers exited the pool of candidates for the next Federal Reserve (Fed) chairman. (Only the timing was really a surprise.) On Wednesday, the Fed didnt taper and de-emphasized several of the targets theyd set earlier. (Big surprise versus consensus - not central bank best practices). Municipal bond offerings by Puerto Rico, California, and Illinois were met with strong investor demand.
2013-09-25 00:00:00 More Than a Sugar High by Pamela Rosenau of HighTower Advisors
The recent decision by the Fed to delay any tapering may be a preview of what to expect by a Yellen Fed. As the Fed appeared to remove virtually every yardstick or goal post that they have provided recently, one thing is certain, they seem determined to keep the accelerator nailed to the floor as they drive the economy at full speed. According to Cornerstone Macro, based on the Feds move, it appears increasingly likely that growth is more likely to reaccelerate.
2013-09-23 00:00:00 Loose and Looser by Brian Wesbury, Bob Stein of First Trust Advisors
Larry Summers took his name out of the hat and wont be considered for the top spot at the Federal Reserve. And while nothing is a slam dunk, it looks very much like current Vice Chair Janet Yellen is going to get the call from President Obama to step up and replace Bernanke.
2013-09-20 00:00:00 Will Europe's Improving Economy Push Interest Rates Higher by Giordano Lombardo of Pioneer Investments
Gross Domestic Product (GDP) increased in the second quarter after six straight declines. Data expectations were on the optimistic side, but investors appeared to become more confident before the release, thanks to encouraging evidence from supposedly reliable forward-looking indicators.
2013-09-19 00:00:00 When Doves Cry, "Not Yet" by Liz Ann Sonders of Charles Schwab
The Fed surprised markets and the consensus by maintaining its full QE bond buying program; while both stocks and bonds soared on the news.
2013-09-18 00:00:00 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Depending upon where you reside, or on which side of the issues you fall, it was a good week last week. We averted a military strike on Syria by the U.S., at least temporarily; we had reasonable adjustments to economic growth statistics; and most made some money in their portfolios. While cyclical dynamics are relatively benign, the broader secular outlook continues to build a solid foundation for recovery.
2013-09-10 00:00:00 The Party's Over. Why Own Commodities? by Jon Ruff, Seth Masters of AllianceBernstein
Commodity prices soared during the first decade of this century. But now the partys over: new sources of supply are coming on line just as demand from China is slowing, leading to expectations of price declines. So should investors shun commodity-related investments?
2013-09-07 00:00:00 Unrealistic Expectations by John Mauldin of Millennium Wave Advisors
Two well-respected analysts of pension funds have produced reports this summer suggesting that pensions are now underfunded by more than $4 trillion and possibly more than $5 trillion. I would like to tell you that the underfunding is all the bad news, but when you probe deeper into the problems facing pension funds, it just gets worse.
2013-09-03 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Click to viewHere is a new update of a popular market valuation method using the most recent Standard & Poors "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1670.09. The ratios in parentheses use the monthly close of 1632.97. For the earnings, see the table below created from Standard & Poors latest earnings spreadsheet.
2013-08-31 00:00:00 How Do I Hate Thee? by John Mauldin of Millennium Wave Advisors
I will list a number of reasons why I hate this market and then suggest a few reasons why that should get you excited. We will look at some charts, and I’ll briefly comment on them. No deep dives this week, just a survey of the general landscape.
2013-08-28 00:00:00 On Tapering, All Signs Point to “Maybe” by Scott Brown of Raymond James
Investors looking to the July 30-31 Fed policy meeting minutes for clear clues on future moves were left disappointed. Nearly all senior Fed officials expect that a reduction in the pace of asset sales is likely to be warranted by the end of the year. However, they appear evenly divided on whether that will be sooner (September) or later (December). The economic data remained mixed, suggesting that the decision will be a close call.
2013-08-28 00:00:00 A New Leg In The Commodity Decline? by Doug Ramsey of Leuthold Weeden Capital Management
For more than two years weve discussed the supply-side risks to commodity producers stemming from capacity built during the manic Third Act of last decades Three Act Play in commodities. Commodity-oriented equities have indeed underperformed since 2011 (chart 1), but to date, most pundits have laid blame squarely on the demand side (i.e., the sharp deceleration in Chinese economic growth). We dont have a strong opinion on the short-term direction of the Chinese economy, but the capacity overhang looks like a multi-year story to us, independent of China
2013-08-25 00:00:00 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.
2013-08-20 00:00:00 Tapering Uncertainty Means Volatile But Range-Bound 10-Year Rate by Chun Wang of Leuthold Weeden Capital Management
The U.S. 10-year yield was pretty much trapped within a 25 bps range between 250 and 275 in July (Chart 1), but intra-day volatility has picked up noticeably. In the last three months, there were 21 days of greater than 5 bps daily moves and 7 days of greater than 10 bps daily moves on the U.S. 10-year yield, the most in the last one and a half years.
2013-08-20 00:00:00 The Speed of Fed Rate Hikes by Zach Pandl of Columbia Management
For the last several months, talk of tapering has dominated the Fed debate. Although there remains some uncertainty around the detailssuch as how large the initial step might bemost observers now expect the Federal Reserve to begin slowing the pace of quantitative easing (QE) at the September 17-18 meeting. Attention is now turning to another major issue on next months agenda: the publication of Fed officials forecasts for the funds rate in 2016. The Fed rolls forward the Summary of Economic Projections (SEP) by one year each September.
2013-08-19 00:00:00 A Bear Market Is Here: In Bonds! by Brian Wesbury, Bob Stein of First Trust Advisors
While it certainly hasnt made the headlines that it should have, the bond market has been kicked in the teeth. After bottoming at 1.61% on May 1, the yield on the 10-year Treasury Note hit 2.84% on Friday, its highest level in two years the worst bear market move in bonds since the end of the 2008-09 financial panic.
2013-08-19 00:00:00 A Warning Regarding Broken Speculative Peaks by John Hussman of Hussman Funds
We presently observe what might best be called a broken speculative peak a strenuously overvalued, overbought, overbullish, rising yield syndrome followed by a breakdown in market internals.
2013-08-19 00:00:00 The Tick-Tock on Tapering by Scott Brown of Raymond James
The Feds September 18 decision on whether to begin reducing the pace of asset purchases will depend on the economic data (the job market figures, in particular), but theres a growing consensus that were likely to see a modest initial step, as a compromise between Fed officials who want to end the program sooner and those that want to see it continued. There are other things for policymakers to consider. One is the possibility of an adverse reaction in the financial markets. Another concern is the low underlying trend in inflation.
2013-08-17 00:00:00 Signs of the Top by John Mauldin of Millennium Wave Advisors
The investment media seems obsessed with the question of whether the Fed will taper. The real question should be not about "tapering" but about credibility. What happens when fundamentals become the narrative as opposed to what the central bank is doing? What happens if the Federal Reserve throws a liquidity party and nobody comes? Today we look at some of the fundamentals. The market is in fact overvalued, but that doesn’t mean it can’t become more overvalued. Is this August 1987 or August 1999?
