August 19, 2010

The Great Debate Continues

Amid persistent market concern about a double-dip recession in the United States, the economic calendar this week, though light, will provide plenty of opportunity for debate. Data for July and August on manufacturing, housing, producer prices and leading indicators are due out this week. None of the reports, however, is likely to be the silver bullet that puts the double-dip debate to rest. It is a relatively quiet week for ……

 

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August 17, 2010

Missed Opportunity

 This year has been defined by three growth scares. In the first quarter, the markets were focused on a slowdown in China, in the second quarter the concern moved to a slowdown in Europe, and in the third quarter the growth scare has shifted to the United States. In each of the prior quarters, the concern peaked at the midpoint of ……


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August 11, 2010

Uncertain Fed Means Certain Outcome

 In his recent testimony to Congress, Federal Reserve Chairman Ben Bernanke used the phrase “unusually uncertain” to describe the U.S. economic outlook. The word uncertain was used five times in the statement released at the conclusion of the June 23 meeting, and was used 16 times in the minutes released on July 28. We may see more of the word “uncertain” this week ……


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August 09, 2010

Will They, or Won’t They?

The Federal Reserve’s (Fed) policy making arm, the Federal Open Market Committee (FOMC), meets this week amid increased market chatter about deflation (or falling prices) and calls for more monetary policy stimulus. The U.S. economic data calendar gets off to a slow start this week, but by the end of the week, the market will know more about the inflation/deflation debate, merchandise trade, retail sales, and small business……

 

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August 05, 2010

July Economic Data Takes Center Stage

 With the very successful second quarter 2010 earnings, reporting season now two-thirds over, the U.S. economic data will likely dominate market sentiment this week and over the next several months until the third quarter corporate earnings “preannouncement” season begins in mid-September. This week is chock full of key data for July, beginning on Monday, August 2 with the Institute of Supply Management’s ……


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August 03, 2010

Mid-Term Market Moves

We continue to adhere to our long-held forecast for modest single-digit gains for the stock market in 2010, despite the lack of any year-to-date gain. As the August recess for Congress gets underway this week, the campaigning for mid-term elections heats up. A catalyst for a late year rally could be the upcoming mid-term elections. The elections may mark a shift away from the uncertainty surrounding the potential for sweeping legislative changes. In addition, as we noted last week, given the shifting ……

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July 30, 2010

Mid-July Data Bounce Not Likely to Continue

With the European bank stress tests and the first wave of second quarter earnings reports out of the way, this week brings a full slate of economic data in the United States. The report likely to get the most attention this week is the report on Gross Domestic Product (GDP) growth for the second quarter of 2010. It is another busy week for ……

 

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July 28, 2010

Current Conditions Index

 Over the past week, the LPL Financial Current Conditions Index was relatively unchanged at 234. The level of the CCI indicates an environment fostering solid growth in the economy and markets. We expect that the CCI may weaken in the latter half of 2010 to reflect an environment of slow growth......


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July 26, 2010

Tax Hike 2011

While information on the economy, European bank stress tests, and corporate earnings helped to lift the markets last week, it may have been the hint that tax rates may not be going up as much as expected in 2011 that got investors the most excited. Based on comments from last week, the party consensus among congressional Democrats on taxes seems to be ……

 

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July 22, 2010

Economic Volatility Continues into July

 Corporate earnings reports for the recently completed second quarter, the results of the European bank “stress tests”, and testimony from Federal Reserve Chairman Ben Bernanke will dominate this week, as the economic calendar in the United States turns relatively quiet. With the Chinese ……


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July 20, 2010

Thriving in Volatile Times

Elevated volatility has been an enduring characteristic of the markets in recent years. Friday’s sharp pullback of about -2.9% in the S&P 500 after a 7% run up in the prior nine days was a reminder that volatility remains high even on a daily basis. This is due, in part, to the ……

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July 16, 2010

Mid-July Fireworks

Despite fireworks in the markets, last week was a relatively calm one for economic data and macro events. This week, however, will see a noticeable pickup in events. Data in the U.S. this week includes reports on manufacturing for July, retail sales, consumer prices and industrial production for June, and merchandise trade ……

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July 13, 2010

Earnings Season Preview

Last week resulted in the biggest weekly gain for the stock market, measured by the S&P 500, in about a year. The rebound completely erased the prior week’s 5% decline. Commodities also rose. Increased risk appetite by investors was also evident in the bond market. Economically sensitive High-Yield Bonds rallied while the safe haven ……

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July 08, 2010

Time for Quiet Reflection

We can expect a quiet week this week, for a change. The shortened holiday week will yield little economic data, the calm before the start of the earnings season next week, and little on the political agenda as Congress heads out of town for the week long Fourth of July holiday recess. However, next week heats up with a spate of important economic data: ……

 

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July 07, 2010

Summer Double Dip?

