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U.K. jobs

Thursday, April 17, 2014

The unemployment rate in the U.K. fell to 6.9% in February – the lowest level since February 2009. Furthermore, the number of people employed that were of working age hit an all-time high at the end of February 2014 – 72.6% of the workforce, according to the Office for National Statistics. These headline jobs numbers combined with other positive economic data coming from the U.K. bode well for a continuation of the economic recovery occurring.  Continue reading »

Market Tizzy

Tuesday, April 08, 2014

Stock markets have gone into a bit of a tizzy since reaching a high last week. Investors are wondering whether this is merely a normal pullback or the beginning of something that may deepen. It is interesting to hear views of others and never is there a lack of opinion or someone willing to take the counter-argument.  Continue reading »

Markets follow the dots

Thursday, March 20, 2014

The Fed recently held their two day meeting to discuss the economy and interest rates, amongst other things. After the meeting, new Fed Chairman – Janet Yellen – conducted her first press conference to communicate to the public all things economic. Ms. Yellen took questions from members of the media and by all accounts performed solidly. She did get pinned down on one question related to the timing of the first Fed funds rate increase to which she indicated approximately six months after the Fed’s bond-buying program ends. Most observers expect the bond-buying program to be completed by year’s end, which would put the Fed funds rate increasing in the summer of 2015.  Continue reading »

Stock correlations

Tuesday, March 11, 2014

In the years immediately following the financial crisis of 2008, stock prices largely moved in tandem, which proved difficult for active managers to separate themselves from the herd. As time moves further from the financial crisis, stock correlations are receding from previously elevated levels.  Continue reading »

February recovery

Thursday, February 20, 2014

It wasn’t but a few weeks ago that speculators were showing pessimism and selling equities on fears of emerging markets not being able to withstand a U.S. Fed cutting back on bond purchases, which would result in interest rates increasing. Well, fast forward about three weeks of trading and worries have receded and markets have recouped losses from January.  Continue reading »

Fear Invasion

Monday, January 27, 2014

The winds of fear have come ashore in lands classified as emerging markets. It is no secret that the U.S. Fed is reducing stimulus now that the domestic economy appears to be on solid ground. Also, contributing to the increased volatility is the fact that the Chinese economy is growing at a slower rate than in years past and concerns are mounting about the risk of trust products sold outside of traditional banking channels that promise higher yields. These factors have investors moving to higher terrain and are causing emerging markets currencies to be bashed by large swells of capital movement. Continue reading »

Tis the Season for Predictions

Wednesday, January 08, 2014

Early January and late December is the time when forecasters predict outcomes for the year ahead. For us, it is viewed as entertaining reading. We do not keep score or try to see who is right or wrong over time. Our preference is to base investment decisions on economic cycles and valuations. Nevertheless, a few of the questions prognosticators are considering when making predictions include: Continue reading »

Sweet Spot

Friday, January 03, 2014

The U.S. economy going into 2014 seems to be in a sweet spot. This means, economic growth is moderate (not too fast or slow), the employment picture continues to brighten, inflation is benign, and interest rates are not an impediment to growth and financing. Many thanks must be given to the Fed’s accommodative monetary policy in assisting to create this rosy environment. Resultantly, some domestic equity indices posted their best annual results since the 1990’s making it a very good year.  Continue reading »

Good news/bad news

Friday, December 13, 2013

U.S. equity markets have had a stellar run in 2013 and are at least fairly valued if not slightly overvalued, according to standard valuation metrics. Many pundits believe accommodative monetary policy on the part of the Fed has played a key role in strong equity market returns.  Continue reading »

Pension Plan Funded Status Improve

Wednesday, December 04, 2013

Mercer said on Tuesday that the funded level of pension plans for S&P 1500 companies rose to 93% at the end of November. This is the highest level since October 2008 and is up 19 percentage points year-to-date. Continue reading »

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