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Divergence

Monday, August 25, 2014

Economic data from the U.S. and Eurozone suggests the two economies are on non-parallel courses. Fed Chairwoman Yellen and ECB head Mario Draghi delivered different messages recently in Jackson Hole, WY about economic conditions in their respective regions of responsibility.  Continue reading »

Passing Storms

Friday, August 08, 2014

Generally during the summer months in parts of Florida, thunderstorms roll through almost on a daily basis. One can just about count on these rain showers to come as they become part of the normal routine. This process is healthy and attributes to the lush, green vegetation found in Florida.  Continue reading »

Earnings

Saturday, July 26, 2014

S&P 500 constituent earnings are beating analysts’ estimates in aggregate so far for 2Q14 earnings season, according to information from the Factset. Of the 46% of companies reporting, approximately 76% have beaten earnings estimates and 67% have exceeded the sales mean estimate. Profit growth for the quarter has averaged 6.7% versus estimates going into the quarter of 4.9%. Analysts forecast further earnings growth for 2H14 with estimates of 8.3% and 10.4% for 3Q14 and 4Q14 respectively. Continue reading »

Equity fundamentals

Thursday, July 10, 2014

Equity return expectations going into this year were for moderate expansion with a bit more volatility. Well, so far returns have been moderately positive but not much in the way of volatility. We expect to see equities hang tough and ultimately move higher, but possibly with more swings in the action. Continue reading »

Historic Broad Rally

Monday, June 30, 2014

Broad asset classes posted gains in unison for the first half of 2014 through Friday 6/27/14, an occurrence not seen in more than 20 years.

Rallies in indices of stocks, bonds, and commodities reflected investor uncertainty in the face of irregular U.S. economic growth and geopolitical turmoil in Ukraine and the Middle East. It is unusual to see this many different categories – Gold 9.7%, Dow Jones UBS Commodity Index 8.1%, 10-year U.S. Treasury note 6.4%, MSCI World Index 4.8%, and MSCI Emerging Markets Index 4.3% - up at the same time as these asset classes tend to perform best in certain market environments. Commodities often rise in inflationary periods, stocks during periods of economic growth, and bonds normally outperform in weaker periods.  Continue reading »

Hammock season

Tuesday, June 17, 2014

Summertime traditionally leads to less equity and bond trading on Wall Street. Trading volume in these markets wane as investors and traders take vacation and enjoy warmer weather. This year, summer is holding true to past patterns. Continue reading »

Grinding

Tuesday, May 27, 2014

Markets have been unexcitable over the past month as broad equity indices slowly grind higher. Markets collectively can place emphasis on any potential macro event or can choose to not place importance on a given situation. So while there are events occurring around the world such as, European parliamentary elections, tensions in Ukraine, disputes in the South China Sea, and mixed economic reports, investors have remained calm and as a result, equity prices in aggregate have not moved stirringly in either direction. Continue reading »

Emerging Markets chatter

Thursday, May 08, 2014

There is a lot more chatter of late about the relative attractiveness of emerging market equities. It wasn’t but about six months ago that investors taste for this group was disdainful. My, how quickly times change.  Continue reading »

Earnings support

Friday, April 25, 2014

S&P 500 constituent earnings are beating analysts’ estimates in aggregate so far this earnings season, according to information from the Wall Street Journal. Of the 41% of companies reporting, approximately 69% have beaten earnings estimates, which is slightly greater than longer-term averages. Profit growth for the quarter has averaged 2.9% versus estimates of flat to no growth.  Continue reading »

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 »

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