10/16/2017 Weekly Market Commentary

  There’s a new kid in town: narrative economics. Last week, Richard Thaler was awarded the Nobel Prize in economics. His work in behavioral economics and finance recognizes not all economic and financial decisions are made after rational reflection.1 In Nudge, he wrote:2 “The workings of the human brain are more than a bit befuddling. How can we be so ingenious at some tasks and so clueless at others?…Many psychologists and neuroscientists have been converging […]

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10/9/2017 Weekly Market Commentary

  Slow and steady… It has been 332 days since the Standard & Poor’s 500 (S&P 500) Index experienced a 5 percent drop, reported Barron’s. If there isn’t a selloff on Monday or Tuesday, this will become the longest rally without such a drop.1 During this period, the Index has gained 33 percent. Think about that for a moment: 33 percent over 332 days. By Barron’s calculations, the market has gained less than 0.1 percent […]

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10/2/2017 Weekly Market Commentary

  A lot happened during the third quarter of 2017, but not much changed. The bull market in U.S. stocks continued to charge ahead. Traditional measures of valuation continued to suggest the market is overvalued, but some analysts argued it’s different this time. The Economist explained:1 “The current [cyclically-adjusted price-to-earnings] ratio of 31 suggests that stocks are about 50% over-valued – a figure that has only been exceeded in the past 60 years during the […]

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9/18/2017 Weekly Market Commentary

  “In theory, there is no difference between theory and practice, in practice there is.”1 Yogi Berra was talking about baseball, but the concept also applies to diversification, according to the GMO White Paper, The S&P 500: Just Say No. From the title, you might think the authors – Matt Kadnar and James Montier – don’t like U.S. stocks. They do:2 “Being a U.S. equity investor over the past several years has felt glorious. The […]

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9/11/2017 Weekly Market Commentary

  Last week, the aftermath of Hurricane Harvey and potency of Hurricane Irma dominated hearts and minds, but there were some diversions and some welcome news, too. The NFL kicked off its 2017 season with the Chiefs’ win over the Patriots.1 The men’s U.S. soccer team tied Honduras to stay in the running for a World Cup spot.2 And, Sloane Stephens made the jump from 957th best on the women’s tennis tour to U.S. Open […]

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9/5/2017 Weekly Market Commentary

  When it comes to economic growth, the government doesn’t measure twice. It measures three times. Last week, the Bureau of Economic Analysis revised its initial estimate that the gross domestic product (GDP), which is the value of all goods and services produced by a country or region, grew by 2.6 percent during the second quarter of 2017. The second estimate indicated the economy grew by 3.0 percent from April through June. The third and […]

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8/29/2017 Weekly Market Commentary

  Hope floats. Optimism about possible pro-growth economic policies, including tax reform and deregulation, helped U.S. stock indices finish higher last week, reported Barron’s.1 It wasn’t all smooth sailing, though. Stocks bobbed up and down as investors’ optimism was weighted by concerns about a possible debt-ceiling battle and government shutdown.2 CNN offered some insight to the historic economic impact of government shutdowns on productivity:2 “The last time the government was forced to close up shop […]

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8/21/2017 Weekly Market Commentary

Here, there, and everywhere… Markets around the world appear to be benefiting from global economic recovery. After pointing out the United States’ economy is the heart of the global financial system, Barron’s reported:1 “The Standard & Poor’s 500 index has tirelessly amassed 30 record closes this year, but is up just 1.2 percent since March 1. Meanwhile, nearly every foreign stock market has sprinted ahead…We wrote on March 25 about how a global recovery should […]

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8/14/2017 Weekly Market Commentary

  North Korea may be a little country, but it can churn up big trouble. The possibility that verbal hostilities between the United States and North Korea could trigger geopolitical conflict had investors on the run last week. In the United States, the Standard & Poor’s 500 Index fell by 1.4 percent, the Dow Jones Industrial Average lost 1.1 percent, and the NASDAQ Composite finished 1.5 percent lower.1 Financial Times explained:1 “The sell-off came as […]

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7/31/2017 Weekly Market Commentary

There was some good news and some bad news last week. First, the good news: Thanks to consumer spending and an upturn in federal government spending, the U.S. economy grew faster from April through June this year. Gross domestic product (GDP) grew by 2.6 percent during the period, according to the advance estimate for economic growth. This was an improvement over growth from January through March, when GDP increased by 1.2 percent.1 Now, the bad […]

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