ACTIONABLE ADVICE FOR FINANCIAL ADVISORS: Newsletters and Commentaries Focused on Investment Strategy

Follow us on
 Facebook  Twitter  LinkedIn  RSS Feed

    Last 14 days

Most Popular Articles


Most Popular Commentaries

    Last 12 Months

Most Popular Articles


Most Popular Commentaries

More on Related Themes


2014-04-18 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

After examining much of the latest scholarly research, and conducting in house research on the link between household wealth and spending, we found the wealth effect to be much weaker than the FOMC presumes. In fact, it is difficult to document any consistent impact with most of the research pointing to a spending increase of only one cent per one dollar rise in wealth at best. Some studies even indicate that the wealth effect is only an interesting theory and cannot be observed in practice.

2014-04-18 Financial Television: Five Things You Need to Know by Rob Isbitts of Sungarden Investment Research

Whether you are new to the retirement investing mindset, you go back to the days of Rukeyser and Kangas, or are somewhere in between, here is my list of things you will often see when watching financial TV ... and how to separate the reality from the hype and sales pitch.

2014-04-17 A Bend in the Road is Not the End of the Road by Scott Minerd of Guggenheim Partners

Turmoil in Ukraine, growth concerns in Japan, and weakness in U.S. equity markets are giving U.S. investors a short-term case of heartburn but none of this should undermine the overall case for optimism.

2014-04-17 What to Make of the Rebound in Emerging Market Equities by Dara White of Columbia Management

A month ago, much of the news from the emerging markets (EM) was negative. We saw headlines highlighting the liquidity headwinds created by U.S. QE tapering, Russia’s aggressive opportunism in the Ukraine, and China’s imminent hard landing.

2014-04-17 Two Major Players Graduate from MSCI FM 100 – Is it Still Worth Tuning into? by Russ Koesterich of iShares Blog

Major changes are coming to the MSCI Frontier Markets 100 Index. Russ K explains the significance and why it reinforces his view that investors should have an allocation to the frontier.

2014-04-17 Tick, Tock, Tax Time by Frank Holmes of U.S. Global Investors

In 2014, Americans will pay $3 trillion in federal taxes and $1.5 trillion in state taxes. Believe it or not, according to the Tax Foundation, that means more of your income is being spent on taxes than on food, clothing and housing combined!

2014-04-17 Hasenstab in Ukraine, on Ukraine by Michael Hasenstab of Franklin Templeton

Ukraine is a country both rich with potential and strategically well positioned. While recent events have been very difficult for many, the people of Ukraine have shown their strength. It’s also been heartening to see the proactive support from the international community. Michael Hasenstab, chief investment officer, Global Bonds, Franklin Templeton Fixed Income Group®, shares his view on the long-term potential of this unique country after a recent visit to Kiev.

2014-04-17 Fixed Income Outlook by Team of Osterweis Capital Management

Given that the Fed is likely to complete its asset purchases this year and may raise rates in early 2015, we still feel that Treasuries and investment grade bonds are unattractive. Although yields in the high yield universe are low by historical standards, they still give us a decent cushion against rising rates, especially at the shorter end of the maturity spectrum. Maintaining a shorter duration exposure in high yield and some convertible bonds, as well as a cash reserve, continues to make sense.

2014-04-17 Why Energy is Catching the Market\'s Eye by Frank Holmes of U.S. Global Investors

Over the last month the energy sector has outperformed the market, and as you can see in the chart below, has done so by 6.5 percent. Year-to-date the sector is beating the S&P 500 Index by over 3 percent. In a spectacularly performing market during 2013, energy lacked some of the incredible performance seen throughout the other sectors, but recently it has turned up, catching the attention of the market yet again.

2014-04-17 U.S. Financials: Investment Theme Update by James Calhoun of AdvisorShares

We reaffirm our recommendation for U.S. Banking and Financial Services as a satellite equity investment. The Federal Reserve’s "Stress Test" reinforces a constructive outlook and conservative risk profile for U.S. Banks. The positive results confirm that U.S. banks have enhanced their ability to withstand macroeconomic challenges by reducing problem assets during the past few years. Equally important, the financial sector appears to be more exposed to a key driver of the broader equity market advance over the last few years: share buyback programs and increasing dividends.

2014-04-17 Pinning Hopes on the \'Chosen One\' by Sharat Shroff of Matthews Asia

, I would caution against expectations of a quick fix or a fixation over the short term. As in much of the rest of Asia, India and Indonesia are attempting to tackle their issues and this makes us optimistic for the future. We look forward to an environment of better governance that is critical for both social and economic progress.

2014-04-17 Three Yards and a Cloud of Dust by Sam Stewart of Wasatch Funds

Former Ohio State football coach Woody Hayes was well-known for his conservative offense-often quoted as saying, "There are only three things that can happen when you pass, and two of them are bad." The two bad outcomes are either an incompletion or an interception. Instead, Hayes favored a methodical, grind-it-out approach, running the ball directly into the line: "three yards and a cloud of dust." What Hayes’ style of play may have lacked in pizazz, it more than made up for in results. The U.S. economy today is following a similar offensive playbook, but with less satisfying results.

2014-04-16 Every Portfolio Has Faith by William Smead of Smead Capital Management

At Smead Capital Management, we believe that everyone who invests has faith in someone or something. We also believe that who and what you put your faith into is greatly influenced by the time period involved. As we look out into the rest of 2014 and beyond, we would like to consider the kind of faith required by the largest pools of investment dollars in the US. This includes looking at who they are trusting, what they are trusting in, and what time frames they are operating under.

2014-04-16 An Uncomfortable Discussion by Scott Brown of Raymond James

Income inequality is a touchy subject. It’s hard to have a polite conversation, but like it or not, we are going to have a discussion this year. I will not take a position here (this is largely a political question). Rather, I will try to illustrate what the data say and to present the different points of view.

2014-04-16 A Classic Barometer by Richard Bernstein of Richard Bernstein Advisors

Investors seem a bit too eager to tout emerging market equities. Much as they did with technology stocks during the early-2000s, investors today are looking for the best re-entry point. Data clearly do not support anymore the notion that emerging markets are a superior growth story, yet investors seem to be ignoring the classic warnings signs for fear of missing out. One such classic warning sign is the slope of the yield curve. Historically, steeper yield curves have been reliable forecasters of stronger overall nominal economic growth and stronger profits growth.

2014-04-16 Echo-Mania at The Fed by Cliff Draughn of Excelsia Investment Advisors

Greetings from a thawed out Savannah! Q1 of 2014 will be remembered for a number of things, but the most prominent were the erratic weather patterns and arctic-blast temperatures that most of the country experienced. I missed writing my Q1 letter for the first time in ten years due to a nasty bout with pneumonia in mid-January. For those of you who have never had pneumonia, I do not recommend it!

2014-04-16 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

And what a bad week it was. After flirting (and setting) new record highs on both the S&P and Dow, equity investors worried about the upcoming earnings reports and freaked out over the some disturbing news from China. Stocks plunged late in the week with the Nasdaq particularly hard hit, though the other indexes followed suit and gave up all of their prior gains for the year. For the most part, domestic developments remain strong but news on the global front have prompted investors to seek out the safe-haven of treasuries. Over-reaction or new trend?

2014-04-16 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks fell last week upset by the growth sectors of biotechnology and social media stocks. Energy issues and related infrastructure were largely unaffected. It is clear that hedge funds and others have become forced sellers as their macro bets on being long growth areas, but being short the bond market have blown up in their faces. Until this settles down the overall market is likely to continue its correction.

2014-04-15 Equity Market Insight by Thomas Faust, Jr. of Eaton Vance

After a powerful rally in 2013, the first quarter of 2014 saw the bull market demonstrate a measure of resilience in the face of several headwinds. In the latter half of January, stocks fell sharply on emerging-market concerns, with volatility spiking to more "normal" post-financial crisis levels. The market bounced back strongly in February and went on to record a new all-time closing high on March 7. Performance was choppy in the final few weeks of the quarter, as investors digested mixed economic reports, geopolitical issues and the latest U.S. Federal Reserve (Fed) meeting.

2014-04-15 Credit Availability Underpins Recovery in Commercial Real Estate Prices, But Also Poses Risks to CMB by Bryan Tsu of PIMCO

Credit availability, low interest rates, limited new construction and improving economic conditions have contributed to the recovery in commercial real estate (CRE) prices. We expect a strong 2014 in the commercial mortgage-backed securities (CMBS) market, which has been a primary source of CRE credit expansion. Increasingly aggressive loan underwriting is a concern. CMBS investors need to speak with their wallets and push back on either valuations or underwriting standards if recent trends continue.

2014-04-15 Approaching a Pause? A Market Review by Rick Vollaro of Pinnacle Advisory Group

First quarter market performance was as whippy and volatile as the weather. Unusually cold temperatures in the U.S. not only froze much of the country’s population, but it also wreaked havoc on the quality of economic data, and kept markets on edge regarding how investors should be positioned. Geopolitical issues also rose from the ashes as various emerging markets had currency issues and Russia showed poor sportsmanship and invaded the Ukraine shortly after the conclusion of the Olympic Games.

2014-04-15 Complacency Makes Volatility Markets a Dangerous Place by Chris Maxey, Ryan Davis of Fortigent

With a dissipation of economic stress in Europe, and a general strengthening of economic conditions in the U.S., equity market volatility has plunged to new lows. Some would argue that market intervention by central banks is acting as an unnatural dampener to market volatility, raising the question as to whether a gradual removal of those policies will cause volatility to resurface. So far, the answer is up for debate, but current positioning suggests many investors are becoming complacent and will be caught off sides if such a scenario emerges.

2014-04-15 Beta Earthquake by Ben Hunt of Salient Partners

One of the things I like to keep my eye on when I’m puzzling out what’s going on in the market are the specific company factors that loosely define concepts like Momentum and Value. I do this because any sort of big market move, like we’ve seen over the past week, is inherently over-determined and over-explained. That is, there are dozens of "reasons" trotted out by the financial media and various experts, ALL of which are probably right to a certain degree.

2014-04-15 What\'s Next for Emerging Markets? by Nathan Rowader of Forward Management

Emerging markets (EM) have been an enduring growth story, but their recent stretch of underperformance and fears of a global economic slowdown are chilling investors’ enthusiasm. Pulled between opportunity and risk avoidance, many investors have been left uncertain as to what they should do next.

2014-04-15 5 Things You Need to Know About the Selloff by Kristina Hooper of Allianz Global Investors

Kristina Hooper puts the sharp pullback in the stock market in perspective for investors who may be wondering about a correction.

2014-04-15 2016 (Part 2, The Political Situation) by Bill O'Grady of Confluence Investment Management

As we survey the political landscape for 2016, the next presidential election could be historic. In this report, we will examine the domestic political situation using four different archetypes to describe the U.S. political landscape. We will then offer a history of the interaction between these groups and address the likelihood of various policy outcomes based on the relative strengths and weaknesses of the four political groups. Unlike our usual reports, we will not conclude with market ramifications but instead discuss the transition to Part 3 of this analysis.

2014-04-15 Running Backwards to Catch Up by Jerry Wagner of Flexible Plan Investments

Did you ever try to run backwards? I find walking backwards difficult enough. Running in reverse can send you tumbling.

2014-04-14 We’re Shuffling the Cards on Our European Play by Frank Holmes of U.S. Global Investors

Did you know that over the last year the Greek stock market is up roughly 45 percent? The country that many believed would never recover from a six-year recession is now making astounding strides, recently being added to the MSCI Emerging Markets Index at the end of 2013.

2014-04-14 Economic Insight: Fed Policy Goes Back to the Future by Thomas Luster of Eaton Vance

We fully expected the strength the economy showed in late 2013 to carry over into 2014; however, that simply was not the case. Instead, we saw weaker-than-expected economic data across a wide range of economic indicators. Not surprisingly, interest rates fell modestly during the quarter rather than continuing their trend higher from last year, while U.S. stocks (as measured by the S&P 500) reacted similarly – barely advancing after a 32% gain in 2013.

2014-04-14 Margins, Multiples, and the Iron Law of Valuation by John Hussman of Hussman Funds

The Iron Law of Valuation is that every security is a claim on an expected stream of future cash flows, and given that expected stream of future cash flows, the current price of the security moves opposite to the expected future return on that security. A corollary to the Iron Law of Valuation is that one can only reliably use a “price/X” multiple to value stocks if “X” is a sufficient statistic for the very long-term stream of cash flows that stocks are likely to deliver into the hands of investors for decades to come.

2014-04-12 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The Federal Reserve’s search for stability. The patterns of world trade are undergoing important changes. Greece issued debt this week: good news or bad news?

2014-04-12 In the End, Time is Everything by Doug MacKay of Broadleaf Partners

While some will claim that valuations are to blame for the large selloff in growth stocks, high growth stocks almost always have premium valuations. In some sectors of the market, we’ve found that it makes more financial sense to pay up for a company of the future than to pay down for one in the past. As Warren Buffet has said, "Price is what you pay, but value is what you get."

2014-04-12 Proper Perspective by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Getting caught up in the weeds is easy in this 24-hour news cycle where everyone is looking to make a splash, but successful investing requires staying above the fray. The U.S. economy is growing and equities appear fairly valued, Europe has issues to deal with but has come a long way from the depths, Japan may be working against itself but improvement has been seen, and the threat of a Chinese debacle at this point seems minimal.

2014-04-11 Bubble Bursting? Only for Biotech & Internet Stocks by Russ Koesterich of iShares Blog

The recent sluggish performance of U.S. stocks is leading some market watchers to question whether we’re witnessing the bursting of an equity bubble. Russ explains that while U.S. equities overall are not in a bubble, valuations have started to become an issue, particularly for certain segments of the market.

2014-04-11 Can You Have Your Cake and Eat It Too? by David Braun, David Holdreith of PIMCO

Many insurers would like to optimize both total return and book yield income, which may be seen as competing and divergent goals. In fact many insurers fall somewhere on the spectrum between these goals or shift their objective based on business and market conditions. While it has long been an accepted practice to track manager performance with regard to total return, tracking book income has been more elusive: PIMCO has an innovative and unique solution to help manager’s track alpha generated by active managers.

2014-04-11 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Co.

Most of the economic and market trends we’ve been discussing for the past few years remain in place. Russia’s action in the Ukraine / Crimea may have long-term implications, particularly for Europe, but the near-term economic implications are modest. It remains to be seen whether this gets added to our long-term worry list or not.

2014-04-11 Tax Management - Optimized for Investors by Scott Bartone of O'Shaughnessey Asset management

Academic studies of portfolio management often neglect real world considerations. Turnover is often used to gauge tax management capabilities, but used in isolation turnover can be misleading. Tax lot accounting is integral to maximizing after-tax returns. Tax management must be an integral part of a manager’s buy/sell discipline, and should be applied throughout the year. OSAM’s after-tax results in 2013 are indicative of an effective, integrated tax management process.

2014-04-11 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.9, up from last week's 133.6 (revised from 133.5). The WLI annualized growth indicator (WLIg) rose to 3.3 from last week's 3.0.

2014-04-10 The March Employment Report by Scott Brown of Raymond James

Last week began with a speech by Janet Yellen. The Fed Chair was not expected to say much of consequence, but instead, she continued to emphasize the large amount of slack in the labor market and the Fed’s strong commitment to reduce it. The clear implication is that short-term interest rates are not going up anytime soon. This message may have been meant to counter misconceptions taken away from her recent press conference.

2014-04-10 The Russians Are Coming by Jeffrey Saut of Raymond James

The Russians Are Coming, The Russians Are Coming is a 1966 American comedy film directed by Norman Jewison and based on Nathaniel Benchley’s book The Off-Islanders. The movie tells the Cold War story of the comedic chaos that happens when a Soviet submarine runs aground closely offshore a small island town near New England and the crew is forced to come ashore. Last Friday, however, rumors that the “Russians are coming” swirled down the canyons of Wall Street, causing a late Friday Fade that left the S&P 500 (SPX/1865.09) down an eye-popping 24 points.

2014-04-10 Financial Market Warning Signs by Dawn Bennett of Bennett Group Financial Services

For those that are actually loving the rise in this U.S. financial market this past week, Warren Buffett has so me pretty cheeky advice to share in his annual letter to the Berkshire Hathaway shareholders.

2014-04-10 India: Poised for Change? by Team of Manning & Napier

In the current slow growth environment, India’s economy will likely continue to feel the downward pressure being exerted by high interest rates and a more challenging global liquidity environment that has negatively impacted foreign capital flows into the country. Despite the challenging short-to-intermediate-term outlook, there are a number of internal dynamics, such as favorable demographics, improving labor productivity, and the potential for tremendous growth in domestic consumption, which provide the opportunity for more robust growth in the future.

2014-04-10 Looking at Current Long-Term Growth Plays by Chip Skinner of The Royce Funds

Portfolio Manager and Principal Chip Skinner talks about the market's more volatile behavior in the first quarter, potential growth areas that he finds interesting, ideas in which he has high confidence, and one stock that has recently done well for him.

2014-04-10 Wanting Work Makes a Difference by Scott Minerd of Guggenheim Partners

As the Fed considers the precise timing of tightening monetary policy, a key consideration will be how many Americans want to get back to work. Monetary doves found an olive twig amid the floodwaters last week when the labor force participation rate increased slightly.

2014-04-10 "I Will Gladly Pay You Tuesday for a Hamburger Today" by Robert Mark of Castle Investment Management

In October of 2013, Robert Shiller won the Nobel Prize in economics for his research on spotting market bubbles. Shiller, an economist and professor at Yale University who accurately predicted the housing bubble, is a pioneer of behavioral finance, or the understanding of how psychology causes us to act irrationally with our money.

2014-04-10 Assuage Your Fears of Rising Rates with Global Diversification by Julie Salsbery of PIMCO

?Although PIMCO believes interest rates are fairly anchored in the near term, we think investors can position their fixed income portfolios more defensively. Global diversification across developed and emerging markets can offer a defense against rising U.S. rates by reducing the concentration of risks within a portfolio, while also potentially lowering volatility and enhancing returns.

2014-04-10 Why the U.S. Should Export Crude Oil by Tim Guinness, Will Riley, Jonathan Waghorn of Guinness Atkinson Asset Management

The Ukraine-Russia crisis, as well as Russia’s position as a major energy provider, has renewed the discussion on whether the US should export crude oil. A forty year old decree bans U.S. producers from exporting crude oil, and it needs to be repealed. It represents misguided protectionism and is a hangover from the days before the US embraced free trade. We think that exporting crude oil would be an economic benefit to the US, as it incentivises the full development of the US shale resource.

2014-04-10 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

One quarter down; three to go. After a rough January, stocks rebounded to complete a solid quarter with the Dow Jones the lone main index still "in the red." The new week found decent numbers from manufacturing and labor and investors moved past the "bad weather" excuse, though still took profits from high-flying bio-techs and internet stocks. The late-week selling hindered the overall equity performance.

2014-04-10 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The Fed gave a push to stocks early in the week, but news about Washington DC investigating the so-called High Frequency Traders drove down the momentum stocks which were still suffering from the previous week’s hangover.

2014-04-09 Whatever It Takes 2.0? by Axel Merk of Merk Investments

If you are convincingly irrational the market may expect extreme measures and front run your bluff. It’s in this spirit that ECB President Draghi is threatening the market with another bazooka. We discuss implications for investors.

2014-04-09 Management’s History of Shareholder Friendliness by William Smead of Smead Capital Management

Many years ago, United Airlines had the slogan, "Fly the Friendly Skies." At Smead Capital Management, we like to own companies for a long time which are "friendly" to their public shareholders. In this missive, we will define what it means in our eyes to be shareholder friendly and give a company specific example of this friendliness.

2014-04-09 How High-Frequency Trading Benefits Most Investors by Gary Halbert of Halbert Wealth Management

A controversial new book came out in late March that lambastes so-called “high-frequency trading” on the major stock exchanges and claims that such computerized trading robs retail investors of good executions and profits on their stock orders. The book, “Flash Boys: A Wall Street Revolt,” was written by former bond salesman turned author, Michael Lewis, who appeared on CBS’ 60 Minutes on March 30. Since then, his book has stirred up quite the controversy among stock market investors.

2014-04-09 Reasons To Remain Optimistic In 2014 by Sandra Martin of Martin Investment Management

The equity markets have taken a respite in 2014 after returning more than 32% in 2013. Margin expansion has been the largest influence on profit growth and should continue with present low inflation expectations. We believe that mergers and share buybacks may continue to increase shareholder value for large capitalization stocks.