2013-08-13 00:00:00 So Now What? by Scott Brown of Raymond James
What did we learn last week? The Fed may not be in any hurry to begin reducing the rate of asset purchases. The economic data suggest a mixed picture.
2013-08-10 00:00:00 We Can't Take the Chance by John Mauldin of Millennium Wave Advisors
What would it have been like to be a central banker in the midst of the crisis in 2008-09? You’d know that you won’t have the luxury of going back and making better decisions five years later. Instead, you have to act on the torrent of information that’s coming at you, and none of it is good. Major banks are literally collapsing, the interbank market is nonexistent and there is panic in the air. Perhaps you feel that panic in the pit of your stomach. This week we’ll perform a little thought experiment to see if we can extrapolate what is likely to happen in when the nex
2013-08-08 00:00:00 Coming Soon: September Volatility by Russ Koesterich of iShares Blog
Since spiking earlier this summer, market volatility is now back to spring lows. Investors, however, shouldnt expect this calm to continue come September. Russ has four reasons why.
2013-08-07 00:00:00 Who has the Edge in Race to Head the Fed? by Zach Pandl of Columbia Management
One of the most common mistakes policy analysts make is what I like to call normative biasallowing personal opinions to affect perceived odds of certain outcomes. Saying The Fed is unlikely to introduce quantitative easing because it would lead to high inflation is an example of normative bias. Fed officials do not think quantitative easing (QE) leads to high inflation, and whether you think it does has no bearing on the probability. Personal perceptions are irrelevant for policy analysisthe only things that matter are the perceptions of the decision maker.
2013-08-06 00:00:00 Equities Grind Higher as the Economy Continues to Muddle Through by Bob Doll of Nuveen Asset Management
U.S. equities advanced last week, with the S&P 500 increasing 1.10%.1 For the month of July, the S&P gained 5.09%, and equities have increased 21.33% year to date. Second quarter earnings season is nearly complete, and there has not been a material change in estimated earnings for the balance of the year or 2014. Revenues were slightly ahead of expectations, and earnings per share were approximately 3% higher than expected, annualizing at about $110 per S&P 500 share.
2013-08-02 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poors "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1668.68. The ratios in parentheses use the monthly close of 1685.73. For the earnings, see the table below created from Standard & Poors latest earnings spreadsheet.
2013-08-02 00:00:00 The Federal Reserve in a Time for Doves by Kenneth Rogoff of Project Syndicate
The battle is on to replace current US Federal Reserve Chairman Ben Bernanke, and two of the leading candidates, Lawrence Summers and Janet Yellen, display a dovish bias regarding inflation. In normal times, that would be a handicap; under current conditions, it is an advantage.
2013-08-02 00:00:00 3 Reasons Silver Is Not the Same As Gold by Russ Koesterich of iShares Blog
Many investors who remain cautious on gold wonder whether they should get their precious metal exposure through silver instead. In response, Russ explains why the two metals arent interchangeable.
2013-07-30 00:00:00 Leuthold's Chun Wang on 10-year Rates by Chun Wang of Leuthold Weeden Capital Management
So now the question is how high can it go? Just like every other market, bond yields tend to overshoot, and we think 3% is the upper bound in the short-term. However, we believe it will settle back closer to 250 bps by the end of the year.
2013-07-26 00:00:00 Economic Value Approach to ROIC May Unearth Hidden Value by Team of Jacob Funds
Equity mutual fund managers employ a wide variety of investing approaches in an attempt to outperform the market, but very few stand out from the crowd. The approaches that do work over the long term tend to be very distinctive, focusing consistently on a specific methodology that is executed regardless of the market environment.
2013-07-22 00:00:00 More Plow Horse in Q2 by Brian Wesbury, Bob Stein of First Trust Advisors
Forecasting economic growth for the second quarter of the year is always precarious. The reason is that the initial report on the second quarter is when the government goes back and makes revisions to GDP for the past several years. This time around, its particularly iffy because the government for the very first time is going to start accounting in GDP for the value of R&D spending by companies.
2013-07-22 00:00:00 What the *&%! Just Happened? by Ben Inker of GMO
In a new quarterly letter to GMOs institutional clients, head of asset allocation Ben Inker highlights the period from May 22 to June 24 characterized by "the universality of the declines" across asset classes.
2013-07-19 00:00:00 Is Inflation Really Gone Forever? by Jon Ruff of AllianceBernstein
Recent movements in asset prices suggest that markets have forsaken any possibility of an inflation outbreak in the next decade. We believe that view is far too sanguine.
2013-07-19 00:00:00 Fixed Income Fed Insight: It's All About Employment by Christopher Molumphy of Franklin Templeton Investments
We can try to guess what the Fed is thinking, but ultimately the Fed is driven by inflation and the labor markets. With inflation seemingly under control, its really the labor markets that dominate. So if you want to know what the Feds going to be doing, look at the labor markets how many jobs we create each month and, most importantly, the unemployment rate.
2013-07-19 00:00:00 Opportunity in Europe by Team of Neuberger Berman
A striking feature of this years global stock market rally is that international markets have significantly trailed U.S. stocks. Nevertheless, Neuberger Bermans Asset Allocation Committee (AAC) recently made the contrarian call of upgrading its view for international developed markets, particularly Europe. In this Strategic Spotlight, we provide an update on the European economy and lay out some reasons for optimism despite the dour growth outlook.
2013-07-18 00:00:00 What's Next for the U.S. Dollar? by Nic Pifer of Columbia Management
Global government bonds have performed poorly so far this year. Year to date through July 13, the Barclays Global Treasury Index, which covers 30 investment grade domestic government bond markets, is down 5.5% in unhedged U.S. dollar terms. The same index hedged back to U.S. dollars is down 0.6% year to date. This difference in returns highlights a key point.
2013-07-17 00:00:00 Bubbles Forever by Robert Shiller of Project Syndicate
In 2006, the largest global real-estate bubble in history imploded, and the collapse of a major worldwide stock-market bubble a year later triggered the global financial crisis. Although one might think that we have been living in a "post-bubble" world since then, talk of new bubbles keeps reappearing.
2013-07-16 00:00:00 AdvisorShares Weekly Market Review by AdvisorShares Research of AdvisorShares
The market increased again last week and both the S&P 500 and the Dow Jones Industrial Average reached record highs by the end of the week. The Nasdaq Composite Index also rose significantly, hitting a 12 year high.
2013-07-15 00:00:00 Mid-Year Outlook: Waiting to Move Beyond a Muddle-Through Economy by Bob Doll of Nuveen Asset Management
By focusing on current economic conditions while giving due importance to the uncertainty created by Fed actions we offer thoughts for consideration in evaluating risk-on investments.
2013-07-15 00:00:00 And That's the Week That Was by Ron Brounes of Brounes & Associates
After weeks of naysaying and fear-mongering about the Fed, investors finally embraced news from Bernanke and friends and equities moved back into record-setting territory. While most accept the fact that the Fed has entered the beginning-of-the-end of its bond-buying stimuli, the minutes from the latest policy meeting and a few comforting comments from Dr. B. himself helped calm the masses that the program would not end yesterday.
