More on Related Themes
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.
2014-12-23 00:00:00 2015 - What Does Cycle Analysis Suggest by Lance Roberts of Streettalk Live
We cant predict the future if it were possible fortune tellers would all win the lottery. They dont, we cant and we arent going to try to. However, we can analyze what has happened in the past, weed through the noise of the present and try to discern the possible outcomes of the future.
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.
2014-12-16 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.
2014-12-11 00:00:00 The Fed, Jobs, and the Financial Markets by Scott Brown of Raymond James
Looking ahead to 2015, the labor market is expected to play the key part in the Feds path to policy normalization. However, as we learned from New York Fed President Dudley last week, the Fed will also consider the reaction in financial markets.
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.
2014-12-02 00:00:00 Oil - Just Another Price by Brian Wesbury, Robert Stein of First Trust Advisors
Dont take this the wrong way: energy is important. Oil prices are important. But, we believeth those involved in economic punditry often bloweth them out of proportioneth.
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.
2014-11-22 00:00:00 A Tale of Two Worlds by Doug MacKay and Bill Hoover of Broadleaf Partners
We are in a Tale of Two Worlds. One worlds success is highly dependent on the outlook for oil and other commodities, while the others is far less exposed and perhaps even a beneficiary of a more bearish climate. Commodity dependent countries like Russia, Saudi Arabia, China and Australia are hurt by falling oil prices, weak global demand and new sources of supply, while the United States, with a far larger consumer driven economy, experiences an overall net benefit, as perhaps seen in earnings from the likes of Wal-Mart, Best Buy, and Lowes in recent days.
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.
2014-11-19 00:00:00 Examining the Divergence between Equities and Credit by Bradley Krom of WisdomTree
Over the last year, U.S. equities rallied, and credit spread generally tightened. However, in recent months, this winning formula has started to diverge. Concerns about global growth, potential changes in monetary policy and uncertainty from geopolitical risk weighed on investor sentiment.
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.
2014-10-31 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 Will the Ebola Scare Haunt the Stock Market? by Kristina Hooper of Allianz Global Investors
Kristina Hooper prescribes four key takeaways from the Ebola epidemic and what it means for investors.
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.
2014-10-21 00:00:00 The Skinny on Fatter Tails for Fed Policy by Kristina Hooper of Allianz Global Investors
Kristina Hooper comments on escalating fears that a slowdown in global growth could hamstring the US recovery and what that means for monetary-policy outcomes in the United States.
2014-09-30 00:00:00 The Fed Trap by Stephen Roach of Project Syndicate
The US Federal Reserve is grappling with the disparity between its unconventional policy's success in preventing economic disaster and its failure to foster a robust recovery. Given that this disconnect has fueled financial-market excesses, the exit will be all the more problematic especially for the market-fixated Fed.
2014-09-30 00:00:00 How Vulnerable Is Short-Duration Fixed Income to Fed Tightening? by Rick Harper, Bradley Krom of WisdomTree
In recent research released by the Federal Reserve Bank of San Francisco and echoed in statements by several Fed regional bank presidents, Fed officials have voiced concerns that the market is underestimating the probability and timing of a change in monetary policy.
2014-09-29 00:00:00 Looking Past the Risks, Equities Still Appear Attractive by Robert Doll of Nuveen Asset Management
Last week featured some positive economic news, but equity markets sank nonetheless, with the S&P 500 Index falling 1.3%. On the bright side, we saw some strong data from the housing market and an upward revision to second-quarter gross domestic product growth (GDP).
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 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 Fed Policy: From Tapering to Tightening by Rick Harper, Bradley Krom of WisdomTree
Over the past nine months, the Federal Reserve (Fed) has gradually reduced the pace of its asset purchases in conjunction with an improvement in the strength of the U.S. economy. With tapering expected to end October 29, we believe that investors should now look beyond 2014 and start to focus on when, not if, the Federal Reserve will raise the Federal Funds Rate.
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.
2014-08-29 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
2014-08-07 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 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.
2014-07-19 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.
2014-06-25 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.
2014-06-13 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.
2014-06-12 00:00:00 An Intriguing Six Point Three by Zach Pandl of Columbia Management
The latest jobs report may look pretty bland on the surface, but I can assure you that it will generate plenty of intrigue among close observers of the Fed. After falling sharply in April, the unemployment rate held at 6.3%, in contrast to expectations that it would partially reverse course.