2014-04-09 Master Limited Partnerships by Greg Reid and the Salient MLP Team of Salient Partners

Master Limited Partnerships (“MLPs”) are a unique asset class in the investment landscape. Historically, MLPs have been primarily owned by high net worth and retail investors due in part to the tax complexities. However, MLPs have started gaining traction over the past few years among institutional investors as they seek alternative sources of yield in our present low-yield world.

2014-04-08 Overcoming Fear and Loathing in Lost Wages by Kristina Hooper of Allianz Global Investors

Personal income, not job growth, may have drawn the ire of investors as stocks sold off on Friday. But look for the market to rebound on continued economic progress and soothing remarks from the Fed, writes Kristina Hooper.

2014-04-08 Labor Markets Looking for a Spring Blossom by Chris Maxey, Ryan Davis of Fortigent

With an unusually harsh winter finally ending, economists were excited to see if labor markets would rebound in March. By many accounts, they were left wanting for more, but the underlying theme in the March report was consistent, steady job growth.

2014-04-08 On Cruise Control by Richard Michaud of New Frontier Advisors

The first quarter was a relatively calm start to the year. The Dow was down 0.7%, the S&P up 1.3%, and the NASDAQ up 0.5%. International equities were nearly flat as well with the MSCI ACWI ex US down 0.1%. European equities were up 1.5% and Pacific equities were moderately negative, with the MSCI Pacific down 3.3% for the quarter. Emerging market equity indices were down 0.8% for the quarter, with China down 6.7%.

2014-04-08 Asset Allocation Implications of a Flattening Treasury Yield Curve by Martin Pring of Pring Turner Capital Group

The Treasury yield curve has started to flatten in recent weeks. Based on historical relationships, this process is likely to have important implications for investors because it signals that the business cycle has moved to a more self-reliant and less Fed dependent state.

2014-04-08 Moving Forward With the Normalization of Yields by Scott Mather, Michael Story of PIMCO

One response to yield normalization is to consider retaining core bonds and diversifying the specific risk factor of concern, in this case duration. In the past, global bonds have captured most of the upside but avoided a significant amount of the downside relative to domestic-only bonds. Generating capital gains from bonds in a rising yield environment requires defining concretely what yield normalization means – where yields are going and when they will get there – and setting these expectations against forward market pricing, country by country.

2014-04-08 Cementing Europe’s Recovery by Mohamed El-Erian of Project Syndicate

Europe’s renewed sense of hope and confidence, however encouraging, is not yet sufficient to produce appreciable gains for current and future generations. A few things need to happen over the next several weeks and months if Europe is to minimize the risk of another prolonged period of under-performance and financial risk.

2014-04-08 Our Five Year Forecast Beginning February 20, 2014 by Kendall Anderson of Anderson Griggs

Late last month I took on the role of judge, not in a court of law, but in a university competition, the CFA Institute Research Challenge Southern Classic. My task was to choose one of fourteen teams from South Carolina, Georgia and Alabama universities to go on to represent their region in the Americas Regional bracket of the CFA Institute Research Challenge. The challenge gives university students from around the globe an opportunity to gain real-world experience as they assume the role of a research analyst

2014-04-07 First Quarter of 2014 Brings Many Reversals, Regressions to the Mean by Ron Surz of PPCA

Unlike 2013, diversification worked in the first quarter of 2014. As revealed in our 2013 market commentary, U.S. stocks dominated with a 33% return while diversifying assets like commodities lost 10%. As shown in the graph on the right, diversification into real estate and commodities was handsomely rewarded in the first quarter.

2014-04-07 The Other Side of the Mountain by John Hussman of Hussman Funds

Having witnessed the glorious advancing portion of the uncompleted market cycle since 2009, investors might, perhaps, want to consider how this cycle might end. After long diagonal advances to overvalued speculative peaks, the other side of the mountain is typically not a permanently high plateau.

2014-04-07 The Doubt of Appearances by Dimitri Balatsos of Tesseract Partners

Households have made significant progress mending their balance sheet in the post-crisis period. Assets have been boosted on the back of higher home values and stock prices, while liabilities have been trimmed, mostly mortgages, thanks in large part to widespread home foreclosures.

2014-04-07 Examining Companies Through the Lens of ESG by Mark Mobius of Franklin Templeton

No matter where we invest, there’s always some sort of risk. This includes not only geopolitical or macroeconomic factors in a given country, but also issues that are unique to a specific sector or individual security. As bottom-up stock pickers, my team and I must assess the potential risks and returns related to each and every company we invest in. One area that warrants closer examination is environmental, social, and governance (ESG) risks and opportunities, which can play a big role in our stock selection and valuation process.

2014-04-05 The Lions in the Grass, Revisited by John Mauldin of Millennium Wave Advisors

Today we explore a few things we can see and then try to foresee a few things that are not quite so obvious. The simple premise is that it is not the lions we can see lounging in plain view that are the most insidious threat, but rather that in trying to avoid those we may stumble upon lions hidden in the grass.

2014-04-04 Bob by Bill Gross of PIMCO

PIMCO recommends overweighting credit and to a lesser extent volatility and curve. Underweight duration. Although credit spreads are tight, they are not as compressed as interest rates, which are now in the process of normalization. While PIMCO agrees with Janet Yellen that such normalization will be a long time coming (the 12th of Never?), probabilities suggest that as the Fed completes its Taper, the 5–30 year bonds that it has been buying will have to be sold at higher yields to entice the private sector back in.

2014-04-04 Putin and the Naughty Chair by Robert Stimpson of Oak Associates

On the surface, the first quarter of 2014 appears to be decent. The S&P 500 eked out a gain of 1.8% in the first three months of the year, despite heightened geopolitical tensions, a changing of the guard at the Federal Reserve, and frigid weather hampering economic growth. Accounts managed by Oak Associates have topped the S&P 500 year-to-date. That being said, signs of internal weakness are present in US equities.

2014-04-04 Meet "Lowflation": Deflation's Scary Pal by Peter Schiff of Euro Pacific Capital

In recent years a good part of the monetary debate has become a simple war of words, with much of the conflict focused on the definition for the word "inflation." The latest front in this campaign came this week when Bloomberg News unveiled a brand new word: "lowflation" which it defines as a situation where prices are rising, but not fast enough to offer the economic benefits that are apparently delivered by higher inflation. Although the article was printed on April Fool's Day, sadly I do not believe it was meant as a joke.

2014-04-04 Warning Signs in Leveraged Credit? by Elizabeth (Beth) MacLean of PIMCO

· Though leveraged credit markets are less levered than they were pre-crisis, signs of more lenient, issuer-friendly terms are prompting regulators (including the Fed) and investors to voice concerns. · Regulators have tightened lending guidelines, but strong demand versus supply means the market is able to find ways around such guidance. · Detailed bottom-up credit analysis with an emphasis on long-term fundamentals and loss avoidance remains crucial to investing in leveraged credit today.

2014-04-04 Pakistan—Reputation and Reality by Taizo Ishida of Matthews Asia

I have been spending an increasing amount of time in “frontier” Asian countries, exploring such fascinating locales as Mongolia and Myanmar. But only recently did I make my first trip to Pakistan. It is a country that has long piqued my interest and was a last, unexplored frontier for me. Through the years, we have debated the issues of safety and law and order there. For many in the West, the mention of Pakistan instills some fears, and many governments continue to warn their citizens to defer all non-essential travel to the country.

2014-04-04 Why Chinese Stocks May Still Make Sense Over the Long Run by Russ Koesterich of iShares Blog

Many investors have been concerned about the Chinese market lately and are asking Russ whether they should abandon Chinese stocks. Russ explains why his answer is still no, at least for the long term.

2014-04-04 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.6, unchanged last week (which was revised from 133.5). The WLI annualized growth indicator (WLIg) rose to 3.0 from last week’s 2.9. Here are some notable developments since ECRI’s public recession call on September 30, 2011: 1) The S&P 500 is up 61.9% at yesterday’s close, fractionally off its record close on April 2nd. 2) the unemployment rate has dropped to 6.7%, and 3) Q4 GDP was revised upward to 2.6%.

2014-04-04 Do You Think You Can Be Effective in Market Forecasting? by Robert Isbitts of Sungarden Investment Research

It is important to understand that no one can predict the future with certainty. Investors should take so-called expert forecasts with a grain of salt. Effective portfolio management is not about forecasting the future and then clinging to that forecast. It’s about continuously evaluating information and market conditions and then making adjustments when necessary to pursue the ultimate goal. To paraphrase long time market watcher Steve Leuthold, “Predictions are for show, our decisions within the portfolio are for dough.”

2014-04-04 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

For the European Central Bank, actions will speak louder than words. US hiring is back on track. The debate over unemployment and wage pressure.

2014-04-04 A New Machine: Is a Capital Spending Cycle Imminent? by Liz Ann Sonders of Charles Schwab

Activist investors have helped highlight companies’ bias toward stock buybacks/dividends vs. longer-term capital investments. Preconditions for a pickup in capital spending appear to be lining up. The technology and industrial sectors are likely the biggest beneficiaries.

2014-04-04 Income Is Always a Good Idea by Jack Tierney of Invesco Blog

Most of the 2014 forecasts were positive on stocks, albeit at a lower return after such a strong year in 2013, and negative on bonds. However, January was a down month for stocks and a very strong month for bonds, February saw stocks rebound and bonds range-bound, and March thus far has stocks down more than up and bonds still range-bound. With apologies for altering the famous quote attributed to Audrey Hepburn in Sabrina, "Paris is always a good idea," I would say that "income is always a good idea."

2014-04-03 Chuck Royce on 1Q14: Despite Minor Pullback, Market Still Shows Strength by Chuck Royce of The Royce Funds

Despite the market's subdued first-quarter performance, annualized total returns for the major indexes remained in double-digit territory for the one-, three-, and five-year periods ended March 31, 2014. President, Director of Investments, and Portfolio Manager Chuck Royce offers his thoughts on the market's behavior during the first quarter and why he thinks investors can expect a major correction within the next twelve months.

2014-04-03 Foolish Investment Ideas by Axel Merk of Merk Investments

With April Fools’ Day behind us, it’s time to get serious about investing. Don’t be fooled by this week’s non-farm payroll report; nor by the assertion that the U.S. may have the cleanest of the dirty shirts. And certainly don’t be fooled into thinking the market has your interests in mind…

2014-04-03 The Stealth Rally: Gold Under the Radar by Peter Schiff of Euro Pacific Precious Metals

So far, 2014 has been a paradoxical year for gold. Many investors aren't even aware that it has rallied almost 8%. On the rare occasion that the financial media mentions the yellow metal, it is only in the context of comparing the recent rise to last year's decline.

2014-04-03 Q2 fixed income outlook — Hitting for the cycle by Gene Tannuzzo of Columbia Management

By the middle of this year, the economic expansion in the U.S. will officially turn five years old. By comparison, the average of all business cycle expansions tracked by the National Bureau of Economic Research dating back to the mid-1800s is about three and half years. But like many five year olds, this cycle hardly seems mature. In particular, we have taken notice of three key elements of the business cycle that have distinct implications for bond investing today.

2014-04-03 VIX Exchange Traded Products...Growth and Risk Impact by Daniel Kirsch of Macro Risk Advisors

The growth of ETFs has been nothing short of tremendous. What started as a product designed to provide investors with broad equity or sector exposure in the US, the ETF landscape now includes a myriad of geographies (Europe, Asia) and asset classes (FX, rates, credit, commodities). Research consultancy firm EFTGI estimates that there are almost 5,000 ETFs globally with total AUM in excess of $2 trillion.

2014-04-03 Yellen’s Labor Market Dashboard by Scott Brown of Raymond James

In her years as a Federal Reserve official (governor, district bank president, and vice chair), Janet Yellen expressed a greater concern about job conditions than her peers. As expected, that emphasis has continued into her tenure as Fed chair.

2014-04-03 Being There by Jeffrey Saut of Raymond James

Spring has sprung, yet many market pundits are worried about the softening economic reports, causing me to remember the book “Being There” by author Jerzy Kosinski.

2014-04-03 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Last week saw a correction in many of the high-flying groups, but overall another quiet week with investors unsure of the economic outlook.

2014-04-03 ProVise Bullets by Team of ProVise Management Group

During the Great Recession, America laid off two million factory workers and factory output fell 20 percent. Before the Great Recession, of course, manufacturing jobs were headed overseas. As we have slowly emerged from the Great Recession, it’s a little surprising to some that manufacturing has led the way, outpacing overall GDP growth. This year it looks like manufacturing could add 3.5 percent in growth. Is this just a replacement of jobs that were lost during the Great Recession?

2014-04-03 And That\'s The Quarter That Was by Ron Brounes of Brounes & Associates

After a nightmare than was January, the quarter actually turned out pretty well (except in the Ukraine).

2014-04-02 Gain International Exposure with Small-Caps by David Nadel of The Royce Funds

Portfolio Manager and Director of International Research David Nadel discusses our attraction to international small-caps, how our investment approach translates into the international small-cap universe, how we try to avoid value traps, the effect monetary policy has had on our approach and performance, and more.

2014-04-02 Available at a Low Price in Relation to Intrinsic Value by William Smead of Smead Capital Management

At Smead Capital Management, valuation matters dearly. We believe all the academic studies from Fama-French, Bauman-Conover-Miller and Francis Nicholson, show that cheap stocks as measured by price-to-book value (P/B), price-to-earnings (P/E) or price-to-dividends outperform more expensive stocks. We especially love Nicholson’s 25-year study because it shows that the 100 cheapest stocks that make up the lowest P/E quintile see their outperformance expand the longer you hold them. Cheapness is the gift that keeps on giving.

2014-04-02 Consumer Confidence Up, But Concerns Remain by Gary Halbert of Halbert Wealth Management

The Conference Board reported last week that its Consumer Confidence Index jumped to 82.3 in March (up from 78.3), the highest reading since January 2008, just as the recession was beginning. But the two underlying components of the Index provided two different perspectives, as we will discuss today.

2014-04-02 Foolish Investment Ideas by Axel Merk of Merk Investments

With April Fools’ Day behind us, it’s time to get serious about investing. Don’t be fooled by this week’s non-farm payroll report; nor by the assertion that the U.S. may have the cleanest of the dirty shirts. And certainly don’t be fooled into thinking the market has your interests in mind…

2014-04-02 4 Areas Revved Up for a Resources Boom by Brian Hicks of U.S. Global Investors

Commodity returns vary wildly, as experienced resource investors can attest and our popular periodic table illustrates. This inherent volatility can spell opportunity for the nimble investor who can look past the mainstream headlines to identify hot spots. Our global resources expert, Brian Hicks, CFA, identified four we believe are revved up for a resources boom.

2014-04-02 Tax Reform: Camp Fires Up the Debate by Milton Ezrati of Lord Abbett

Chances for passage of the congressman's overhaul of the U.S. tax code are slim, but provisions of the bill could point the way to future reform.

2014-04-02 A Year of Reversals Amid a Search for Value by Russ Koesterich of iShares Blog

Stocks have traded in a relatively narrow range for the past two weeks, but beneath the surface, some of last year’s winners are shaping up to be this year’s losers. Russ explains the shifts he’s seeing and what they mean for investors.

2014-04-01 Have You Looked at India Lately? by Eric Stein, Patrick Campbell of Eaton Vance

In our judgment, it’s time to remove India from the ranks of the so-called “Fragile Five”* emerging-market countries. We believe the strong investment case to be made for India today underscores the importance of taking a country-by-country approach to emerging-market investing.

2014-04-01 U.S. Growth Offers a Tailwind for the Region by Mohit Mittal, Ed Devlin, Lupin Rahman of PIMCO

PIMCO expects growth in the U.S. to improve due to a reduction in fiscal drag, although the Federal Reserve’s tapering and slowing growth in China are risks. While higher U.S. growth should offer a boost to exporters, Canada will likely face headwinds from a housing correction and drop in consumption. Latin America has fared relatively well amid the recent volatility in emerging markets, but differentiation across credits and markets continues to increase.

2014-04-01 A Look at First Quarter Market Performance by Chris Maxey, Ryan Davis of Fortigent

As the first quarter draws to a close, equity markets appear poised to finish in positive territory despite a somewhat tumultuous news environment. As noted by Bloomberg, save for a sharply negative Monday period, the S&P 500 will close out a fifth consecutive quarter in positive territory for the first time since 2007.

2014-04-01 Equities Sag as Macro Backdrop Quiets Down by Robert Doll of Nuveen Asset Management

Last week U.S. equities struggled for direction as the S&P 500 declined 0.4%. Small cap stocks were hit harder, and macro and geopolitical issues seemed to be on the back burner. Overall, emerging markets rallied, value and contrarian plays outperformed and Japanese stocks bounced.

2014-04-01 Signs of Life?? by Adam Bowe, Robert Mead of PIMCO

As mining investment in Australia tapers, improvements in other sectors of the economy recently have allayed some concerns of a collapse in domestic demand. We share the cautious optimism but stop well short of expecting higher policy rates this year. Australian bond yields remain highly correlated to global developed market bond yields, and without a near-term domestic catalyst to cause that correlation to break, Australia’s yields are more likely to gradually rise, particularly in the longer end of the yield curve, which isn’t supported by anchored policy rates. ?

2014-04-01 2016 (Part 1, The Economic Issue) by Bill O'Grady of Confluence Investment Management

In this report, we are tackling the geopolitical impact of the 2016 elections. Given the size of the topic, it will be discussed over a three-part series. As we survey the political landscape for 2016, the next presidential election could be historic. In our opinion, the last three presidents have been unable to create a consistent foreign policy that reflects America’s role as the unipolar superpower. We will begin by examining the economic challenges the next president will face, with a broad analysis of the issues of inequality and economic growth.

2014-04-01 Why Key Long-Term Trends Matter to Stock Pickers by Virginie Maisonneuve of PIMCO

The combination of demographic changes, climate change and the ongoing shift in emerging markets over the next 30 years will have long-term consequences for supply and demand factors and business sustainability for many companies. The impact of these long-term trends must not be underestimated. It is crucial for equity investors to not only be attuned to them, but also to understand how companies are adapting to the shifts in the global corporate operating environment. ?

2014-04-01 Fundamental Tango by Scotty George of Alexander Capital

The economy and financial markets are forever sending out mixed, parallel, or confusing messages. Inflation or stagflation? Buy now, or take your profits? Proceed slowly, or go home? At this moment, the signals are hardly synchronized.

2014-03-31 European Rally Has Legs by Nick Kalivas of Invesco Blog

Since hitting a low on June 1, 2012, the MSCI Europe Index has rallied 64.73%. In our view, there’s room for European equity markets to advance further, supported by strong fundamentals, positive flows and a steady uptrend from the June 2012 low.

2014-03-31 Labor Market Clues for Bond Investors by Christopher Molumphy of Franklin Templeton

When the US Federal Reserve (Fed) began tapering early this year, the general assumption was that investors would flee en masse from fixed income investments. Certainly, there has been some volatility in Treasury yields, most recently after Fed Chair Janet Yellen suggested interest rates could start to rise around six months after tapering ends – which would be somewhat sooner than many were expecting.

2014-03-31 Raising the Minimum Wage: Cure or Curse? by Russ Koesterich of iShares Blog

There’s been a lot of talk lately about raising the minimum wage, both on the federal and local level. Russ and an investment strategist on his team weigh in on what higher minimum wages could mean for the economy and for investors.

2014-03-31 Shifting Policy at the Fed: Good for Long-Term Growth, Bad for Cyclical Bubbles by John Hussman of Hussman Funds

The Fed is wisely and palpably moving away from the idea that more QE is automatically better for the economy, and has started to correctly question the effectiveness of QE, as well as its potential to worsen economic risks rather than remove them.

2014-03-31 Will Jobs Benefit From a Spring Thaw? by Kristina Hooper of Allianz Global Investors

The upcoming jobs report, a bellwether for the health of the US economy, could reveal that the harsh winter has created a coiled spring in the labor market, writes Kristina Hooper.

2014-03-29 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Using energy as a pawn may work to Russia’s disadvantage in the long run. China’s 2014 economic outlook is hazy. Lessons from the 2014 stress test.

2014-03-29 When Inequality Isn\'t by John Mauldin of Millennium Wave Advisors

We’ve discovered so far that income inequality is a fact; however, income mobility has remained roughly the same over the last 40 years. That is, a person’s chances of rising from a lower stratum of wealth distribution to a higher stratum is approximately the same as it was in 1975.