This week (July 5-12) is shaping up to be one of the quietest weeks of the year on the United States economic calendar. On the policy front, the Federal Reserve (Fed) is in vacation mode this week as well. However, major central banks overseas — the European Central Bank (ECB), the Reserve Bank of Australia (RBA), and the Bank of England (BOE) — will meet to set policy this week ……

 

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July 02, 2010

June Jobs Report Highlights a Busy Week

The status of the U.S. consumer in June (on both the spending and employment fronts) will likely dominate as the calendar turns from June to July. There are a few reports due out this week on the Chinese economy in June, and the data calendar in Europe is relatively heavy. On the policy front, although the Federal Open Market Committee (FOMC) meeting is now in the rear view mirror, overseas central banks have a busy week ahead. Early in the week ……

 

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June 28, 2010

Advantage Growth

 Watching the stock market lately has been like watching a very long tennis match. In the month of June, the S&P 500 has had nine up days and 10 down days ending up relatively unchanged. That is a lot of back and forth with little progress. This makes it fitting that last week’s Wimbledon first-round main draw match featuring John Isner against Nicolas Mahut lasted 11 hours over the course of ……


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June 25, 2010

No Summer Doldrums This Week

 Economic, monetary, and regulatory policy is likely to take center stage this week, as the economic data, soft of late, fades in importance. In addition to handicapping the outcome of the Federal Reserve (Fed) Federal Open Market Committee (FOMC) meeting, market participants will be mulling over the decision by Chinese authorities to allow the Chinese currency, the yuan, to move ……


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June 22, 2010

Soft Spot

Back at the beginning of this quarter, we forecasted that leading indicators of economic and profit growth would be peaking during the second quarter (Weekly Market Commentary, “When Leading Indicators Peak”, April 5, 2010). We believe that the upward momentum in these measures has now peaked, including the closely followed Leading Economic Index (LEI) and the Institute for Supply Management‘s Purchasing Managers Index (ISM). (We note that the ……

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June 18, 2010

Is Our European Vacation About to End?

Investors embraced risky asset classes such as Equities, Commodities, and High-Yield Bonds, last week, as the latest global economic data revealed few signs of any significant slowdown in economic activity related to the still-unfolding European fiscal and liquidity situation. While there were a number of key economic data reports ……

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June 15, 2010

Europe is Not the World

 With the markets’ movements in recent weeks driven almost entirely by news coming out of Europe it would seem that the European outlook must be central to the prospects for global economic and profit growth. However, evidence to the contrary was abundant last week as the stock ……


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June 10, 2010

Is the Labor Market Changing Course?

There was a torrent of economic data released in the United States last week as market participants continue to sift through the incoming data very closely, looking for signs of contagion from the European fiscal situation. The good news is that virtually none of the U.S. economic data released over the past week showed any signs of contagion including: ……

 

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June 09, 2010

Current Conditions Index

Over the past week, the LPL Financial Current Conditions Index remained stable at about 208. The stock market has tracked the CCI closely this year as it did last year reflecting the attention investors are paying to real time measures of economic and market conditions ……

 

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June 07, 2010

One Hit Wonder

 Like a performer that can’t string together a series of big hits, the stock market has provided investors with big one-day moves with no follow up lately. Last week was another example of the one hit wonder stock market. On Wednesday, stocks jumped 2.6% only to be flat on Thursday and then on Friday stocks ……


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June 04, 2010

Buy in June and Stay Tuned

The old adage of “sell in May and go away” has been repeated so many times we are still often asked if this is a sound investing strategy. We do not find sound reasoning behind this maxim. Instead, we believe investors should “buy in June and stay tuned” this year.  

We expressed caution in mid-April, given our outlook for a pullback in the stock market. However, now that the pullback that began on April 23 has occurred, we have spent most of May calming fears of another stock market plunge and, in general, we believe ……

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June 02, 2010

Does the Economic Data Matter?

Last week’s batch of economic data for April and May in the U.S. came in better than expected, including:
·         New and existing home sales,
·         Home prices,
·         Consumer confidence,
·         Shipments and orders for durable goods,
·         First time filings for unemployment insurance, and
·         Inflation.
 

Taken together, the data suggest that the U.S. economy continued to make a successful transition from recovery to sustainable growth as the first quarter of 2010 ended and the second quarter began. Financial markets, however, are forward looking and largely ignored last week’s data ……


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May 27, 2010

Ten Reasons for a Rebound

 Our outlook for 2010 remains for modest gains in the stock and bond markets, accompanied by a lot of volatility. Over the last couple of months, we presented our reasons for why we believed the stock market, as measured by the S&P 500, was due for another …… 


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May 25, 2010

If Europe Sneezes, Does the United States Catch a Cold?

