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Surprise: Cyclicals May Soon Come Back

Weekly Market Commentary 4.7.2014 So far this year, “defensive” stocks, those that are less sensitive to economic growth, such as utilities and health care stocks, have led the markets higher. However, we may soon be nearing a meaningful and durable shift in the market favoring the more economically sensitive sectors that we call “cyclicals,” which […]

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Is the Party Over?

Weekly Market Commentary 3.31.2014 Consumers are the most confident they have been in over six years, according to last week’s widely watched consumer confidence report from the Conference Board. Investors have been feeling confident too. The high valuations of stocks in some industries have been the talk of the markets lately, leading some to fear […]

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What Is Priced In?

Weekly Market Commentary 3.24.2014 The S&P 500 seems to have absorbed the prospect for rate hikes by the Federal Reserve (Fed) beginning as soon as the middle of next year reasonably well. While stocks slid on Friday, March 21, early in the day they hit a new all-time intraday high a day after Fed Chair […]

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March Madness in the Markets

Weekly Market Commentary 3.17.2014 With the exception of last year’s steady rise, March has been maddening for investors. In three of the past four years the S&P 500 raced higher in March only to reverse all of those gains in a pullback of about 10% that began in late March or April. It later took […]

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Europe’s Big Bet

Weekly Market Commentary 3.10.2014 Bond yields have fallen this year, but they began to rebound in the United States in the latest week as the glass-half-empty bond market realized the all-time high stock market may have it right. But this was not the case in most of Europe. The ongoing decline in European government bond […]

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Stocks Go From Great to Good as the Bull Turns Five

Weekly Market Commentary 3.03.2014 The end of this week will make it five years since the second most powerful bull market in post-WWII history began [Figure 1]. After five years, only the bull market that began on August 12, 1982 was stronger. It is not over yet. In fact, the bull market may be getting […]

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The Real Reason for the Rebound

Weekly Market Commentary 2.24.2014 The first market storm of 2014 (that we had named Angel) is over with the S&P 500 and broader Russell 3000 stock market indexes rebounding to all- time highs after reversing a 6% decline. The decline was sparked by turmoil in emerging markets (EM) and weak economic data here in the […]

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Lies, Lies, and Charts

Weekly Market Commentary 2.18.2014 A comparison of the S&P 500 Index in 1929 just ahead of the stock market crash to the performance of stocks from 2012 through today has been making the rounds on the internet [Figure 1]. The implication by the bears is that stocks are poised for an epic crash. This chart […]

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Add More Bond — James Bond — to Your Portfolio

Weekly Market Commentary 2.10.2014 It was 1964, 50 years ago, that the film Goldfinger debuted. It is the quintessential James Bond film and the first one to win an Academy Award. In Goldfinger, Q — the head of the gadget-making “Q-Branch” — presents Bond an alternative to the traditional car. It can emit an oil […]

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Turn Down the Volume

Weekly Market Commentary 2.3.2014 January saw a loss of 3.5%, the biggest one-month loss in the S&P 500 Index since May 2012. The main driver of the market weakness seems to be sharp currency declines and accompanying stock market losses in several emerging markets, such as South Africa and Turkey (for reasons we previewed in […]

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