2014-03-28 Johnson Controls: Back To Consistency? by Team of F.A.S.T. Graphs

Johnson Controls (JCI) traces its roots back to an interesting bit of history. One hundred and thirty-one years ago, Warren Johnson was a professor in Whitewater, Wisconsin. It was here that he invented and installed the first electric tele-thermoscope – known today as the thermostat – in his classrooms. The invention served a dual purpose: it kept his students more comfortable and put an end to the hourly interruptions from the janitor checking the rooms’ temperature. Of course we can’t confirm this, but it would be our guess that Professor Warren was a regular student favorite.

2014-03-28 Americas: Regional Economic Review 4Q 2013 by Team of Thomas White International

The outlook for the developed economies in North America remains healthy while the emerging economies of Latin America continue to face headwinds. Though recent data from the U.S. and Canada have indicated moderation in economic activity, most of the slowdown was likely caused by adverse weather conditions in the region.

2014-03-28 The End of Chinese Central Planning by Stephen Roach of Project Syndicate

Since Deng Xiaoping’s reforms of the early 1980’s, senior Chinese policymakers have paid less and less attention to central planners’ numerical growth targets. Now they are close to taking the final step in the long journey to a market-based economy, by adopting a flexible framework in which GDP growth currently does not come first.

2014-03-28 “Mind the Gap”: Adapting to a Post-Crisis World in Transition by Virginie Maisonneuve of PIMCO

??Barring any sharp deterioration in global geopolitical risk, the medium term outlook for equities is quite positive in an environment where we see subdued growth and inflation amid healing economies. From a markets standpoint, valuations are not very expensive – they’re not cheap, but they’re not expensive versus historical standards for the market overall.

2014-03-28 Why International Now? by David Garff of AdvisorShares

One of the ongoing challenges that advisors face is determining what percentage of their clients assets should be allocated to international equities. The magnitude of this decision is often amplified when the United States has years of persistent out/under performance. US clients will inherently gauge the success of their portfolio based on the S&P 500, or similar index. The challenge for advisors is explaining why a more diversified exposure to global equities is meaningful in the long-run, despite recent years of outlandish performance.

2014-03-28 Asia's E-Commerce Trends by Jerry Shih of Matthews Asia

On a recent research trip, I went to Beijing, Hong Kong, Tokyo and Melbourne and spoke with Internet companies in industries as diverse as automotives, travel and real estate. I also met with several e-commerce companies with varying Internet penetration rates. As growth rates for new Internet users across parts of Asia level off, comparing these firms offered me an interesting glimpse into the potential opportunities and challenges facing the region's newer Internet firms.

2014-03-28 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.5, up from 133.0 last week (a revision from 132.9). The WLI annualized growth indicator (WLIg) at one decimal place rose to 2.9 from last week's 2.3.

2014-03-28 Lacking Conviction by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Investors seem to lack conviction, what will potentially push them to one side or the other.

2014-03-27 What Has Been Fueling the Rise of Gold in 2014? by Kevin Mahn of Hennion & Walsh

Gold declined approximately 28% for the year of 2013, its worst annual performance since 1981 according toUSA Today. At that time, the downturn ended Gold’s own bull market run of 12 consecutive years as investors jumped on the back of this current bull market by piling into stock funds in 2013 and largely exiting bond funds.

2014-03-27 A Sustainable Recovery?? by Mike Amey of PIMCO

Early signs indicate that the long awaited increase in business investment is underway. In turn, that bodes well for real income growth and the sustainability of the economic recovery. Given the improved economic prospects and the change in rhetoric at the Bank of England, the central bank could well be an early adopter of tighter monetary policy. We expect the BoE to hike rates ahead of the US Federal Reserve. While we beli?eve the British pound has already reflected the BoE’s guidance for official rates to rise by mid-2015, the bond market has yet to fully reflect the new environment. ?

2014-03-27 Real Estate Alpha Hides in Smaller Neighborhoods by Eric Franco of AllianceBernstein

After a spectacular five-year run, global real estate stocks look headed for a period of more normal returns. We think winning in this space will require a more discriminating eye—and venturing into the often neglected nooks and crannies of the smaller-cap real estate world.

2014-03-26 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

Well, apparently Janet Yellen has her own style, her own personality, her own mixed message. Just as Fed watchers had to get used to Bernanke in the aftermath of maestro Greenspan (does that name still apply after the financial crisis?), investors will need a few meeting to figure out the new Fed Chair. An early rebound was followed by a selloff which was followed by a rebound which was followed by a late-week selloff. Nicely done, Ms. Yellen (though Russia played a role as well).

2014-03-26 Striking a Balance: Risks and Opportunities in Emerging Market Debt? by Francesc Balcells, Anton Dombrovsky of PIMCO

?We believe the risk of a full crisis in emerging markets is greatly diminished as the initial conditions of such economies nowadays are quite different. Although there are vulnerable credits out there, the mark-to-market volatility in the financially strong emerging market economies can present advantages as longer-term fundamentals reassert themselves. By monitoring key triggers and employing a differentiated investment approach, investors may be able to take advantage of attractive valuations in emerging market debt. ?

2014-03-26 Europe is a Land of Opportunity in 2014 by Kevin Mahn of Hennion & Walsh

While we are forecasting a high, single-digit gain for the S&P 500 index over the course of 2014 at this time, we do still contend that U.S. stock market returns will likely be outpaced in 2014 by certain International – Developed Country stock market returns (notably Europe) as regions such as the Eurozone continue to emerge from their own recession.

2014-03-26 Yellen Speaks, Do the Financial Markets Listen? by Scott Brown of Raymond James

No surprise, the Federal Open Market Committee tapered the monthly rate of asset purchases by another $10 billion and altered the language in its forward guidance on the federal funds rate. In its policy statement, the FOMC indicated that “it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.”

2014-03-26 Picture This by Jeffrey Saut of Raymond James

Picture this: you’re an investor starting out in the 1940s after World War II came to an end. Your own experience in the contemporary history of the stock market would've taught you that bonds were the safer, and superior, asset allocation over the long-term.

2014-03-26 Unleashing Africa’s Potential by Michael Hasenstab of Franklin Templeton

Many investors who have never traveled in Africa probably have preconceived ideas about it, perhaps as a land of safaris and political strife, rich in coveted natural resources that have failed to bring widespread wealth and development to the continent. Many also might not realize how diverse the landscape, the economies and the people are on the continent, which boasts more than 1,000 languages spoken in more than 50 countries and climates ranging from hot deserts and tropical rainforests to frozen glaciers.

2014-03-26 Durable Goods Orders: The Disconnect Continues by Team of GaveKal Capital

This morning durable goods orders were released, and while the headline index exhibited a good bounce from January, the rest of the report was more mixed.

2014-03-26 Housing Booming, Busting and Muddling Along by John Burns of John Burns Real Estate Consulting

Housing is local again! Our consultants and clients see vastly different housing markets all across the country. I categorize them into three groups (booming, busting, and muddling) in this article and provide anecdotes from our team members---- but it is really more complicated than that.

2014-03-25 Stocks: "Aging Bull" Could Still Pack a Punch by Milton Ezrati of Lord Abbett

Bearish market observers fret that earnings growth will falter and that current equity valuations are unsustainable. Their worries are misplaced.

2014-03-25 US Housing Round-Up by Team of GaveKal Capital

We had three US housing related economic releases today: FHFA House Price Index, S&P Case-Shiller, and new home sales. The two price series both slightly beat consensus while new home sales came in exactly at consensus.

2014-03-24 March Flash Update by Clyde Kendzierski of Financial Solutions Group

At the end of February, the market as measured by the S&P 500 moved slightly above the year-end levels. Subsequently, a brief calming of the tensions surrounding the events in the Ukraine (time will tell) generated a relief rally that extended a bit further resulting in new record highs exactly 5 years after the financial crisis lows of March 2009.

2014-03-24 Market Outlook by Scotty George of Alexander Capital

For those of us that have been around for awhile, we have come to recognize that each Federal Reserve Board Chairman has had a unique way of speaking and a unique personality. Remember the "Volcker Rules"? How about "Greenspan-speak"? Well, last week we had a chance to take a measure of the person, and her language, who currently presides over monetary policy, Fed Chair Janet Yellen. And while a snapshot is not necessarily a truism of the embodiment of the whole, there were a few takeaways, not the least of which was the market's (once again) overreaction to what was being said.

2014-03-24 Four Reasons Businesses Could Begin Spending Again Soon by Russ Koesterich of iShares Blog

Despite record profits and exceptionally high corporate cash levels, capital spending by U.S. businesses remains subdued. Russ explains why this could change this year as well as what a pickup in capital spending would mean for investors.

2014-03-24 Michael Cirami on Ukraine: It May Just Be Spring Training for Putin’s Hardball Tactics by Michael Cirami of Eaton Vance

Earlier this month, Michael Cirami, co-director of Eaton Vance’s Global Income Group, offered his views on the immediate crisis surrounding the seizure of Crimea by Russian and pro-Russian troops, having been in Kiev just two weeks prior. In this Viewpoint, he adds some perspective to how events have unfolded since and how they may going forward in the wake of that event.

2014-03-24 Stocks Rise as Economic Backdrop Slowly Improves by Bob Doll of Nuveen Asset Management

U.S. equities finished higher last week, with the S&P 500 increasing 1.4%. Ukraine seemed to be receding in investors’ minds. Despite the volatility and sharp increase in bond yields on Wednesday, the hawkish takeaways from the FOMC meeting were not a lingering overhang.

2014-03-24 Fed-Induced Speculation Does Not Create Wealth by John Hussman of Hussman Funds

Fed-induced speculation does not create wealth. It only changes the profile of returns over time. It redistributes wealth away from investors who are enticed to buy at rich valuations and hold the bag, and redistributes wealth toward the handful of investors both fortunate and wise enough to sell at rich valuations and wait for better opportunities.

2014-03-24 Is the Fed Supporting the Equity Markets? by Tom Riegert of Hatteras Funds

The Federal Reserve’s unprecedented increase in reserves purchased through its quantitative easing programs has paralleled the performance of the equity markets to a startling degree. Has the Fed’s program been supporting the equity markets? We examine the strong correlation between the Fed’s balance sheet and the performance of the S&P 500 since end-2008, and ponder the effects the Fed’s long-awaited tapering will have on market volatility. Investors facing the uncertainty ahead could well find alternative investments a welcome addition to their portfolio.

2014-03-24 Market Had Its Way With Yellen’s Words by Kristina Hooper of Allianz Global Investors

Fed Chair Janet Yellen got a taste for how sensitive investors are to her public remarks last week, but the kneejerk response was probably an overreaction, writes Kristina Hooper.

2014-03-22 Debt and Taxes by Peter Schiff of Euro Pacific Capital

It seems that the majority opinion on Wall Street and Washington is that we have entered an era of good fortune made possible by the benevolent hand of the Federal Reserve. Ben Bernanke and now Janet Yellen have apparently removed all the economic rough edges that would normally draw blood. As a result of this monetary "baby-proofing," a strong economy is no longer considered necessary for rising stock and real estate prices.

2014-03-22 China\'s Minsky Moment? by John Mauldin of Millennium Wave Advisors

In speeches and presentations since the end of last year, I have been saying that I think the biggest macro problem in the world today is China. China has run up a huge debt, and the payments are coming due. They seem to be proactive, but will it be enough? How much risk do they pose for the global system?

2014-03-22 We See Opportunities in Commodities by Bob Greer, Ronit M. Walny, Klaus Thuerbach of PIMCO

Fundamentals and some recent data suggest that challenging trends for commodity investing may be coming to an end. Commodities may increase their role as an important and unique source of returns, diversification and protection from unanticipated inflation. As commodity sectors are each dominated by unique factors, we see even more opportunities to add value through active management.

2014-03-22 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The Federal Reserve’s updated guidance takes a page from its past. Wage trends will guide the timing of tightening. Chinese banking reformers should be careful what they wish for.

2014-03-22 What Makes a Slam-Dunk Portfolio? by Frank Holmes of U.S. Global Investors

As a native Canadian, hockey is in my blood, but after moving to Texas, the icy arenas changed to basketball courts, as the sole major league sports team in the city is the San Antonio Spurs.

2014-03-21 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.9, down from 133.6 last week (a revision from 133.8). The WLI annualized growth indicator (WLIg) at one decimal place rose to 2.3 from last week's 2.1 (a revision from 2.3).

2014-03-21 We See Opportunities in Commodities by Bob Greer, Ronit Walny, Klaus Thuerbach of PIMCO

Fundamentals and some recent data suggest that challenging trends for commodity investing may be coming to an end. Commodities may increase their role as an important and unique source of returns, diversification and protection from unanticipated inflation. As commodity sectors are each dominated by unique factors, we see even more opportunities to add value through active management.

2014-03-21 Emerging Markets: Four Reasons for Caution, Not Abstinence by Russ Koesterich of iShares Blog

In the space of three years, emerging markets have gone from a key strategic asset class to persona non grata. But while Russ shares investors’ concerns on the near-term outlook for EM assets, he doesn’t agree that EM stocks should be completely shunned.

2014-03-21 Debt and Taxes by Peter Schiff of Euro Pacific Capital

The red flags contained in the national and global headlines that have come out thus far in 2014 should have spooked investors and economic forecasters. Instead the markets have barely noticed. It seems that the majority opinion on Wall Street and Washington is that we have entered an era of good fortune made possible by the benevolent hand of the Federal Reserve. Ben Bernanke and now Janet Yellen have apparently removed all the economic rough edges that would normally draw blood.

2014-03-21 World Industrial Production Finished 2013 At An All-Time High by Team of GaveKal Capital

The CPB Netherlands Bureau for Economic Policy Analysis publishes a monthly report called "World Trade Monitor". This report tries to quantify the seemingly unquantifiable; world industrial production and world trade volume and prices. Either later today or early next week the CPB should come out with the first statistics for 2014. Today, however, we are going to take a look at world industrial production for 2013.

2014-03-21 Climbing a Wall of Worry? by Norm Boersma of Franklin Templeton

One of the main questions our clients have been asking us lately revolves around worries of how strong equity markets have been over the last five years. During that period, we’ve seen markets bottoming out in February – March 2009 and basically recovering since then.2 Given the performance of the market since the trough, it’s not surprising that people are a bit concerned right now, and the market has been quite volatile in early 2014.

2014-03-21 China's Evolving Health Care Landscape by Hayley Chan of Matthews Asia

China has begun a long-term transformation of its health care industry. Much of this industry is still fragmented and in the early stages of consolidation. China’s top 10 pharmaceutical companies, for example, account for a combined market share of approximately 20% versus more than 60% in the U.S.

2014-03-21 A Second Leg to Our Economic Outlook by Will Nasgovitz of Heartland Advisors

In our heavily consumer?driven economy, it can be easy to overlook the importance of corporate capital spending. We’ve seen a number of data points suggesting such expenditures are due for an uptick.

2014-03-21 When Will it be Time to Get Back to EM? by David Garff of AdvisorShares

Global investors have been experiencing an ongoing drag on returns to the extent they have had exposure to Emerging Market (EM) equities. It is difficult to abandon the asset class given historical performance, relative economic growth, current valuation discounts, and portfolio management tenets regarding diversification. But the fact that the U.S. has been such a strong performer, along with its size and prominence in the press, creates questions about why any non-U.S. stocks should even be in the portfolio.

2014-03-21 The Global Economy’s Tale Risks by Robert Shiller of Project Syndicate

Fluctuations in the world’s economies are largely due to the stories we hear and tell about them. In Japan, "Abenomics" has created a powerful narrative of positive change, whereas the stories being told in other advanced countries are far scarier.

2014-03-20 Exploration & Production: An Evolving Business Model by Suken Patel of Diamond Hill Investments

The successful development of shale crude oil and gas has led to one of the most rapid and unexpected increases in production in the history of the energy sector. This remarkable turn of events is in complete contrast to the previous popular belief that the country was running out of both resources.

2014-03-20 The Song Remains the Same by Scott Minerd of Guggenheim Partners

The noisy journey from winter to spring in the United States may mask the underlying strength in the U.S. economy. The risk-on environment should remain intact, despite international tensions.

2014-03-19 A Preference for Discomfort by Chris Brightman of Research Affiliates

Is the stock market inefficient or do investors have varying preferences? How does behavior affect wealth accumulation? Unpopular choices can result in improved outcomes....

2014-03-19 What if Grantham is Right? by Roger Nusbaum of AdvisorShares

There were two articles recently both exploring the same possible outcome; that investor returns from capital markets could be much lower in the coming years. No matter what markets end up doing, advisory clients and do-it-yourselfers still have financial plans that likely require some amount of growth over time in order to have a chance of succeeding without something, such as desired lifestyle or working longer than hoped for, having to give.

2014-03-19 Utilities And Health Care: This Year's Odd Couple by Team of GaveKal Capital

Quick name the two best performing sectors YTD in the MSCI World...

2014-03-19 Pockets of Opportunity in Europe, Emerging Markets by Lisa Myers of Franklin Templeton

Maintaining the right mix or balance of assets in a portfolio to achieve a desired goal can be a challenge, particularly when the markets are constantly shifting. As portfolio manager for Templeton Global Balanced Fund, Lisa Myers, executive vice president, Templeton Global Equity Group, regularly faces that task.

2014-03-19 Feelin’ the Fire, Investors are Hot for Gold by Frank Holmes of U.S. Global Investors

Gold seems to be sparking more attention these days, as investors have seen the precious metal steadily rise from its December low of around $1,200, to a new high of $1,350 just three months later.

2014-03-19 Is the Fed's Monetary Mojo Working at Last? by Milton Ezrati of Lord Abbett

It just might be. Data suggest that the central bank’s massive liquidity boost may be starting to flow into the broader economy.

2014-03-19 The Fed Policy Outlook by Scott Brown of Raymond James

Much of the recent economic data have been distorted by adverse weather, which makes it difficult to gauge the underlying strength. However, while economic activity appears to have slowed in early 2014, the longer-term outlook hasn’t changed. Growth should pick up.

2014-03-19 A Kid’s Market? by Jeffrey Saut of Raymond James

The Great Winfield goes on to say, in Adam Smith’s classic book from 1967, “The strength of my kids is that they’re too young to remember anything bad, and they are making so much money they feel invincible.” He rented kids with the idea that one day the music will stop (it partially did in 1969-1970 and completely did in 1973-1974) and all of them will be broke but one.

2014-03-19 Objects in the Rear View Mirror May Appear Closer Than They Are: A Look Back at the 1990s by Liz Ann Sonders of Charles Schwab

Human nature tells us to look back to help divine the future. Today's environment looks strikingly similar to the mid-1990s, which has pros and cons.

2014-03-19 If They Will Lend, Someone Will Spend (on Something) by Paul Kasriel of Econtrarian, LLC

Upon awakening from my winter hibernation way up here in beautiful northeastern Wisconsin, I have noticed that bank asset managers have been anything but hibernating. Rather, they have been quite busy expanding their loans and securities.

2014-03-18 Emerging Markets: Fertile Ground for Country Picking by Michael Cirami, Eric Stein, John Baur, Matthew Murphy Jr., Bradford Godfrey of Eaton Vance

Given the variations among individual emerging countries in today’s environment, country-by-country differentiation is likely to remain key to successful emerging-market investing. We believe investors may benefit from emerging-market strategies that: 1. have the flexibility to invest both long and short. 2. invest beyond traditional emerging-market benchmarks. 3. access frontier markets outside those benchmarks.

2014-03-18 Japan’s Rising Opportunity by Neil Hennessy, Masakazu Takeda of Hennessy Funds

After WWII, the Japanese economy began what is sometimes referred to as the “Economic Miracle”, a three-decade long period of growth and prosperity. Japanese firms and their management teams were studied around the world as the model of efficiency and an example for all companies and leaders to strive for. In 1989, a bubble in real estate fueled by speculators burst, and the Japanese markets crashed. Since then, the Japanese economy has been in a virtual standstill with more than two decades of stagnant growth and a deflationary environment.

2014-03-18 Currency Markets Heat Back Up, and Will Likely Remain that Way by Chris Maxey, Ryan Davis of Fortigent

Long dormant after the financial crisis, foreign exchange markets are beginning to heat up, offering ample trading opportunity for asset managers. The U.S. dollar was widely viewed as being the best long trading opportunity for 2014, but so far, that has not played out, with activity in the Euro, Chinese Yuan, and other currencies impeding dollar strength.

2014-03-18 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks were buffeted last week on the outcome in Ukraine (well founded), growing concern that the world does not know what happened to that missing Malaysian airliner, and of course, the ever-present worries about the global economy - especially in light of renewed concern over China, both its economy and its banking system.

