“It’s hard to make predictions, especially about the future,” Yogi Berra famously said. The S&P 500 pushed to a new high last week and the yield on the 10 year U.S. Treasury Bond dropped to the year’s low May 15—confusing signals. Ordinarily, a rising stock market anticipates higher economic growth, and higher interest rates usually
The prospect of interest rates remaining low for longer has become clearer in the first 100 days of Janet Yellen’s leadership at the Federal Reserve. At the same time the threat of new asset bubbles forming may have become more pronounced. These are views expressed by faculty at the Wharton Business School. While tapering of
Just as one cold wave follows another this winter, waves of market volatility have become the norm in 2014. Do the waves of volatility forecast a change in the investment climate, or is it just a naturally recurring market rhythm? Based on our readings, seasonal volatility does not appear to be a precursor of a
Markets have been choppy since the page turned to another year. Uncertainty about the withdrawal of economic stimulus by the Federal Reserve, the pace of economic growth, and the potential for contagion spreading from emerging markets have been leading causes. This week we examine these issues as they relate to one another. We believe reasons
Labor Day is behind us and fall—usually a volatile period-- is before us. The last weeks of August showed signs of optimism for the economy and as well as a rise in tensions in the Middle East.
Stocks are rebounding from a rough ride, but this is characteristic of many pullbacks since the bull market began in March 2009. According to the analysis of Liz Ann Sonders of Schwab, the stock market appears to be transitioning to a market driven more by traditional fundamentals, and less by Fed policy. On the bond side, Bill Gross of PIMCO believes the Fed is overly optimistic in its outlook for declining unemployment, and the recent spike in bond yields has been overdone
Unlike the fictional town of Lake Wobegon, it has not been a quiet week on Wall Street. Virtually every financial asset is down. This week we look at different perspectives on Federal Reserve communications occurring last Wednesday when Chairman Bernanke discussed tapering the pace of bond-buying.
Since May 22, markets have been volatile. This week we explore some of the reasons, review a colorful essay on the effects of Fed policy, and what Fed policy is doing to long-term care insurance rates.
Despite volatility of recent days the Dow Jones Industrial Average and the S&P 500 Index® recently marched to even higher all-time highs. A large part of the fuel is Federal Reserve policy.