The strong, uninterrupted start to the year for equities is very likely to lead to further gains in the second half of the year. But the crack that opened in NDX two weeks ago has widened further and the consistent historical pattern is for SPX to follow, lower.

A holiday-interrupted week is loaded with important economic data. Since many market participants will skip Monday to stretch their weekend, the action will focus on Friday’s employment situation report. People will be asking: Just how strong is the labor market?

The first half of 2017 is shaping up to be unequivocally brutal for value-oriented rebalancing strategies. Wired to avoid pain, we humans know it’s very tempting to ask whether a model or philosophy is broken, especially the moment it dashes expectations.

With the euro up another 50bps today against the USD, we thought it timely to review some fundamental factors that should act to support the longer-term trend higher in the euro.

Global economic activity has generally been good during the first six months of 2017. Europe’s renewed momentum has been a highlight for the developed world, and China’s steady growth has compensated for faltering elsewhere in emerging markets.

The mood among investors in Europe is generally positive in spite of mixed cyclical and secular factors influencing the economies and the markets there. The cyclical forces are dominated by a better business tone across the continent.

MSCI has taken a cautious approach to A share inclusion that encourages China to increase foreign investor access and ultimately ability to redeem and repatriate funds in exchange for greater future index weightings. It’s a sensible plan.

This week, I’d like to draw to a conclusion my series of notes from Mauldin’s 2017 Strategic Investment Conference. The topics ranged from geopolitical to global macro to specific investment ideas. One of my all-time favorite economists is David Rosenberg. Today I offer my high-level bullet point notes from his presentation.

Providing a path for career growth is essential to every business. Two recent conversations with young, talented professionals illustrated the price an advisory practice will suffer if it lacks a career track for growth.

Although the British economy is showing signs of slowing down, the country has not contracted or imploded as many Brexit opponents had predicted. In fact, certain British sectors such as exports and manufacturing continue to expand.

A year ago, Templeton Global Equity Group’s Norm Boersma, Cindy Sweeting and Heather Arnold penned an article for Beyond Bulls & Bears discussing the signs of a revival in value stocks. With the nascent rally in global value stocks underway, the trio return along with their colleague Tucker Scott to outline where they now see the next pockets of overlooked potential opportunities for patient bargain hunters.

A tsunami of change is headed toward the financial-industry shore, promising to swallow those unprepared for challenge and disruption. Indeed, disruption can resemble a tsunami—a series of waves with enormous destructive power. Leaders must meet these challenges with appropriate responses from positions of strength.

MSCI has announced that China A-shares will be included in its emerging-market (EM) index next year, as we anticipated. Now, global equity investors need to consider how to access the vast universe of stocks traded onshore in China.

The U.S. bond market’s post-election optimism has now evaporated: The 10-year nominal U.S. Treasury yield has dropped by almost half a percentage point from its mid-March 2.62% post-election high, with lower implied inflation rather than lower real yields accounting for most of the decline.

The last two weeks of June are usually a good time to recharge the batteries and get away. Unfortunately, last week kept many of those out of the office attached to their smartphones and their boats tied up at the docks.

During the most-recent Berkshire Hathaway Shareholder Meeting, Warren Buffett and Charlie Munger reiterated a point during the question and answer portion that has stuck with us. We feel compelled to share what we learned.

As I discussed this past weekend, the current “bull market” seems unstoppable. Even on Twitter, investors have once again been lulled into the “complacency trap.”

Fed hikes rates again, even as inflation falls further from target and financial conditions continue to ease. Smooth sailing ahead? Beware the leverage risks building below the surface.

NDX has opened a noteworthy crack in US equities. NDX has fallen 4.5% in the past week. In the past 7 years, falls of more than 4% in NDX have preceded falls in SPY of at least 3%. That doesn't sound like much, but it would be the largest drop so far in 2017. A key watch out now is whether NDX weakens further and breaks both its 50-d as well as its mid-May low; if so, then SPY is likely to follow with its first 5% correction since the US election.

All of a sudden the Fed got a little tougher. Perhaps the success of the hit movie Wonder Woman has inspired Fed Chairwoman Janet Yellen to discard her prior timidity to show us how much monetary muscle she can flex when the time comes for action.

Another soft U.S. core Consumer Price Index (CPI) inflation report – the third in a row that has lagged expectations – could complicate the Fed’s intentions to raise rates one more time this year, as the central bank’s Summary of Economic Projections currently forecasts.

While generally upbeat about global economic prospects, former Treasury Secretary Jack Lew warned policymakers against “blowing a hole in the deficit” by cutting taxes and pursuing aggressive fiscal policy measures.

The global economy continues to expand, corporate revenues and earnings are solid and, despite frothy valuations, the stock market continues to chug up “to 11” and beyond.

Small, well-run companies exist all over the world providing investors with dynamic growth potential and attractive investment opportunities. Despite this, international small cap equities remain underinvested and largely overlooked by investors. WE believe there are unique benefits for investors when considering an allocation to international small cap equities.

Park Geun-hye’s ouster as president of South Korea was due to a scandal involving her close confidant accused of seeking bribes from chaebols, a group of family-owned multinational conglomerates that dominate the economy.

Because of the secular headwinds facing global economies, currently labeled as the “New Normal” or “Secular Stagnation”, investors have resorted to “making money with money” as opposed to old-fashioned capitalism when money and profits were made with capital investment in the real economy.

Today, you’ll find my high level notes from Mark Yusko’s presentation at the Mauldin Economics 2017 Strategic Investment Conference.

Forty years of behavioral science research provides a more realistic framework for viewing investors and markets than does MPT.