The good news on the U.S. economy last week included the benign readings on both producer and consumer prices in April, solid news on manufacturing in April, and decent housing data for April and May. However, all of that good news was largely ignored amid the unfolding debt crisis in Europe. The bad news last week included……

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May 20, 2010

Current Conditions Index

Over the past week, the LPL Financial Current Conditions Index stabilized at 216 after two weeks of declines. The decline in the index and the S&P 500 in recent weeks mirrors the short-lived pullback we saw in January. The stock market has tracked the CCI closely this year as it did last year reflecting the attention investors are paying to……

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What Did the Fed Know on April 28?

Questions lingered last week about European economies and debt markets, including concerns as far reaching as the potential for a breakup of the Eurozone. This concern among market participants and policy makers came despite the historic $955 billion European loan guaranty package unveiled a week ago.

As a result, another very good week of U.S. economic data was overshadowed. The United States economic data continues to suggest ……

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May 18, 2010

The Long-Term Outlook

Over the past year, the stock market has tended to rise most of the time on Mondays and fall most of the time of Fridays with little change, on average, on the days in between. Last week provided an exaggerated version of that pattern with a greater than 4% gain on Monday, followed by a generally sideways move during the middle of the week and a 2% sell-off on Friday. Despite a solid gain for the week as a whole that put an end to a two week pullback, the sharp moves during the week left many investors feeling ……

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May 11, 2010

Back From the Brink in Europe

 Volatility reigned supreme in global financial markets last week, as budget and deficit related issues led to both social unrest (rioting in Greece) and wild swings in financial markets. Lost in all this volatility was another week of very good news on the U.S. economy. The data suggested ……


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May 07, 2010

Letter from LPL

 Dear Valued Investor:
On Thursday, May 6, 2010, the stock market, as measured by the S&P 500, expanded its recent pullback with a vengeance as it dropped over 3% for the day after rallying from midday declines of almost 10%. While fear was certainly the undertone for the day, the big declines and subsequent rally happened ……


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From Defense to Offense

Amid a scattering of economic data last week, the FOMC left its policy statement—and interest rates—unchanged versus the prior FOMC meeting in March. While the FOMC provided a modest upgrade of its assessment of the labor market and consumer spending, the rest of the FOMC statement—, which is dissected word by word by market participants for insight into the FOMC’s next move on monetary policy—suggested that the Fed is ……

 

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May 04, 2010

Watching the Calendar

Stocks fell for the first time in eight weeks as:

  • Standard & Poor’s cut Greece’s credit rating to “junk” status and downgrades on Portugal and Spain last week fueling concern Europe’s debt crisis is worsening.
  • Financial reform advanced to debate in the Senate, propelled by the fraud charges against Goldman Sachs and the dropping of a pre-funded bailout tax. These events fueled concern over ……

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April 30, 2010

Extending the Extended Period?

Although there are several notable economic reports due out this week, including the first look at real gross domestic product (GDP) growth in the first quarter of 2010, market participants are likely to be focused on……

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April 27, 2010

Extended Period For the Rally?

Stocks have now posted eight straight weeks of gains, measured by the broad Russell 3000 stock index. The good news on earnings and the economy helped sustain market momentum for another week. Last week, about 80% of S&P 500 companies’ earnings per share……

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April 23, 2010

Suit Yourself

The stock market, measured by the S&P 500, fell 1.6% on Friday as news that the Securities & Exchange Commission (SEC) filed fraud charges against Goldman Sachs. This news roiled financial markets, sending both stocks and commodities asset classes lower. Friday’s snapback was the most significant……

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April 19, 2010

Has the Consensus Caught Up?

Last week was a busy week for economic data and events. On balance, the mix of monetary policy messages and economic data releases left us with the same opinion of the Fed outlook, the outlook for Chinese policy, and the outlook for the United States economy that we had at the beginning of the week.


Our view remains that the U.S. economy is on track to transition from  recovery to sustainable growth, the Fed may very well modify (but not remove) the……


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April 15, 2010

Market Milestones and Earnings Expectations

On the cusp of the first quarter earnings season, the markets are hovering around two milestones: Dow 11,000 and 4% on the 10-year Treasury.

