This Friday, March 7, 2014, the U.S. Department of Labor will release the Employment Situation report for February 2014. The Employment Situation report is two reports in one; the household survey generates the headline unemployment rate, while the establishment survey generates the nonfarm payroll job count. The unusually harsh winter weather across a large swath of the nation in February 2014 will likely have a major impact on the employment data in February. As of early Monday, March 3, 2014, the consensus of economists as polled by Bloomberg News is looking for a net increase of 154,000 private sector jobs in February 2014, after the 142,000 gain in January 2014. Prior to the 75,000 weather-impacted gain in jobs in December….
The first market storm of 2014 (that we had named Angel) is over with the S&P 500 and broader Russell 3000 stock market indexes rebounding to all-time highs after reversing a 6% decline. The decline was sparked by turmoil in emerging markets (EM) and weak economic data here in the United States in what amounted to a “growth scare.” Stocks have rebounded even though conditions in EM, measured by bond yields and credit default swaps, have not improved much, and the U.S. economic data continue to disappoint economists’ expectations [Figure 1]. Also, the Federal Reserve has communicated no change in path or message as a result of these developments. So what turned stocks around from their intraday low point on February 5? It was most likely fading concerns over weaker growth and deteriorating conditions for EM….
A comparison of the S&P 500 Index in 1929 just ahead of the stock market crash to the performance of stocks from 2012 through today has been making the rounds on the internet. The implication by the bears is that stocks are poised for an epic crash….
It was 1964, 50 years ago, that the film Goldfinger debuted. It is the quintessential James Bond film and the first one to win an Academy Award. In Goldfinger, Q — the head of the gadget-making “Q-Branch” — presents Bond an alternative to the traditional car. It can emit an oil slick and has a battering ram, a pop-up rear bulletproof screen, and even an ejector seat. These gadgets helped Bond make the best of some risky situations. Now, 50 years later, bonds are facing a risky situation — and alternative investments may help to make the best of it.
Although not part of the overall bond market measured by the Barclays Capital Aggregate Bond Index, the high-yield and municipal bonds we favor for 2014 are considered traditional investments….
This week (January 27 – 31, 2014) the Federal Reserve’s (Fed) policymaking arm, the Federal Open Market Committee (FOMC), holds the first of its eight meetings this year. The meeting — which will conclude with the FOMC issuing a statement at 2PM ET on Wednesday, January 29 — is being held against the backdrop of a wave of volatility in global financial markets, as market participants brace for another round of tapering by the FOMC.
We — and the consensus of economists as polled by Bloomberg News — expect that the FOMC will vote to taper its purchases of Treasury notes and…
Some things just go together — like the Oscars and Meryl Streep. The actress received her 18th Academy Award nomination last week. It is not all that surprising since half of the annual Academy Awards over the past 36 years have featured Meryl Streep as a nominee. While not as well known, business spending and stock market gains go together at least as well — especially when it comes to renewed spending by manufacturers and the stocks in the industrials sector Last week’s monthly report of U.S. factory capacity utilization, which measures the percentage of maximum potential output currently in use, reached the highest level since mid-2008. The drawdown in spare capacity highlights how long it has been since capacity has been expanded for America’s manufacturers….
The beginning of the year is often full of talk about what indicators to watch as to how the year may unfold: the first five days indicator, the January effect, the Super Bowl indicator, even the Chinese lunar New Year cycle, among many others. Many of these indicators claim to tell us either the outcome for the year or the pattern stocks may take for at least part of it. While most of these are little more than folklore and are easily discredited upon analysis, there is one that has stood the test of time, and I call it: the Year-Two Curse….
LPL Financial Research forecasts U.S. economic growth, as measured by real gross domestic product (GDP), to accelerate to 3% in 2014 from the 2% pace of recent years. This marks our first above-consensus annual forecast for GDP in many years. As of mid-December 2013, the Bloomberg-tracked consensus estimate by economists for 2014 was 2.6%. If achieved, the 3% pace of GDP growth in 2014 would be the best performance for the U.S. economy since 2005, when the economy posted 3.4% growth. While a strong growth rate in comparison to the past 10 years, the 3% growth rate would simply equal the average pace of real GDP growth since the end of WWII….
Each year that passes contains some wisdom for investors, but along with that wisdom can be some folly. 2013 was a year that bestowed an abundance of each on investors. The top 10 lessons of 2013 for investors need to be put into two categories: those that investors can take to heart as sound wisdom for the year to come, and those they should try to forget as they prepare for 2014….
In 2014, portfolios are likely to enjoy more independence from policymakers than in 2013, when the markets and media seemed to obsess over policymakers’ actions both here and abroad. This could be seen throughout 2013, during the government shutdown and debt ceiling debacle, the Federal Reserve’s (Fed) mixed messages on tapering its aggressive bond-buying program, the bank bailout and elections in Europe, and the unprecedented government stimulus referred to as “Abenomics” in Japan, among many other examples…..