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.
2014-05-16 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.
2014-05-15 00:00:00 Thoughts on Investing in Convertible Securities by Alan Muschott of Franklin Templeton Investments
Changes and potential changes in monetary policy across the globe, along with increased volatility in currency and equity markets, have thrown a spotlight on convertible securities, described by some as offering the best of both worlds in terms of stock and bond characteristics. But what are they, how do they work, and how can they play a part in a diversified investment portfolio in todays market? Alan Muschott, portfolio manager for Franklin Convertible Securities Fund, who has been investing in convertible securities for more than a decade, provides his take.
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.
2014-05-09 00:00:00 Thoughts on Investing in Convertible Securities by Alan Muschott of Franklin Templeton Investments
Changes and potential changes in monetary policy across the globe, along with increased volatility in currency and equity markets, have thrown a spotlight on convertible securities, described by some as offering the best of both worlds in terms of stock and bond characteristics. But what are they, how do they work, and how can they play a part in a diversified investment portfolio in todays market? Alan Muschott, portfolio manager for Franklin Convertible Securities Fund, who has been investing in convertible securities for more than a decade, provides his take.
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.
2014-04-25 00:00:00 Income Market Insight by Payson Swaffield of Eaton Vance
Fans of NASCAR racing, and most other motorsports, know what it means when the yellow flag is being waved: proceed with caution. For investors in today?s credit markets, we believe that is an appropriate image to keep in mind. After five years of generationally low rates, investors are ?stretching? for yield ? that is, they are scooping up deals at yields that, in our opinion, barely compensate them for the risk.
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.
2014-03-28 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.?
2014-03-18 00:00:00 Can the Fed Fend Off the Ides of March? by Kristina Hooper of Allianz Global Investors
Mid-March hasn?t been associated with much good luck in Europe historically. And with Ukraine mired in conflict, this year?s no different. But investors should resist the urge to react to geopolitical uncertainty and expect steady guidance from the Fed.
2014-03-10 00:00:00 With Fed in Charge, 5-Year Bull Run Poised to Continue by Kristina Hooper of Allianz Global Investors
The Federal Reserve?s loose monetary policy and gradual improvement in the economy are two big reasons the stock market can keep moving higher, says Kristina Hooper. Will it be reflected in this week?s consumer sentiment and spending data?
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.
2014-03-04 00:00:00 A Century of Policy Mistakes by Niels Jensen of Absolute Return Partners
A century ago Argentina ranked as one of the wealthiest countries in world. Today it is a shadow of its former self. A long string of policy errors explain the long slide from riches to rags. Europe, like Argentina 100 years ago, is facing enormous challenges - as well as potential pitfalls - and the management of those challenges will define the welfare path for many years to come. Unfortunately, the early signs are not good. Our political leaders, afraid to face public condemnation, have so far chosen to ignore them.
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.
2014-02-15 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.
2014-02-10 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.
2014-02-10 00:00:00 Two Reasons for Value to Outperform in 2014 by Will Nasgovitz of Heartland Advisors
Weve seen the longest period of growth outperformance since 1932, but the two catalysts could cause value to return to favor. First, tapering by the Fed should allow interest rates to normalize and thereby benefit the Financials sector. Second, theres potential for a correction in the Consumer Discretionary sector, which appears overvalued: The groups P/E is above the historical average and performance has tracked upward despite flat earnings revisions.
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.
2014-01-10 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.
2014-01-08 00:00:00 Rehab World by Niall Ferguson of Project Syndicate
The late English chanteuse Amy Winehouse sang, "They tried to make me go to rehab, but I said No, no, no." Perhaps 2013 should be known as the year of Winehouse economics, with the singers being the worlds most important central banks, led by the Federal Reserve.
2014-01-07 00:00:00 Where are Margins Headed? by Mark Oelschlager of Oak Associates
The fourth quarter was another good one for stocks, with the S&P 500 returning 10.5%, and 32.4% for the year. This was the best calendar-year performance by the index since 1997. All four quarters of 2013 produced positive returns, with the first and fourth quarters, typically the strongest seasonally, both hitting double-digits. For the year Consumer Discretionary and Healthcare were the standout sectors, while Utilities and Telecom lagged. The laggards are not surprising, as they are income-oriented - an area of the market that was hurt by the backup in bond yields.
