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Monthly Archives: August 2015

Flat Start Does Not Mean Flat Finish

This year has brought a whole lotta flat. The S&P 500 dipped into negative territory for the year last week (on August 12) and is only up about 1% year to date. The bond market has been flat — the Barclays Aggregate Bond Index has returned just 0.51% so far in 2015. Even the U.S. economy was relatively flat during the first half of 2015, with just 1.5% growth in gross domestic product (GDP) on an annualized basis, well below potential. Flat, flat, and more flat. With the S&P 500 still fairly close to flat on the year (+1.6% on a price basis as of August 14), we look at how likely stocks are to produce a solid year of gains. A look back at history over recent decades is encouraging….

Flat Start Does Not Mean Flat Finish

Bond Market Perspectives: “Summer Growth Concerns”

The fixed income markets exhibited signs of a growth scare in July as inflation-adjusted, or real, yields fell over the month. The decline in real yields, along with lower inflation expectations and a flattening yield curve, all reflect the market’s downgraded assessment of future economic growth. Signs of growth picked up for the domestic economy over the second quarter of 2015 and, as a result, inflation expectations were on the rise throughout thequarter. Housing data were the standout, existing home sales in June moved to an annualized rate of 5.5 million, the highest since February 2007. Strongconsumer spending was another bright spot. Data released so far in the third quarter — such as a slowdown in retail sales figures and weak readings on wage growth — have been mixed and helped push inflation expectations down on the prospects of lower than anticipated growth…

Summer Growth Concerns