The 11,000 level on the Dow, touched briefly on Friday, is psychologically important. The 11,000 level was flirted with in 1999 and 2000, but unlike 10,000 which has been criss-crossed over-and-over again dozens of times, 11,000 has only definitively been crossed to the upside once, in 2006. The move to 11,000 is a clear sign of……

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Information Overload

Last week was relatively quiet on the economic front. The best news of the week was the unexpected surge in pending home sales in February, along with a better-than-expected reading on both chain store sales and the service sector Institute for Supply Management (ISM) index for March. The unexpected rise in first-time filings for jobless claims in early April was……

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April 09, 2010

When Leading Indicators Peak

The first quarter of 2010 was a good one for investors. The stock market, measured by the S&P 500, posted a total return of 5.4%. Small company stocks, measured by the Russell 2000 index, were up an even stronger 8.9%. Even bonds, as measured by the Barclays Aggregate Bond Index, were……

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April 06, 2010

Central Banks on Parade!

Last week saw another solid round of U.S. economic data for February and March. Personal spending, home prices, consumer confidence, and jobless claims data all came in at or above expectations. Although they were below expectations, vehicle sales in March……

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April 02, 2010

Quarterly Pattern to Repeat

In the first quarter, the stock market followed a volatile path that looks to be on track to end with a solid gain. We believe this pattern of performance is likely to be repeated in the second quarter. Specifically, as the first quarter began the upward momentum of the fourth quarter of 2009 continued, with the S&P 500 rising……

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March 30, 2010

Another Jobless Recovery?

Markets absorbed and shrugged off another round of weak housing data last week, as equity markets (as measured by the S&P 500 index) posted their fourth consecutive weekly advance, the sixth in the past seven weeks. A strong reading on durable goods shipments and orders in February, along with a comforting drop in first-time filings for jobless benefits provided a solid economic backdrop. On the policy front,……

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March 24, 2010

Awaiting a Change in Signal from the Fed

What We Make of the Key Reports Last Week:

Benign inflation data, improving jobless claims and the Fed dominated the economic landscape last week. The February readings on both the Producer Price Index (PPI) and Consumer Price Index (CPI), should allow the Fed to keep rates lower for longer.

The overall PPI fell by 0.6% between January and February, putting the year-over-year change at 4.4%. As recently as July 2009, the PPI posted……

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Current Conditions Index

Over the past week, the LPL Financial Current Conditions Index remained at 2.0, in line with the highest level of the past year. The stock market has tracked the CCI closely this year as it did last year reflecting the attention investors are paying to real time measures of economic and market conditions as they assess the likelihood of a successful transition from recovery to sustainable growth. The level of the Current Conditions Index indicates……

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A Healthy Rally?

The major stock market averages continued their gains last week. After advancing 10% in only 26 days, the S&P 500 reached a level not seen since September of 2008. The latest leg of the rally may be nearly exhausted after posting a double-digit gain in little more than a month. However, conditions remain……

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March 18, 2010

Made in America

Last Thursday, the U.S. trade data was reported for the month of January reflecting a brief pause in an improving trend of export growth. On the same day, the stock market, measured by the S&P 500, moved up to a new 17-month high. The market reaction was fitting since export growth is a key driver of the economy and profits for S&P 500 companies. In fact, exports accounted for……

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March 16, 2010

Dour U.S. Consumer Keeps on Spending

What We Make of the Key Reports Last Week:

The vast majority of last week’s U.S. economic reports support our view that the U.S economy remains on track for a sustainable recovery in 2010. The key report of the week was the better-than-expected February retail sales data, but data on jobless claims, merchandise trade, mortgage applications, consumers’ balance sheets, and business inventories also……

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March 11, 2010

Happy Anniversary?

One year ago, on March 9, 2009, the stock market began a rally that has led to a total return of 72% for the S&P 500, through the end of last week. As we reach this anniversary it is worth taking a look back at the powerful rally that has unfolded and seek clues as to what may lie ahead……

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March 09, 2010

Current Conditions Index

Over the past week, the LPL Financial Current Conditions Index held steady at 1.7. The level of the Current Conditions Index indicates an environment fostering trend-like growth in the economy and markets. We expect that the CCI may…..

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A Tale of Two Surveys

Key Reports Last Week:

The economic data last week was a mixed bag, but financial markets generally reacted well, even to the data that fell short of expectations. Many of the U.S. economic reports last week were impacted by severe weather in February, but the impact was more muted than we (and most market participants) expected. The key report of the week was the February jobs report. Bad weather kept more than……

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March 02, 2010

Groundhog Day Comes Late

Groundhog Day came late in February for the stock market. Last Thursday’s worsening weekly unemployment claims data spooked stock market investors worried about job growth as February winter storms negatively impacted the data. In that labor report, the stock market saw……

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A Blizzard of Data

Key Reports Last Week:

It was definitely a mixed bag for U.S. economic data last week, with more good news on the Business sector offset by some disturbing news on the consumer sector and the Labor Market. On balance, the market reacted well to the mix of generally weaker news, suggesting……

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February 24, 2010

Watch Your Step

The Federal Reserve moved another step in the process of “normalizing” monetary policy last week, announcing a 25 basis point increase to the discount rate—the rate the Fed charges banks who borrow money from the Fed—after the market closed on Thursday. The move was well telegraphed, as Fed Chairman Ben Bernanke mentioned ……


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February 17, 2010

Snow Day

Believe it or not, 49 of the 50 states (sorry, Hawaii) had some snow on the ground on Friday, February 12, capping off a historic week for snowfall in many mid-Atlantic cities. Barring an unlikely heat wave over the final half of the month, February’s harsh weather pattern is likely to impact economic data ranging from……

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February 09, 2010

Where Are the Jobs?

