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Category Archives: Weekly Market Commentary

Love-Hate Relationship Between Bond Yields and Stock Prices

Stock prices and bond yields have historically had a love-hate relationship that would make the romantic ups and downs of any soap opera seem mild by comparison. But, currently, the relationship between them remains tight and far from crossing the line that would lead to a breakup. With the 10-year Treasury yield rising a half of a percentage point last month, investors are beginning to wonder when rising interest rates may start to negatively affect stock prices. Higher yields can slow…

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Love-Hate Relationship Between Bond Yields and Stock Prices

Summer Rentals

Memorial Day weekend kicks off the summer season in sunny destinations across the country as city dwellers and others seek to escape the heat and enjoy some natural beauty and relaxation. But like unwanted guests crowding a cabin or a cottage, a lot of unwelcome events that impact the markets can really ruin a summer vacation. So far, however, the calendar for investors appears…

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Summer Rentals

Buyers & Sellers

We devote this commentary each week to assessing the many reasons markets may rise or fall. But at the heart of it, all markets come down to just one thing: 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…

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Buyers & Sellers

The Rally Is Getting Old, but a New Trend May Be Emerging

Will stocks have a pullback? Eventually sure — but when? This past Friday, May 10, 2013 marked 176 days since a 5%+ pullback in the S&P 500, tying the record for stretches without a pullback in this 50-month-old bull market…

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The Rally Is Getting Old, but a New Trend May Be Emerging

Borrowing for the Future

A recently detected error in a study by Harvard economists Reinhart & Rogoff has garnered much attention in the financial press lately. The study had initially concluded that once a country exceeded a 90% debt-to-gross domestic product (GDP) ratio, the pace of economic growth slowed sharply. The corrected data reveal that growth slows as debt-to-GDP rises, but at a pace not meaningfully different than at other round numbers. The study raised the issue of whether large amounts of debt are really bad. After waging a war on debt for the past several years…

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Borrowing for the Future

Soft Spot Arrives on Schedule

There are certain things we have gotten used to counting on each spring: the season changes and the weather warms, baseball games bring fans to the stadiums, the economy weakens, and investors “sell in May and go away.” The old Wall Street adage “sell in May and go away” refers to the seasonal tendency of stocks’ performance to weaken in the spring until the fall. In recent years, this spring slide in the stock market was driven by the arrival of a spring soft spot in the economy. This soft spot has emerged again — for the fourth year in a row…

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Soft Spot Arrives on Schedule

Is Investor Complacency Finally Ending?

Last week, U.S. stocks suffered their worst drop since June 1, 2012, measured by a 2.1% loss — totaling 318 points — in the Dow Jones Industrial Average. The week began with a terrorist attack that disrupted the Boston Marathon and a report that China’s economic growth unexpectedly slowed in the first quarter of 2013. Throughout the week, first quarter 2013 earnings results, including widely watched companies such as…

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Is Investor Complacency Finally Ending?

First Quarter Earnings Insights

Four times a year, investors focus on the most fundamental driver of investment performance: earnings. Unfortunately, like the economy, earnings growth remains sluggish. The first quarter of 2013 is likely to mark the fourth quarter in a row of low to mid-single-digit earnings per share growth. The dollar amount of earnings per share for the S&P 500 companies is expected to be…

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First Quarter Earnings Insights

Searching for Inspiration

The S&P 500 Index closed at 1553 on Friday, April 5, the level the current rally first reached a month ago. The stock market’s stalling momentum and increasing volatility, combined with other signs evident in the market’s recent behavior, suggest investors might be looking for new inspiration…

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Searching for Inspiration

Message From the Markets

Stocks posted a strong first quarter. While shy of last year’s 12% first quarter gain, the S&P 500 Index’s 10% gain seen this year reflects very strong performance. Consistent with the powerful gains for stocks, bond yields and oil prices also rose in the quarter. We devote careful study to the economic data to help us assess the outlook for the markets. What about the other way around? Given the average-at-best economic readings during the first quarter, the performance of the stock, bond, and commodity markets begs the question…

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Message From the Markets