With the Dow cracking 21,000 this morning, just over a month after breaking 20,000—and with other indices setting records as well—there are a few questions we need to ask.
The speech presents a chance for the president to clearly define what he wants Congress to accomplish.
Every so often, I like to look back. Not too often, because life is lived moving forward. Occasionally, though, we can learn a lot about where we are going from considering where we've been
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.
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.
Since the election, the market has been driven up largely by a combination of economic improvements and a vast increase in hope. Although the fundamentals continue to improve, there are signs that may be slowing down. Even without the slowing, the gap between expectations and reality is large. A lot has to happen to close that gap and fulfill investors’ hopes.
In the past couple of days, I’ve led a pretty optimistic quarterly call for investors, given a couple of pretty optimistic TV interviews, and written some fairly optimistic pieces here on the blog. Although I stand by all of my statements, it occurs to me that, for someone known as Eeyore, I’ve displayed an unusual amount of optimism lately. Time for a reality check.
The key driver of the stock market, over the long term, is earnings. In the short term as well, earnings can be the primary driver of market performance. So, each quarter, it makes sense to review whether earnings are doing well or poorly, and why.
ust 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.
This week, someone asked me about the excess reserves held by the banking system and what the Federal Reserve is likely to do about it. As it turned out, what he really wanted to know was whether inflation is likely to take off and which signals might alert us if the economy and markets are about to roll over.
Brad McMillan, Commonwealth’s CIO, discusses the markets and economy for December. Last month was all about confidence: for the consumer, for business, and in the stock market. U.S. markets finished strong for the month, in large part due to the post-election rally. Consumer confidence moved to its highest level since 2001, employment grew, and business confidence reached a level we haven’t seen since before the financial crisis. Given such strong results, what should we keep an eye on as we start 2017? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
It’s the most wonderful time of the year! I suspect many of you are as tired of hearing that as I am. I love the holiday season, but the endless repetition of carols can get to you after a while.
It was 243 years ago today that a group of Massachusetts Bay colonists threw the Boston Tea Party, protesting a law they did not like by dumping tea from British ships into the harbor. This, of course, led to further British laws and colonial unrest—and eventually to where we sit today, in the United States of America instead of Greater Britain.
I remember when the Dow Jones Industrial Average hit 10,000, both going up and going down. It was a lot more fun going up, especially the first time. The index is now approaching double that level—Dow 20,000. If we get there, it should be exciting.
Brad McMillan, Commonwealth’s CIO, discusses the market reaction to November’s election upset. Everyone thought markets would sell off after a Trump victory, and they did for a few hours before rallying strongly. Although the reaction around the world has been less favorable, U.S. fundamentals are sound, and with the uncertainty of the election behind us, the economy and markets are free to do even better. Nothing’s guaranteed, but as headwinds turn to tailwinds, we may see even more acceleration. Follow Brad at blog.commonwealth.com/independent-market-observer.
With U.S. stocks surging to new highs and trouble brewing elsewhere in the world (the failed Italian referendum and resignation of Matteo Renzi, not to mention the continued decline in the Chinese currency), I’ve been getting questions about whether investors should just stay here in the USA.
Over the past couple of weeks, everyone’s been wondering how long the stock market's “Trump bounce” will last.
With everyone out shopping today, we'll soon be seeing the usual slew of Black Friday data (and the instant economic analysis that goes along with it).
Since the election, much of the financial commentary has centered on the stock market's surprising surge.
Although many were predicting a significant pullback on Mr. Trump’s election, we, in fact, got a fairly significant advance. What’s up with that? I suspect there are several reasons.
Throughout the campaign, much of the media coverage on both sides has verged on the apocalyptic, and, indeed, there may be substantial challenges as a new administration comes into power. But the reality is that the sun will continue to come up each day, and the country will move on.
After significant bouncebacks in the major indicators over the past couple of months, we saw a bit of a pullback in several components of the data in October.
Brad McMillan, Commonwealth’s CIO, discusses October tricks and treats for financial markets and the economy. As expected, it was a tough month for markets, as uncertainty surrounding the upcoming election and the future of interest rates continued to rattle investors. Still, fundamentals remain solid, and we were treated to rising business and consumer confidence, as well as strong economic growth. Is it possible that the trickiest part of the quarter is behind us? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
A few weeks ago, I wrote a piece on what the election means for investors’ portfolios. Longer term, the answer was not much. Shorter term, there’s potential for market volatility...
It’s been a while since I wrote about inflation, the general increase in prices that makes everything cost more. Inflation has been so low recently that it hasn’t really been a priority.
Amazingly enough, after the concern about another Black Monday, the 1987 drop's anniversary today hasn’t generated much media attention. It’s almost like it never happened.
In the past couple of days, three different people have forwarded me an opinion piece that attempts to draw some parallels between the way the market acted in October 1987 and the way it’s acting now.
There’s no escaping coverage of the presidential election—what it means, whom to vote for, whom not to vote for. Many of us are deeply engaged in the process and passionately committed to one of the candidates.
Tomorrow, the Labor Department releases the jobs report—probably the most important economic report of them all. After all, jobs drive everything.
Brad McMillan, Commonwealth’s CIO, discusses the markets and economy for September. It was a volatile month, with markets dropping only to bounce back at month-end. Large companies in the S&P 500 were down slightly, while smaller companies and those outside of the U.S. did well. There was also a larger-than-expected pullback in the service sector, yet consumer confidence reached a nine-year high. Given such mixed news, should we be concerned about where the economy is going? Stay tuned to find out. Follow Brad at blog.commonwealth.com/independent-market-observer.
I woke up early this morning to check the results of the British referendum on leaving the European Union. Against expectations, the Leave vote won a convincing victory, defying the polls and the prediction markets. There’s no doubt the world has changed, significantly. There is considerable doubt about what that actually means and—more immediately—what to do about it.