2013-07-09 00:00:00 The Germans Deserve Credit for Extending Credit by Sam Wardwell of Pioneer Investments
Germanys government agreed to (indirectly, via guarantees) provide Spains government-run ICO development banks with the funding to make up to 800 million of low-interest loans to small and medium-sized businesses.
2013-07-05 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
The odds of a September tapering have increased but are conditional on labor market conditions continuing to evolve at least as favorably as viewed at the present time. The important caveat is that the Feds forward guidance has stressed the importance of improvements in the outlook of the labor market and inflation to consider tapering, which implies that economic data between now and the September FOMC meeting will play an important role in the timing of tapering of asset purchases.
2013-07-03 00:00:00 Failure to Communicate, Part 2 by Scott Brown of Raymond James
The financial markets have begun to reassess Fed Chairman Bernankes monetary policy comments. Several Fed officials spoke last week, each echoing Bernankes key messages: 1) policy will remain data-dependent, 2) tapering is not tightening, and 3) a rise in the federal funds target rate is a long time off. With an emphasis on data-dependence, the economic figures should get more scrutiny from the markets. Still, theres a sense that hope plays a major role the Feds economic outlook.
2013-07-01 00:00:00 "This Country is Different" by John Mauldin of Millennium Wave Advisors
Cyprus is a very small country, some 800,000 people. Among the leadership, everyone knows everyone. There is much to admire, as we will see. But Cyprus has had a gut-wrenching crisis, proportionately more dire than any in other European countries recently; and precedents are being established here for how future problems will be dealt with in the Eurozone and elsewhere.
2013-07-01 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poors "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1618.77. The ratios in parentheses use the monthly close of 1606.28. For the earnings, see the table below created from Standard & Poors latest earnings spreadsheet.
2013-06-27 00:00:00 What We've Got Here is (a) Failure to Communicate by Scott Brown of Raymond James
In his press briefing following the June 19 FOMC meeting, Fed Chairman Bernanke outlined how the evolution of the economic outlook will drive policy decisions in the months ahead. The key messages are that monetary policy will remain data-dependent, that tapering is not tightening, and that higher short-term interest rates are still a long way off.
2013-06-27 00:00:00 AdvisorShares Weekly Market Review by Team of AdvisorShares
Once again, US stock indexes declined last week based on investors fears of rising interest rates. While markets were rising at the beginning of the week, on Wednesday, Federal Open Market Committee Chairman Ben Bernanke said that if the economy continued on its current growth path, the Fed would scale back on asset purchases by the end of the year and attempt to end the extraordinary measures by the middle of 2014.
2013-06-27 00:00:00 Turmoil Shouldn't Derail Turkey by Carlos von Hardenberg of Franklin Templeton Investments
In 2012, Turkeys stock market rose more than 50%, posting one of the strongest performances of any global equity market last year. However, recent news of protests sweeping the nation has started scaring off some investors, at least in the short term. We consider turmoil to often be a natural part of change and development, and these short-term political disturbances likely wont be the last. Ive invited my colleague Carlos von Hardenberg, Managing Director, Turkey, based in Istanbul, to share some local insight.
2013-06-25 00:00:00 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn
All markets came under pressure last week (and this morning) over the dual concerns of a slowing global economy coupled with the Federal Reserves suggestion that things are improving and thus tapering might start by the end of the year.
2013-06-25 00:00:00 Rates, Dividends and The Laws of Gravity by Don Taylor of Franklin Templeton Investments
The laws of gravity may dictate that what goes up must come down, but interest rates seem to have their own converse course of action what goes down eventually will go up. Although it seems like interest rates can stay stuck in low gear for years, (decades even, in the case of Japan) eventually they will creep higher, and talk is heating up about the timing and magnitude of such creep in the US. As the portfolio manager of Franklin Rising Dividends Fund, Don Taylor was quick to comment that higher interest rates dont mean all dividend-paying stocks are doomed.
2013-06-21 00:00:00 Outlook for the Global Bond Market by Nic Pifer of Columbia Management
The global economy continues to expand, but seems stuck on a moderate, below-trend trajectory. Lately, the story seems to be more about a growth rotation across regions than a clear-cut acceleration or deceleration at the global level. Looking to 2014, however, we still expect the global economy to accelerate to a more trend-like pace.
2013-06-20 00:00:00 Fed Slightly More Optimistic by Brian Wesbury, Bob Stein of First Trust Advisors
The Federal Reserve made only slight changes to the text of its statement, but those it did make signal slightly more optimism. It said labor market conditions show further improvement, rather than some improvement and sees diminished downside risks for the broader economy.
2013-06-17 00:00:00 Keynesian Model Blew It Again by Brian Wesbury, Bob Stein of First Trust Advisors
If theres one economic conclusion we can make from recent data, its that the Keynesian model has failed - again.
2013-06-15 00:00:00 Economists Are (Still) Clueless by John Mauldin of Millennium Wave Advisors
The economic forecasts of mainstream economists are quite positive, if not enirely optimistic, reflecting the current data. Should we not take heart from that? Alas, no. This week we look at some of our recent musings on that topic, triggered by a letter from a very serious economist who took umbrage when I wrote disparagingly about economists and forecasting a couple months ago.
2013-06-11 00:00:00 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn
The last few weeks have seen volatility emerge as concerns about the Feds policy of quantitative easing and the timing of changing it have taken center stage.
2013-06-08 00:00:00 Banzai! Banzai! Banzai! by John Mauldin of Millennium Wave Advisors
In practice it may be harder for Japan to grow and generate inflation than it might be for other major nations. Today we’ll focus on Japanese demographics. While the letter is full of graphs and charts, it does not paint a pretty picture. The forces of deflation will not go gently into that good night.
2013-06-06 00:00:00 Inflation Is Still the Lesser Evil by Kenneth Rogoff of Project Syndicate
The worlds major central banks continue to express concern about inflationary spillover from their recession-fighting efforts. That is a mistake: given the political, social, and economic risks of continued slow growth, policymakers should encourage a sustained burst of moderate inflation.
2013-06-04 00:00:00 The Threat to the Central-Bank Brand by Mohamed El-Erian of Project Syndicate
For the last 30 years, Western central banks have used their "brand" to help maintain low and stable inflation: by signaling their intention to contain price pressures, they would alter expectations and behavior. But, as corporate executives know, brand management is a tricky affair, particularly when popular sentiment overshoots.
2013-06-04 00:00:00 Equities Hit Pause by Bob Doll of Nuveen Asset Management
Stocks and other risk assets struggled last week, with the S&P 500 declining 1.11%.1 Equities finished lower on Friday, the final trading session of May. The decline trimmed Mays gains and sealed the second consecutive weekly decline for U.S. equities. The S&P increased 2.34% for the month and has gained 4.31% this quarter and 15.37% for the year.1
2013-06-01 00:00:00 After the Gold Rush by Nouriel Roubini of Project Syndicate
The run-up in gold prices in recent years from $800 per ounce in early 2009 to above $1,900 in the fall of 2011 had all the features of a bubble. And now, like all asset-price surges that are divorced from the fundamentals of supply and demand, the gold bubble is deflating.