2014-03-18 Global Economic Overview - February 2014 by Team of Thomas White International

Pessimism over the sustainability of global growth this year has subsided as it is now widely acknowledged that softer data from some of the developed countries in recent months were influenced by the severe winter weather.

2014-03-18 Understanding The "Millennial Generation" by Gary Halbert of Halbert Wealth Management

As the father of two adult children who were born in the early 1990s, I have a particularly keen interest in the “Millennial Generation” – those 80 million or so people born in the US between 1980 and 2002, the largest generation ever – and who will be running the country before too long.

2014-03-17 Restoring the "Virtuous Cycle" of Economic Growth by John Hussman of Hussman Funds

The so-called “dual mandate” of the Federal Reserve does not ask the Fed to manage short-run or even cyclical fluctuations in the economy. Instead – whether one believes that the goals of that mandate are achievable or not – it asks the Fed to “maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.”

2014-03-17 Frontier Markets Find Footing by Mark Mobius of Franklin Templeton

Frontier markets remain in focus for the Templeton Emerging Markets Group in 2014, and my team and I have spent the early part of the year exploring potential investment opportunities in a number of them.

2014-03-17 Market Outlook by Scotty George of Alexander Capital

What's another 200 point down day (Dow) when you're having fun? The violent and excessive overreactions of the week prior were added to by Asia and Europe on Thursday/Friday past, just for good measure.

2014-03-17 Emerging Markets Equity Commentary - February 2014 by Team of Thomas White International

After a weak start to the year, emerging market equity prices recovered in February as concerns about slower than expected global expansion and a further decline in Chinese economic growth subsided.

2014-03-17 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

Remember when tiny Greece was a market mover? Well, now it’s tiny Crimea. With the growing global tensions and concerns about Crimea’s secession from the Ukraine to Russia, investors chose to take a week off (for the most part) and take some equity profits, while moving back into the safe haven of treasuries. With little news on the domestic economic calendar, investors looked abroad and didn’t care much for what they saw in China. (Still, the yuan must be better than the ruble these days.)

2014-03-17 Stocks Weighed Down by Ukraine, China and U.S. Economy by Robert Doll of Nuveen Asset Management

U.S. equities came under pressure last week as the S&P 500 declined almost 2.0%. Blame was primarily placed on the crisis in Ukraine and the growth slowdown and tight credit environment in China. Safe haven investments such as U.S. Treasuries and gold outperformed. Stocks may have already discounted the weather distortions on early 2014 data, and an overhang is expected to linger into first quarter earnings season. Cautiousness surfaced for investments that support the recovery, including banks and homebuilders.

2014-03-17 Recalibrating the Retirement Clock: Should 75 Be the New 65? by Nick Kaiser of Saturna Capital

Retirement sounds pretty sweet, doesn't it? Exotic holidays. Finally writing that novel. Never having to rely on an alarm clock to wake up early. Being your own boss. Retirement goals are as varied as people themselves.

2014-03-17 Frontier Markets: Weighing the Risks by Nathan Rowader of Forward Investing

Why would investors even think about investing in fledgling, so-called frontier economies half a world away? The quick answer is that some of the best-performing stock markets in the world can be found in places like Kenya, Bulgaria and Argentina. Annual equity returns topped 40% in all three countries in 2013 while a number of other frontier markets (FMs), including Romania, Serbia and Nigeria, experienced annual returns ranging from 25% to 35%. Although past performance is not a guarantee of future results, investors in search of portfolio growth and diversification are taking note.

2014-03-16 Inequality and Opportunity by John Mauldin of Millennium Wave Advisors

Today we will continue our thinking about income inequality, and I will respond to some of your letters, as they make good launching points for further discussion of the topic.

2014-03-15 Follow the Money to Asia\'s Tech Hub by Frank Holmes of U.S. Global Investors

China’s slower economic data points and a surplus in copper and iron ore drove many commodities lower this week, while gold rose. In the short term, until the copper and iron ore surplus is liquidated, or absorbed at a slower pace, the base metals market will likely be sloppy. As the second-largest economy in the world and a huge driver of commodities demand, it’s not surprising China provoked such a significant response from world markets. Interestingly, most of the media thought it was geopolitical fears from Ukraine that chopped up the market and lifted gold.

2014-03-15 Heating Up and Thawing Out by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

Concerns over growth and geopolitical issues have largely been set aside by investors in the United States, but complacency can be dangerous and another pullback in the near term could unfold if history holds. Investors should keep longer term goals in mind and remember that trying to time the market is an extremely difficult task. The weather is turning and economic data will be watched to see if recent softness was temporary or something more serious. We lean toward the former, but a retrenchment in bond yields would cause some concern about the potential for something more than weather.

2014-03-15 Like Houdini, the Markets Escape Again and Again by Stephen C. Sexauer of Allianz Global Investors

Like the great escape artist Harry Houdini, the markets have repeatedly escaped a series of potential catastrophes. Central banks around the world have coordinated policy making these escapes possible, but the end result is another trap from which we need to escape - seemingly permanent low interest rates for savers ("financial repression"), slow growth, and high asset prices. Financial repression is better than an outright debt deflation, but it causes its own problems. The outlook is for low returns.

2014-03-14 A Matter of Odds: Not Everything That’s Supposed to Work, Works All the Time by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, explores the worth of quantitative analysis versus fundamental, and examines forecasts, consensus, and valuation as three ways of looking at the market for investment.

2014-03-14 Deflationary Pressure and Tight Credit Facilities Weigh on Eurozone Recovery? by Andrew Balls of PIMCO

The eurozone is enjoying a broadly balanced resurgence in economic output and domestic demand. Deflation risk is real, and the European Central Bank’s asymmetric attitude toward its inflation target could contribute to a decline in inflation expectations. In the current climate, we continue to favour select regional credit exposure and look to generate attractive returns across European credit and asset-backed securities.

2014-03-14 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.8, up fractionally from 133.5 last week. The WLI annualized growth indicator (WLIg) at one decimal place rose to 2.3 from last week's 1.8.

2014-03-14 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Global trade negotiations have stalled; This is a delicate time for Chinese finance; Where will Europe’s growth come from?

2014-03-13 Waiting for Winter’s End by Pamela Rosenau of HighTower Advisors

Undoubtedly, the long cold winter season has many yearning for more pleasant weather. Despite a strengthening economy, the economic data over the past few months appears to have been weighed down by the snow and ice. Come springtime, I believe the data will reflect an economy that is in bloom.

2014-03-13 Emerging Markets: Will Ukraine fallout become contagious? by Jeff Hussey of Russell Investments

Jeff Hussey, global CIO, outlines Russell Investments’ views on the conflict in Ukraine and how it might impact the markets.

2014-03-13 PIMCO Cyclical Outlook: A Steady Passage in 2014? by Saumil Parikh of PIMCO

PIMCO's baseline expectation is for 2.5% to 3% real growth in the U.S., thanks to trends toward growth and spending in the consumer, corporate and public sectors. In the eurozone, our baseline expectation of 1% to 1.5% real growth calls for a broad-based cyclical improvement in domestic demand amid steady external demand. We anticipate Japan will be the only major developed economy experiencing a slowdown this year, down to 0.5% to 1%, and we expect China's growth will continue slowing as well, with growth in the range of 6.5% to 7.5%.

2014-03-13 A Closer Look at Japanese Yen Depreciation and its Impact on Growth and Equities by of Manning & Napier

Weakness in the Japanese economy has given investors reason for concern. Recently released data showed that GDP grew just 0.2% quarter-over-quarter (qoq) during the last three months of 2013. This worked out to be a qoq annualized rate of merely 0.7%, and marked the second consecutive quarter of weaker growth relative to the preceding periods. Growth in the country has softened despite significant monetary and fiscal stimulus, and it is especially concerning considering that an impending tax increase (April 2014) has pulled some consumption forward.

2014-03-13 Fail to Prepare, Prepare to Fail by Scott Minerd of Guggenheim Partners

Five years into the U.S. bull market this remains a “risk on” environment, but with monetary tightening on the horizon now is a time to become more cautious and start thinking about what comes next.

2014-03-13 Beware of Earnings Gimmicks by Jason Wang of Columbia Management

Since the global financial crisis, economic recovery worldwide has been slow. Over the last three years, annual gross domestic product (GDP) growth in the U.S. was limited to 2.1%, significantly below its long-term average of 3.3%. In this low growth environment, for a majority of companies, churning out high earnings-per-share (EPS) growth rates, either through top-line growth or margin expansion, has become increasingly more difficult.

2014-03-12 Housing: An Oft Forgotten Pivot Point by Matt Lloyd of Advisors Asset Management

Today we got the newly released data on the state of the economy in the form of the Fed Flow of Funds. We have often cited it as a way of corroborating certain trends and potential reversal of trends when warranted.

2014-03-12 Reflections on Ukraine by Bill O'Grady of Confluence Investment Management

Over the past five weeks there have been a number of significant events that have occurred in Ukraine. A president has fled, a revolutionary government is forming and Russia has taken de facto control over the Crimea. The events themselves are momentous but the broader effects are significant as well. In this report, we will offer three reflections—Putin’s Gambit, The U.S. Adrift and A Dangerous New World. Although any of these could be a topic in themselves, we will shorten these issues to offer a single journey through the current crisis. As always, we will conclude with market ramifications

2014-03-12 The Importance of Beta Management by Richard Bernstein of Richard Bernstein Advisors

Morningstar recently released “Mind the Gap-2014” which demonstrated that investors are generally very poor beta managers. The Morningstar data showed that investors’ performance lagged that of their funds by about 250 basis points per year for the past ten years because of poor beta management, i.e., investors tend to be very poor allocators of capital.

2014-03-12 The Goldilocks Conundrum: A Market Review by Rick Vollaro of Pinnacle Advisory Group

When we decided to ride the central bank liquidity wave in 2013, we knew there was a chance the market could have a pretty good year, but like most investors we were pleasantly surprised with the gains that the U.S. stock market delivered. Including dividends, the S&P 500 Index soared by 32%, well in excess of what even the most optimistic prognosticators envisioned at the start of the year.

2014-03-12 U.S. Household Net Worth Hits New Record High by Gary Halbert of Halbert Wealth Management

The Federal Reserve announced last Thursday that US household net worth reached a new record high by the end of last year – at $80.7 trillion. The Fed said the new record was made possible largely due to vaulting stock prices, increased home values and Americans paying off more of their debts.

2014-03-11 Making Green from Gold, Palladium and Pollution by Frank Holmes of U.S. Global Investors

Gold is coming back with a vengeance, experiencing a clear recovery and grabbing the attention of market cynics. Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years, according to Barron’s.

2014-03-11 U.S. Economy: The Mild Kingdom by Milton Ezrati of Lord Abbett

"Animal spirits" remain caged as business spending lags. What will it take to unleash them?

2014-03-11 Thirsty for Income? Try Dividend Growth by Frank Caruso of AllianceBernstein

Chasing yield has become a challenging mission for investors in recent years. As yields collapsed in fixed income, investors flocked to bond-like substitutes such as high dividend-yielding stocks. Now that these stocks have become a bit pricey, we think companies with strong dividend-growth potential offer a better way to source equity income.

2014-03-11 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Markets waited all week for the jobs report for February. After its release the data continued to be mixed at best.

2014-03-11 Michael Cirami on the Ukraine Crisis by Michael Cirami of Eaton Vance

Investors tend to ignore events that do not demand immediate attention. Unfortunately, this approach is no longer an option following the recent events taking place in Ukraine. Michael Cirami, co-director of Eaton Vance’s Global Income Group, was in Kiev the week before President Yanukovych was ousted. In the following interview, he shares his views on the crisis in this emerging market and its implications for investors.

2014-03-10 Market Outlook by Scotty George of Alexander Capital

The irascible, and sometimes irrational, actions of the major indices this year should confirm for all observers that there's something at work in the financial markets that goes way beyond "traditional" fundamental analysis and good stock picking.

2014-03-10 M&A: A New Rx for Specialty Pharma by Janus Equity Team of Janus Capital Group

Merger and acquisition (M&A) activity is heating up among specialty pharmaceutical companies and potentially creating a once-in-a-generation investment opportunity in an industry that is quickly consolidating.

2014-03-10 Positive Payroll Report Offsets Geopolitical Concerns by Bob Doll of Nuveen Asset Management

U.S. equities increased 1.1% last week after somewhat volatile trading due to heightened tension in Ukraine. Although the crisis dominated headlines, the market relegated the major geopolitical issue to the back burner. The broader macro narrative did not change, as concerns about dampened growth momentum continued to be pacified by the distortion from adverse weather.

2014-03-10 Happy Birthday, Bull Market by Russ Koesterich of BlackRock

March 10, 2014, could be considered the fifth birthday of the current equity bull market. Investors looked beyond mixed economic data and turmoil in the Ukraine to push stocks to further gains last week. Stocks still remain a more attractive option relative to traditional bonds and cash.

2014-03-10 Earning Estimates Plunging Around The World by of GaveKal Capital

Earnings estimates (and sales estimates to an extent) have taken a beating over the past three months. On average, EPS growth estimates are down 5.3% for the next fiscal year during this time. Not a single industry group out of the 24 MSCI classifications have seen their earning estimates rise and only four industries have seen their sales growth estimate increase.

2014-03-10 It Is Informed Optimism To Wait For The Rain by John Hussman of Hussman Funds

Regardless of very short-term market direction, it is urgent for investors to understand where the equity markets are positioned in the context of the full market cycle.

2014-03-10 With Fed in Charge, 5-Year Bull Run Poised to Continue by Kristina Hooper of Allianz Global Investors

The Federal Reserve’s loose monetary policy and gradual improvement in the economy are two big reasons the stock market can keep moving higher, says Kristina Hooper. Will it be reflected in this week’s consumer sentiment and spending data?

2014-03-10 Tech Bubble 2.0? by Chris Maxey, Ryan Davis of Fortigent

The $19 billion acquisition of WhatsApp by Facebook in late February put an exclamation point on several high profile takeovers in the technology space in recent months. Sizeable deals such as Google’s $3 billion acquisition of Nest and Facebook’s $3 billion offer for SnapChat have fueled the idea that an indiscriminate buying spree in the technology space a la 1999 could set up financial markets for another valuation bubble.

2014-03-10 How Much Slack Is in the U.S. Economy? The Inflation Jury Should Decide by Jeremie Banet of PIMCO

The unemployment rate may not be a reliable indicator of output slack in the U.S. economy. We’ll know (with a lag) if the economy has reached the end of the cyclical downturn when inflation picks up. The Fed will have to choose between risking a hawkish mistake or being behind the curve, waiting to see inflation actually increase. We expect it will choose the latter.

2014-03-09 The Innovation Enigma by Joseph Stiglitz of Project Syndicate

Around the world, there is enormous enthusiasm for the type of technological innovation symbolized by Silicon Valley, with many attempting to replicate the ingenuity that they regard as America’s true comparative advantage. But there is a puzzle: it is difficult to detect the benefits of this innovation in GDP statistics.

2014-03-09 The Problem with Keynesianism by John Mauldin of Millennium Wave Advisors

Keynes himself would appreciate the irony that he has become the defunct economist under whose influence the academic and bureaucratic classes now toil, slaves to what has become as much a religious belief system as it is an economic theory. Men and women who display an appropriate amount of skepticism on all manner of other topics indiscriminately funnel a wide assortment of facts and data through the filter of Keynesianism without ever questioning its basic assumptions. And then some of them go on to prescribe government policies that have profound effects upon the citizens of their nations.

2014-03-07 Remember that Key Market Fundamental: Stock Prices Follow Earnings by Gene Goldman of Cetera Financial Group

The stock market has enjoyed a very solid run over the past five years. Unfortunately, over the last few weeks, potential market headwinds have made their appearance, shaking investor confidence.

2014-03-07 Inflation Blues: Is it Time to Start Worrying? by Liz Ann Sonders of Charles Schwab

Inflation was revised higher in the latest GDP revision; while an increase in the minimum wage could push it higher still. But we remain sanguine about inflation risk as long as velocity and wage growth remain low. The key to watch near-term is bank lending, which is starting to accelerate sharply; signaling the possible return of "animal spirits."

2014-03-07 Weather or Not? by Peter Schiff of Euro Pacific Capital

Everyone agrees that the winter just now winding down (hopefully) has been brutal for most Americans. And while it's easy to conclude that the Polar Vortex has been responsible for an excess of school shutdowns and ice related traffic snarls, it's much harder to conclude that the it's responsible for the economic vortex that appears to have swallowed the American economy over the past three months.

2014-03-07 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The fight over Ukraine is an unwelcome source of uncertainty; Hiring in the U.S. improves in February; American businesses have lots of cash to invest.

2014-03-07 Making Green from Gold, Palladium and Pollution by Frank Holmes of U.S. Global Investors

Gold is coming back with a vengeance, experiencing a clear recovery and grabbing the attention of market cynics. Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years, according to Barron's.

2014-03-07 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 135.5, up from 131.8 last week. The WLI annualized growth indicator (WLIg) at one decimal place rose to 1.8 from last week's 1.7.

2014-03-06 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

February ended up being a strong month for stocks despite the growing perception of a slow economic start to the year 2014.

2014-03-06 Volatility Returns as Crisis in Ukraine Creates Uncertainty by Kevin Mahn of Hennion & Walsh

Most investors have most likely never even heard of Ukraine prior to the last two weeks. Now the future of Ukraine and potential repercussions on other countries in the region appear to be at the forefront of investor minds across the globe. Overall, Ukraine is a relatively small country in Eastern Europe with a population of about 46 million people that borders the likes of Russia, Belarus, Poland, Slovakia, Hungary, Romania and Moldova.

2014-03-06 Looking Forward 2014: Fixed Income Market Outlook by of Managers Investment Group

On January 8, 2014 Managers Investment Group (MIG) hosted a webinar – "Looking Forward 2014: Fixed Income Market Outlook." The discussion included insightful analysis of the 2013/2014 fixed income markets and Q&A sessions with renowned panelists Marty Tourigny of GW&K Investment Management (subadvisor to our suite of GW&K Funds), Dan Fuss of Loomis Sayles subadvisor to the Managers Bond Fund), and Tony Crescenzi of PIMCO (subadvisor to the Managers PIMCO Bond Fund).

2014-03-06 Emerging Markets: Distinguishing Opportunities by of Manning & Napier

The recent sell-off in emerging market currencies and equities is part of a broader move that has seen the asset class heavily underperform developed markets since mid-2012. Part of the underperformance can be attributed to disappointing economic performance, as actual growth in the emerging markets (EMs) has come in much lower than broader consensus expectations.

2014-03-06 The Briefest Flight to Safety by Scott Minerd of Guggenheim Partners

Tensions in Ukraine and tapering speculation seem unlikely to derail rising U.S. equity markets and the positive outlook for U.S. credit.

2014-03-06 Money Managers Aren't Paid to Forecast; They're Paid to Adapt by Chris Puplava of PFS Group

It seems we can't go a week without someone predicting the end of the world and stirring up everyone's fears of a market meltdown. These apocalyptic warnings are becoming routine and the sad thing is that it does cause the squeamish individual investor to run for the hills and liquidate their investment portfolio.

2014-03-06 Evolution of SRI Leads Investors to a Sustainable Future by Chat Reynders of AdvisorShares

It’s no secret that positive screening as an investment strategy is becoming increasingly popular as advisors seek ways to identify substantive investment opportunities. The practice focuses investors on the elements of a company that can make a positive impact both on the bottom line and on society, pointing to socially progressive companies that generate returns.

2014-03-06 The Dollar's Long Term Decline by Axel Merk of Merk Investments

The cleanest of the dirty shirts doesn’t necessarily preserve your purchasing power. Sure, the U.S. dollar has beaten the Russian Ruble and some others of late, but when it comes to real competition, the U.S. dollar has taken a back seat. The U.S. dollar’s long-term decline may be firmly in place and investors may want to buckle up to get ready for the ride.

2014-03-05 The US Economy - Back To The Slow Lane Again by Gary Halbert of Halbert Wealth Management

Late last year, President Obama predicted that 2014 would see “breakout growth” in the US economy. His optimism was not completely unwarranted since the economy grew by a healthy 4.1% (annual rate) in the 3Q of last year, driven largely by an unexpected surge in inventory rebuilding. Then in late January, the Commerce Department reported that the economy grew by a better than expected 3.2% in the 4Q.

