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Dow 25K: A Look Beyond the Headlines
The Dow has hit yet another milestone: 25,000. By all means, cue the fireworks, cheering, champagne, and so forth. But since this is the sixth time since the start of 2017 that a 1,000-point milestone has been reached, let’s take a step back. After all, anything that happens six times in 12 months is hardly uncommon—and perhaps not worth getting too excited about.
Market Thoughts for January 2018

Brad McMillan, Commonwealth’s CIO, recaps another month of good news for the markets. In December, U.S. markets were up across the board, international markets did even better, and emerging markets hit it out of the park. As a result, we are entering the new year with a huge amount of momentum. Hiring continues to be strong, consumer confidence is very close to the highest level since the dot-com boom, and business confidence remains high. But will the recent tax reform bill have a major impact in 2018? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
What Does the Alabama Election Mean for the Markets?
Yesterday’s news that the Democrats won the Alabama special Senate election, for the first time in 25 years, rattled U.S. politics. By taking the Republican majority in the Senate from 52 to 51, it reduces an already tight margin for difficult votes.
3 Current Economic Trends to Watch
I have been wrestling with what to write about today. There’s not much to add that is new. The economy is doing well, and the data is coming in strong. Although the stock market is reacting to events in Washington, it is still within 1 percent of its all-time highs. From my beat, there is not a lot worth commenting on at the moment.
Market Thoughts for December 2017

Brad McMillan, Commonwealth’s CIO, recaps a month of good news for the markets. In November, U.S. financial markets were up across the board, and developed markets rose substantially. Hiring continued to do well, personal income grew, and consumer confidence rose to the highest level in 17 years. Plus, business confidence improved more than expected, and business spending was up. Given all of these positives, do we need to worry about political uncertainty in Washington, including the debt ceiling? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
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Is a New Crisis Brewing in Germany and Europe?
Many of us were under the assumption that we could go into the holiday season with Europe pretty much checked off the risk list. The economic news is good and getting better, and the major elections that have caused so much angst have passed. Not so fast, bub.
What the Tax Bills Could Mean for You
With the passage of the House’s tax reform bill, the Republicans have moved significantly closer to one of their key political goals. Of course, the Senate bill still needs to pass that chamber, and then the reconciled bill must pass both chambers. But the fact that the fractious Republican factions in the House have come together is a signal that passage is a real possibility.
Market Thoughts for November 2017

Brad McMillan, Commonwealth’s CIO, recaps a terrific month for the markets. In October, U.S., developed, and emerging markets were all up. Companies are making money, and stock markets are positive. Plus, despite three of the worst storms in U.S. history, consumer and business confidence grew. This is a very positive sign. On the corporate earnings front, however, there is some worrisome headline data. Still, profit growth continues to beat expectations. So, with a solid economy, where do we go from here? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
Should We Be Worried About Earnings Growth?
One of the key points in my argument that things are actually pretty good—and likely to get better—has been that with a growing economy, companies are selling more and making more money. Rising profits, especially on a per-share basis, are the foundation for a rising market.
Market Thoughts for October 2017

Brad McMillan, Commonwealth’s CIO, reports on a great month for the financial markets. In September, all three U.S. indices and developed markets around the world were up. These results are surprising given recent events. The U.S. was hit by some of the worst storms in history. Plus, the North Korea crisis persists, with credible talk of a nuclear war. Still, the markets continue to respond to the fundamentals, like strong consumer confidence and business investment. Will the bad news catch up with us? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
Improving Fundamentals Lead to a Strong Third Quarter
As we close out the third quarter of the year, here’s what we know. It has been a great year and a great quarter for stocks around the world. We’ve seen a really good month for all areas except emerging markets, which pulled back a bit but still posted the strongest quarterly gains overall.
Market Thoughts for September 2017

Brad McMillan, Commonwealth’s CIO, recaps a solid month for the economy and financial markets. International markets were mixed in August, but U.S. markets were up across the board, despite rising tensions with North Korea and the effects of Hurricane Harvey. Plus, retail sales came back, employment grew, and consumers seemed willing and able to spend. Should we expect growth to accelerate going forward, and what’s the potential effect of the debt ceiling? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
Market Thoughts for August 2017

Brad McMillan, Commonwealth’s CIO, recaps another great month for the markets and economy. In July, U.S. and developed markets were up, due to the simple fact that companies are making more money. Earnings came in much better than expected, U.S. job growth was strong, and wage growth picked up. Plus, both consumer and business confidence are on the rise. Clearly, there is positive momentum going forward. But with slow spending growth and a pullback in business investment, are there clouds on the horizon? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
Dow 22K: Are We Seeing a Pattern?
It seems like just a couple of months ago that I was writing about record highs for the Dow. In fact, looking at the data, it was only a few months ago, on January 26, that I wrote about Dow 20K. Reviewing that post, it notes that I last discussed stock market records 58 days before that. Are we seeing a pattern here?
Here Comes Another Bus: The Debt Ceiling
There’s an important—and potentially very disruptive—issue that has been largely ignored during coverage of the health care debate. The U.S. government hit its borrowing limit on March 16, 2017. Yes, that’s right—the U.S. borrowed as much as it legally can four months ago.
Q2 Earnings Outlook: Can Companies Continue to Beat Expectations?
When looking at the stock market, one of the key things we should focus on are earnings, as they represent the bedrock of a stock’s value. The best way to value stocks—the dividend growth model—analyzes earnings, growth rates, and required returns to determine what a stock is worth fundamentally.
Market Thoughts for July 2017