2013-06-01 00:00:00 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 00:00:00 The American Consumer is Not Okay by Stephen Roach of Project Syndicate
The spin-doctors are hard at work arguing that falling unemployment, rising home values, and record stock prices mean that the American consumer the major drag on the economy in the post-crisis period is finally back. The facts say otherwise.
2013-05-31 00:00:00 The Week in Fiscal and Monetary Policy by Scott Brown of Raymond James
The financial markets were more than a bit confused by the minutes of the April 30 May 1 Federal Open Market Committee meeting. Some Fed officials wanted to begin tapering the rate of asset purchases as early as June. However, that wasnt a majority opinion. Fed Chairman Bernankes testimony to the Joint Economic Committee of Congress was balanced, but strongly suggested that monetary policy is unlikely to be tightened anytime soon. In his testimony, Bernanke also lectured congress on fiscal policy, which has been completely wrong-footed this year.
2013-05-29 00:00:00 Outlook on the Japanese Equity Market by Team of Nomura Asset Management
The Nikkei Stock Average closed 128 points higher, or 0.9%, to close the week at 14,612 following the dramatic 7.3% sell-off on Thursday, May 23, 2013. The Tokyo Stock Price Index (TOPIX) also added 6 points, or 0.5%, to 1,194, following a 6.9% sell-off on Thursday, May 23rd.
2013-05-28 00:00:00 Taking Stock by Bob Doll of Nuveen Asset Management
U.S. and global equities were under pressure last week, with all major U.S. indices lower for only the fourth time this year. With discussion of the Fed tapering its stimulus, market uncertainty gained momentum. The S&P 500 was down 1.0% for the week.1 We consider the market pullback technical in nature since the mention of a Fed quantitative easing exit likely created a natural point to take profits after the recent rally.
2013-05-25 00:00:00 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 00:00:00 4 Ideas for Today's Low Inflation Environment by Russ Koesterich of iShares Blog
Theres certainly no shortage of things to worry about right now related to the US economy. But one thing were not too worried about right now: Inflation. Not only is inflation low, but the latest numbers show its actually falling. And as I write in my commentary this week, inflation is unlikely to become a problem in the United States for at least another 12 to 18 months. Why? There are a number of headwinds keeping US prices low in the near term.
2013-05-23 00:00:00 Chart of the Week: S&P 500 versus Expected CPI by Mark Ungewitter of Charter Trust Company
In the post-crash environment, US equities have shown a remarkable 70% correlation with TIPS breakeven spreads. This compares with a 0% correlation in the four years preceding March 2009.
2013-05-22 00:00:00 Is Japan's Economic Rebound For Real? by Daisuke Nomoto of Columbia Management
The two phrases Abenomics and the BOJs Shock and Awe Monetary Easing are all over the headlines about Japan. Prime Minister Abe unveiled his economic policy late last year calling for a 3% annual nominal gross domestic product (GDP) growth target and an aggressive monetary easing by the BOJ (The Bank of Japan) to achieve 2% inflation. The BOJ unleashed the worlds most intense burst of monetary stimulus last month promising to double the monetary base to 270 trillion yen ($2.7 trillion) by the end of 2014 to defeat deflation.
2013-05-21 00:00:00 Putting Cash to Work: 3 Ways to Enter the Market Today by Russ Koesterich of iShares Blog
With global equities up more than 25% since their bottom last June, many investors are wondering: Is it too late to move cash from the sidelines to stocks? No, says Russ, and he offers three ideas for where find value today.
2013-05-20 00:00:00 Bernanke's JEC Testimony by Scott Brown of Raymond James
On Wednesday, May 22, Federal Reserve Chairman Ben Bernanke will testify on The Economic Outlook. The next monetary policy meeting is four weeks away, but Bernanke is likely to provide a preview of what will be discussed at that time specifically, on the issue of when to begin reducing the rate of asset purchases. The short answer may be it depends.
2013-05-17 00:00:00 Weekly Market Highlights by Matthew Rubin of Neuberger Berman
Bank of England leaves monetary policy unchanged. S&P 500 and DJIA post gains of 1.3% and 1.1%, respectively. U.S. inflation and housing data and euro area GDP headline this weeks economic releases.
2013-05-15 00:00:00 And That's the Week That Was by Ron Brounes of Brounes & Associates
Fiscal Cliff. Sequester. Different names for similar budgetary issues that both basically resulted in games of Congressional kick the can. Now in a stroke of luck for non-compromising politicos, the budget deficit is shrinking as higher payroll taxes and paybacks from previously bailed out entities (thanks Fan) have enhanced government revenues since the beginning of the year.
2013-05-14 00:00:00 Changing Face of High Yield by Christian Thwaites of Sentinel Investments
High yield has been on a tear. A series of fortunate events have made this one of the best asset classes in recent years. It has outperformed the S&P nine out of the last thirteen years. In those that it lagged, underperformance averaged 1.9%. Outperformance averaged 9.7%. From 1985 to 2012, high yield had five down years averaging (-8.8%). The S&P had five down years averaging (-16.6%). Over the entire period, high yield underperformed the S&P by around 180bp but with about half the risk and a 0.58 correlation.
2013-05-14 00:00:00 Inflation Update by Team of North Peak Asset Management
Basing investment decisions on inaccurate measurements of the inflation rate can result in investors unknowingly positioning their portfolios to lose purchasing power over time. This mis-measurement could be especially dangerous when yields are low. For example, evaluating a nominal 3% investment opportunity using an inaccurate 2% inflation rate indicates a marginally attractive 1% real return opportunity. However, if inflation is actually running at 5%, this becomes a deeply unattractive negative 2% real return investment.
2013-05-06 00:00:00 The Economy: Why Interest Rates Shouldn't Rise Anytime Soon by Ron Sloan of Invesco
Real is irrelevant. The US Federal Reserve (the Fed) is unconcerned about real GDP the inflation-adjusted measurement of US economic growth. Rather, without inflation in our economy, the Fed is focused on raising nominal GDP. And that priority means that interest rates should stay low for the foreseeable future.
2013-05-06 00:00:00 All's Well That Ends Well by Scott Brown of Raymond James
The economic data reports were decidedly mixed last week. However, the April Employment Report exceeded expectations, which provided a good excuse for share prices to move higher. Bonds were whipsawed, encouraged by the view that the Fed was less likely to taper its asset purchases, but then hit hard by the better-than-expected payroll figures.
2013-05-02 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poors "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1,570.70. The ratios in parentheses use the monthly close of 1,597.57. For the earnings, see the table below created from Standard & Poors latest earnings spreadsheet.