2014-03-05 Asset Allocation: The Conundrum of 2014 by Jeffrey Knight of Columbia Management

In 2013, both the S&P 500 Index and the yield on 10-year Treasury bonds finished the year at their highest levels of the calendar year. So ended a year when equity markets dominated the return landscape, while bonds and numerous other assets struggled. The environment apparently changed, though, with the turning of the calendar to 2014. In the New Year, bonds have performed quite well, with yields on 10-year Treasuries, as an example, falling from 3.03% to 2.67% so far this year. Stocks meanwhile, have been volatile, yet stand close to unchanged on a year to date basis.

2014-03-05 2014: A Transition Year - Back to Fundamentals by Lorenzo Pagani of PIMCO

The past several years have seen multiple regime changes in financial markets in Europe, each dominated by different factors and requiring a distinct approach to fixed income investing. As spreads tighten to pre-2008 levels, it is now time to ask whether a shift in investment style is due. Macroeconomic developments and inflation expectations are likely to be key determining factors in whether 2014 will be a good year for European bond investors.

2014-03-05 A Tough Spring Ahead for Stocks? by Russ Koesterich of iShares Blog

Despite last week's disappointing economic data, stocks rallied to record highs. Russ explains what's behind this disconnect and why stocks may be vulnerable come the spring.

2014-03-05 The Renminbi's New Normal by Teresa Kong of Matthews Asia

The gyrations in Chinese money markets in the last few weeks have caused much alarm in the financial press. The moves in these markets are not only inline, but healthy for an economy looking to increase the role of the market in allocating resources. Those who believe these moves indicate financial stress, or draw parallels between the recent volatility and that which preceded the subprime crisis in the U.S., might be looking through the wrong end of the telescope.

2014-03-05 What Is the Fed Thinking? by Milton Ezrati of Lord Abbett

The central bank's decision to taper, despite its earlier caution on the economy, has puzzled many observers. New research from the Fed's own staff may provide some clues to its current mindset.

2014-03-05 What Areas of the Market Will Remain in the Limelight? by Frank Holmes of U.S. Global Investors

The current bull market has been five years in the making. Since the bottom on March 9, 2009, the S&P 500 Index has grown an incredible 174 percent. With this spectacular performance, investors are asking if U.S. companies will stay in the limelight or if it is time to draw the curtain on equities. While I was in Los Angeles at a leadership event for CEOs from around the world, I asked John Derrick, CFA, director of research, to shed some light on the subject.

2014-03-05 A Tough Spring Ahead for Stocks? by Russ Koesterich of iShares Blog

Despite last week’s disappointing economic data, stocks rallied to record highs. Russ explains what’s behind this disconnect and why stocks may be vulnerable come the spring.

2014-03-05 The Renminbi's New Normal by Teresa Kong of Matthews Asia

The gyrations in Chinese money markets in the last few weeks have caused much alarm in the financial press. The moves in these markets are not only inline, but healthy for an economy looking to increase the role of the market in allocating resources. Those who believe these moves indicate financial stress, or draw parallels between the recent volatility and that which preceded the subprime crisis in the U.S., might be looking through the wrong end of the telescope.

2014-03-04 The Second Coming by William Gross of PIMCO

Almost permanently affixed on the whiteboard of PIMCO's Investment Committee boardroom is a series of concentric circles, resembling the rings of a giant redwood, although in this case exhibiting an expanding continuum of asset classes with the safest in the center and the riskiest on the outer circles. Safest in the core are Treasury bills and overnight repo, which then turn outwards towards riskier notes and bonds, and then again into credit space with corporate, high yield, commodities and equities amongst others on the extremities.

2014-03-04 Malthus, Marx, and Modern Growth by Kenneth Rogoff of Project Syndicate

The promise that each generation will be better off than the last is a fundamental tenet of modern society. But will future generations, particularly in advanced economies, realize such expectations?

2014-03-04 A Century of Policy Mistakes by Niels Jensen of Absolute Return Partners

A century ago Argentina ranked as one of the wealthiest countries in world. Today it is a shadow of its former self. A long string of policy errors explain the long slide from riches to rags. Europe, like Argentina 100 years ago, is facing enormous challenges - as well as potential pitfalls - and the management of those challenges will define the welfare path for many years to come. Unfortunately, the early signs are not good. Our political leaders, afraid to face public condemnation, have so far chosen to ignore them.

2014-03-04 What the Jobs Report Will Tell Us-And What It Won't by Kristina Hooper of Allianz Global Investors

Kristina Hooper puts the soon-to-be-released February employment report in context, including what it means for Fed policy, consumer confidence and stocks.

2014-03-04 A Consumer Releveraging Renaissance? by Chris Maxey, Ryan Davis of Fortigent

After a long period of deleveraging, there are appearances that consumers are entering a stage of releveraging. The devil is always in the details, though, and this releveraging cycle is likely to play out vastly different than those of previous expansions.

2014-03-03 Do Foreign Profits Explain Elevated Profit Margins? No. by John Hussman of Hussman Funds

Foreign profits as a share of GNP have been contracting since 2007, are only about two-tenths of a percent above the 2009 low, and therefore do not have any material role in the surge in overall profit margins we’ve observed in recent years. The surge can be fully explained by mirror image deficits in household and government saving - a relationship that can be demonstrated across decades of historical evidence.

2014-03-03 Casting a Wide Asset Net in a Volatile Sea by Ed Perks of Franklin Templeton

It’s fair to say that investors will likely never be fully comfortable with market volatility. But actively managing the inevitable bumps that accompany equity investments, even in bull markets, can help make the ride a little less harrowing, according to Ed Perks, executive vice president and director of Portfolio Management, Franklin Equity Group®. He explains how understanding the fundamental dynamics behind market selloffs is key to uncovering potential opportunities in the face of a rough market ride.

2014-03-03 Blame it on the Weather? Not so Fast by Russ Koesterich of iShares Blog

How much is the weather to blame for recent soft U.S. economic data? While the weather is certainly responsible for some, or perhaps even most, of the recent slowdown, it’s not the whole story, writes Russ.

2014-03-03 The Long Road Back by Scott Brown of Raymond James

Five years ago, the economy appeared to be in freefall. Monetary policy and fiscal stimulus helped to halt the downslide, but a full economic recovery was still expected to take years. This wasn’t your father’s recession that we went through; it was your grandfather’s depression. We have made progress, but we still has very long way to go.

2014-03-03 Equities Rise Despite Mixed Fundamental News by Bob Doll of Nuveen Asset Management

U.S. equities increased 1.3% last week as the S&P surpassed the key 1850 level and pushed to new record highs. One favorable dynamic of the rally was the upside leadership from retail stocks, as earnings were largely ahead of expectations. Fed Chair Janet Yellen suggested concern about softerthan-expected spending in a number of recent data releases, but the bar for adjusting the tapering process has not been lowered.

2014-03-03 Bond Aid: Positive Outlook for High Yield in 2014 by Darren Hughes, Scott Roberts of Invesco Blog

While most fixed income asset classes tied to interest rates saw negative returns during 2013, high yield bonds returned more than 8%, according to the JP Morgan Domestic High Yield Index. While we anticipate slightly lower returns in 2014, it looks to be a positive year for high yield markets.

2014-03-03 The 5-Year Itch by Robert Isbitts of Sungarden Investment Research

The financial media is filled with historical comparisons to past periods. Despite the fact that all mutual fund companies and financial advisors are obligated to warn that past performance is no guarantee of future results, it is human nature to look for clues as to when history may repeat itself. As the famous quote goes, those who ignore history are doomed to repeat it. What prompted this week's blog, is the most uncanny, shocking and truly creepy numerical coincidence I have seen in some time...or perhaps ever.

2014-03-01 Wallets Wide Shut by Mohamed El Erian of Project Syndicate

With profitability at or near record levels, cash holdings by the corporate sector in Europe and the US have reached an all-time high - and are earning very little at today’s near-zero interest rates. But, for at least six reasons, firms are not investing in capacity and creating the jobs that these economies need.

2014-02-28 Is an Avalanche Waiting to Hit the U.S. Stock Market? (The Slippery Slope of Stupidity) by Dawn Bennett of Bennett Group Financial Services

The U.S. economy as we know it is headed for a huge correction. The only questions remaining are when will it start and what will be the trigger that starts the cascade? Financial and economic implosion is always a slow and stealthy process that grows over time behind the scenes.

2014-02-28 China’s Growth Puzzle by Stephen Roach of Project Syndicate

Though China’s economy is now slowing, the significance of this is not well understood. The downturn has nothing to do with problems in other emerging economies; in fact, it is a welcome development.

2014-02-28 The Stock Market's Shaky Foundation by Chris Martenson of Whitney Peak

Martenson explains the headwinds that make the long-term case for lower valuations than we've seen in previous decades. But more urgently, he lays out the litany of short-term triggers likely to result in a vicious correction in stock prices this year. In fact, for the first time in years, he believes the time to actively short equities is arriving.

2014-02-28 Emerging-Market Risk and Reward by Nouriel Roubini of Project Syndicate

Industrialization, urbanization, and the rise of a middle-class consumer society were supposed to boost emerging-market countries' long-term economic and sociopolitical stability. But in many countries recently wracked by political unrest, it is the urban middle classes that have been manning the barricades.

2014-02-28 Looking Beyond Politics in Thailand by Mark Mobius of Franklin Templeton

Throughout its history, Thailand has been subject to periods of political instability that have at times given cause for concern among investors. In the past few months, investor sentiment has reflected the political uncertainty, putting Thailand in the news.

2014-02-28 Drug Retail On A Roll by of GaveKal Capital

While the MSCI World consumer staples sector is not the source of scorching growth, there are some decent growth opportunities. Let's start by calibrating the drug retail industry within the consumer staples sector.

2014-02-28 Korea's Changing Consumer Patterns by Michael Han of Matthews Asia

Following a recent research trip to Korea, I was able to spend some time there with my family. Three consecutive weeks away afforded me the opportunity to observe changes in spending patterns among Korean consumers as well as the improving competitiveness of the country’s service industries.

2014-02-28 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.8, down from 123.3 last week. The WLI annualized growth indicator (WLIg) at one decimal place slipped to 1.7 from last week's 2.5 .

2014-02-28 Emerging Markets Equity Commentary: January 2014 by Team of Thomas White International

Emerging market equity prices corrected in January as investors worried about slower growth in China as well as political and economic turbulence in some the frontier economies such as Argentina and the Ukraine. Markets were also unnerved by the unexpectedly large interest rate hike in Turkey, which failed to prop up the currency.

2014-02-28 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The sensitivity of emerging markets complicates the Fed’s exit plans; Raising the minimum wage is not the only way to aid low-income workers; Brazil’s economy is faltering as the World Cup approaches.

2014-02-28 Hide and Seek by Herbert Abramson, Randall Abramson of Trapeze Asset Management

Hide and seek. A game investors played as children but should not forget these days. Currently, investors need to hide safely to protect from some unfavourable developments in an environment that could hurt them.

2014-02-28 What Areas of the Market Will Remain in the Limelight? by Frank Holmes of U.S. Global Investors

The current bull market has been five years in the making. Since the bottom on March 9, 2009, the S&P 500 Index has grown an incredible 174 percent. With this spectacular performance, investors are asking if U.S. companies will stay in the limelight or if it is time to draw the curtain on equities.

2014-02-28 Bounce Back by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

US stocks have bounced and the market’s still attractive and in the midst of a secular bull market. But there are likely to be bumps along the way; notably given that this is a midterm election year; which are known for first-half pullbacks. A diversified portfolio is important and both European and Chinese stocks appear to have upside, while Japan continues to frustrate with a two-steps forward, two-steps back sort of approach. And a final reminder not to replace fixed income assets with equities in search of higher income without recognizing the risk profile of a portfolio has changed.

2014-02-27 Trading Secrets: The Godot Recovery by Tad Rivelle of TCW Asset Management

With this recovery, prosperity has always been just around the corner. It wasn’t supposed to be this way. True, the massive fiscal and edgy new monetary measures enacted in the wake of the 2008 crisis kept the economy’s heart beating. The Fed deftly executed its role of lender as last resort, and for this we should all be grateful. What has become steadily less clear is why, five years after the crisis, the Fed remains committed to its zero rate policy. Are artificially low rates truly the secret sauce that takes a weak recovery and makes it strong?

2014-02-27 Big Wheel Keep on Turning by Scott Minerd of Guggenheim Partners

Economic uncertainty from this winter soft patch will linger for months, but strong housing fundamentals should underpin a strengthening U.S. economy while low inflation augers well for stock prices.

2014-02-27 Gut Check: The Outlook on Fixed Income by Colin Lundgren of Columbia Management

With nearly two months of the year behind us, we thought now would be a good time to see how the fixed-income market is faring in 2014 and assess our outlook. We asked our investment team five questions to help capture our view on the market today.

2014-02-26 What Columbus Missed: Royce Rediscovers India by David Nadel of The Royce Funds

In 1492, Italian explorer Christopher Columbus set sail to discover India. He missed his mark, however, landing in America instead. The rest, as they say, is history-with the exception that more than 500 years later India is still worthy of discovery for many Western investors.

2014-02-26 Market Perspective by CCR Wealth Management Investment Committee of CCR Wealth Management

It cost $0.32 to mail a letter, unemployment was 4.9%, O.J. Simpson was found liable in a civil suit, Hong Kong was returned to Chinese rule, Timothy McVeigh was sentenced to Death, Green Bay defeated the Patriots in the Super Bowl, Titanic came crashing into movie theatres, and Dolly, the first genetically engineered lamb was unveiled to the public; the year was 1997.

2014-02-26 Supply and Demand in the Balance by John Burns of John Burns Real Estate

We look at the housing demand/supply balance two ways.

2014-02-26 A CAPE Crusader by James Montier of GMO

In a new white paper today, James Montier of GMO's asset allocation team reviews a range of valuation measures to assess current U.S. equity market valuations. He concludes: "We continue to believe that the weight of valuation evidence suggests the S&P 500 is significantly overvalued at its current levels."

2014-02-26 Gaps, Not Growth by Zach Pandl of Columbia Management

Monetary policy is primarily about "gaps" not growth: the Fed is trying to reduce spare capacity in the economy, not bring about a rapid expansion per se.

2014-02-26 U.S. Housing: Investors Reach for Higher-Hanging Fruit by Joshua Anderson, Emmanuel Sharef, Grover Burthey of PIMCO

PIMCO expects house prices to transition to steady secular growth, with nominal price increases of 5%–10% cumulatively over two years. An environment of reduced volatility and steady gradual growth may result in tightening risk premia and spreads as the market begins to price in this new dynamic. Over the coming years, we will focus on whether the underbuilding of single-family homes is ultimately resolved through housing starts, rental growth or continued price appreciation.

2014-02-26 Weather-Beaten by Scott Brown of Raymond James

Harsh winter weather often shows through in the economic data. Large seasonal adjustment can magnify that impact. Snowstorms happen every year, of course – the key is whether they are worse than usual. This year, bad weather has been relatively widespread, affecting many areas of the country and much of the economic data for December, January, and February. None of the bad weather has had a significant impact on the longer-term outlook and investors have begun to take the economic news with an appropriate grain of salt.

2014-02-25 Time to Worry About Europe Again? by Chris Maxey, Ryan Davis of Fortigent

The European sovereign debt crisis has all but faded from investors’ minds since ECB President Mario Draghi’s famous pronouncement on July 26, 2012 that he would do “whatever it takes” to save the monetary union. Since that time, equity markets in Europe rallied sharply as accumulated risk aversion fell away.

2014-02-25 U.S. Economy: Curb Your Enthusiasm by Milton Ezrati of Lord Abbett

Amid optimistic projections of an acceleration in growth, the factors that have restrained GDP remain firmly in place.

2014-02-25 The Return of Japan by Bill O'Grady of Confluence Investment Management

Two weeks ago, we discussed Germany’s apparent early steps to return to regional power status. In this week’s report, we will examine Japan’s steady evolution to regional power status.

2014-02-25 Alternative Energy Brief by Edward Guinness of Guinness Atkinson Asset Management

This month we provide our Outlook for the Alternative Energy sector in 2014.

2014-02-25 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

A quiet four days for stocks last week. Between the holiday, school vacations and winter weather; there just were not many catalysts for the stock marker.

2014-02-25 Flirting With Deflation by Andrew Bosomworth of PIMCO

Over the medium term, we see downside risks to both growth and inflation in the eurozone, unlike the ECB’s more balanced view. However, even if eurozone inflation sinks close to 1% in 2014–2015, as PIMCO forecasts, this in itself probably would not be low enough for the ECB to consider further easing. A lack of further policy action may undermine the ECB’s credibility to anchor longer-term inflation more closely to 2%.

2014-02-25 Smoother Sailing in Washington? by Libby Cantrill of PIMCO

With the debt ceiling increase out of the way, we should expect many fewer fiscal fights – and less policy uncertainty and potential market disruptions – emanating from Washington in 2014. We also expect Washington to do less harm from an economic growth perspective. We estimate that fiscal drag in 2014 will be about 0.4% of GDP. As we enter an election cycle, we expect Congress will do very little that is constructive for the economy in the year ahead – meaning that tax reform and an immigration overhaul will likely have to wait.

2014-02-24 Secular Bull Or Bear? by Doug Ramsey of Leuthold Weeden Capital Management

At the January highs, the S&P 500 had gained almost 175% in just 58 months, while secondary stocks and equal-weighted market measures have gained considerably more. If it’s already over (and we don’t think it is), this cyclical bull will go down as a memorable one. But is this move the first leg of a new secular bull market? … We think the next cyclical bear market will drive the market to levels low enough that debate will rage over the true date of the secular bear market low: was it 2009, or 201X?

2014-02-24 Market Outlook by Scotty George of Alexander Capital

In the four and one-half year market recovery since the "Great Recession" there has been a remarkable transformation in the construction and analysis of corporate earnings. This is something that gives me pause for concern.

2014-02-24 Wallflower Value Stocks Are Ready to Dance by Chris Marx of AllianceBernstein

Global equities are notching new highs, valuations are elevated and talk of market bubbles is increasingly common. Yet, by our measure, the potential for outperformance in value stocks has rarely been better. How can that be?

2014-02-24 Three Reasons Frontier & EM Equities Are Not Created Equal by Russ Koesterich of iShares Blog

With all the turmoil in emerging markets recently, some investors may be especially wary of investing in so-called frontier markets. Russ explains why frontier and emerging markets are separate asset classes, each deserving of a strategic allocation.

2014-02-24 Confusing Crosscurrents Result in Trendless Market by Bob Doll of Nuveen Asset Management

U.S. equities finished mixed after the shortened holiday week.1 The broad market narrative did not change, as additional disappointing economic data was largely attributed to the impact of adverse weather. Comfort that the recovery may be gaining traction was evidenced through Fed discussions and the January FOMC minutes, with consensus expectations for tapering to continue at a measured pace. Some renewed concerns about a growth slowdown in China surfaced but had little impact.

2014-02-24 Leading Indicators Offer a Window into Europe’s Recovery by Matthew Dennis of Invesco Blog

We’re seeing signs that the recovery in Europe is progressing. I wanted to take a moment to highlight some of the positives, uncertainties and opportunities that we believe investors should consider about the region.

2014-02-23 The Worst Ten-Letter Word by John Mauldin of Mauldin Economics

A new word is achieving ubiquity. The word has always been with us and at times has been a beacon to attract the friends of liberty and opportunity. But now I’m afraid it is beginning to be used as a justification for social and economic policies that will limit the expansion of both liberty and opportunity. The word? Inequality.

2014-02-21 Investing in an M&A Boom by James Tierney, Jr. of Alliance Bernstein

Equity markets got off to a rough start in 2014, but a resurgence of corporate dealmaking has given investors reason to cheer. With executives’ confidence increasing, and companies sitting on a mountain of cash, we think that the stage has been set for a sustained recovery of US takeover activity.

2014-02-21 The Big Four Economic Indicators: Real Retail Sales by Doug Short of Advisor Perspectives (dshort.com)

With yesterday's release of the January Consumer Price Index, we can now calculate Real Retail Sales for the underlying sales data released on February 13th. Nominal Retail Sales had fallen 0.4% month-over-month, the second month of contraction, and are up only 0.3% year-over-year. When we adjust for inflation, January sales were down 0.6% MoM. The YoY change was a fractional 0.1% growth. Real sales are down 0.9% from their all-time high in November.