What does the CEO of an advisory firm do? Would you know what to do if you were to step into a true leadership role?

We are having a hard time finding high-quality companies at attractive valuations.

Goldilocks appears to be taking up residence on Wall Street, with modest growth, low inflation and a cautious Fed combining to make things "just right" for investors. Additionally, the apparent improving global trade trend could help contribute to further stock market gains and support large-cap outperformance. But the risk of a pullback and/or sharp acceleration in volatility is elevated courtesy of both domestic and world political uncertainty, and the potential of a Fed misstep.

You could say I’m hoping for the best but preparing for the worst. I advise investors to do the same. No one can say what the future holds, and it’s prudent to have a portion of your portfolio in gold, gold stocks and short-term, tax-free municipal bonds, all of which have a history of performing well in volatile times.

Every production phase or civilization or other human invention goes through a so called transformation process. Transitions are social transformation processes that cover at least one generation. In this article I will use one such transition to demonstrate that humanity is at a crossroads: up to a third world war or will humanity create new heaven on earth.

The financial markets continued to absorb major news events with surprising ease last week. Be it the tragedies in the U.K., the withdrawal from the Paris climate agreement, or the weakness in Friday's employment data, the stock and bond markets both continued to edge higher. Investors seem to have become conditioned toward individual isolated disappointments all while the bigger picture is toward one of global economic growth and relative stability.

The initial conditions or the starting point conditions, mean to me that a small degree of monetary restraint has a very quick and strong impact on economic activity.

Who is better at value investing: robots or people? How have robots – the quantitatively-driven passive funds that hold, for example, low price-to-book stocks – fared against actively managed value mutual funds?

Surprising no one, President Donald Trump announced his decision to withdraw the U.S. from the Paris climate agreement this week, highlighting the depth of his commitment to keep “America First.” Also surprising no one, the media is making much of the fact that the U.S. now joins only Nicaragua and Syria in refusing to participate in the accord.

The macro data from the past month continues to mostly point to positive growth. On balance, the evidence suggests the imminent onset of a recession is unlikely. That said, housing starts grew only 1% in the past year. Permits are up only 2%. Moreover, employment growth has been decelerating, from over 2% last year to 1.6% now. It's not alarming but it is noteworthy that expansions weaken before they end, and slowing employment growth is a sign of some weakening. Finally, real retail sales excluding gas is in a decelerating trend. In April, growth was just 1.6% after having grown at more than 4% in 2015. Personal consumption accounts for about 70% of GDP so weakening retail sales bears watching closely.

We all know that investing is inherently risky and that diversification is one way to help to manage risk. Most investors or advisors—who know just how important a diversified portfolio can be—would not go all fixed income, or all value stocks, or put all their money in a single company.

Low-cost, high-grade coal, oil and natural gas - the backbone of the Industrial Revolution - will be a distant memory by 2050.

Adam Butler introduces a simple but novel innovation for modeling equity market valuations. There are reasons to believe average valuations should rise through time in response to changes in market structure. We discuss the conditions that might lead to higher valuations through time, and present a model to account for it.

With the probability of recession sometime in the next five years around 70% in our view, now may be a critical time to prepare for when the cyclical tailwind that began last year begins to fade. Over the next five years, the global economy may undergo five significant pivots in the direction and scope of monetary, fiscal, trade, geopolitical and exchange rate policies. Are investors too optimistic about the future economy? We address this and other crucial questions in PIMCO’s 2017 Secular Outlook – our long-term view for the global economy and markets. 

We thought it would be very helpful to review Warren Buffett’s argument in 19991, the last time there was very high expectations attached to technology stocks and to the overall level of common stock prices. We will reference Buffett’s quotes by the year he said them. The sections labeled 2017 offer our current observations on the markets and thoughts from respected experts.

There are more “silo practices” than we realize – those with two or more advisors, each with his or her own book of business. In the eyes of a buyer, there are business risks that chip away at these firms’ values. To mitigate against these risks, there are at least five things these firms can do.

US equity markets made new all-time highs again this week. By Friday, SPX had risen 7 days in a row; that type of trend persistence has a strong tendency to carry the markets higher over the next week(s). That said, the month of June is seasonally weak and there are a number of reasons to suspect it will be again this year, not the least of which is the FOMC meeting mid-month during which markets anticipate the federal funds rate will be hiked for a 4th time. The prior three rate hikes have coincided with notable drawdowns in equities (as well as a fall in treasury yields).

Both political uncertainty and Fed policy changes could contribute to increased volatility, but solid economic and earnings growth—both in the United States and globally—should help the bull market to continue. We suggest looking past the political rhetoric for the most part and focusing on economic developments and the long-term stability the United States provides. Globally, we’re seeing improving growth, but China is a concern that bears watching and emphasizes the need for a globally diversified portfolio.

It’s been a whirlwind week. After attending two big conferences, I landed in Vancouver today where I’ll be presenting at the International Metal Writers Conference. Markets continue to close at record highs, even as political uncertainty remains and the threat of terrorism looms large over Western nations. On Monday, gold flashed a bullish signal we haven’t seen in over a year. There’s much to talk about! Below are five things you need to know from the week now behind us.

Last week I discussed what I think will be the fallout from the Great Reset, when the massive amounts of global (and especially government) debt and the bubble in government promises will have to be dealt with. I think we’ll see a period of great volatility in the markets. I offered a solution for dealing with this complexity and uncertainty in the markets by diversifying trading strategies. But that diversification must reflect a rethinking of Modern Portfolio Theory, including a significant reshaping of valuations in asset classes. We’ll deal with those topics today.