2013-05-02 00:00:00 Fed Doesn't Budge by Brian Wesbury, Bob Stein of First Trust Advisors
It would be hard to find a policy statement from the Federal Reserve with as few changes as the one issued today. The Fed made no changes to monetary policy and only minor changes to the language of its statement. Even the lone dissent, from Kansas City Fed Bank President Esther George, was a carbon copy from the last statement in March.
2013-05-01 00:00:00 Likely Rate Cut from the European Central Bank Will Be No Magic Wand by Darren Williams of AllianceBernstein
Disappointing April data suggest that the ECB is set to cut the refinancing rate at Thursdays Council meeting. This is likely to have limited economic impact but could encourage expectations of more creative policy action later, helping to take some upward pressure off the euro.
2013-04-30 00:00:00 Beyond Gold: 4 Reasons to Think Energy by Russ Koesterich of iShares Blog
While the sell-off in gold has dominated headlines lately, another commodity oil has also experienced price declines in recent months. But despite crudes drop, Russ is still a fan of energy stocks for four reasons.
2013-04-29 00:00:00 The Trapdoors at the Fed's Exit by Nouriel Roubini of Project Syndicate
It may be too soon to say that many risky assets have reached bubble levels, and that leverage and risk-taking in financial markets is becoming excessive. But the reality is that credit and asset/equity bubbles are likely to form in the next two years, owing to loose US monetary policy.
2013-04-26 00:00:00 The Sustainability of U.S. Interest Rates Rising by Paresh Upadhyaya of Pioneer Investments
Investors are growing concerned, with good reason, we think, that yields have bottomed for the 10-year Treasury and will surge as the economy gains strength. Prices, which move inversely to yields, would fall, and the question is whether rising rates in 2013 could trigger a bond bear market along the lines of the Great Bond Bear Market of 1994. We dont think so.
2013-04-24 00:00:00 Market Observations, Deflation Fears by John Rothe of Riverbend Investment Management
Last week, the S&P 500 took a quick dive down toward the 50-day moving average as investors became worried about continued poor economic data. While some investors are quick to point to the Boston Marathon attack as the reason for the decline, there was in fact a large decline in the market before the tragedy in Boston occurred.
2013-04-22 00:00:00 Guess What? Growth is Back! by Brian Wesbury, Bob Stein of First Trust Advisors
The first quarter has come and gone and lots of data have been released. Still, there are pieces of data missing and these missing data points make forecasting GDP treacherous.
2013-04-22 00:00:00 Commodity Declines and Weak Data Startle Investors by Bob Doll of Nuveen Asset Management
U.S. equities declined last week as the S&P 500 fell by more than 2.0%, which came on the heels of a new all-time high the prior week. Led by gold, commodities experienced volatility and declined over the past two weeks. Other detractors included disappointing first quarter Chinese economic numbers and somewhat softer U.S. releases.
2013-04-20 00:00:00 Austerity is a Consequence, not a Punishment by John Mauldin of Millennium Wave Advisors
Austerity is a consequence, not a punishment. A country loses access to cheap borrowed money as a consequence of running up too much debt and losing the confidence of lenders that the debt can be repaid. Lenders don’t sit around in clubs and discuss how to “punish” a country by requiring austerity; they simply decide not to lend. Austerity is a result of a country’s trying to entice lenders into believing that the country will change and make an effort to restore confidence.
2013-04-19 00:00:00 Global Economic Overview - March 2013 by Team of Thomas White International
Global economic trends turned softer during the month of March as indicators from Europe showed further declines and U.S. consumer sentiment moderated on labor market uncertainties, government spending cuts, and tax increases. Continuing weakness in European demand has somewhat dulled the export outlook for emerging economies, while government policies to prevent excessive asset price inflation have led to concerns about domestic consumption growth in these countries.
2013-04-18 00:00:00 The Road to Omaha: Own High Quality Businesses by Bill Smead of Smead Capital Management
We are spending the five weeks leading up to the Berkshire Hathaway Annual Meeting focusing on investment keys which are important to both Warren Buffett and Smead Capital Management. This week our focus is on owning high quality businesses.
2013-04-18 00:00:00 Inflation and Interest Rates by Scott Brown of Raymond James
The Federal Reserve began its first asset purchase program in the fall of 2008, during the depth of the financial panic. Some observers feared that the Feds actions would fuel higher inflation. However, the Fed is now well along in its third asset purchase program and inflation (as measured by the PCE Price Index) has remained low. In fact, Fed officials expect that inflation will trend at or below the 2% target for the next couple of years. That hasnt stopped the inflation worrywarts from predicting that inflation is still just around the corner.
2013-04-15 00:00:00 2013 First Quarter TIPS Performance by Stephen Percoco of Lark Research, Inc.
TIPS returns turned negative in the 2013 first quarter. The average loss was 0.31%, according to our estimates. By comparison, the return on comparable maturity straight Treasurys was flat.
2013-04-15 00:00:00 Keynes And Retail Sales by Brian Wesbury, Bob Stein of First Trust Advisors
No, just because retail sales fell 0.4% in March does not mean Keynes was right. Sequestration did not cause the decline. Nor did the end of the temporary 2% payroll tax cut, back in January, cause it either.
2013-04-11 00:00:00 Bank of Japan Surprises Market and Yen Reacts by Team of Nomura Asset Management
We recently indicated on March 14, 2013 that we believed the Yen would remain range bound near the level of PPP (purchasing power parity), which we estimated to be between 90 to 95 Yen/USD. We wrote at the time that though currency movements will be affected by various factors, the monetary policies of both Japan and the U.S. are the most important.
2013-04-10 00:00:00 Economic Slowdown Halts Equity Rally by Bob Doll of Nuveen Asset Management
The latest softness in economic indicators probably means that more consolidation in the equity markets is required before we can advance beyond the recent all-time highs. During March, nearly all of the activity for the S&P 500 was within 1% of 1550. Equities may move lower due to deteriorating technical conditions and the possibility of weak first quarter earnings reports.
2013-04-10 00:00:00 Surprising Surge!! by Jim Tillar, Steve Wenstrup of Tillar-Wenstrup
Momentum from 2012s surprisingly strong performance continued into the first quarter of 2013 with stocks rising sharply. Our portfolios did well but lagged behind our benchmarks in the quarter. Taking a little longer view, over the trailing 12 and 36 months we mostly matched the double-digit gains of our benchmarks, which we are very pleased with since we usually underperform during strong market advances. So far this year small- & mid-capitalization, value, and domestic stocks were the market leaders, while international, growth, commodity stocks and Apple were laggards.
2013-04-02 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Click to viewHere is a new update of a popular market valuation method using the most recent Standard & Poors "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1,550.83. The ratios in parentheses use the monthly close of 1,569.19. For the earnings, see the table below created from Standard & Poors latest earnings spreadsheet.
2013-03-28 00:00:00 Today's Good News Isn't Bad for US Stocks by Daniel Loewy of AllianceBernstein
Believe it or not, recent US housing market gains, the slight reduction in jobless rates and other signs of a revival in US economic growth are making some investors bearish about US stocks. We think their fears are misplaced.