The economic data released last week was solid, but largely overlooked, as markets focused on sovereign credit risk in southern Europe. The week’s attention grabbing report, the January employment report, was……

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February 02, 2010

The Good, The Bad, The Ugly… And the FOMC, Too

The data released last week (and early on Monday, February 1) can be grouped into The Good, The Bad, and the Ugly. The “Good” news dominated the “Bad” and “Ugly”, suggesting that the economic data was……

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January 26, 2010

FOMC Meeting, Q4 GDP Report On Tap This Week

The economic data released last week was largely a sideshow, given the news on the special election in Massachusetts, financial regulation, the late -week drama surrounding the reappointment of Fed Chairman Ben Bernanke and policy tightening in China. The two most disturbing reports released last week were……

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January 21, 2010

Lost and Found

Many consider the 2000s to be a “lost decade” for stock market investors. This view is not surprising since the 2000s marked the biggest loss for the S&P 500 of any decade, including the 1930s. However, it wasn’t what you invested, as much as how……

 

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www.mwboone.com/library/Weekly_Market_Commentary_1_19_10

 

 

January 19, 2010

Q4 GDP Tracking to a 4.5% Gain; Relatively Quiet Week Ahead

On balance, last week’s economic data did little to change our forecast for real gross domestic product (GDP) growth in Q4 2009, or our outlook for Federal Reserve policy or inflation in 2010.

This week, the economic data takes a backseat to the deluge of Q4 corporate earnings reports, as the market……

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www.mwboone.com/library/Weekly_Economic_Commentary_01_19_10

 

January 15, 2010

Labor Market Recovery? Not Quite Yet.

Last week’s batch of U.S. economic data provided a favorable backdrop for U.S. equity prices. The reports showed that while the U.S. economy continued to expand in late 2009/early 2010, it was not expanding quickly enough to warrant any immediate action from…….

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www.mwboone.com/library/Weekly_Economic_Commentary_1_11_10

 

 

January 05, 2010

Buyers and Sellers

At the heart of it, all markets come down to buyers and sellers. Taking a look at who is buying and who is selling can tell us something about the durability of the market’s performance and what may lie ahead.

Presently, there are four notable trends in buying and selling in the stock market….

To see the rest of this article, please click on the link below:

 

 http://www.mwboone.com/library/Weekly_Market_Commentary_1_4_10.pdf

December 24, 2009

Current Conditions Index

The LPL Financial Current Conditions Index rose by 0.1 to 1.5, making another new high for the year. The CCI has had a late year growth spurt over the past several weeks. The index reflects current conditions aligned with the high end of our base case outlook, established at the end of last year, for mid-teen gains in the stock market an mid-single digit gains in the bond market in 2009, as measured by the S&P 500 index and the Barclays Aggregate Index respectively. The markets have already achieved these gains. However, the CCI implies the economy and markets are on track for an outcome somewhat better than our original base case outlook for 2009.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Current_Conditions_Index_12_23_09.pdf

December 22, 2009

The Decade Ahead

Investors are ending the year bidding a fond good-bye to 2009 and good riddance to the decade of the 2000s. After the stock market's steady rise in the 1980s and 1990s, the volatility and losses of the 2000s made for an unpleasant experience for many investors.

Just how bad was the past decade? The 2000s were the worst decade in history for the S&P 500. In the 2000s, the S&P 500 total return (including dividends) is down about 11%, or an annualized loss of -1% for the decade. That is worse than the -.01% annualized loss during the Great Depression decade of the 1930s.

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_12_21_09.pdf

Outlook for 2010

The data released over the course of last week continues to support our view on the economy, labor market, the Fed, and inflation for Q4 and 2010. We continue to expect real GDP growth of between 4.0% and 4.5% in Q4 (consensus is 3.0%) and growth in the 3-4% range for the full year 2010, with stronger 3-5% growth in the first half and slower 2-3% growth in the second half.