2014-02-21 Is the U.S. Economy Under the Weather? by Carl Tannenbaum of Northern Trust

Is the U.S. economy under the weather?; Japan is faltering a bit as year two of Abenomics begins; Bitcoin has generated a lot of attention, some of it unwanted

2014-02-20 American Industrial Renaissance Revisited by Richard Bernstein of Richard Bernstein Advisors

We first wrote about The "American Industrial Renaissance" in 2012, and it remains one of our favorite investment themes. We continue to implement this theme through small US-centric industrial companies and small financial institutions that lend to public and private industrial firms. It remains unlikely that the United States will be the manufacturing powerhouse that it was during the 1950s and 1960s, but many factors are suggesting that the US industrial sector will continue to gain market share.

2014-02-20 The Next Phase of Housing\'s Recovery: Which Five Investments Should You Own Today? by Mark Kiesel of PIMCO

PIMCO has significant top-down and bottom-up expertise dedicated to understanding the U.S. housing market cycle. In 2006, we warned U.S. housing prices were significantly overvalued, which led to our defensive positioning heading into the recession. In 2011, we turned bullish on real estate and added investments such as non-agency mortgage-backed securities, banks and homebuilders that we felt would benefit from an eventual recovery in housing prices.

2014-02-20 Peer Group Analytics and Valuation, an Abstraction by David Kleinberg of Universal Orbit

Peer group analytics and valuation are essential components when assessing the optimal risk-return equation. As opposed to an efficient frontier populated with the regressed correlated expected future returns of conventional securities or asset classes perhaps one determined by business segment operations is more advantageous.

2014-02-20 The State of International Small-Cap by Francis Gannon of The Royce Funds

While some argue that domestic small-cap leadership in 2013 was a result of its heavy exposure to companies that tend to generate most of their income domestically, others contest that this greater focus on the U.S. may mean missing out on the benefits of faster-growing foreign economies. We, on the other hand, choose to focus our attentions on individual companies, particularly those in more cyclical areas of the market that are more closely tied to the global economy.

2014-02-20 Lack Of Slack - Why Aggregate Unemployment May Be Masking Wage And Inflation Pressures by Anthony Wile of J.P. Morgan Funds

A historically large number of long-term unemployed, representing 36% of joblessness, have kept the unemployment rate elevated which could be distorting the traditional tradeoff between inflation and unemployment dynamics.

2014-02-20 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

We’re back, baby. (Well, at least, for a week.) Janet Yellen made her case to become the most revered Fed Chair (anyone even remember Maestro Greenspan?) by merely reiterating Dr. B’s prior remarks about the economy and the bond buying program. Investors felt the love this Valentine’s week as they shook off the past negativity and took the Dow to its best daily showing and back above the 16k level. Can Cupid (and Yellen) continue to work his (her) magic after Prez day and beyond?

2014-02-20 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks soared last week as economic reports showed the global economy was weaker than originally estimated in the last quarter of 2013 and has lost further momentum in 2014. This has acted to support bond prices and lower interest rates. Thus, stocks as an asset class continue to do well.

2014-02-20 International Equity Commentary: January 2014 by Team of Thomas White International

International equity markets have started the year on a difficult note, as concerns about the robustness of economic growth in the U.S., Japan and Europe have made investors more cautious. Though the U.S. economy expanded at a faster than expected pace during the last quarter of 2013, recent data reports from the labor market have not been as healthy.

2014-02-20 Stocks for 2014: Fairly Valued Dividend Growth Stocks with an Emphasis on Dividends - Part 4 by Chuck Carnevale of F.A.S.T. Graphs

I am a firm believer that common stock portfolios should be custom-designed to meet each unique individual’s goals, objectives and risk tolerances. With that said, I believe it logically follows that in order to create a successful portfolio, the individual investor must first conduct some serious introspection to be sure that they truly "know thyself." Therefore, I believe the first, and perhaps most critical step, towards designing a successful equity portfolio is to ask your-self, and honestly answer several important questions.

2014-02-20 Thanks Washington, But the Recovery Remains Soft by Russ Koesterich of iShares Blog

While two events in Washington last week supported stocks and other risky assets, they overshadowed the release of some relatively disappointing economic numbers providing more evidence of still soft U.S. economic growth.

2014-02-20 Nothing Burns Like the Cold by Scott Minerd of Guggenheim Partners

The U.S. economy has stalled amid a winter freeze but the Federal Reserve is unlikely to act because warmer weather should bring a rebound, leading to higher U.S. stock prices and tighter credit spreads.

2014-02-20 February Flash Update by Clyde Kendzierski of Financial Solutions Group

It's too early to mean much, but so far out 2014 forecast is falling nicely into place. The market highs on Dec 31st have held, bonds are outperforming stocks, gold is outperforming both stocks and bonds, while gold mining shares are soaring! The anticipated volatility in emerging markets and Japan as well as the wild card of the Chinese economy continue to unfold, while bad weather has postponed the evidence of strong 2014 US growth.

2014-02-20 Stocks for 2014: High Yield and Fairly Valued Dividend Stocks for High Current Income – Part 5 by Chuck Carnevale of F.A.S.T. Graphs

Retired investors seeking high income to live off of during retirement, face greater challenges today than almost ever before. The days of high yields available from bonds and other fixed income vehicles are long gone. Consequently, generating an adequate level of current income on retirement portfolios is difficult to say the least. This is especially tricky for those investors with a low tolerance for risk.

2014-02-20 The Fed: Yellen's Tapering Tightrope by Milton Ezrati of Lord Abbett

In reducing quantitative easing, the Federal Reserve chairwoman faces a big challenge: preventing asset bubbles at home without pressuring developing economies.

2014-02-20 Emerging Markets Equity Commentary: January 2014 by Team of Thomas White International

Emerging market equity prices corrected in January as investors worried about slower growth in China as well as political and economic turbulence in some the frontier economies such as Argentina and the Ukraine. Markets were also unnerved by the unexpectedly large interest rate hike in Turkey, which failed to prop up the currency.

2014-02-20 Preparing for the Unexpected with Commodity Futures ETFs by Ryan Issakainen of First Trust Advisors

Three straight years of negative returns for broad commodity benchmark indices, such as the Dow Jones-UBS Commodity Total Return Index, have led some investment advisors (and their clients) to begin questioning the rationale for including commodity futures ETFs1 in their asset allocation models. Relatively tame inflation expectations seem to support these doubts, as commodities are often thought of as a hedge against inflation.

2014-02-20 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.2, unchanged from last week. The WLI annualized growth indicator (WLIg) at one decimal place slipped to 2.5 from last week's 3.2 (a downward revision from 3.3).

2014-02-20 WhatsApp With That? by Peter Schiff of Euro Pacific Capital

Two pieces of business news announced this week provide a convenient frame through which to view our dysfunctional and distorted economy. The first (which has attracted tremendous attention), is Facebook's blockbuster $19 billion acquisition of instant messaging provider WhatsApp. The second (which few have noticed) is the horrific earnings report issued by Texas-based retail chain Conn's. While these two developments don't seem to have much in common, together they shed some very unflattering light on where we stand economically.

2014-02-19 US Savings Rate Falling Again - Here Comes \"MyRA\" by Gary Halbert of Halbert Wealth Management

Today we weave together several different topics that are all connected in one way or another. We begin with the US savings rate which is trending lower once again. From 1975 to 2007, the savings rate fell to an all-time low of 2.4%. While it jumped up briefly after the 2008 financial crisis, it is now moving lower yet again.

2014-02-19 The U.S. an Oasis in a Global Sea of Problems by Charlie Dreifus of The Royce Funds

Despite the ongoing political and economic uncertainty in the emerging markets and a slow start for stocks in 2014, Portfolio Manager and Principal Charlie Dreifus believes the U.S. economy is in good shape going forward.

2014-02-19 Interest Rate Outlook - \"Old Normal\" by Jerry Paul, Zach Jonson of ICON Advisers, Inc.

Contrary to a popular belief that interest rates are destined to rise significantly, at ICON we believe we may be re-entering the "old normal" where the U.S. Treasury 10-year yield remains between 2%-4% for an extended period of time. As can be seen in the following chart of interest rates since 1871, with a few exceptions this is where interest rates traded prior to the mid-1960s. From this perspective, the late 1970s appear to be unusual and the decline of the last 32 years is simply a return to normal, where rates can remain for many years in a setting of slower growth and low inflation.

2014-02-18 Puerto Rico\'s Double-Downgrade by Michael Taylor of Columbia Management

On February 4, Standard & Poor’s lowered its long-term credit rating on the Commonwealth of Puerto Rico’s (PR) general obligation (GO) debt making it the first rating agency to downgrade the Commonwealth to below investment-grade levels. Just three days later, Moody’s cut its GO rating by two notches to ’Ba2’; ratings that are capped by or linked to the Commonwealth’s GO rating were also downgraded two notches, with the exception of the Puerto Rico Aqueduct and Sewer Authority (PRASA) Revenue Bonds.

2014-02-18 From Micro-Caps to Mid-Caps, a Comprehensive Approach to Smaller Companies by Team of The Royce Funds

As the small-cap asset class has grown in size, those companies just beyond the periphery of small-cap have become somewhat orphaned.

2014-02-18 Market Outlook by Scotty George of Alexander Capital

The new thinking amongst market analysts is that one must respond to every news flash, every short-term nuance, any variable that creates a daily ripple in prices or attitude, or risk having your portfolio drift in obscurity and underperformance. The new "keeping up with the Jones’" demands that we stay tuned to business news programming 24/7 to see if we’re conforming to expectations.

2014-02-18 A Time for Optimism in Europe? by Philippe Brugere-Trelat of Franklin Templeton

Volatile markets and an uneven recovery may appear to justify a cautious outlook for investing in Europe right now, while in the US the specter of higher interest rates might also be signaling a challenging market environment ahead. Philippe Brugere-Trelat believes the investment case for European equities favors a more optimistic outlook and despite a bumpy start to the year for equities globally, he still sees the market as rife with potential opportunities for selective investors, particularly undervalued segments of the market. One place where he thinks caution is likely warranted? Japan.

2014-02-18 Stocks for 2014: Growth and Income For Total Return - Part 3 by Chuck Carnevale of F.A.S.T. Graphs

When investing in common stocks, there is no one strategy that fits all investors. Some investors are focused on investing for income, some for capital appreciation and others for various combinations of both. Additionally, there is the issue of risk tolerance. Some investors are willing and capable of assuming greater risk if they believe it will lead to greater returns, while others are more risk adverse. These are just but a few of the many variations that apply to the individual investor’s own unique goals and characteristics.

2014-02-18 After a Rocky 2013, What\'s in Store for Asia This Year? by Brent Bates of Invesco Blog

Overall, 2013 wasn’t the best year for Asian markets, however there are several trends emerging that we believe will be good for the region this year.

2014-02-18 Equity Markets: How Much Energy Does the Bull Have Left? by Kurt Feuerman of AllianceBernstein

After another big year for stocks in 2013, many investors are questioning how much longer the bull market can run before it collapses from exhaustion. This doubt has intensified with the early 2014 selloff. However, based on what we see, it’s not time to worry about the market’s stamina yet.

2014-02-18 Congress Raises the Debt Limit: Is This the End of the Budget Battles? by Andy Friedman of The Washington Update

Last week Congress - faced with an impending snow storm and a desire to get home for the Presidents Day holiday - hastily passed legislation permitting the federal government to continue to borrow funds through March 15, 2015. Coupled with the agreement reached last December to fund the government through September 30, 2015, this action eliminates the prospects of additional fiscal showdowns for at least the remainder of 2014.

2014-02-18 Global Growth Expectations Push Stocks Forward Despite Weather by Bob Doll of Nuveen Asset Management

U.S. equities finished sharply higher last week with the S&P 500 increasing 2.3% and all major U.S. averages up more than 2%.1 The rapid market recovery from the January pullback is a bigger surprise than the pullback that preceded it.

2014-02-18 Topping Patterns and the Proper Cause for Optimism by John Hussman of Hussman Funds

We would dismiss classic topping patterns we observe here if the recent market peak did not feature the "full catastrophe" of textbook speculative features, particularly the same syndrome of extreme overvalued, overbought, overbullish, rising yield conditions observed (prior to the past year) only at major market peaks in 2007, 2000, 1987, 1972, and 1929. Meanwhile, we remain encouraged. Those who follow a historically informed, value-conscious, and risk-managed investment discipline should be among the most optimistic investors in the financial markets.

2014-02-15 The Economic Singularity by John Mauldin of Millennium Wave Advisors

Today, let’s think about central banks and liquidity traps and see if we agree that central bankers are driving the car from the back seat based upon a fundamentally flawed theory of how the world works. That theory helped produce the wreck that was the Great Recession and will have its fingerprints all over the next one.

2014-02-14 Does a Down January Dog the Rest of the Year? Probably by Peter Nielsen of Saturna Capital

The bottom line for investors is that a negative January tends to herald lower (though not necessarily negative) returns for the subsequent 11 months.

2014-02-14 Turkey, Doves, Hawks and Owls by Robert Horrocks of Matthews Asia

The current market sentiment is something of an albatross around Asian economic and market performance. Whilst it is never safe to assume the currency speculators have gone away, the region’s economies have put in enough hard work over the previous decades to earn some goodwill.

2014-02-14 PepsiCo Dividend: Refreshing The Investor World by Team of Fast Graphs

PepsiCo is presently trading in line with its historical valuations and might be offering a reasonable - albeit not necessarily screaming - opportunity moving forward. However, as always, we recommend that the reader conduct his or her own thorough due diligence.

2014-02-14 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.2, unchanged from last week. The WLI annualized growth indicator (WLIg) at one decimal place slipped to 3.3 from last week’s 4.2. Last weekend, ECRI posted a new publicly available commentary on the company’s website: Failure to Launch. The brief text concludes with this remark: It is now quite clear that the economy is decelerating, not accelerating, with growth in ECRI’s Weekly Coincident Index ... falling rapidly.

2014-02-14 Arresting Disinflation Will Require Taking up the Slack by Carl Tannenbaum of Northern Trust

Arresting disinflation will require taking up the slack. Estimates of the U.S. output gap remain substantial. The U.S. achieves budget peace but still faces long-term fiscal challenges.

2014-02-14 Many Reasons for Rates to Rise by Robert Isbitts of Sungarden Investment Research

There are a number of scenarios and events that could cause rates to rise in the next several years. Increasing economic growth in the United States would mean that the Federal Reserve no longer needs to keep market interest rates artificially low. Central banks around the world have been buying debt to spur economic activity, with mixed result at best. When there is no longer a need to purchase more debt, the massive, coordinated demand for that debt will fall. And when that happens... uh-oh.

2014-02-14 Weather Related? by Liz Ann Sonders, Brad Sorensen & Michelle Gibley of Charles Schwab

The recent slowdown in economic data appears to be largely weather related and we believe decent growth will reassert itself. Stocks have bounced after a weak start to the year, but the threat of a further pullback remains, although our longer-term optimism has not been dented. Likewise, we believe Europe offers some attractive investment opportunities but we’re in a wait-and-see mode with Japan. Finally, we don’t see EM turmoil becoming overly contagious, but we are watching that situation closely.

2014-02-14 These Gold Charts Will Make Your Heart Beat Faster by Frank Holmes of U.S. Global Investors

So while gold may correct over the next several months as the metal enters its seasonally weak period of the year, this looks promising for gold investors.

2014-02-13 Bad News is Good News Again by Scott Minerd of Guggenheim Partners

Extremely cold weather in the United States, a sell-off in equities and in emerging markets, and large swings in fund flows combined for a volatile start to the year. But none of this will derail the ongoing U.S. economic expansion, and investors should take advantage of this temporary weakness.

2014-02-13 A Time for Optimism in Europe? by Philippe Brugere-Trelat of Franklin Templeton

Volatile markets and an uneven recovery may appear to justify a cautious outlook for investing in Europe right now, while in the US the specter of higher interest rates might also be signaling a challenging market environment ahead. The investment case for European equities favors a more optimistic outlook and despite a bumpy start to the year for equities globally, he still sees the market as rife with potential opportunities for selective investors, particularly undervalued segments of the market. One place where caution is likely warranted? Japan.

2014-02-13 Equity Markets: How Much Energy Does the Bull Have Left? by Kurt Feuerman of Alliance Bernstein

After another big year for stocks in 2013, many investors are questioning how much longer the bull market can run before it collapses from exhaustion. This doubt has intensified with the early 2014 selloff. However, based on what we see, it’s not time to worry about the market’s stamina yet.

2014-02-12 Was the labor report positive, or negative, anyone? by Chris Maxey and Ryan Davis  of Fortigent

Stocks were modestly positive last week following three straight weeks of negative performance. Markets crawled back following an ugly Monday in which the S&P 500 suffered its worst loss in more than seven months. For the week, the S&P rose 0.9% while the Dow Jones Industrial Average added 0.7%.

2014-02-12 Harvard’s Endowment: Wise or Foolish? by William Smead of Smead Capital Management

Warren Buffett says, "What the wise man does in the beginning, the fool does in the end." In a Barron's feature over the weekend, writer Andrew Bary dug into the portfolio of Harvard's Endowment through an interview with their CIO, Jane Mendillo. After all, who could possibly be wiser than what many would argue is the most respected undergraduate and graduate university in the world? Using a combination of Bary’s article and our perspective, this missive will seek to determine whether the Harvard Endowment is wise or foolish.

2014-02-12 Grey Owl Capital’s Third Quarter Letter by of Grey Owl Capital Management

2013 was a banner year for the US stock market. Despite equities’ meager fourteen-year record of accomplishment, investors, broadly speaking, are limited to short-term memory. Last year’s performance was enough to generate significant enthusiasm for stocks. We continue to believe, the current environment warrants a more balanced approach.

2014-02-12 Why Quantitative Easing Didn’t Work by Gary D. Halbert of Halbert Wealth Management

IN THIS ISSUE: 1. Why Fed’s Quantitative Easing (QE) Didn’t Work 2. Velocity of Money Plunged During Financial Crisis 3. Should Bernanke & Company Have Done More? 4. QE Was a Huge, Dangerous Experiment That Failed 5. Fed Begins to “Taper” QE Purchases in January 6. Conclusions – What Happens Next?

2014-02-11 Equities Markets Start 2014 in Deep Freeze by Douglas Coté of ING Investement Management

By slowly normalizing policy, the Fed is passing the responsibility of pricing risk back to the markets, resulting in higher volatility. The health of the emerging markets is vital to global growth, as developing countries have doubled their contribution to global GDP over the past decade to nearly 40%. S&P 500 corporations derive half their revenue from overseas; support from global consumerism and manufacturing is on track to continue. Broad global diversification across equity and fixed income markets is the best way to protect against volatility.

2014-02-11 Leveraged Finance Outlook: Riding the Low Default Wave by Andrew R. Jessop, Elizabeth (Beth) MacLean of PIMCO

Following strong performance in 2013, we expect low (1%-3%) defaults in leveraged finance markets this year. Issuance should remain healthy, and continued slow but steady growth in the U.S. economy should offer further stability to these companies. However, careful credit selection and monitoring of sector trends remain imperative. Investors with low tolerance for volatility and more interest rate sensitivity may emphasize loans, while investors with greater risk tolerance and a more benign outlook for rates may look to high yield.

2014-02-11 ‘Hot’ Money’s Fast Exit Cools Emerging Markets by of Knowledge @ Wharton

Capital flight from emerging markets has been accelerating in recent weeks ($6 billion alone in the week ending February 5). Turkey is the poster child, but the exodus is also happening in India, Indonesia, Brazil, South Africa and others – mostly from equity markets. This “hot money” is moving out over concerns that asset bubbles have built up, and that emerging market economic growth is now slowing. The slowdown is partly a result of tighter money in the wake of the Fed’s tapering plans and a decelerating economy in China, many believe. To better understand the risks to the global financial

2014-02-10 Bond Investing in a Rising Rate Environment by Kathleen Gaffney of Eaton Vance

After a transitional year like 2013, when a multidecade declining rate environment moved to a rising rate environment, we think it is important for investors to consider a multisector approach to finding value in the bond market. Finding bonds that can appreciate in price regardless of the interest-rate environment is what a multisector strategy generally seeks to accomplish.

2014-02-10 Emerging Markets Equity Commentary - December 2013 by Team of Thomas White International

Emerging market equity prices saw a modest correction for the second successive month in December, as investors remained cautious about the outlook for some of the emerging economies. Select countries such as Thailand in Asia and Turkey in Europe continue to face difficult political environments, with large demonstrations against the governments. Their currencies have reacted negatively to the latest developments, making investors fearful of a repeat of the volatile market movements seen during the third quarter of 2013.