2013-12-24 00:00:00 A Spoonful of Sugar by Peter Schiff of Euro Pacific Capital
The press has framed Ben Bernankes valedictory press conference last week in heroic terms. Its as if a veteran quarterback engineered a stunning come-from-behind drive in his final game, and graciously bowed out of the game with the ball sitting on the opponents one-yard line. In reality, Bernanke has merely completed a five-yard pass from his own end zone, and has left Janet Yellen to come off the bench down by three touchdowns, with no credible deep threats, and very little time left on the clock.
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 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.
2013-12-10 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.
2013-12-07 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.
2013-12-02 00:00:00 Consumers Doing Fine by Brian Wesbury, Bob Stein of First Trust Advisors
According to the National Retail Federation, Thursday to Sunday holiday sales dropped 3% versus last year. No doubt, this will wake up some dozing bears. And, we are sure that when we say its not as bad as you think, many will argue we are perma-bulls, naive, or downright stubborn. You can think what you want, but we dont believe sales are falling.
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.
2013-11-20 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.
2013-11-08 00:00:00 China at a Crossroads by Anthony Chan of AllianceBernstein
Expectations are high that President Xi Jinping and Premier Li Keqiang, nearly one year into their likely 10-year reign, will unveil reform policies that will define Chinas social and economic development over the next decade and beyond. After the proposals are made public, the new leaders must prove that they can implement substantial change without derailing the growth of the worlds second-largest economy.
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?
2013-11-04 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.
2013-10-31 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.
2013-10-28 00:00:00 Beyond the Noise, More of the Same? by Scott Brown of Raymond James
Delayed economic data reports have begun to arrive. The figures point to a disappointing 3Q13 (relative to expectations) and the partial government shutdown is unlikely to help in 4Q13. The recovery had been poised for improvement this year, but fiscal policy has been a major headwind. Economic figures will be distorted in October (due to the government shutdown) and in November (due to the rebound from the shutdown). Yet, beyond the noise, the underlying pace of growth is likely to remain disappointing in the near term. Is there hope for 2014?
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.
2013-10-26 00:00:00 Why U.S. Dollar Will Remain World's Reserve Currency, Despite Political Brinkmanship by Tatjana Michel of Charles Schwab
The U.S. dollar is not likely to lose its premier world reserve-currency status anytime soon. But continuing U.S. political brinkmanship could drive foreign countries into other currencies faster. With the market focus shifting to monetary policy and growth, we expect a Fed taper delay to give foreign currencies some time to recover.
2013-10-21 00:00:00 Winners and Losers - Pensions and Food Stamps by Gregg Bienstock of Lumesis
To the brink they went and a deal was had. I dont know if I call it much of a deal I kind of feel like Ive seen this B movie before. I could go on but that would put me in the same stature as the talking heads on the left and right news channels that prophesize to their viewers without regard for the rest of us. That said, one quick digression.
2013-10-17 00:00:00 Politics Secondary to US Equity Fundamentals by Grant Bowers of Franklin Templeton
Its easy to get caught up in the tense drama surrounding the government shutdown and the debt ceiling squabble between Congressional Republicans and Democrats, but Grant Bowers, portfolio manager of Franklin Growth Opportunities Fund, maintains that looking beyond the political posturing and focusing instead on US corporate fundamentals is his preferred approach. Read on for more from Bowers on how he views the issues at hand, and why, even in the face of another political showdown in the Capitol, he thinks the US still presents a strong investment case.
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.
2013-09-28 00:00:00 The Renminbi: Soon to Be a Reserve Currency? by John Mauldin of Millennium Wave Advisors
Contrary to the thinking of fretful dollar skeptics, my firm belief is that the US dollar is going to become even stronger and will at some point actually deserve to be the reserve currency of choice rather than merely the prettiest girl in the ugly contest the last currency standing, so to speak. But whether the Chinese RMB will become a reserve currency is an entirely different question.
2013-09-27 00:00:00 Read My Lips... by Dimitri Balatsos of Tesseract Partners
Chairman Ben Bernankes press conference this week, commenting on the decision by the Federal Open Market Committee (FOMC) not to taper, reminded us of the famous slogan of Presidential hopeful George H.W. Bush at the 1988 Republican National Convention Read my lips: no new taxes. Yet, after he won the election, he raised taxes in an effort to reduce the public deficit.
