Last week the US stock market had its best week since 2014, after an election result that almost nobody saw coming. The Dow Jones Industrials rose about 5% for the week. At the week’s beginning, The Dow went up in anticipation of a Clinton Presidency, then dropped 700 points in Dow futures in a short
Britain’s vote to leave the European Union (EU) caught the world by surprise. Since the vote, stock market volatility has increased dramatically—a predictable result because stock markets don’t like uncertainty. Similarly, interest rates have declined—just as dramatically—because investors seek the safe haven of U.S. Treasury bonds during uncertain times. With lower rates at home, spillover
Interest rates are unlikely to rise very much in the next few years. That is the message coming through from the Fed’s June 15 meeting and from Chairwomen Janet Yellen’s testimony to Congress this week. This is a notable change in tone over the last few weeks. The Fed capitulated to the realization its forecasts
Last week the Federal Reserve scaled back its view of prospects for the U.S. economy and labor market. Reuters discusses the timing of when interest rates will go higher. Many of our clients have been burned by the brokerage industry. The CFA Institute advocates for Department of Labor proposals to broaden the sweep of individuals
If we had told you 25 years ago--when you were earning 8.5% on a 30 year U.S. Treasury bond—that you would be earning 2.5% today on that same bond, you would have labeled the thought sheer madness. Yet, that is today’s reality. This week we review why low interest rates may be with us for
Markets were rocked last week due to a dramatic drop in oil prices. This week we discuss what to make of it. The plunge in the price of oil should act like a shot of adrenaline to the world economy. But, there will be winners and losers. Overall, the effect of cheaper oil is clearly
Investors have been contending with two trends in the sell-off of recent weeks: anxiety over a change in Fed policy and evidence of a slowdown in the global economy. A strong U.S. economy continues to suggest increases in interest rates in the first half of 2015. At the same time, the rest of the world
U.S. economy returns to growth after winter downturn. The U.S. economy grew at a seasonally adjusted 4% in the second quarter, according to numbers released last week from the Commerce Department, topping most economists’ forecasts. This was a nice rebound from the first quarter’s steep contraction of 2.1%--the worst single quarter downturn in five years.
In our world of investment management and financial planning, uncertainty begets questions: sometimes the best reply to any of them is It Depends. This week we examine several current issues where It Depends. When will the Fed hike rates? It depends. What will the conflict in Iraq mean for the economy and investors—it depends. Will
Global growth appears to be gathering momentum after an unusual cold snap in the U.S. The employment picture has improved with four months of sustained job growth. And, inflation is firmly under control, with the implication that stock and bond markets are fairly valued in a low interest rate environment. Outlook for Global Growth. The