2014-02-10 Double Trouble by John Hussman of Hussman Funds

On the basis of a broad range of valuation measures that are tightly (nearly 90%) correlated with actual subsequent S&P 500 total returns over the following decade, we estimate that stock prices are about double the level that would generate historically adequate long-term returns.

2014-02-10 What Would a Stronger Dollar Mean for Global Markets? by Borge Endresen, Brent Bates of Invesco

As the world watches the progress of the US Federal Reserve’s tapering program, and anticipates the strengthening of the US dollar, We’re often asked how this affects our view of international markets and risk. The short answer is that it doesn’t. We’re long-term, bottom-up stock pickers , so we;re primarily concerned with currency impacts on a company-by-company basis. However, there are some broad trends that are worth noting.

2014-02-10 Growth and Policy Uncertainty Cause Choppy Markets by Bob Doll of Nuveen Asset Management

U.S. equities closed with modest gains last week, as the S&P 500 overcame Monday’s decline, the largest one-day percentage loss since June 2013. The weaker-than-expected ISM manufacturing and vehicle sales data drive the sell-off on Monday, exacerbating the focus on slowing momentum for the U.S. recovery. The impact of adverse weather complicates the picture. Also, although January non-farm payroll missed expectations, there were more upbeat indications for the household survey.

2014-02-10 Market Outlook by Scotty C. George of Alexander Capital

Despite the inverted gyrations of the stock market during the past three weeks, my market overview continues to be moderately bullish, of course with specific reservations about investors’ unbridled carryover of unrealistic expectations borne out of last year’s performance.

2014-02-10 Two Reasons for Value to Outperform in 2014 by Will Nasgovitz of Heartland Advisors

We’ve seen the longest period of growth outperformance since 1932, but the two catalysts could cause value to return to favor. First, tapering by the Fed should allow interest rates to normalize and thereby benefit the Financials sector. Second, there’s potential for a correction in the Consumer Discretionary sector, which appears overvalued: The group’s P/E is above the historical average and performance has tracked upward despite flat earnings revisions.

2014-02-10 Volatility Should Persist, But Stick With Stocks by Russ Koesterich of iSharesBlog

Volatility rose last week and is now close to its long-term average. Economic data has softened, but we do not believe the Federal Reserve will change course. Investors may want to consider adding to equity positions during periods of weakness

2014-02-10 What Would a Stronger Dollar Mean for Global Markets? by Borge Endresen, Brent Bates of Invesco

As the world watches the progress of the US Federal Reserve’s (Fed’s) tapering program, and anticipates the strengthening of the US dollar, we’re often asked how this affects our view of the international market and risk. The short answer is that it doesn’t. We’re long-term, bottom-up stock pickers, so we’re primarily concerned with currency impacts on a company-by-company basis. However, there are some broad trends that are worth noting.

2014-02-09 A Most Dangerous Era by John Mauldin of Millennium Wave Advisors

This week we were confronted with a rather troubling appendix in the Congressional Budget Office (CBO) analysis of the Affordable Care Act, which suggests that the act will have a rather profound impact on employment patterns.

2014-02-09 Global Economic Overview - December 2013 by Team of Thomas White International

The global economic outlook has turned brighter as several major economies are improving. Both business and consumer sentiment have become healthier across most regions, as the policy uncertainties that plagued several countries last year have faded. The U.S. economy is expected to accelerate further in 2014, while Europe and Japan are also likely to see faster growth.

2014-02-08 International Equity Commentary - December 2013 by Team of Thomas White International

International equity prices saw marginal gains in December as investors weighed the improved global economic outlook against the reduction in monetary stimulus from the U.S. Federal Reserve. Economic trends have become more positive across most regions, helped by the improving business environment and consumer sentiment in the U.S. as well as in Europe. Japan continues to see stronger export gains as demand revives in its major markets and the cheaper yen remain supportive.

2014-02-07 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Long-term unemployment needs to be addressed more intensively. January’s jobs data was very much a mixed bag. Janet Yellen’s testimony will include thoughts on joblessness.

2014-02-07 What\'s the Game Changer for Gold? by Frank Holmes of U.S. Global Investors

What will break gold of its losing streak? Will inflation, which is a lagging indicator, be stronger than expected? In one of my most popular posts last year, I said that based on the jobs market, the limited housing recovery and regulations slowing down the flow of money, the Fed would have no choice but to start tapering and raising rates very gradually to keep stimulating the economy.

2014-02-07 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.2, down from last week’s downward revision from 133.7. The WLI annualized growth indicator (WLIg) at one decimal place slipped to 4.2 from last week’s 4.3.

2014-02-07 Emerging Europe: Regional Economic Review - 4Q 2013 by Team of Thomas White International

The club of emerging European economies expanded, as Morgan Stanley Capital International (MSCI) moved Greece from developed to the status of an emerging economy. The majority of the countries covered in this review, including the new entrant, had something to look up to in the New Year.

2014-02-07 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

How do you follow up some 30%-ish annual index gains in 2013...with major losses in January? Sadly, that’s what investors experienced as the Dow plunged over 5% to start the month, the worst January since 2009. Those who say "as January goes, so goes the market" are not among the most popular these days. Earnings have been lackluster at best; emerging markets are in panic mode; Bernanke is moving out to pasture; investors still have quite a few profits they can take from last year. Then again, 11 months is plenty of time to "right the ship."

2014-02-07 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Fears over emerging markets, a tightening Federal Reserve Board and a loss in momentum in the economy have combined to create a sloppy market for stocks, while the bond market continues to confound the pundits and enjoy a solid start to the New Year.

2014-02-07 Two Questions for Japan Inc. by Kara Yoon of Matthews Asia

During my last research trip in November, we visited mostly consumer-facing companies in Japan where we took the opportunity to pose two key questions to the management teams we met. The first was-"Are you planning to increase prices for products or services after Japan’s consumption tax hike (scheduled for April)?" And secondly: "Will you raise employee wages?"

2014-02-07 Investment Principles and Habits: Contrarian Value Investing in a Liquidity-Driven Environment by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at how recent market performance, having been both driven down by and buoyed by liquidity, should cause asset managers to re-examine their investment principles. Though he cautions that the possibility exists that the recent market drivers might be an aberration, "stubborn aberrations are worth paying attention to."

2014-02-07 Global Inflation: A Mixed Picture by Monty Guild of Guild Investment Management

Many investors and global macro economists have been on vigil for a ramp up in global inflation spurred by immense central bank QE and other forms monetary stimulus. All of the money printing from around the globe has helped keep the financial system functioning, and it continues to help weak developed economies get back on firmer growth footing.

2014-02-07 American Bandstand by Ben Hunt of Salient Partners

Clark didn’t poll America to determine their taste in music. He told them their taste in music...not directly, but by creating common knowledge - ideas that a crowd believes that the crowd believes. It’s certainly the most potent force in the social world of markets, and every Central Banker today is playing the Common Knowledge Game just as hard as Dick Clark ever did.

2014-02-06 Divesting When Discomfited by Ben Inker of GMO

Ben Inker explains why, "for our asset allocation portfolios we generally try to trade slowly." He notes, "The slightly odd fact is that moving slowly on value-driven decisions has simply made more money historically than moving immediately would have."

2014-02-06 Year-End Odds and Ends by Jeremy Grantham of GMO

In a new quarterly letter to GMO’s institutional clients, chief investment strategist Jeremy Grantham offers "Year-End Odds and Ends": Fossil Fuels: Is Tesla a Tease or a Triumph?, Fracking and Yet More Technical Stuff on Fracking, Update on Metals, Fertilizers, and Food, Problems in Forecasting Short-term Prices for Resources, Another Look at U.S. GDP Growth, Investment Lessons Learned: Mistakes Made Over 47 Years

2014-02-06 How Did the Emerging Markets Get Into This Mess? by Andres Garcia-Amaya of J.P. Morgan Funds

A number of central banks around the world tightened monetary policy during the week of January 27, but the rationale for their policy decisions varied significantly. In the U.S., the Federal Reserve continued its "tapering" of quantitative easing (QE) to reflect the strong economic growth prospects, while Turkey, India and South Africa tightened policy in an attempt to prevent an exodus of foreign capital from their countries.

2014-02-06 Will China Overtake the U.S. as World Leader and Reserve Currency? by Dawn Bennett of Bennett Group Financial Services

Will China Overtake the US as World Leader and Reserve Currency? This has not happened yet, but it may not be far down the road if the US does not get its fiscal house in order. The United States has been the biggest national economy since 1871, but more than half of Americans have slapped an expiration date on its global reign.

2014-02-06 Emerging Market Woes abd Fed Tapering Equals Stocks Plunge by Gary Halbert of Halbert Wealth Management

January saw US stocks record their first losing month since last August. After reaching new record highs at the end of December, the Dow Jones shed almost 1,000 points in the last half of the month and the decline continues. Analysts attributed the sell-off in large part due to troubling news from several emerging nations, in particular to the so-called "Fragile Five" - Turkey, India, Brazil, Indonesia and South Africa.

2014-02-06 So Cruel: Pullback Could Become Correction by Liz Ann Sonders of Charles Schwab

For now, the EM tail is wagging the dog, but the US remains the world’s big dog and should ultimately get through the latest turmoil. "January Barometer" has sent mixed signals for the remainder of the year historically. More technical and sentiment recovery is likely needed before a market recovery is likely.

2014-02-06 Health Care Holds Promise by Team of Janus Capital Group

Last year was a strong year for health care investing, as the sector was a top performer in a number of indices. Even after such a strong run, we believe the sector will continue to provide a shot in the arm for equity portfolios.

2014-02-06 EM Misery and US Large-Cap Euphoria by William Smead of Smead Capital Management

Many investors are wondering why emerging stock market misery currently equates to weakness in the US stock market as represented by the Dow Jones Industrial Average and the S&P 500 indexes (large-cap). Long time followers of our writing at Smead Capital Management are aware that we have been making the argument this would happen since 2010 and we are happy to review our thesis.

2014-02-06 Technology Leaders and Laggards by Paul Meeks of Saturna Capital

The technology sector includes several industries, such as semiconductors and semiconductor capital equipment, software and services, and technology hardware and equipment.

2014-02-06 An Opportunity to Buy by Scott Minerd of Guggenheim Partners

We will likely look back on the current turbulence in financial markets as a healthy correction, and an encouraging sign that policymakers are allowing markets to self-correct in a way not seen since before 2008.

2014-02-06 Stagnation by Design by Joseph Stiglitz of Project Syndicate

The difficulties that many rich countries now face are not the result of the inexorable laws of economics, to which people simply must adjust, as they would to a natural disaster. On the contrary, the decline in most households’ income over the past three decades, particularly in the US, is the result of flawed policies.

2014-02-06 How Fragile are Emerging Markets? by Kenneth Rogoff of Project Syndicate

Emerging-market equities and exchange rates are again under severe downward pressure, but are the underlying economies really as fragile as global traders seem to fear? The short answer, for a few, is probably "yes," but, for most, "not quite yet."

2014-02-05 Emerging Market Turmoil Creates January Decline by Bob Doll of Nuveen Asset Management

U.S. equities finished lower last week, as the S&P 500 ended January with the first monthly loss since August 2013 and the largest monthly decline since May 2012. A global retreat from risk has been sparked by unrest around the world, sell-offs in emerging markets led by a 20% decline in the Argentine peso, weaker than expected economic reports from China, U.S. economic growth concerns in light of frigid temperatures and anxiety over Fed tapering.

2014-02-05 2014 Market Outlook by Kevin Mahn of Hennion & Walsh

Some Bumps along the Road of Global Recovery

2014-02-05 Chicago Housing Outlook an A Plus after Falling 91% by John Burns of John Burns Real Estate Consulting

Watch out for a housing renaissance in the Chicago metro area. The region massively overcorrected in this last downturn and just recently joined the recovery. New home revenue fell 91% from 2005 to 2010, and most private builders went out of business.

2014-02-05 New Maestro, Seasoned Band by Tony Crescenzi of PIMCO

The process by which the Fed carries out its duties is institutionalized, firmly rooted and unlikely to change - no matter who is at the helm. The core personal consumption expenditures (PCE) price index will be one of Janet Yellen’s most important guiding lights for future Fed policy.

2014-02-05 The Importance of Taking a Long-Term Perspective by Jeffrey Knight of Columbia Management

For asset allocation decisions, we find great value in maintaining a long-term outlook for major asset classes. Twice a year, in fact, we conduct an extensive update of our five-year return forecasts for several asset classes. The purpose of this exercise is two-fold. First, taking a longer term perspective helps us to set strategic asset allocations and design portfolios for diverse investment goals.

2014-02-05 Most \'Medieval\' by William Gross of PIMCO

Unlike today, when most believe that animals were put on this Earth for humanity’s pleasure or utility, most people in the Middle Ages believed that God granted free will to Adam, Eve and all of His creatures. Animals were responsible in some strange way for their own actions and therefore should be held accountable for them.

2014-02-04 Volatility Prompts a More Cautious View Toward Emerging Markets by Russ Koesterich of BlackRock Investment Management

The market selloff continued last week, and emerging markets stocks are looking more uncertain in the short term. With U.S. wages under pressure, consumer-related stocks remain an unattractive option. The Federal Reserve’s tapering program is starting to remove a pillar of support for stocks.

2014-02-04 Groundhog Day for Investors by Kristina Hooper of Allianz Global Investors

As investors, we’re hard-wired to bow to our emotions, which cause us to repeat the same mistakes over and over. But one tough month for stocks shouldn’t scare us away, says Kristina Hooper. Here are four tips for investors following the January selloff.

2014-02-04 Weekly Market Update by James Welch of Castleton Partners

Taking direction from a sharp sell-off in risk assets across the globe-especially in emerging market economies, Treasury yields continued their month long decline last week.

2014-02-04 Investors Should Focus on Wages, Not Jobs by Chris Maxey, Ryan Davis of Fortigent

This Friday investors receive the first official labor market report of 2014. Following a highly disappointing jobs figure in December, many market participants hope to see a rebound - particularly one that will help justify the Fed’s decision last week to continue tapering its asset purchases.

2014-02-04 Short-Term Trends Can Have Long-Term Consequences by Dawn Bennett of Bennett Group Financial Services

There are short-term trends that can have implications for the long-term investor’s investment portfolios. The first trend and outcome for 2014 is Americans are earning less and have less money to spend.

2014-02-03 Market Outlook by Scotty George of Alexander Capital

Despite the inverted gyrations of the stock market during the past three weeks, my market overview continues to be moderately bullish, of course with specific reservations about investors’ unbridled carryover of unrealistic expectations borne out of last year’s performance.

2014-02-03 NY Fed Models Forecasting Excess Returns Through 2018 by John Bougearel of Structural Logic CTA

The NY Federal Reserve has an equity research department. Their research department determined in 2013 that "stocks are cheap" and that investors should enjoy "excess high returns" in an abnormally low or negative real interest rate environment for the next five years through 2018. Before reviewing potential mean reversions, implications from the Year of the Horse, & George Lindsay’s bearish Three Peaks and Domed House model, let’s attempt to quantify the NY Fed models. How high the Dow Jones might climb if it is to enjoy "excess high returns" through 2018.

2014-02-03 Dr. Copper: Prognosis Negative by Team of GaveKal Capital

Dr. Copper, aptly named for the metal’s ability to gauge the strength of the global economy, is not giving the most upbeat prognosis at the moment. In fact, with today’s weakness the intermediate term trendline is being tested. A decisive breach of this important trendline would likely lead to a testing of the low made last June and would probably be accompanied by rising concerns of deflation and slow global growth.

2014-02-03 A Secular Bull Market? by Juliet Ellis of Invesco Blog

Five years from now, I believe we will look back and see that 2014 was part of the early stages of a multi-year secular bull market for US equities, characterized by rising stock prices with only short, intervening market corrections.

2014-02-03 Stocks for 2014: Fairly Valued Dividend Growth Stocks with an Emphasis on Dividends - Part 4 by Chuck Carnevale of F.A.S.T. Graphs

I am a firm believer that common stock portfolios should be custom-designed to meet each unique individual’s goals, objectives and risk tolerances. With that said, I believe it logically follows that in order to create a successful portfolio, the individual investor must first conduct some serious introspection to be sure that they truly "know thyself." Therefore, I believe the first, and perhaps most critical step, towards designing a successful equity portfolio is to ask your-self, and honestly answer several important questions.

2014-01-31 A Surprising Gift for Chinese New Year by Sherwood Zhang of Matthews Asia

Beijing-based China Credit Trust Company, a firm that operates as a non-banking financial institution in China, announced this week it reached an agreement to restructure a risky high-yield product that had earlier ignited worries over the health of China’s trust industry. Just in time for the Lunar New Year, investors in the troubled trust may receive a big (metaphorical) red envelope-a monetary gift traditionally given during Chinese New Year or other special occasions-or at least avoid a financial hit.

2014-01-31 A Toast- To the Decade by Rick Lear of Sloan Wealth Management

This is the most common question the members of the Sloan Wealth Management (SWM) Portfolio Management Team fielded this holiday season. This common quandary is in the context of the (2010, 2011, 2012 and now 2013) bull-run in the stock market, but we can’t help but visualize the numerous parallels to an actual party. If you have read our previous year-end letters you know we were among the first to arrive at the party and have no plans of leaving any time soon - as this decade remains enticing.

2014-01-31 Not All Emerging Markets Are Created Equal by Robert McConnaughey of Columbia Management

Emerging markets (EM) is a term given to a universe of countries that is extremely diverse across a wide number of variables including geography, levels of industrialization and political systems. Despite this diversity, emerging markets are often discussed as if they are a homogenous block, particularly in the context of broad asset allocation decision making. We think that’s a mistake. Instead, we see opportunity from applying a more bottom-up approach to country, industry and security selection amidst growing dispersion in outcomes across the emerging world.

2014-01-31 The Trouble with Emerging Markets by Nouriel Roubini of Project Syndicate

The financial turmoil that hit emerging-market economies in the spring of last year, following the Federal Reserve’s "taper tantrum" over its quantitative-easing policy, has returned with a vengeance. But the immediate trigger for these pressures should not be confused with deeper causes: Many emerging markets are in real trouble.

2014-01-31 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.8, unchanged at one decimal place from last week’s downward revision from 133.9. The WLI annualized growth indicator (WLIg) at one decimal place rose to 4.3, up from last week’s 4.2.

2014-01-31 The Big Four Economic Indicators: Real Personal Income Less Transfer Payments by Doug Short of Advisor Perspectives (dshort.com)

The December month-over-month Real Personal Income less Transfer Payments came in at a disappointing -0.21% (-0.2% rounded to one decimal). The year-over-year change is -2.47% (rounded to -2.5%). However, the YoY metric is radically skewed by the December 2012 end-of-year tax-planning strategy whereby income was captured in 2012 to avoided expected tax increases.

2014-01-31 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

China’s shadow banking products are coming under the spotlight. Emerging markets: Be sure to differentiate. The fixed income sector’s surprising strength.

2014-01-31 ProVise Bullets by Ray Ferrara of ProVise Management Group

This month, we sing happy birthday to Apple. It was 30 years ago that Apple introduced its first Mac computer. What was novel then is commonplace today and far less clunky. For those old enough to remember what that boxy looking thing was like, it’s hard to believe how far we’ve come. Carl Icahn bought another $500 million more shares of Apple stock, bringing his total investment to $3.6 billion. As an activist shareholder he is trying to force Apple to buy up to $500 million in a stock buyback program.

2014-01-31 Value-Hunting in the US by Cindy Sweeting of Franklin Templeton

With key stock indices in the US closing the year near historical highs and many pundits predicting stronger growth rates both in the US and globally going into 2014, one would think bargains would be hard to find this year. January’s volatility, however, proved just how unpredictable markets can be. The recent market gyrations may be somewhat painful for many investors in the short-term, but the silver lining is that corrections can serve up buying opportunities, particularly for long-term, value-oriented investors.

2014-01-31 The New Watchword-Deflation? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Equity markets have been shaky to start the year but we don’t believe it’s time to abandon ship. The fundamentals in the United States continue to look appealing and the recent pullback has helped to correct some sentiment and valuation concerns. We are watching the fight against deflation carefully in Europe and Japan, and believe both countries may need to do more via monetary policy stimulus. Meanwhile, some emerging economies are dealing with inflation, but we don’t believe the recent problems will morph into a widespread crisis at this point.

