1/16/2018 Weekly Market Commentary

  Inflation, inflation, where’s the inflation? The U.S. Federal Reserve has been raising interest rates in anticipation of higher inflation.1 In its 2018 forecast, Goldman Sachs indicated it expected to see “a gradual increase in global core inflation, albeit to levels that are still below central bank targets in most places.”2 At year-end 2017, Barron’s wrote:3 “Economists have raised the specter of inflation for several years, only to be disproved time and again. There’s reason […]

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1/9/2018 Weekly Market Commentary

  Whoosh! Bang! Flash! Fizz! Whistle! U.S. stock markets delivered their own version of fireworks to celebrate the New Year. During the first week of 2018, the Dow Jones Industrial Average hit a new all-time high, moving above 25,000 for the first time ever. The NASDAQ Composite and Standard & Poor’s 500 Indices also rose to new highs.1 2018 is off to an impressive start, but let’s pause for a moment and take a look […]

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1/3/2018 Weekly Market Commentary

  How good was 2017? It was so good, the Standard & Poor’s (S&P) 500 Index finished in positive territory every month for the first time ever (on a total return basis), reported Barron’s. All major U.S. indices finished the year with double-digit gains.1 As we enter 2018, keep an eye on investor sentiment. “History has shown us that the crowd can be right during trends, but it also tends to be wrong at extremes. […]

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12/11/2017 Weekly Market Commentary

  “It’s the hap- happiest season of all.”1 While holidays don’t make everyone happy, investors should be feeling festive. The Standard & Poor’s 500 Index is up more than 18 percent year-to-date. The Dow Jones Global ex U.S. Index is up about 21 percent year-to-date (refer to the table), and Treasury bond yields are lower than they were at the start of the year. 2 In addition, the CBOE Volatility Index (VIX), a measure of […]

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11/27/2017 Weekly Market Commentary

  There was a lot to be thankful for last week. Stock markets around the world may have ripened to full-slip sweetness this year. Emerging markets have delivered the most attractive returns year-to-date. The MSCI Emerging Markets Index was up 34 percent year-to-date, last week. The United States and Europe have marched higher, too. The Standard & Poor’s 500 Index was up about 16 percent year-to-date, while the Euro Stoxx Index was up 11.3 percent, […]

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11/20/2017 Weekly Market Commentary

  Are investors more like tigers or African wild dogs? It appears investors – retail and institutional – have become rather like predators. They patiently stalk shares, waiting for a dip, and then they strike – buying stocks when prices fall. Consider last week. Barron’s described it like this: “The Dow traded down nearly 80 points on Monday, 170 points on Tuesday, and 170 points on Wednesday, but each time the blue-chip benchmark finished off […]

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11/14/2017 Weekly Market Commentary

  Selling it overseas. Most of the companies in the Standard & Poor’s 500 (S&P 500) Index have reported third quarter earnings per share (EPS), which is the profit earned per share of stock outstanding during the period. Many have done quite well.1, 2 With more than 90 percent of companies reporting, the total EPS growth rate for the S&P 500 has exceeded expectations, reported FactSet. In aggregate, the growth rate accelerated from 3.1 percent […]

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10/31/2017 Weekly Market Commentary

  The last full week of October was a box full of surprises. First, U.S. economic growth exceeded expectations. The devastation wrought by Hurricanes Harvey, Irma, and Maria was widely expected to stifle U.S. quarterly growth, according to NPR.1 The Atlanta Federal Reserve predicted 2.5 percent gross domestic product (GDP)* growth for third quarter, down from 3.1 percent the previous quarter. Instead, U.S. GDP grew by 3.0 percent.1, 2 In fact, productivity has been flourishing […]

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10/23/2017 Weekly Market Commentary

  And the hits just keep on coming. Last week was the anniversary of Black Monday. On October 19, 1987, the Dow Jones Industrial Average (Dow) lost 508 points, or more than 20 percent of its value, as it fell from the previous trading day’s closing value of 2,247 to 1,739.1 The culprits behind the historic drop are widely thought to be program trading, high valuations, and market psychology.2 The anniversary didn’t put a hitch […]

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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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