The H Group Blog

Investment and Financial Planning news from some of the best in the business.

Weekly Review - May 22, 2017

Website Administrator - Monday, May 22, 2017

Summary

Economic data for the week was highlighted by some mixed regional manufacturing results, stronger industrial production, a drop-off in housing starts, and jobless claims that continue to run at very low historical levels.

U.S. stocks declined during the week along with more controversy surrounding the president, while foreign equities gained due to the drop in the value of the dollar. Bonds fared well with investors seeking out safe haven assets, resulting in lower interest rates. Real estate also gained, as did commodities, with oil prices rising on the heels of extended OPEC supply cuts.

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Weekly Review - May 15, 2017

Website Administrator - Monday, May 15, 2017

Summary

Economic data for the week was highlighted by a disappointing gain in retail sales, while consumer sentiment improved, jobless claims provided their best showing in almost 30 years, while inflation numbers were mixed but generally showed tempered gains.

U.S. equity markets lost ground, while foreign markets experienced a positive week. Bonds were up slightly with rates ticking downward, and commodity indexes rose due to an increase in energy prices.

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Weekly Review - May 8, 2017

Website Administrator - Monday, May 08, 2017

Summary

Economic data for the week was highlighted by a decline in but still-strong ISM manufacturing numbers, continued strength in ISM non-manufacturing, and continued strength in labor metrics, including the April employment situation report. The FOMC meeting resulted in no policy action, which was as expected, although chances for a June rate increase appear to have again risen.

Equity markets rose over the week, with foreign stocks in Europe especially strong with sentiment improving prior to the French election. Bonds pulled back a bit in the U.S., as rates rose, while foreign bonds benefited a bit from a weaker dollar. Commodities generally lost ground due to continued weakness in crude oil prices.

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Question of the Week - May 8, 2017

Website Administrator - Monday, May 08, 2017

Where are we from a business cycle perspective? Any closer to recession?

As it turns out, recessionary risks appear to remain contained. No doubt, this business cycle is long, and in fact, if this continues another year or so, it will be the longest in modern history, rivaled by the extended 1990's and 1960's cycles. Economists are quick to point out that there is nothing special about a long length that necessitates bad things happening from a business cycle 'time's up' perspective. Instead, it's about the magnitude of growth that has occurred during the growth cycle, as well as the excesses that can arise as cycles naturally expand. As we've noted several times, growth has been slow, for a number of reasons. Real GDP growth has been sub-par relative to prior decades mostly because of poorer demographics (fewer workers) and a lag in productivity (which tends to be a cyclical phenomenon). Despite hopes by the new administration of high growth into the 3's and 4's, it's been shown by a variety of economists that such growth isn't sustainable (or likely even possible) because of those long-term factors mentioned. Essentially, there would need to be a huge demographic boom (which obviously wouldn't become productive for several decades) as well as a major productivity increase (where it's difficult to locate where such a boost would originate). Labor force growth has averaged +1.5% for the bulk of the post-war period, but how we're lucky to get +0.5%. Productivity has grown in the range of 0.6% or so over the last five years. Obviously, the sum of the two factors is quite low. Interestingly, the areas where these factors are decent is abroad, and particularly in the emerging markets—both sales exposure from EM in developed markets as well as direct EM exposure, where valuations continue to look depressed.

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Weekly Review - May 1, 2017

Website Administrator - Monday, May 01, 2017

Summary

Economic data for the week were highlighted by a weaker-than-expected result for 1st quarter GDP, and disappointing sentiment data, while housing ended mixed and jobless claims remained low.

Stock markets rose globally, with help from results from the French presidential election that favored a conventional, pro-euro candidate. Bonds declined a bit on the U.S. investment-side, but high yield and foreign debt fared well. Commodities were mixed, as oil prices were little changed during the week.

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Weekly Review - April 24, 2017

Website Administrator - Monday, April 24, 2017

Summary

Economic data for the week showed slower but still-strong results in regional manufacturing and production, while housing metrics were mixed.

Stock markets gained globally, led by the U.S. and Japan, while other markets generally came in flatter. Bond returns were flattest of all, with minimal changes in interest rates for the week. Commodities lost ground along with oil prices declining due to higher supplies

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Tax Freedom Day 2017

Ron Kelemen - Tuesday, April 18, 2017

Taxes are on everyone's mind this time of year, now that most of us have filed our taxes—or at least extensions. Just how much taxes do we pay, and how long do we have to work each year to pay them? According to The Tax Foundation, Tax Freedom day falls on April 23 in 2017, 113 days into the year. The Foundation also calculates that: Read Entire Article Here

Weekly Review - April 17, 2017

Website Administrator - Monday, April 17, 2017

Summary

Economic data for the week consisted of unsurprisingly weaker retail sales, lower inflation readings via the consumer price index and producer price index, as well as continued strength in labor markets.

Equity markets lost ground in the U.S. for the most part, while developed and emerging foreign markets generally were flattish. Bonds fared well in that anti-risk environment, as did real estate, while commodity indexes also gained with help from higher crude oil and gold prices.

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Question of the Week - April 10, 2017

Website Administrator - Monday, April 10, 2017

What does the Fed mean when it talks about reducing its balance sheet?

In the course of its regular operations, the Federal Reserve maintains a balance sheet of assets and liabilities, which is meaningful for government accounting purposes, and, more tangibly, to serve as a vehicle for holding U.S. treasury bonds that are bought and sold during the Fed’s routine open market operations (which serve the key function of interest rate targeting). Since the financial crisis when quantitative easing was put into place through the massive purchase of treasuries, this asset bucket has also held agency mortgage debt, in an effort to help stabilize home finance markets in the wake of the widespread breakdown of housing prices and well-publicized issues with mortgage underwriting quality.

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Weekly Review - April 10, 2017

Website Administrator - Monday, April 10, 2017

Summary

Economic reports for the week came in mixed, with slightly weaker ISM manufacturing and non-manufacturing data, although both remained strongly expansionary. While the ADP employment report was quite strong, the government nonfarm payrolls report was far less so, while the unemployment rate declined.

Equity markets were mixed with flat to lower results in the U.S., with large-caps holding up much better than small, and better results from emerging markets than developed. Bonds gained a bit with interest rates ticking downward a bit, but foreign assets of all kinds held back by a stronger dollar. Commodities edged upward along with higher prices for crude oil.

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