2013-03-27 00:00:00 Weekly Market Commentary by Scotty George of du Pasquier Asset Management
Even after a global market surge that virtually wiped away the four year bear market, equities still seem to be the best game in town. Corporate and individual investors are flocking back to a haven they had abandoned in favor of bonds when, in an era long ago, yields and credit rating offered them a secure place to park money.
2013-03-25 00:00:00 Fed Outlook: Cautiously Optimistic or Just Hopeful? by Scott Brown of Raymond James
The Federal Open Market Committees latest policy meeting generated few surprises. The FOMC maintained its forward guidance on the federal funds rate target, which is still not expected to start rising until 2015, and did not alter its asset purchases plans ($40 billion per month in agency mortgage-backed securities and $45 billion in longer-term Treasuries). However, in his press briefing, Bernanke indicated that the pace of asset purchases could be varied as progress is made toward the Feds goals or if the assessment of the benefits and potential costs of the program were to cha
2013-03-20 00:00:00 Spending Patterns Paint Half Truth by John Browne of Euro Pacific Capital
On March 13th, the Commerce Department announced a 1.1 percent increase in food and services retail sales, doubling a prior Dow Jones survey of economists that forecast an increase of just 0.6 percent. This new data has led to a fresh wave of enthusiastic commentaries that the US economy is set for a strong recovery. Less examined were the underlying factors that supported the increase.
2013-03-19 00:00:00 How Strong? by Scott Brown of Raymond James
The recent economic reports have been mixed. The stock market seems to have embraced the strength and ignored the weakness. The bond market typically approaches the information in a more balanced way. How might the differences between the two markets be resolved?
2013-03-18 00:00:00 And That’s the Week That Was by Ron Brounes of Brounes & Associates
Move over Dow Jones, here comes the S&P. What few thought possible a year ago is coming to fruition as the major indexes continue to push toward record territory. The S&P 500 is close (but no cigar) to besting its personal high set in late 2007, before this whole banking mess emerged and sent equities into a tailspin. Confident investors seemed to be overlooking the numerous concerns (budget/sequester, payroll taxes, Europe, China) so they can participate in the record run.
2013-03-13 00:00:00 Dow--Then and Now by Frank Holmes of U.S. Global Investors
The Dow Jones Industrial Average is making record highs, knocking the 2007 peak off its pedestal, but investors arent celebrating.
2013-03-12 00:00:00 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn
Stocks rose each day last week as the notion of a ho-hum global economy was reassuring to those who fear either a recession or a surge in economic activity.
2013-03-11 00:00:00 The Job Market: Not As Strong As It Looks by Scott Brown of Raymond James
With headwinds fading, the U.S. economic recovery appeared poised to pick up more substantially in 2013. Unfortunately, fiscal policy is going in the wrong direction.
2013-03-07 00:00:00 New Highs by Team of Janus Capital Group
The Dow Jones Industrial Average closed at a new record high the first week of March, breaking its previous closing high reached in October of 2007. The new record is symbolic more than anything else, but it still has some positive implications for equity markets.
2013-03-07 00:00:00 After the Dow Record Close: What Comes Next? by Russ Koesterich of iShares Blog
After Tuesday's record setting Dow Industrials close, are US stocks still cheap? Can the market move higher? Russ answers these questions and more.
2013-03-05 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1,512.31. The ratios in parentheses use the monthly close of 1,514.68. For the earnings, see the table below created from Standard & Poor's latest earnings spreadsheet.
2013-03-05 00:00:00 No Rest for the Wicked by Scott Brown of Raymond James
With headwinds fading, the U.S. economic recovery appeared poised to pick up more substantially in 2013. Unfortunately, fiscal policy is going in the wrong direction.
2013-03-04 00:00:00 Is Congress About to Cause a Major Economic Slowdown? by John Rothe of Riverbend Investment Management
The fiscal cliff, sequestration, higher taxes, and a pending budget debate may be too much for overly optimistic investors to handle. Volatility has started to rise and the market is looking weaker:
2013-03-01 00:00:00 What Are The FOMC Minutes Telling Us? by Zach Pandl of Columbia Management
The release of the minutes of the January Federal Open Market Committee (FOMC) of the Federal Reserve (Fed) caused a tremor in the bedrock of investor euphoria last week. The minutes confirmed that the cost/benefit analysis of quantitative easing (QE) is at center of policy debate right now. However, the minutes did not provide a definitive signal that the program may be cut short. In particular, it is not clear where Chairman Bernanke and Vice Chair Yellen stand. I believe the level of debate slightly raises the odds that QE will end this year.
2013-03-01 00:00:00 Seeking a Fixed Income Fix by Team of Franklin Templeton Investments
While governments worldwide continue to struggle with debt and budget issues, for the most part, corporations have turned lemons into lemonade and have become lean and mean. While not without risk, corporate credit actually looks to be in fairly good shape, according to Eric Takaha who, as senior vice president and portfolio manager of Franklin Strategic Income Fund spends a good deal of time analyzing the space.
2013-02-27 00:00:00 "Abenomics" & the Weakening YenToo Far, Too Fast by Chun Wang of Leuthold Weeden Capital Management
Japan's new Prime Minster Shinzo Abe made more of an impact on the market than anyone else last month. In what the market has dubbed "Abenomics," Abe not only launched a new fiscal stimulus, but also pushed the Bank of Japan to raise its inflation target from 1% to 2% AND agree to a new open-ended QE program. The reluctance on the BoJ's part is clearly visible because the new open-ended QE will not start until 2014 and there is no commitment to asset purchases after 2014. Shortly afterwards, the BoJ governor said he would step down, a clear sign of disagreement.
2013-02-27 00:00:00 Singapore A Wise Owl Among Currency Snakes by John Browne of Euro Pacific Capital
As China enters the "Year of the Snake," Singapore stands as a beacon of sound currency in a world gone mad. China's renminbi remains pegged to the US dollar, while even steadfast Switzerland has followed the US, UK, EU, and Japan into an impoverishing strategy of currency debasement. Singapore, alone, has been able to sustain genuine economic growth in the context of a strong national currency.
2013-02-25 00:00:00 Fed Will Make Excuses About Inflation by Brian S. Wesbury and Robert Stein of First Trust Advisors
Inflation is tame. For now. The CPI was flat in January and is up only 1.6% from a year ago. The PPI rose a small 0.2% in January and is up just 1.4% from a year ago. And even though energy prices spiked in February, the year ago comparisons are likely to stay tame. The consensus expects the February CPI to rise 0.6% - the largest in 44 months. Nonetheless, it would still show just 1.9% inflation in the past year, which is still below the Federal Reserves target of 2%. This wont last. With the Fed loose; we expect consumer prices to rise toward 3% during 2013.
2013-02-25 00:00:00 We Expect High-Yield Defaults to Remain Low by Jeff Skoglund of AllianceBernstein
High-yield bond defaults are historically low today, even for troubled companies. Despite the worries we hear in some corners about looming high-yield defaults, we think default rates will stay low for at least the next few years. In the wake of the 2008 financial meltdown, US companies did the responsible thing and got leaner, reducing head count and overhead costs aggressively. When the recovery gained traction, they held the line on expensesand profit margins are at historic highs today.
