Utility stocks still hold the top-spot among US sectors for the trailing one-year return slot, based on a set of proxy ETFs. As horse races go, there’s nothing subtle here. This interest-rate sensitive slice of the stock market enjoys a sizable—and expanding—performance lead over the rest of the field.
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Initial Guidance | 10 June 2016
US Equity Market Optimism Vs. The Risk-Off Trade In Treasuries
Is the US stock market inspired by expectations that the Fed will delay interest rate hikes? Or perhaps the crowd anticipates that economic growth will chug along at a healthy rate, despite last week’s news that employment suffered a sharp slowdown in May. Maybe both factors are in play. Whatever the source of the renewed optimism that’s driving equities higher, the revival of animal spirits in the stock market conflicts with the ongoing and arguably firmer appetite for the risk-off trade in Treasuries.
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Initial Guidance | 9 June 2016
Was That A Bear Market For US Stocks? Is It Over?
The S&P 500 inched higher again yesterday (June 7), closing at at 2112.13–the highest level since last July. The all-time high— 2130.82 on May 21, 2015—is now within shouting distance. The latest upside momentum gives the bulls fresh confidence for arguing that the bear market is over—or perhaps there was never a bear-market in the first place. In any case, the stock market has mounted an impressive rally since the February bottom and for the moment the upside bias remains intact.
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Initial Guidance | 8 June 2016
Is The Weak Labor Market A Smoking Gun For The Business Cycle?
The recent slowdown in job growth in the US will likely convince the Federal Reserve to forgo another interest rate hike at its June 14-15 policy meeting. But Fed Chair Janet Yellen kept the door open for squeezing policy at some point. “I see good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones,” she advised in a speech on Monday. “As a result, I expect the economic expansion to continue, with the labor market improving further and GDP growing moderately.”
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Initial Guidance | 7 June 2016
A Buying Spree Lifted All The Major Asset Classes Last Week
In a rare display of uniformly bullish behavior, all the major asset classes posted gains last week, based on a set of proxy ETFs. Emerging-market stocks led the field higher during the shortened US trading week. For the second week in a row, the Vanguard Emerging Market ETF (VWO) was the top performer, posting a 2.6% total return for the four trading days through June 3.
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