This week we continue the theme begun last week—examining the economy and the stock market as we turn the page on a New Year. This week we present three articles that in varying degrees, address the economy and markets from different angles. The first article compares present conditions to those that existed prior to the
Mixed signals—that’s the only term to describe it. As the calendar turned into a New Year, signs looked promising that the economy was beginning to gain strength—to finally reach the point it does not require monetary stimulus. Then, the Friday jobs report, which Mohammed El-Erian of Pimco called ‘strange and puzzling’, created doubt about the
The last few days have brought some good news for both Main Street and Wall Street. The House passed a budget deal, so we can avoid the uncertainty of a government shutdown for at least two more years. Regulators finally agreed on rules that reduce the potential of banks making risky trading bets that spill
My daughter Susanna has a new job as Corporate Communications Manager for the Washington Redskins. It was serendipity, a fortuitous series of events that led to her first day of work on Labor Day. She received a call one Thursday evening about a job opening; she interviewed eight days later; she packed her car and drove to Ashburn, Virginia—home to Redskins Park—the following week.
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.
Sometimes good news is greeted poorly by the market. Last week the number of claims for jobless benefits dropped to the lowest level since October 2007. Consumer confidence also moved near a five-year high. However, the stock market dropped, and the yield on the benchmark 10-year Treasury note, which moves inversely to prices, climbed. Concerns that the Federal Reserve will taper asset purchases beginning as early as September have stoked a selling spree.
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
Economic growth—where we are, two possible trajectories for the intermediate term, and a “middle way” to stimulate growth that hugs neither ideological extreme. Those are the questions we look at this week.
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.
The Dow Jones Industrial Average and the S&P 500® Index recently reached all-time highs. Yet, a seeming disconnect between the economy and the stock market exists. In this blog we focus on news events that clarify the economic situation and Fed policy and the apparent disconnect with the level of the major stock indexes. We also mention an item in the President’s budget proposal that is central to this region’s economy.