Brad McMillan, Commonwealth’s CIO, discusses the markets and economy in June. It was a good month, with consumer confidence and business confidence remaining strong. The Federal Reserve raised rates and seems likely to keep doing so. Plus, growth is accelerating around the world, from Europe to China. But here’s the problem: Both consumer spending and business investment are not growing as much as expected. So, are we going into a typical summer slowdown or are we looking at slower growth going forward? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
Not a Bad Place to Be: Market and Economic Forecast for the Second Half of 2017
Despite a weak first quarter, the second quarter has looked good, and signs are pointing to a solid remainder of the year. Recent data has shown an expanding economy, while companies have grown both their top and bottom lines. Markets around the world have reacted to this by rising substantially, and we’ve continued to hit new highs here in the U.S.
Market Thoughts for June 2017

Brad McMillan, Commonwealth’s CIO, discusses the markets and economy in May. It was a good month, with financial markets around the world rising and strong gains in the U.S. Still, we’ve had political and economic concerns, with the first quarter of the year being quite slow. But the data in May suggests this slowdown was temporary: Jobs came back, consumer spending was up, and consumer confidence remained high. We also saw growth in business investment. Are these positive trends likely to continue? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
Washington Turmoil Creates Uncertainty for Investors
I am in California, which means that I woke up this morning to a market that was already open—and dropping. Washington, DC is the cause once again. Growing turmoil in the nation’s capital has called into question the ability of the Trump Administration and Congress to enact their policy goals.
Market Thoughts for May 2017

In his latest video update, Commonwealth CIO Brad McMillan reviews another strong month for world financial markets. Markets were down for most of April but rallied during the last week of the month as worries about the French election subsided. Political concerns aside, economics are pretty sound, despite lackluster U.S. growth in the first quarter. Looking at the global economy, the news remains good and is getting better. Although a bit more worry has crept into the picture lately, the overall situation remains positive. Follow Brad at blog.commonwealth.com/independent-market-observer.
Sell in May and Go Away?
As April draws to a close, the old adage “Sell in May and go away” may be on some investors’ minds. The saying refers to the tendency of markets to underperform during the period from May to October (as compared with better performance from November through April), advising us to sell and wait for brighter days ahead.
The Trump Tax Plan: What You Need to Know
The big news today is the White House's tax plan, which proposes to cut taxes across the board, relieve millions of people from the burden of paying income taxes, and make filing much simpler and easier—all while keeping the budget in balance (or at least not making the situation worse).
Political Risk Update: France and the U.S. Budget
With Emmanuel Macron through to the second round, the French election is (largely) off the table as a systemic risk. Polls show Macron well ahead of Marine Le Pen of the National Front, and the likelihood is that the next French president will be a pro-European centrist rather than an anti-European populist.
Moment of Truth: Will the Market Meet Expectations This Earnings Season?
First, there was hype and then improving sentiment in the real economy, along with a nice initial rush in the stock market. More recently, we’ve seen doubts and weak numbers creep in for the economy and worries and a small pullback for the stock market.
March Jobs Report Preview
The monthly employment report comes out tomorrow, and markets are watching closely to see whether the string of positive surprises continues. If it does, it could be the start of a new upward run in the stock market. If not, it will suggest that economic strength may be starting to moderate. Either way, it will be big news.
Market Thoughts for April 2017

It was a decent month and a great quarter for markets, both in the U.S. and around the world, says Commonwealth CIO Brad McMillan. Globally, economics are very positive, which supports financial markets. Fundamental factors are also improving, and that looks likely to continue. What do we need to worry about? One word: politics. Although markets have largely priced in U.S. political risk, Europe poses greater concerns. Overall, though, the picture is quite positive going forward. Follow Brad at blog.commonwealth.com/independent-market-observer.
Today's GDP Report (and What to Expect in Q2)
As we close out the first quarter of 2017, all I can say is that it’s been a great one, economically and financially. Despite all of the worry and turmoil—in Washington, DC, and elsewhere in the world—markets have risen substantially and the economy has continued to grow.
Brexit Begins: Should U.S. Investors Care?
The big news of the day is that the United Kingdom has finally pulled the trigger on its exit from the European Union. The letter initiating Brexit was delivered this morning, and the parties now begin the two-year process of negotiating the exit terms and subsequent relationship.
Monthly Market Risk Update: March 2017
Just as I do with the economy, I review the market each month for warning signs of trouble in the near future. Although valuations are now high—a noted risk factor in past bear markets—markets can stay expensive (or get much more expensive) for years and years, which doesn’t give us much to go on timing-wise.
Market Thoughts for March 2017

As Commonwealth CIO Brad McMillan puts it, markets in February basically rocked. Here in the U.S., all three major indices rose substantially, and markets around the world also did quite well. Why is this happening? The economic news is good, with U.S. consumers and businesses feeling optimistic. What’s more, for the first time since the crisis, we’re seeing a synchronized global upturn, with most areas and regions starting to expand. Will the recovery continue (and possibly accelerate)? The prospects are encouraging. Follow Brad at blog.commonwealth.com/independent-market-observer.
Monthly Market Risk Update: February 2017
Just as I do with the economy, I review the market each month for warning signs of trouble in the near future. Although valuations are now high—a noted risk factor in past bear markets—markets can stay expensive (or get much more expensive) for years and years, which doesn’t give us much to go on timing-wise.
Market Thoughts for February 2017

Brad McMillan, Commonwealth’s CIO, discusses the markets and economy for January. Last month was a great month for stock markets, and from a financial market perspective, the world is in good shape. In fact, we’re seeing the first synchronized global expansion since the financial crisis. What’s the problem? Even as growth continues to do well, it’s not quite keeping pace with expectations. Is this a healthy normalization? What will be the economic effect of the current political conflict in Washington? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.