2013-02-22 00:00:00 UK Equities Reach Inflation Tipping Point by Jon Ruff, Patrick Rudden of AllianceBernstein
As UK inflation surges ahead, equity investors should be concerned. With yields on inflation-linked bonds at extreme lows, we think real assets offer a better way to combat the risk of rising prices.
2013-02-21 00:00:00 Fed Must Tune in to Changing US Economy by Joseph Carson of AllianceBernstein
With each passing month, more questions are being asked about the sluggish US economic recovery. Why has growth been subdued since the recession ended in mid-2009? What's changed in the economy? How long can loose monetary policies persist before promoting more inflation or creating a new bubble?
2013-02-19 00:00:00 All is Not Well Down Under by Russ Koesterich of iShares Blog
Though Russ continues to like Australian equities for the longer term, he explains why he may downgrade his near-term view of the Australian market soon.
2013-02-19 00:00:00 On Competitive Devaluations by Scott Brown of Raymond James
Aggressive monetary policy moves in recent years have been accompanied by a growing fear of a currency war. In a currency war, or competitive devaluation, countries attempt to weaken their currencies to boost exports, but each devaluation leads to counter devaluations. That's not what's going on now. However, whether a country is purposely devaluing its currency or is merely pursuing accommodative monetary policy is irrelevant, the consequences are the same. The recent meeting of G-20 finance ministers and central bankers highlights the lack of coherent policies to boost growth.
2013-02-11 00:00:00 When to Worry About Inflation by Russ Koesterich of iShares Blog
Though the Fed continues to flood the US economy with money, Russ explains why inflation isn't likely to be a problem until 2014 and what investors can do in the meantime to prepare.
2013-02-08 00:00:00 Messing with the Bull by Peter Schiff of Euro Pacific Capital
With the announcement this week of its massive $5 billion lawsuit against ratings agency Standard & Poor's, the Federal Government took a bold step to squelch any remaining independence of thought or action in the financial services industry. Given the circumstances and timing of the suit, can there be any doubt that S&P is paying the price for the August 2011 removal of its AAA rating on U.S. Treasury debt?
2013-02-08 00:00:00 World War C: Neosho Capital On The Currency War by Chris Richey of Neosho Capital
This summer, Brad Pitt will star in a new film called "World War Z", an action-horror film about a post-zombie apocalypse Earth, hence the "Z" in the title. Zombie films are not our cup of tea at Neosho (we thought the genre was dead), so it is debatable whether we will see this film, but one thing is clear to us, we are perched on the precipice of "World War C", where "C" stands for "currency".
2013-02-06 00:00:00 What Happens When the Fed Loses Money by Zach Pandl of Columbia Management
The Federal Reserve's exit from ultra-easy monetary policy still looks very far offby most accounts, rate hikes will not begin for more than two years and asset sales for even longer. However, the exit strategy could matter for markets well before that point. Fed officials have said that they will consider the costs and risks associated with quantitative easing (QE) when deciding how long to continue their purchases, and one factor they will be looking at will be whether the program could "complicate the Committee's efforts to eventually withdraw monetary policy accommodation."
2013-02-05 00:00:00 Dividend Growth Continues to Impress by Mike Boyle of Advisors Asset Management
The S&P 500 posted a very solid price appreciation of 5.14% (total return of 5.18%) for the month of January which marks its best January since logging a total return of 6.25% in January 1997 (16 years). However, it does pale in comparison to the best January of the last 50 years which saw the S&P 500 return 13.47% in January 1987. Perhaps equally noteworthy, but clearly not garnering as many headlines, is the continued impressive growth of dividends.
2013-02-05 00:00:00 The 2030 Outlook by Bill O'Grady, Kaisa Stucke of Confluence Investment Management
Over the next several weeks we will look into the more distant future, to the year 2030. We will explore the long-term strategic alternative world development scenarios as laid out by the National Intelligence Council (NIC) and present our views regarding the developments. The NIC forecasts the likely paths that are either currently underway or are forecast to occur in the future. The NIC projects four possible global political and economic states based on these expected trends.
2013-02-05 00:00:00 2012 Equity Market Market Year in Review by Natalie Trunow of Calvert Investment Management
Equities started the year strong as global inflation remained tame, and aggressive, accommodative monetary policy by central banks around the globe helped equity markets rally hard off their lows posted in the fall of 2011. Continuously improving U.S. economic data, strong corporate earnings, and policy steps toward mitigation of the sovereign debt crisis in Europe also provided support for the equity markets worldwide.
2013-02-04 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1,480.40. The ratios in parentheses use the monthly close of 1,498.11.
2013-01-31 00:00:00 Signs of a Solid 2013 for Stocks by Milton Ezrati of Lord Abbett
Yield spreads versus bonds indicate that stock valuations have considerable upside.
2013-01-29 00:00:00 Investment Basics by Michael Kayes of Willingdon Wealth Management
I've always been curious about how famous people would have done had they pursued completely different careers. Some of our former presidents make excellent examples. For instance, Abe Lincoln towered over his contemporaries. I wonder how he would have fared as a basketball player had the game existed during his life. Our heaviest president, William Howard Taft weighed well over 300 pounds. Had football risen to prominence a few decades earlier, could gridiron greatness have been part of his resume?
2013-01-28 00:00:00 Economic Insights: Signs of a Solid 2013 for Stocks by Milton Ezrati of Lord Abbett
Yield spreads versus bonds indicate that stock valuations have considerable upside. Earlier in this recovery, when earnings were growing very strongly, consensus concerns about equities cited the danger of an earnings slowdown. Those expressing this concern pointed out, that such a slowdown would occur inevitably as the recovery matured, especially with economic growth proceeding at such a subpar rate. What seems to have escaped notice is that the slowdown already occurred in 2012 and that the stock market offered good returns despite it.
2013-01-23 00:00:00 Ignore the GDP Headline by Brian Wesbury, Bob Stein of First Trust Advisors
Next week, Fourth Quarter Real GDP will be released. Our forecast of 0.9% annualized growth, if correct, will encourage the pessimists to continue fretting about the economy in the year ahead. But we will ignore that dour response. Beneath the surface of the report will be evidence that the plow horse economy is picking up some steam.
2013-01-23 00:00:00 Inflated Expectations? by Kristina Hooper of Allianz Global Investors
Investors should prepare themselves for higher long-term inflation because the market may be ignoring it, a mistake that could come back to haunt. On the heels of encouraging economic data, central bankers are projecting only modest price increases for goods and services over the next 10 years. But history tells us that an inflation spike is inevitable when governments print money so aggressively. As such, investors with long-term time horizons should have substantial exposure to inflation-hedging asset classes. Now, more than ever, real returns matter.
2013-01-17 00:00:00 Rehab: An Update on Housing Recovery by Liz Ann Sonders of Charles Schwab
The National Association of Home Builders' Housing Market Index has staged a record-breaking run higher. Home prices have been rising and are feeding into real mortgage rates, consumer confidence, household net worth...and pushing fence-sitters off the fence. Housing's contribution to job growth could push the unemployment rate down more quickly than many believe.
