Tag Archive: Stocks

Markets May be Tied Too Close to the Fed

The Federal Reserve has signaled that it may be done cutting rates, for now at least. Of course, the central bank could change its mind, and quickly, if the economic data stream shows further deterioration or if a U.S./China trade deal appears to be a no-go. Thus far, the Fed appears to be trying to maintain its patience, and the central bank could also see good things ahead for the U.S. economy. The markets may be tied too close to the fed. Another matter could... Continue Reading

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A Shot Across the Bow

Stocks are getting hit today, and hard, as rising bond yields fuel selling in equities. The recent concerns over higher yields-which are trading at multiyear highs-is only one issue that stock investors will need to contend with in the months and years ahead. None of this is to say that stocks cannot keep going higher, in fact, stocks may very well see a fresh leg higher and new all-time highs going into the end of the year. Once the levee breaks, however, look out below.... Continue Reading

Will Stocks Force a Retirement Crisis?

Although stocks have shown some signs of trouble in recent sessions, the market has been quite resilient in recent months. Volatility remains at subdued levels, and while there may be whiff of selling in the air, the bears have yet to really show their teeth. The aging bull market will at some point make its final high-if it hasn’t done so already. Not only that, but the economy is likely to slow significantly in the quarters ahead, and the next major recession could be seen... Continue Reading

A Lot More of the Same

Yesterday, investors got the release of the latest Fed meeting minutes. For those looking for more clarity from the central bank regarding its plans for monetary policy going forward, the minutes were likely a disappointment. In its commentary, the central bank discussed jobs, a lack of inflation and a stronger economy. They also again reiterated another rate hike this year. While the Fed focused on a number of positives, there are some key negatives that cannot be overlooked. The Fed’s failure to spark meaningful inflation... Continue Reading

Don’t Be Fooled

The gold market has come under some selling pressure in recent weeks and can be viewed in one of two ways: First, that the recent rally is failing and that further downside could potentially be seen or, secondly, that the current dip from recent highs is nothing more than back and fill trade and an excellent opportunity to buy gold at a relative discount. Sure, the dollar index has been rebounding a bit and that may be weighing on gold. And yes, stocks remain at... Continue Reading

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Welcome Lower Prices With Open Arms

Gold saw some decent selling pressure to end last week’s trading, with spot prices falling by nearly two percent. Friday’s non-farm payrolls data was the primary culprit, as the report showed the U.S. added 255,000 jobs last month-well above consensus estimates of 180,000 jobs. The unemployment rate moved a tad higher, but that may simply be attributed to an increase in the labor participation rate. Combined with positive revisions for both May and June, the jobs data was described by analysts as “stellar, strong and... Continue Reading

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The Stock Market Fallacy

After seeing a decent sell-off following the June 23rd Brexit referendum, stocks have not only fully recovered, but the broad market S&P 500 is probing deeper into new all-time high territory. After the S&P fell over 120 handles in the wake of Brexit, the market took just days to recover. Since that recovery, the market has remained on the offensive, with seemingly unstoppable forces behind it propelling it to fresh all-time highs. This begs the question: What powers could be behind the sharp rise in... Continue Reading

The Counterparty Risk Problem

Investopedia defines counterparty risk as “the risk to each party of a contract that the counterparty will not live up to its contractual obligations.” Now think about that for a moment… Whether you realize it or not, you have to confront counterparty risk on a daily basis. Will the power company deliver electricity to your home? Will the city or municipality provide a clean and reliable water supply? Will your health insurer pay up in the event of a claim? While all of these issues... Continue Reading

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A Lurking Danger

It seems that the pace and timing of additional interest rate hikes by the Federal Reserve has largely dominated financial headlines in recent months. While the general consensus seems to be that the pace of further hikes will be very slow and incremental, we’d like to present an alternative possibility that seemingly few investors are considering. What if inflation expectations were to pick up rapidly? What if in the coming quarters, inflation were to accelerate at a pace significantly faster than the Fed’s two percent... Continue Reading

Mixed Signals

Following  this morning’s release of non-farm payrolls data for April, one could certainly characterize the reaction among various markets as being “mixed.” According to the U.S. Department of Labor, the country added 223,000 jobs last month while the unemployment rate ticked lower to 5.4 percent-the lowest level in seven years. The less talked about “participation rate”, which indicates the percentage of working-age people who are employed or actively looking for work, came in at 62.8%- matching the lowest since 1978. Stocks cheered the headline number,... Continue Reading

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