News

Market Commentary
February 2014

The fourth quarter earnings reporting season started off badly but has improved significantly in recent weeks. The aggregate earnings for stocks in the S&P 500 are on track to reach a new all-time quarterly record, and earnings growth for the quarter should wind up being the highest of any quarter during the year.

 

more

 

 

January 2014

As we enter 2014 optimism is high that the recovery in economic growth in the United States will finally accelerate. Economic activity was lackluster for much of 2013, but strengthened as the year came to a close. Through the first half of 2013 U.S. gross domestic product growth averaged only 2.6 %, but during the third quarter GDP growth accelerated to 4.1 %, and early indications are positive for the fourth quarter. Businesses in the U.S. continued to build inventories in November, which will be a boost to economic growth in the quarter.

 

more
December 2013

Stocks continued to climb in October, with the S&P 500 Index up another 4.6%. Through October the index is up 25.3% in 2013. While this bodes well for the final two months of the year in domestic markets, 2014 is a different story. We continue to believe foreign markets will lead the way in 2014.

The recent economic data releases in the United States have been mostly supportive of the gains stocks have made this year.

 

more
November 2013

Stocks continued to climb in October, with the S&P 500 Index up another 4.6%. Through October the index is up 25.3% in 2013. While this bodes well for the final two months of the year in domestic markets, 2014 is a different story. We continue to believe foreign markets will lead the way in 2014.

The recent economic data releases in the United States have been mostly supportive of the gains stocks have made this year.

 

more
September 2013

The third quarter is almost over and so far the market has not experienced the sell-off many had been predicting. The S&P 500 Index was down 2.9% in August, but the rally in stocks has resumed in September with the index up over 3.0% this month (as of September 10th).

Historically September and October have been the most volatile months of the year in the stock market, and this year stocks appear to be especially vulnerable.

 

more
August 2013

Stocks in the United States continued to plow higher in July, buoyed by stronger-than-expected economic reports and corporate earnings reports which have generally beat analyst's lowered expectations. Companies in the Financial and Technology sectors have been particularly strong.

The S&P 500 Index was up another 5% for the month, bringing the total return for the index to 18.2% year-to-date. However, there are enough warning signals to cause us to continue to be cautious regarding stock returns the remainder of the year.

 

more
July 2013

Even though the U.S. economy is still facing many headwinds, the recovery in activity appears to be gaining traction. As the second quarter came to a close most of the economic reports were surprisingly strong, and the Federal Reserve seems to believe the U.S. economy is healthy enough to continue growing even as the amount of stimulus is reduced.

The U.S. Central Bank wants to believe this is true because the United States Government simply cannot afford to continue indefinitely the approximately $85 billion per month in bond purchases, and a review of the economic data gives some evidence that supports their thought process.

 

more
June 2013

Worldwide Quantitative Easing continued to push stocks into record territory in the month of May despite weak economic and corporate earnings reports. However, within the stock market there are two contradictory trends that developed over the past six weeks of trading which cannot last much longer.

In mid-April investors started speculating the Fed will soon begin to unwind the amount of stimulus being provided to the economy. Since that time those stocks that DO NOT derive as much benefit from the Fed's stimulus program (high-dividend, lower-volatility stocks) have sold off.

 

more
May 2013

Stock prices continue to rise, but the market's push into record territory has not been driven by economic or earnings data. Rather, stocks are climbing thanks to the continued liquidity support from most of the major Central Banks around the world, including the U.S. Federal Reserve.

Most of the economic data released recently has been disappointing, which indicates that the recovery in growth is faltering. Manufacturing activity in China and other large Asian economies eased in April, Korean exports are falling, and most of Europe remains mired in a recession.

 

more
April 2013

The recovery in economic activity in the United States appears to be gaining traction, but there are many headwinds which cause us to believe that the U.S. economy will not be able to sustain its growth rate the rest of the year.

That is not to say that the economic data is not improving. In fact, the data has been stronger than anticipated and now many economists are optimistic that growth during the first quarter of 2013 Gross Domestic Product (GDP) rose 2 - 3%.

 

more