As the current bull market enters its ninth year, it's time to recall that bull markets never go in a straight upward trajectory. Pullbacks of 5% or more and corrections of 10% or more are quite normal. But just how normal are they? Read Entire Article Here
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Economic data for the week was highlighted by strong employment reports from both ADP and the official government report on Friday, which raised or solidified the likelihood of a FOMC interest rate increase next week. Other peripheral manufacturing reports were generally neutral.
Equity markets in the U.S. fell back for the first time in a while, while European stocks gained due to stronger results and ECB language. Bonds suffered due to higher interest rates, as did real estate. Commodities experienced a poor week from a sharp decline in oil prices due to higher inventories.Read Entire Article Here
Is the bull market really 8 years old?
It doesn't seem that long ago, but stock markets just celebrated an 8-year anniversary from the market lows hit on March 9, 2009, when sentiment hit a trough during the Great Recession. Since that time, the S&P 500 price index has moved from 677 to 2,373, which, when adding back in dividends, accounted for a +316% cumulative total return (over 19% on an average annualized basis). Interestingly, it has been considered one of the least-loved bull markets in some time, as many investors seemed to have been skeptical from the start, and only recently have shown signs of optimism with hopes for improvement from the political side in the tax and regulatory environment, as well as hoped-for fiscal spending on defense and infrastructure.Read Entire Article Here
Economic data for the week was led by strength in both manufacturing and non-manufacturing indexes, strong consumer confidence and jobless claims, and mixed housing results.
Equity markets gained in the U.S. and abroad in foreign markets, while emerging markets fell back for the week. Bonds lost ground as interest rates rose in response to Fed rate hike comments. Commodities lost ground, mostly due to oil and precious metals.Read Entire Article Here
Is the Economy Running 'Hot' Yet?
Probably not, but it's all relative. That reference was a previous quote from Janet Yellen, in regard to her willingness to let the economy overheat a bit more than typical in an effort to err towards higher growth. This can be a tricky balance, of course, from a monetary standpoint, as the purpose of raising interest rates and other types of restrictive policies in the first place is to keep economies from running overly hot. 'Hot' economies tend to be characterized by over-exuberance, too much risk-taking and taking on credit risk until a peak hits—when there's not much margin for error from smaller economic hiccups, that can lead to defaults and subsequently lead to a dramatic reversal of the previously bullish sentiment. This is the nature of the process, and is hard to circumvent completely, although officials do their best to 'manage' the severity of these cycles as much as they can. This was generally successful over the past few decades (2008 excluded), with ongoing debate about how much an economy can be managed using just these tools.Read Entire Article Here
On a shortened holiday week, and a light one for economic data, housing results were generally strong, and jobless claims continued to run at low levels.
Global equity markets were generally higher on the week, with continued improved sentiment, while U.S. bond markets rallied upon lower interest rates, as did foreign bond markets. Commodities ended flat, with little change in crude oil prices.Read Entire Article Here
With the Dow index of 30 stocks recently closing above 20,000, we are getting asked if the stock market is too high. Our favorite answer to this and many other questions is "It depends." Just the price of a stock or the level of a market index doesn't tell the whole story. Part of our answer depends upon whether one is looking at the stock market as value investor or as a growth investor. Both approaches are valid, and both go in and out of favor. Read Entire Article Here
Read Entire Article Here
In a busy week for economic releases, several manufacturing indexes shined with strong results, inflation came in stronger than in recent months, and housing numbers were a bit mixed.
U.S. equity markets again showed strong gains, although foreign stocks also came in positive. Bonds were flattish with little changes in interest rates, although high yield bonds continued their momentum. Commodities fell on the week, although crude oil prices were little changed.Read Entire Article Here
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