To see  the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_12_21_09.pdf

December 17, 2009

The Return of Headline Inflation

Taken together, last week's set of economic reports sent markets participants scrambling to raise their Q4 GDP estimates from around 3% to closer to 4%. Our own forecast for Q4 (3 to 3.5%) is too low as well. Better than expected data on export growth in October, inventory restocking in October, retail sales in November, and data released in early December suggesting a downward revision to Q3 GDP growth were the key drivers behind the renewed optimism for Q4. Even the news on the nation's budget deficit in November was better than expected, although the deficit remains politically uncomfortably high. In addition, the four-week average on jobless claims continued to decline in early December, further raising the odds that the economy will begin to create jobs in early 2010.

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_12_15_09.pdf

December 15, 2009

7 Steps to Create a Self-investment Plan

The end of the year is a good time to think about how you'll handle your financial investments, but it's also a good time to consider how you'll handle your number one investment — you.

With the stresses of work and other responsibilities, people often forget about treating themselves well, but the notion of investing in you goes beyond giving yourself a little time off or a treat at the mall. If you've ever wondered if your job could be better, if you could be earning more money, or if you simply could be happier, it makes sense to develop a plan to get there.

Here are first steps in creating a self-investment plan:

Continue reading "7 Steps to Create a Self-investment Plan" »

December 10, 2009

Data Suggest at Solid Finish for U.S. GDP Growth in 2009

Last Week's busy slate of economic data and events supported our view that the U.S. economy will post a 3.0 to 3.5% growth rate (as measured by real Gross Domestic Product) in Q4 2009, and that growth will continue at or above that pace over the first part of 2010. There were certainly some disappointing data points last week, among them:

* The below 50 reading on the Institute of Supply Managment's service sector index for November.
* The weaker than expected chain store sales data for November.
* A further drop in consumer confidence in early December.
* The sharp downward revisions to construction activity in August and September suggest that Q3 GDP will be revised down further.

However, there was better than expected news last week.........

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_12_7_09.pdf

December 03, 2009

Busy Week Ahead of November Job Reports

As this week's Weekly Economic Commentary was being published, market participants were busy digesting the details of last week's barrage of mostly better than expected economic data, along with the early results from the first weekend of the 2009 holiday shopping season. Last week's package of economic data included reports on:

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_12_1_09.pdf

December 02, 2009

Current Condition Index

The LPL Financial Research Current Condition Index (CCI) is an objective and transparent measure of how the conditions are evolving relative to our base case, bear, and bull cases defined in our Outlook 2009 publication. This weekly index is not intended to be a leading index or predictive of where conditions are headed, but merely a coincident measure of where they are right now. We want to track the conditions in real time to aid investment decision making. There are thousands of indicators-some lead the economy, some lag, while others merely offer a lot of statistical noise. We chose to create our own index tailored to the current environment to provide the clearest and most useful way to track how conditions are aligned with the expectations embedded in our investment recommendations.

To view the rest of this article, please click on the link below:

http://www.mwboone.com/library/Current_Conditions_Index_12_2_09.pdf

December 01, 2009

Protect Your Legacy. Update Your Estate Plan

If you don't have an estate plan in place, a will, a trust, a health care proxy and the like, now — regardless of your age or life stage — would be a good time to put your affairs in order. But if you already have an estate plan in place, do you know when you should be updating it?

Here are 12 things to consider:

Continue reading "Protect Your Legacy. Update Your Estate Plan" »

November 24, 2009

Busy Week of Data Ahead of "Bargain Friday"

It was a drab week overall for the economy last week. The data on housing and industrial production for October failed to meet expectations while the three reports for November - jobless claims, Empire State Manufacturing and Philly Fed manufacturing index - came in at or above expectations. The October retail sales and leading indicator data for October was roughly in line with expectations. Taken together, the data released last week does not change our view that the economy will post a 3.0% growth rate in Q4 2009 and will deliver above consensus growth in 2010.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_11_23_09.pdf

November 19, 2009

Benevolence in Bellevue

The path to being an independent financial advisor varies, but a lot of advisors wouldn’t attempt to go independent without first building a substantial client base. That wasn’t the case for Michael Boone, whose modest beginnings have fueled a passion for helping others.

After only nine months into his financial career, Michael decided to go independent and founded MWBoone and Associates in Bellevue, Washington. Not having many industry contacts or clients meant that the early years on his own were lean. For example, he reports his gross revenue was $5,900 his first year in business.

To see the rest of the article, please click on the link below:


http://www.mwboone.com/library/MWBA_LPL_Invest_in_Others.pdf

Running the Table

At around 1100, the S&P 500 index is in line with its high of the year. Signs that the recovery in the economy and earnings are sustainable are encouraging investors to drive stocks to higher. The key sign of sustainability is job growth, and the key to job growth is profit growth.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_11_17_09.pdf

November 18, 2009

Data Deluge on the Way This Week

Last week's rather sparse U.S. economic data calendar highlighted two fundamental factors that are driving the U.S. dollar lower: the twin trade and budget deficits. While a weak report on consumer sentiment in early November was worrisome, data on jobless claims, banks' willingness to lend, another set of robust economic data from China, and the weaker dollar were enough to keep the eight month, 65% rally in the U.S. equity markets on track.