2013-01-15 00:00:00 Inflation, Still Not Taking Off Anytime Soon by Scott Brown of Raymond James
A few years ago, amid exceptionally large federal budget deficit and extraordinarily accommodative Fed policy, a number of pundits warned of impending hyperinflation. Instead, inflation has stayed low. That hasn't stopped the inflation worrywarts. It's just a matter of time, they say. Inflation "has to show up at some point." That's not an argument. There are a number of reasons to expect inflation to stay low.
2013-01-11 00:00:00 2 Reasons to Stick With Emerging Markets by Russ Koesterich of iShares Blog
Think emerging markets equities have run their course? Not so fast despite recent strong performance, Russ explains why there's room for further EM gains in 2013.
2013-01-08 00:00:00 The Good Without The Awful by John Hussman of Hussman Funds
Generally speaking, the very best times to be long are when a market decline to reasonable or depressed valuations is followed by an early improvement in market internals (breadth, leadership, positive divergences, price-volume behavior, and so forth). This is a version of a general principle: bullish investors should look for uniformly positive trends to be coupled with an absence of particularly hostile features such as overvalued, overbought, overbullish conditions. Put simply, we are looking for the good without the awful.
2013-01-08 00:00:00 The Cliff, the Fed, and the Economy by Scott Brown of Raymond James
The budget deal removes a major uncertainty for the financial markets. We now know what tax rates will be. However, the American Taxpayer Relief Act (ATRA) has a number of drawbacks. The December 11-12 FOMC policy meeting minutes showed a split among Fed officials, but that doesn't necessarily mean that asset purchases will end any sooner. The economic data reports have been mixed but generally indicate that the recovery is in reasonable shape.
2013-01-03 00:00:00 Is the Stock Market Cheap? by Doug Short of Advisor Perspectives (dshort.com)
Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month, which is 1,422.29. The ratios in parentheses use the monthly close of 1,426.19.
2010-04-07 00:00:00 Currency Manipulation: A Primer by Komal Sri-Kumar of TCW Asset Management
The air is thick with allegations that China is manipulating its currency by keeping the renmibi fixed and undervalued with respect to the U.S. dollar. All of this is in anticipation of whether Treasury Secretary Timothy Geithner will designate China as a currency manipulator in his semi-annual report to Congress on trade practices. This designation could lead to new U.S. sanctions against Chinese exports. Ultimately, however, the key to success for U.S. authorities would not be public criticism of the United States' largest creditor, but a thoughtful discussion behind closed doors.
2010-04-01 00:00:00 The Fed's Last Hurrah by Peter Schiff of Euro Pacific Capital
When the tech bubble burst, the Fed inflated a larger one in real estate. Now that the real estate bubble has burst, the Fed is inflating the biggest bubble of all - a bubble in government. The government bubble will cripple the economy and deliver widespread misery to the majority of Americans. As government grows, it deprives the private sector of the resources it needs to survive and grow. In the end, when runaway inflation and skyrocketing interest rates burst the government bubble, there will be no more bubbles to replace it ? just one hell of a hangover.
2010-03-19 00:00:00 Jobless Claims, Inflation and Retail Pricing Power by David A. Rosenberg of Gluskin Sheff
Jobless claims are down to 457,000, the same place they were in late 2001 after the terrorist attacks. Sustained job creation does not occur, however, until claims drop below 400,000. The headline inflation rate was 2.1 percent in February and the core was 1.3 percent, the lowest core inflation rate since February 2004. Pricing trends suggest that airlines, shipping and hospital services have retained pricing power, while restaurants, home improvement, apparel, movies, telecoms, books and newspapers have not.
2010-03-15 00:00:00 Weekly Commentary and Outlook by Tom McIntyre of McIntyre, Freedman & Flynn
The conventional wisdom seems to be that the worst is over and a slow but self-sustaining recovery is taking place. A very quiet and slow week of trading produced yet another advance in the stock market. Concerns over Greece and other sovereign debt issues receded, while evidence on the global economy was mixed. The Dow Jones Industrial Average gained 1.5 percent while the NASDAQ gained 1.8 percent over excitement generated by the new product line by Apple.
2010-02-22 00:00:00 Inflation is Contained, Fed Focus on Growth and Jobs Remains in Place by Asha Bangalore of Northern Trust
The January consumer price index report shows no inflationary pressures. The CPI rose 0.2 percent last month following similar gains in the previous four months. The Federal Reserve will continue to focus on economic growth and jobs, while eliminating emergency measures put in place as the economic crisis unfolded in August 2007.
2010-02-20 00:00:00 The Fed Tests the Waters by Brian S. Wesbury and Robert Stein of First Trust Advisors
The Federal Reserve took a big first psychological step toward a tighter monetary policy yesterday when it raised the discount rate to 0.75 percent, from 0.50 percent. The Fed wants to make sure, however, that markets understand that a rising discount rate does not necessarily entail higher federal funds rate.
2010-02-16 00:00:00 G7 Weekly Economic Prospects by Christopher Probyn and Geoffrey Somes of State Street Global Advisors
Christopher Probyn and Geoffrey Somes of State Street Global Advisors say in their weekly economic commentary that US retail sales rose 0.5 percent in January, but consumer confidence fell 0.7 points, to 73.7. Investor risk appetites improved following assurances that the EU will stand behind Greek fiscal reforms.
2010-01-28 00:00:00 "Extended Period" of Low Rates Starting to Lose Support by Brian S. Wesbury and Robert Stein of First Trust Advisors
The Federal Reserve made no direct changes to the stance of monetary policy today, leaving the target range for the federal funds rate at 0% to 0.25%. However, one member dissented from the Fed?s comm
2010-01-22 00:00:00 Reflections Across the Pond by John Browne of Euro Pacific Capital
Having been among the economic engines of Europe for much of the past decade, it appears as if the British economy has run out of steam. Inflation is rising while bankruptcies and unemployment continu
2010-01-14 00:00:00 Recent Fed Rhetoric and Highlights of Beige Book by Asha Bangalore of Northern Trust
In speeches late yesterday, Fed Presidents Plosser and Fisher of Philadelphia and Dallas, respectively, were of the opinion that unemployment rate is most likely to trend higher than the December jobl
2010-01-12 00:00:00 Things Fall Apart in Eurozone by John Browne of Euro Pacific Capital
2010-01-11 00:00:00 Inflation Expectations Approach Pre-Crisis Range by Asha Bangalore of Northern Trust
Inflation expectations as measured by the difference between yields of the nominal U.S. 10-year Treasury note and the 10-year inflation protected security are now at levels seen prior to the onset of
2009-12-30 00:00:00 Monetary Policy: Inflation-Deflation, Debt, Excess Reserves, Currency Volatility by Michael J. Schussele of Michael J. Schussele, CPA
2009-12-28 00:00:00 Stocks are Still Cheap by Brian S. Wesbury of First Trust Advisors