Expectations for 2017 Market

An overview of expectations and factors that could affect the market in the coming year were outlined by strategist Burt White of LPL Financial in a recent Barron’s article. GDP: “We expect growth to accelerate modestly to near 2.5% with a low chance of a recession in 2017, driven by gains in consumer and business spending, supported by potential pro-growth fiscal policies.” While White says the odds of a recession based on economic data remain… Read More

U.S. Stocks Show Increased Global Footprint

The post-election market rally coupled with the strength of the U.S. dollar has increased the share of U.S. stocks as a percentage of the global economy, according to this week’s Wall Street Journal. FactSet data reflect the market capitalization of U.S. stocks at approximately $25 trillion last Friday, a figure that represents 40% of the value of global equities, the article says—the highest level since 2006. “Investors and traders have largely interpreted the president-elect’s policy… Read More

Does the Market Trust Trump?

“Reading market movements—such as the steep rise in stock prices in the early post-election days as well as the subsequent ups and downs—requires a Rosetta stone,” writes Harvard economics professor Sendhil Mullainathan in a recent New York Times article. An increase in stock prices, he writes, “signals an expected increase in future profits” for investors, but even those who do not own stocks can become more optimistic since in a well-functioning market the interests of… Read More

Doll Bullish on Stocks

The S&P 500 inched up another 1.2% last week and, according to a Barron’s article by Bob Doll of Nuveen Asset Management, while equities are expensive on a historical basis they are still an attractive alternative to bonds and cash. Doll outlines his take on current market conditions: The Fed will probably raise rates in December, provided “economic growth remains on track and the global financial system does not endure an additional shock.” U.S. inflation… Read More

Sonders Says Recession Risk is Low

Although there are those that believe the U.S. is on the brink of recession, Liz Ann Sonders, Charles Schwab’s chief investment strategist, says the risk is low. This according to CNBC’s report on her commentary at the Morningstar ETF Conference in Chicago earlier this month. While Sonders says there are no clear buy signals at present, the market “could continue to grind higher, but not without drama. An ongoing secular bull market is still a… Read More

The Markets and Economy Under Past Presidents

There’s a tendency among the masses to judge our presidents on the state of the economy during their terms. However, says a recent article by Morgan Housel of The Motley Fool, jumping to conclusions based on four or eight years of an administration (both of which, he argues, are “blips”) may not be well-founded. “No matter who lives in the White House,” Housel writes, “business cycles come and go, the Federal Reserve flexes with unmatched… Read More

Harvard Professor’s View of a Sick Economy

If you were to view the current economic situation through the lens of a medical doctor, you might see that the patient’s illness fails to offer an obvious diagnosis. At least that’s the view that N. Gregory Mankiw, professor of Economics at Harvard University, describes in last week’s New York Times. He writes that if you had to choose one statistic to gauge an economy’s health, it would be total (inflation-adjusted) income produced within an… Read More

Howard Marks talks Economy, QE and More

When it comes to investing in less efficient markets, Howard Marks (founder and co-chairman of Oaktree), has plenty of expertise. He also has plenty to say about the state of the economy and the factors influencing our financial outlook. In a recent Barron’s article, Marks shares his views: Central bankers can’t create economic progress; they can only stimulate activity temporarily. Rather, a nation’s productiveness (GDP) is the driver of long-term growth, which is independent of… Read More

Doll on the Markets Positives and Negatives on Today’s Market

In a recent Barron’s article, Nuveen Asset Management’s Chief Equity Strategist Bob Doll says that, despite disappointing first quarter results and apparent earnings struggles, consumer spending will be a healthy tailwind for the economy as a whole. He offers contrasting views of the current market situation:   Positive: Equity valuations don’t appear to be stretched; Earnings improvements should materialize in the coming quarters; The tumult in the oil market appears to be over; Investor sentiment… Read More

Ed Yardeni’s Optimistic View of the U.S. Economy

Ed Yardeni of Yardeni Research recently told Barron’s he expects a “difficult and choopy” year, but “the U.S. will come out of this in good stead.” He observed that “the risks of global recession outside the U.S. have increased,” but noted that “it this drags the U.S. into a recession, it would be the first time it has happened.” Yardeni explained part of the recent downturn by noting that “when the dollar is up 22%… Read More