2013-09-25 00:00:00 Muni Market Resurgent by Andrew Clinton of Clinton Investment Management
In light of the recent recovery in fixed income markets and the outperformance of the municipal bond market in particular, I thought I would send a note to provide a brief update since we last sent our market observations in July and August. As you may recall, we stated in the clearest terms that we felt the recent rise in interest rates provided an attractive entry point for municipal bond investors.
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.
2013-09-19 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.
2013-09-16 00:00:00 FOMC Preview: Taper Likely To Be Deferred or Minimal by Team of Northern Trust
Market participants have been working overtime to refine their expectations of what the Federal Open Market Committee (FOMC) might do at its meeting next week. Many are calling for a cut in the Feds pace of asset purchases from the current level of $85 billion per month.
2013-09-09 00:00:00 The Shape of Things to Come by Kristina Hooper of Allianz Global Investors
With a week to go before the September FOMC meeting, theres little that stands in the way of Fed tapering. Fridays jobs report didnt impress but it probably wasnt bad enough to stop central bankers from pulling some punch, writes Kristina Hooper.
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.
2013-08-26 00:00:00 The Case for More Mortgage QE by Kristina Hooper of Allianz Global Investors
Disappointing new home sales dont mean that tapering is less likely to occur in September. Rather, it may only mean that when tapering begins, the Feds likely to start small and only trim Treasuries.
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.
2013-08-19 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?
2013-08-14 00:00:00 Why GDP Deserves Less Attention by Zach Pandl of Columbia Management
Before joining Columbia Management I worked for several years as an economist at a few of the large broker-dealers in New York. One of my primary functions was to maintain an ongoing estimate of growth in the nations gross domestic product (GDP)a so-called GDP bean count. Most investors use GDP as their primary summary measure of overall economic performance, so they are keenly interested in how incoming data are likely to impact the estimates. Our running tally of GDP growth for the current quarter was one of the most sought after pieces of research we produced.
2013-08-12 00:00:00 Understanding Quality: The Crux of Long-Term Investing by Francis Gannon of The Royce Funds
While some experts believe that small-cap valuations are currently stretched, we see ample opportunities in what we think are high-quality smaller companies.
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
2013-08-02 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.
2013-07-27 00:00:00 A Lost Generation by John Mauldin of Millennium Wave Advisors
This week we will briefly look at why weak consumer spending is going to become an even greater problem in the coming years, and we will continue to look at some disturbing trends in employment.
2013-07-25 00:00:00 ECB's Attitude to Portugal Raises Questions about Bond-Purchase Programme by Darren Williams of AllianceBernstein
Political upheaval in Portugal has thrown the spotlight on the European Central Banks (ECBs) bond-purchase programme, known as Outright Monetary Transactions (OMTs). Many are asking whether the ECB is ready to support the market if yields rise further. And if not, why not?
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.
2013-07-18 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 The Bernanke Guessing Game by David Wismer of Flexible Plan Investments
There can be little doubt that US equity markets have become more dependent than ever, at least in the short-term, on the every utterance of Fed Chairman Ben Bernanke and his fellow FOMC members.
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.
2013-07-16 00:00:00 Bernanke Still Trying To Get The Message Across by Scott Brown of Raymond James
Economists view the Federal Reserves communications with the public as being consistent over the last several weeks. There has been no change in the monetary policy outlook. The Fed had been expected to reduce the pace of asset purchases later this year. The financial markets, however, seem to be hearing different things at different times.
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 AdvisorShares Weekly Market Review by AdvisorShares Research of AdvisorShares
Markets went higher last week after central bankers around the world reassured investors that they would not kill the economic recovery with higher interest rates. More volatile small and mid-cap stock indices performed even better than the S&P 500.
2013-07-03 00:00:00 Why a Normalized Yield Environment Marks the Return of Capitalism by Francis Gannon of The Royce Funds
While market sentiment over the past few years has shifted between confidence and fear, the quality companies that we covetand never abandonedhave been relatively ignored. Portfolio Manager Francis Gannon suspects that, although a shift back to a more normalized environment will mean continued volatility, the landscape will be more favorable for active managers.
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.