In sharp contrast to last week's data calendar, this week's is chock full of data. Among the reports due out are:

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_11_16_09.pdf

November 12, 2009

Running the Table

With many market participants fretting about the sustainability of the economic recovery, we thought that last week's slate of economic data would have to "run the table" in order for the equity market to break the slump it had been in mid-October. For the most part, the data released last week did "run the table", with the vast majority of reports coming in at or above expectations. The market also benefited from another "friendly" FOMC statement, in which Federal Reserve (Fed) policy makers upgraded their assesment of the economy, but again promised to keep rates low "for an extended period". Equity markets responded positively to the preponderance of good news, as the S&P 500 posted a healthy 3.2% gain in the week, the first weekly gain since mid October.

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_11_9_09.pdf

November 10, 2009

Financial Regulatory Reform

This week marks the 10th anniversary of the passage of the of the Gramm-Leach-Bliley act (passed on Nov. 12 1999). This financial "reform" act helped to sow the seeds of the recent financial crisis by effectively repealing the Great Depression-era Glass-Steagall act of 1933. The Glass-Steagall act had separated lending and investing for many decades after combining both activities in the same financial institution had led abuses that threatened the stability of the financial system and worsened the Great Depression. The financial "reform" act passed 10 years ago this week allowed for consolidation between commerical banks, investment banks, and insurance companies, blurring the distinctions between lines of business and regulatory oversight. The unintended outcomes of this transformation was an explosion in the volume of mortgage originations and the use high amounts of leverage by investment banks that ultimately threatened the stability of the financial system.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_11_9_09.pdf

November 05, 2009

Are Stocks Over Valued?

Back in the summer months of May, June, and July, the stock market, measured by the S&P 500, remained in a range around 900 after investors moved from pricing in another great depression to a typical recession. Now, this fall, the S&P 500 has been in a range around 1050 as investors have moved from pricing in a typical recession to a recovery. The recent pattern of performance of the S&P 500 is remarkably similar to what place during the early summer months.

The nearby chart of the S&P 500 compares this summer's performance (from Aprll 22 through July 31) and the pattern this fall (from September 1 to now). They are nearly a perfect match, with the fall being exactly 150 points higher on the index than during summer. What this suggests is that recent slide may not be the end of the pullback either. An eventual move down of a few more percentage points in the next few weeks may unfold if ....

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_11_2_09.pdf

November 03, 2009

Assessing the Sustainability of the Recovery

Taken together, last week's economic reports raised concerns about the sustainability of the recovery. While our view remains that the economic recovery that began in Q3 2009 is sustainable and will persist into 2010 and beyond, the market began to doubt that view after a mixed week of economic data.

The sustainability of the recovery, and more importantly, the health of the albor market will be at the forefront of debate this week amid a very busy (and meaningful) weak of economic data. This week begins with the release of nonfarm payroll job report for October on Friday. In between, markets will digest key reports on housing sales, vehicle sales, chain store sales, and construction spending. Throw in the FOMC meeting, and the market will be just as overwhelmed by the economic calendar this week, as it was by the busy calendar over the past two weeks.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_11_2_09.pdf

October 29, 2009

Q3 Report Card Due This Week

Not surprisingly, in a week dominated by the first full week of the Q3 earnings reporting season, the economic data took a back seat to all the headlines on earnings. On balance, the week's economic data was mixed, with a few reports beating expectations, a few in line, and a few disappointments. Importantly, none of the data changed our view that the U.S. economy will experience 2.0 to 3.0% GDP growth in the second half of 2009, and that the consensus forecast for 2010, at 2.4%, is still too low.

This week, there are even more Q3 earnings reports (150+) than last week (137), but the market seems almost immune to all the good news there. Thus, we expect there to be more focus on the week's full slate of economic data which include reports on:

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_10_26_09.pdf

October 27, 2009

Back to the Future: Will 2010 Look Like 2004?

While some forecasters are reaching back to the 1930s to find comparisons to the environment the markets are likely to encounter in 2010, we find a more recent comparison to be compelling. We believe that 2004 could be a useful guide to what may happen in 2010.

The idea that 2010 could be similar to 2004 in many ways may not be as far fetched as it may seem. After all, 2009 looked a lot like 2003. Consider that in both 2003 and 2009.

