During the last couple of weeks, we have seen a significant spike up in bond yields globally. The longer end of the U.S. Treasury Bond (TLT) market is down about 12% in price from its high in January, or the yields have gone up about 0.40%. The 1-Year chart below shows the recent price trend…
Read BlogLast week, the first quarter GDP was reported, and as we expected, it came in much below expectations, up only .2%, with the consensus at 1%. We really like the Federal Reserve Bank of Atlanta’s website and analysis. Their model seems very accurate. They were dead on with their first quarter GDP forecast. You can…
Read BlogLast week, the very big news was GE announcing they are going to monetize their financial/real estate business, repatriate a significant amount of money back to the U.S., and implement a $50 billion share repurchase program. This will allow GE to focus on higher margin businesses that have higher valuations in the market. Fifty billion…
Read BlogWe strongly believe that yield oriented stocks are coming back into favor as income from the higher yielding stocks now far out paces the earnings growth of the S&P 500. For the first quarter of 2015 earnings estimates are expect to be down -4.9%, and for all of 2015 earnings for the S&P 500 are…
Read BlogThe Employment report was much lower than expected, which perhaps builds the case for both the bulls and bears. That might sound odd. The bulls need the economy to grow a little less than what the Federal Reserve desires to keep interest rates from rising until at least later in the year. The bond market…
Read BlogLast week was interesting. As you know, we believe a 10% to 20% decline for equities seems very appropriate to bring the price more in line with the fundamentals. As always, the timing is unknown and the markets may make modest new highs first. There is clearly a significant amount of speculation in the market,…
Read BlogLast week, the Federal Reserve gave the market exactly what it wanted, a slower and potentially lower increase in interest rates in the second half of the year. Interest rates are still likely to go up, but the Fed seems to acknowledge the strength of the dollar and the disruption it is having on the…
Read BlogThe market is focused on Wednesday, when the Federal Reserve ends its two day meeting and is expected to announce they are planning on removing the word “patient” from their statement on interest rates. Yellen will hold a news conference and is expected to open the door for a rate hike in June. What is…
Read BlogThe Employment report on Friday was much better than expected. Bond prices took a nose dive, as did stock prices in reaction to the strong report. The market expectation quickly moved to the assumption that the Federal Reserve will likely raise interest rates in June rather than in September. In reaction to the change in…
Read BlogOn Monday, the ISM Manufacturing Index was reported at 52.9, which was down from 53.5. We like the ISM Index as it gives us a monthly reading into the health of the U.S. manufacturing sector. Above 50 is expansionary and below 50 it is contracting. The report was a little weaker than expected but still…
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