2013-07-02 00:00:00 Investors Gear Up for Earnings Post-Taper by Chris Maxey, Ryan Davis of Fortigent
Following a few weeks of FOMC-induced turmoil, investors are looking forward to getting back to the fundamentals.Second quarter earnings season are set to kick off July 8 with Alcoa, in what will mark an important reporting period for financial markets.Given the now much telegraphed intentions of the Fed, investors are scrutinizing whether the US economy and corporate sector is ready to stand on its own feet.
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.
2013-06-25 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.
2013-06-21 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.
2013-06-15 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.
2013-06-08 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.
2013-06-04 00:00:00 Stocks: How Long Will the Bull Run? by Milton Ezrati of Lord Abbett
Conditions appear favorable for the next 12 to 24 months. What could change the markets prospects in the longer term? Heres a look.
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.
2013-05-31 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.
2013-05-28 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.
2013-05-22 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.
2013-05-06 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 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.
2013-04-26 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.
2013-04-25 00:00:00 Murkier Prospects for Merkel by Milton Ezrati of Lord Abbett
An anxious German electorate may make it harder for the chancellor to continue her pro-cooperation approach to Europes fiscal crisis.
2013-04-23 00:00:00 Federal Funds, Interest Rates and Defaults and Bankruptcies by Gregg Bienstock of Lumesis
This week we focus on Federal Funds delivered to the States and consider some interesting data points to contemplate as folks pretend to get a bit more serious about addressing fiscal issues at the National level. We move on to an interesting and surprising quote on rates and then a look at some facts and figures around bankruptcies and defaults.
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.
2013-04-20 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.
2013-04-15 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.
2013-03-25 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
2013-03-25 00:00:00 Housing Recovery Still Young by Brian Wesbury, Bob Stein of First Trust Advisors
Into early 2012, conventional wisdom argued that the odds of a robust housing recovery were lower than the odds of New Mexico and Georgetown losing to Harvard and Florida GC.
2013-03-22 00:00:00 ING Fixed Income Perspectives March 2013 by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management
Developed sovereigns are still broadly unattractive, but global central banks appear poised to ease. We prefer EM currencies that will continue to benefit from positive global growth and tolerate further upward pressure on the U.S.
2013-03-13 00:00:00 Coping With Age by Zach Pandl of Columbia Management
Many things in life get better with age, but many others do not. Unfortunately for central banks, the effects of unconventional monetary policy probably fall in the latter category. Unlike traditional monetary policyin which the central bank only sets short-term interest ratesthe impact of unconventional policies likely decays over time. This means that it is not enough for the Federal Reserve to keep its current policies in placeit actually has to take additional action to maintain the same impact on interest rates and the economy.
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.
2013-03-05 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.
2013-02-27 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.
2013-02-21 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 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 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.
2013-01-29 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?
2013-01-23 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.
2013-01-22 00:00:00 The Economic Fundamentals of 2013 by Nouriel Roubini of Project Syndicate
The global economy this year will exhibit some similarities with conditions prevailing in 2012 no surprise there. But there will be some important differences, as fiscal austerity spreads to more advanced economies, the risk of a hard landing in China rises, and the threat of war in the Middle East grows.
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.
2013-01-14 00:00:00 Bond Market Review & Outlook by Thomas Fahey of Loomis Sayles
The ?nal quarter of 2012 was the icing on the cake of an exceptional year for the credit sectors. Fourth quarter credit gains stemmed in part from uncommonly aggressive monetary policy responses in the third quarter. As economic growth continued to undershoot expectations, major central banks made clear that they were dissatis?ed with the status quo of tepid economic growth and high unemployment. The Federal Reserve went so far as to tie its monetary policy to the level of the unemployment rate.
2010-04-09 00:00:00 Interest Rates are Creeping Up by Asha Bangalore of Northern Trust
The Fed is on hold in the near term, with nearly all its emergency programs either closed or expired. The effective federal funds rate has moved up in recent weeks, to an average of 16 bps in March, as have yields on other Treasury securities. The upward trend of Treasury market yields places the Fed is a tight spot, because the objective of easy monetary policy is defeated if Treasury market yields continue to move up and raise the cost of credit. Northern Trust's best bet is that interest rates will decline somewhat in the weeks ahead as bearish economic news comes out.
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.
2010-01-28 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
2010-01-14 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