To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_10_26_09.pdf

October 22, 2009

Persistent Pessimism

After crossing the 10,000 for the first time in a year, the Dow finished the week just below that threshold - but up for the second straight week, gaining 1.3%. The S&P 500 added a similar 1.5% on the week, up 61% since early March but still off 31% from the October 2007 peak.

The stocks market gain was solid, but clearly reflects lofty expectations for earnings since a record-breaking 79% of the 61 companies in the Standard & Poor's 500 that have reported third-quarter earnings so far managed to beat analysts' profit projections. Based on last week's reception, companies appear to have to present revenue growth combined with much better than earnings expected results to generate anything more than a yawn from the stock market - which appears to be nearly saturated with good news.

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_10_19_09.pdf

October 20, 2009

How, Why, and When?

After a long month- long respite in  September, the economic data is once again beating expectations in October, returning to the pattern seen in June, July, and August, when nearly 70% of economic reports beat expectations. This past week, only the early October University of Michigan consumer sentiment report failed to match what are now raised expectations for the economy.

This week, the economic data calendar is dominated by housing, with reports on homebuilder sentiment for October, housing starts, building permits, existing home sales for September, and housing prices for August. The Federal Reserve (The Fed) also releases its "Beige Book" - a qualitative assessment of the economy in the 12 Federal Reserve districts - ahead of the November 4 Federal Open Market Committee (FOMC) meeting. The FOMC is the policymaking arm of the Fed.
To see the rest of this article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_10_19_09.pdf

October 15, 2009

Setting a Higher Standard

Our mission is to offer the best advice, tools, and resources available to help you meet your financial goals. Guided by three tenets, performance, service, and transparency, the team is committed to delivering to all three through conflict free, actionable manager guidance, effective assett allocation positioning, timely economic and market perspectives, and visibility into our process.

Please click on the link below to view the rest of this article:

http://www.mwboone.com/library/LPL_Advancing_Your_Perspective.pdf

October 14, 2009

Renewed Rally

Last week's 5% stock market rally, as measured by the S&P 500, was driven primarily by a positive start to the third quarter earnings season. While we cautioned last week about drawing conclusions on third quarter results too early, we can't help but note that a number of companies gave us just what we were looking for by posting better than expected sequential revenue growth and a high 74% of companies are beating expectations.

We had expected a renewed rally to begin last week after stocks have been in a range of 1025 to 1075 on the S&P 500 for the past month. We raised our recommended stock weighting just prior to last week as the earnings reporting season was about to get underway. During the past two quarters, the stock market moved sideways in the two weeks prior to the start of the earnings season then rallied as the reports came in. This pattern appears to be unfolding again this season.
To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_10_12_09.pdf

October 13, 2009

2010 Consensus GDP Forecast Still Too Low

The data this past week was sparse, but the data that was released was generally above expectations, including the:

* Service sector ISM report for September

* Jobless claims for the week ending September 26

* Chain store sales for September

* September trade balance

In addition, we saw a spike in mortgage applications in early October and a better than expected reading on the nation's trade deficit in September. Financial markets reacted accordingly, with the S&P 500 rising 4.5% in the week, while the yield on the 10 year Treasury note rose nearly 20 basis points, to 3.38%, from under 3.2% a week earlier.

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Commentary_10_12_09.pdf

October 07, 2009

Third Quarter Earnings Preview

Four times a year investors focus on the most fundamental driver of investment performance: earnings. The third quarter earnings season gets underway this week. However, the companies that report early in the season are most often not the bellwethers they are commonly thought to be. We will not really know how results are shaping up until the end of the month, when about half of the companies will have reported.

The analyst consensus estimates for the earnings of S&P 500 companies in the third quarter fell sharply in the first five months of the year. Then, they stayed relatively flat despite a steady improvement in leading indicators of profit growth that we have highlighted in prior weekly commentaries, such as the ISM index and even our own Current Condition Index.

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Market_Commentary_10_7_09.pdf

October 06, 2009

Labor Market Improvement Stalled Out in September

The weak September jobs report, released on Friday, October 2, brought a disappointing month of economic data to a close. In June, July, and August, about 70% of the economic data came in above expectations. In September and early October however, the vast majority of economic releases were below (raised) expectations. As noted above, the much anticipated September jobs report also came in below expectations, and there were few “silver linings” in the report. (see below for details). Our key take away from the September jobs report is that the steady improvement in the labor market (from horrendous, to horrible, to awful, to bad) over the last eight months seems to have stalled out at “bad” in September. This calls into question our forecast that the economy will begin to generate job growth by year end. It does not, however, alter our overall views on the economy, inflation or the Fed.

To see the rest of the article, please click on the link below:

http://www.mwboone.com/library/Weekly_Economic_Commentary_10_5_09.pdf