2014-01-30 Quarterly Review and Outlook - Fourth Quarter 2013 by Van Hoisington, Lacy Hunt of Hoisington Investment Management

In The Theory of Interest, Irving Fisher, who Nobel Laureate Milton Friedman called America’s greatest economist, created the Fisher equation, which states the nominal bond yield is equal to the real yield plus expected inflation. It serves as the pillar of macroeconomics and as the foundational relationship of the bond market. It has been reconfirmed many times by scholarly examination and by the sheer force of historical experience. Examining periods of both low and high inflation offers insight into how each variable in the Fisher equation affects the outcome.

2014-01-30 FOMC Sticks With the Tapering Plan by Team of Northern Trust

The Federal Open Market Committee (FOMC) at the conclusion of its meeting today announced a further $10 billion reduction in its monthly rate of asset purchases. The increment was similar in size and composition to the first tapering step taken in December.

2014-01-30 A Healthy Correction in Emerging Markets by Scott Minerd of Guggenheim Partners

It has been a hard start to the year, especially for emerging markets, but the latest dislocation is a healthy part of the cycle and the risk-on trade remains intact.

2014-01-30 Breakthrough by Colleen Denzler of Janus Capital Group

The funny thing about crises is that we tend to feel as if they occur suddenly, on one day. For me, that day was when Lehman Brothers filed for bankruptcy protection on September 15, 2008. I remember looking at my Bloomberg screen and thinking I was witnessing the end of the financial markets.

2014-01-30 High Yield in 2014: Where Can You Look for Upside in a \'Medium Yield\' Market? by Andrew Jessop, Hozef Arif of PIMCO

Default rates and credit losses in high yield markets remain below their long-term averages, and we believe default rates will remain low in 2014 and 2015 as well. Investors should consider positioning for better convexity via exposure to sectors with favorable industry dynamics and positive event risk from M&A or equity offerings, potential upside from price recovery in high quality bonds trading below par and exposure to select new supply from former investment grade companies.

2014-01-30 The Equity \"Game\" by Heather Rupp of AdvisorShares

We have seen the cracks begin to emerge in the equity story over the past week. Earnings are beginning to come in and so far have been a disappointment. The retail sector is showing signs that Q4 was weaker than originally expected, with store cuts announced by, Sears, J.C. Penney, and Macy’s and job cuts at Target. Emerging markets have been roiled this week, with Argentina shifting policy, likely devaluing their currency, and other currencies plunging.

2014-01-30 Getting Comfortable With Volatility by Mark Mobius of Franklin Templeton

Over the past few weeks, we’ve seen significant volatility in the markets, which has spooked some investors, but is also something we have become accustomed to. Markets generally (not only emerging markets) have become much more volatile during the last 20 years as a result of massive flows of money from not only institutional investors and long-only mutual funds but also hedge funds and high-frequency trading. We see such selloffs as potential opportunities to pick up bargains in select stocks if, in fact, the prices move low enough to draw our interest.

2014-01-30 The Path to Becoming an Emerging Market by Henry D'Auria, Morgan Harting of AllianceBernstein

Why have some equity markets in the developing world flourished more than others? It’s a pivotal question for investors hoping to stake an early claim to the potential emerging-market (EM) success stories of the next decade.

2014-01-29 Do China Insider Transactions Lie? by William Smead of Smead Capital Management

In our business, we like to say that insider transactions never lie. For this reason, one of our eight criteria for selecting common stocks is strong insider ownership, preferably with recent purchases. Additionally, as contrarians, we want to make our original purchases in a business at a time when most investors are scared to buy for one reason or another. When we see officers, directors and substantial existing shareholders of a business buying at prices which are temporarily depressed, we raise our confidence in the long-term future of a business.

2014-01-29 2014 Oil Outlook: How Slick Is the Oil Slope by Greg Sharenow of PIMCO

While the supply outlook tilts the balances toward bearish in 2014, an improving global economy is a positive for oil demand and a support for prices. With roll yields positively contributing to returns, investors ultimately could be paid to hold a security that hedges both global event risk and any resulting shock to inflation. Growth in shale oil has been a powerful moderating force for prices by both filling an important gap in global supply and demand and by anchoring the back end of the futures curve.

2014-01-29 How the Pioneer of Hydraulic Fracturing changed the MLP Landscape by David Chiaro of Eagle Global Advisors

A banner year for MLPs and the future looks bright.

2014-01-29 All Things in Moderation, Including Housing by Ed Devlin of PIMCO

In our view, the cooling housing market and other domestic factors will keep Canadian growth at a modest 1.75%-2.25% in 2014, despite a boost from higher U.S. growth. While we expect a correction in Canada’s housing market to begin this year, the macroeconomic environment and the availability of mortgage credit suggest a housing crash is unlikely. In this environment, we think the Canadian dollar should remain attractive, 10-year bonds should offer the potential for gains, and provincial bonds will likely outperform federal government and corporate bonds.

2014-01-29 The Future in Focus: Trade Could Aid an Aging America by Milton Ezrati of Lord Abbett

Goods and services sourced from overseas could help the United States alleviate the effects of future labor shortages - if lawmakers can resist protectionist impulses.

2014-01-29 A Few Concerns by Scott Brown of Raymond James

We’ve begun 2014 with widespread expectations that economic growth will pick up. Growth last year was restrained by tighter fiscal policy. With that out of the way and the housing sector recovering, the pace of expansion is poised to improve. However, there are a number of concerns. Weak growth in real wages may limit consumer spending, which accounts for 70% of Gross Domestic Product. Long-term interest rates could rise too rapidly, choking off the recovery in the housing sector. A continued low trend in inflation, a major concern for some Fed officials, could weaken growth.

2014-01-29 Middle East/Africa: Regional Economic Review - 4Q 2013 by Team of Thomas White International

The International Monetary Fund (IMF) anticipates weak growth in the Middle East and North Africa (MENA) region mainly due to heightened political instability. What’s more, after years of healthy performance, growth in the oil exporting nations is expected to lose pace due to lower international demand and local oil supply disruptions. Given that these countries are witnessing a population boom, the IMF emphasized the need for economic diversification by the oil exporters and job creation in private non-oil sectors.

2014-01-28 2013 - A Strong Year for ETFs by Ryan Issakainen of First Trust Advisors

US-listed ETF1 net inflows totaled $185.5 billion in 2013, setting a new record. While the largest percentage of net inflows remained concentrated among a relatively small group of the 1521 US-listed ETFs, investors broadened their horizons more in 2013 than in previous years, as 312 ETFs had net inflows exceeding $100 million.

2014-01-28 Emerging Market Issues Weigh on U.S. Equities by Bob Doll of Nuveen Asset Management

U.S. equities finished lower last week as the S&P 500 declined 2.6% and suffered the largest weekly pullback since June of 2012. U.S. stocks are down approximately 3.0% both year to date and from all-time highs. In 2014, lack of direction in the market has been a focus, and the waning influence of macroeconomic news caused a notable shift late last week.

2014-01-28 Commodities In 2014: Supply Remains A Concern by Doug Ramsey of Leuthold Weeden Capital Management

If a reacceleration of EM demand for raw materials were imminent, one would think the MSCI BRIC Index would be the first to sniff it out. Yet that index remains among the poorest performing market composites in the world. Still, commodity demand will eventually right itself. Our worry is supply. Capital spending levels remain elevated, and are far above the levels seen just over a decade ago-on the eve of China’s great commercial and residential construction boom. Commodity producers didn’t anticipate that boom, which is precisely why it was so powerful.

2014-01-28 Financial Resolutions for a New Year by Gary Stroik of WBI Investments

It’s the start of a new year; the traditional time for self-examination, reflection, and a new list of resolutions intended to help us work on those aspects of our lives we feel could use some improvement.

2014-01-28 Surviving Austerity by Andrew Schiff of Euro Pacific Capital

With the Standard & Poor’s 500 Index having posted a 30% gain, it’s easy to assume that U.S. stocks easily led the world in 2013. (There is more on what is behind this rally in the latest version of the Euro Pacific Capital Newsletter). But as it turns out, the stimulus-loving U.S. markets had plenty of company. Surprisingly, this includes countries supposedly saddled by the scourge of austerity.

2014-01-28 An Active Management Turning Point? by Chris Maxey, Ryan Davis of Fortigent

Active managers faced a difficult road in recent years, leading to many questions about the efficacy of active versus passive investment management. There are signs that the tide is once again changing in favor of active managers and the road ahead could offer happier times.

2014-01-28 The TTIP and the TPP by Bill O'Grady of Confluence Investment Management

The Transatlantic Trade and Investment Partnership (TTIP) is a trade and investment treaty being negotiated between the European Union (EU) and the U.S. The Trans-Pacific Partnership (TPP) is a similar pact between the U.S. and various Pacific Rim nations. We will examine overall details of each, focusing on how they’re different from traditional trade agreements. From there, we will present an analysis of the controversy surrounding the proposals, followed by a look at the geopolitical aims and likelihood that these treaties will be enacted. We conclude with potential market ramificatio

2014-01-28 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

My caution last week unfolded into a market sell off related to both disappointing earnings and concern over emerging markets affecting the foreign exchange markets.

2014-01-27 Closed End Fund Review - Fourth Quarter 2013 by Jeff Margolin of First Trust Advisors

2013 was a mixed year for the closed-end fund (CEF) structure. While the Morningstar universe of 176 equity CEFs were up on average 12.13% on a share price total return basis and clearly benefited from the global rise in equity prices, the Morningstar universe of 387 fixed-income CEFs was lower by an average of 8.56% on a share price total return basis.

2014-01-27 Broadleaf\'s 2014 Investment Playbook by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

Most sell side firms publish their outlook for the economy and stock market at the end of December and in early January. As a buy side firm, we really aren’t under any expectation to share our outlook for the coming year and, as funny as it might sound, some of our clients don’t even care to know what we think, only that we handle what they hired us to do, which is to outperform the market indices over a full market cycle and help them attain their financial goals over time.

2014-01-27 Increasing Concerns and Systemic Instability by John Hussman of Hussman Funds

The potential collapse of a now-complete log-periodic bubble is best considered something of a physics experiment, and it’s not what drives our investment stance. Still, the backdrop of steep overvaluation, extreme bullish sentiment, record margin debt, and international dislocations could hardly provide a more fitting context for a disruptive completion to the present market cycle.

2014-01-27 Hasenstab: Standing One\'s Ground by Michael Hasenstab of Franklin Templeton

When the masses are against you, it’s hard to stand your ground. Going against the crowd is familiar turf for Michael Hasenstab, who manages Templeton Global Bond Fund and co-manages Templeton Global Balanced Fund, and certainly knows the virtue of patience. He has staunchly defended his investment theses over the years, tuning out the naysayers and market noise time and again.

2014-01-27 Market Outlook by Scotty George of Alexander Capital

Despite projections that interest rates might enter a secular upswing if the economy continues to improve, the inescapable fact is that bonds, and other fixed-income securities, are not the place for investors to generate yield, stocks are. The way to improve upon dwindling dividend and interest investment objectives is to build a portfolio of high yield equities, and to protect against downside market volatility with select stop-loss support.

2014-01-27 America\'s False Dawn by Stephen Roach of Project Syndicate

Financial markets and the so-called Davos consensus are in broad agreement that something close to a classic cyclical revival in the US economy may finally be at hand. But, while the celebration may seem warranted at first glance, the champagne should be kept on ice.

2014-01-27 Rummaging for Yield - The Case of the Insurance Investor by Eugene Dimitriou of PIMCO

Since the height of the global financial crisis in 2008, insurance companies have faced three key challenges: First, insurance companies urgently needed to address new critical risk management issues as banking sector and peripheral sovereign credit risks significantly increased in Europe. Second, the prospects of longer-term low yields forced insurers to identify alternative sources of meaningful yield. And third, insurance companies needed to prepare for pan-European insurance regulation Solvency II.

2014-01-27 Commodities: Is the Bear Market Near Its End? by Scott Wolle of Invesco Blog

On the surface, 2014 looks to be a tough year for commodities, as multi-year projects increase the flow of supplies to market even as demand has turned tepid, especially in emerging markets. However, a deeper look at the history of this asset class suggests that the outlook for commodities might turn around sooner than many expect.

2014-01-25 Five Things To Ponder: Valuations, Triggers & Inequality by Lance Roberts of Streettalk Live

I was thinking about valuations, profits and what could cause a real correction in the markets. That is the premise behind today’s "Things To Ponder" for your weekend homework.

2014-01-25 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

So while the Fed was the first to implement nontraditional monetary strategies, the BoE may be the first to unwind them. And it may be the first to test the power of macroprudential policy. The results might make for an interesting export back across the Atlantic.

2014-01-25 At Davos, Inequality and Africa in Focus by Scott Minerd of Guggenheim Partners

The focus at Davos has shifted to two new topics: growing income inequality as a risk to economic growth and social stability and the emergence of Africa as an economic force. Neither of these is a big surprise as neither is new. But the fact that these are the primary focus this year tells us that these topics will likely become more prominent in 2014.

2014-01-24 Stocks for 2014: Growth and Income For Total Return Part 3 by Chuck Carnevale of F.A.S.T. Graphs

When investing in common stocks, there is no one strategy that fits all investors. Some investors are focused on investing for income, some for capital appreciation and others for various combinations of both. Additionally, there is the issue of risk tolerance. Some investors are willing and capable of assuming greater risk if they believe it will lead to greater returns, while others are more risk adverse. These are just but a few of the many variations that apply to the individual investor’s own unique goals and characteristics.

2014-01-24 United Arab Emirates: An Emerging Market Melting Pot by Mark Mobius of Franklin Templeton

The investable Middle East/North Africa region known as "MENA" encompasses 11 diverse countries, extending from Oman to Morocco, and also includes Bahrain, Egypt, Jordan, Kuwait, Lebanon, Qatar, Saudi Arabia, Tunisia and the United Arab Emirates (UAE). I recently had the pleasure of returning to Dubai, the largest city in the UAE, a truly striking and cosmopolitan city with a diverse population from around the world.

2014-01-24 The Policy View From Washington by Scott Brown of Raymond James

Lawmakers put the finishing touches on the budget bill, which will remove most of the fiscal policy uncertainty for the next two years. That’s helpful for the economy and the financial markets, although the debt ceiling remains a possible trouble spot. Federal Reserve officials seem intent on continuing the tapering of asset purchases, but economic and financial market developments will dictate the pace.

2014-01-24 The Week by Jeffrey Saut of Raymond James

Arguably, the best magazine of recent times has been The Week, a publication that embraces magazine journalism in its most functional style. The Week is written in one-hundred synopses culled, for the most part, from other news organizations from around the world on all topics. If I had but one publication to read in order to stay informed on just about everything, it would be The Week. In this morning’s missive, however, I am referring to "the week" I experienced last week in South Florida.

2014-01-24 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.9, down from last week’s 134.3. The WLI annualized growth indicator (WLIg) to one decimal place rose to 4.2, up from last week’s 3.5.

2014-01-23 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The year 2014 is off to an uncertain start. Earnings reports are not doing that well (see Best Buy, Citigroup & all retailers etc.), and bond prices have rallied so far in 2014 despite the fears of tapering which were expressed as last year ended.

2014-01-23 EPV: Establishing Predictive Value (i.e., Demand Characteristics) by David Kleinberg of Universal Orbit

EPV: Establishing Predictive Value (i.e., Demand Characteristics) is designed as a complement to quantitative portfolio strategies and fundamental research. Continuing the thread from EPV:RO, tested is the premise of structural bias in performance benchmarks as determined by third party data vendors with implied effects on peer group analytics and valuation.

2014-01-23 What\'s Your 2014 Market View? by Robert Horrocks of Matthews Asia

U.S. monetary policy seems likely to continue occupying center stage as people fret about interest rates. Last year was a somewhat instructive year for monetary policy theory in that it seemed to show that policies can be effective even when interest rates have no further room to be lowered. Can the nominal GDP in the U.S. grow at faster rates in 2014, and what would that mean for Asia? This month Matthews Asia’s Chief Investment Officer, Robert Horrocks, offers his insights into how reforms planned for China could be a key factor to change and what could lie ahead for the region overall

2014-01-23 Economic Growth is Likely to Improve in 2014 by Derek Hamilton of Ivy Funds Investment Management

We believe a global economic upturn is likely in 2014, although the overall growth rate will remain sluggish. We think developed countries will show the largest improvement, which in turn will help support growth rates in emerging markets.

2014-01-23 Dreman and Lorde: We Will Never Be Royals by Bill Smead of Smead Capital Management

In his 1980 book, Contrarian Investment Strategy, David Dreman opens with an analogy comparing the stock market to a casino with two distinct sides. The "red" room has lots of action and an occasional player striking it rich quickly. In effect, you become royal. Unfortunately, most of the players leave without the money with which they entered, because the house has the odds stacked heavily in its favor.

2014-01-23 Can Equities Continue Their Rise? Equity Investment Outlook: January 2014 by Matt Berler, John Osterweis of Osterweis Capital Management

2013 marked the fifth year of recovery following the near-death experience of the 2008 global financial system meltdown. From a low of 677 in 2009, the S&P 500 Index (S&P 500) finished 2013 at 1,848, delivering a stunning 203% total return from the low. Over the same period, the total return for the Dow Jones Industrial Average was 188%. The tech-heavy and arguably more speculative NASDAQ logged a 249% total return. These very large equity returns reflect both a strong recovery in corporate profits and a dramatic clean-up of our financial system.

2014-01-23 Tacking Through the Banking Headwinds by John Loesch of Diamond Hill Investments

Pick up nearly any financial publication these days and it is bound to have one, if not several, stories about the headwinds facing the banking industry.

2014-01-23 Be Selective by Jim Goff, Adam Schor of Janus Capital Group

After broad rally, focus shifts to individual company growth prospects.

2014-01-23 A Problem with the Numbers - Unemployment and the Fed\'s Timetable by Anthony Wile of J.P. Morgan Funds

Given a potentially inaccurate assessment of labor force participation, the Federal Reserve may be missing the mark on their current economic projections, which increases the potential for policy error going forward. Assuming the natural rate of unemployment is at the low end of Fed projections, the Fed can lower forward guidance thresholds without spurring an acceleration in inflation.

2014-01-23 Ordem e Progresso by Michael Gomez of PIMCO

Amid stagnant growth and high inflation in 2013, Brazil’s equity market was one of the worst performers, the real was a chronic underperformer and the corporate sector struggled. Brazil needs to anchor economic policy around a stringent and credible primary surplus target rather than run the current mix of loose fiscal policy, subsidized public credit and ever tighter monetary policy. Valuations are attractive, but unless an effective policy mix is restored, the outlook for order in Brazil’s financial markets is less certain.

2014-01-22 In the Spirit of Martin Luther King: Reflections on Income Inequality by Doug Short of Advisor Perspectives (dshort.com)

Last night my wife and I were looking for something to stream on Netflix, and I remembered that The Butler was available on Red Box (which has a vending machine about a 90-second walk from our residence).

2014-01-22 Crosscurrents Buffet Markets by Bob Doll of Nuveen Asset Management

U.S. equity performance was mixed last week, as the S&P 500 recovered from Monday’s sell-off that was the largest one-day decline since early November. Economic data was mostly in line or slightly better than expected, following the disappointing December unemployment report. Corporate earnings drove much of the price action. Bank earnings were fairly well received but did not always translate to good performance since the stocks ran up earlier. Negative guidance trends remain an overhang, particularly for retail.

2014-01-22 Market Outlook by Scotty George of Alexander Capital

One of the most common themes we hear from political pundits and market observers these days is about either the demise or rise of the middle class, an amorphous, non-homogeneous group of people not quite rich but also not too poor. This class is often cited as the reason either to be for or against legislation, fiscal policy, social norms, or the price of a gallon of gasoline at the pump!

2014-01-22 4 Simple Truths About US Consumers by Kristina Hooper of Allianz Global Investors

The December employment report called into question the momentum of the jobs recovery, which has clear implications for consumers. While further clarity on jobs is needed, here are some key observations that help frame the consumer-sentiment discussion.

2014-01-22 Market Share: The Next Secular Investment Theme by Richard Bernstein of Richard Bernstein Advisors

It is well known that corporate profit margins are at record highs. US margings, developed market margings, and even emerging market margins are generally either at or close to record highs. A myopic focus on profit margins may miss an important investment consideration. Whereas most investors remain fearful of margin compression, we prefer to search for an investment theme that could emerge if margins do indeed compress. Accordingly, our investment focus has shifted toward themes based on companies who might gain market share.

2014-01-22 What to Expect in 2014 (And Beyond) by Jack Rivkin of Altegris

Each year, I take Alfred Lord Tennyson’s advice and "ring out the old, ring in the new" by creating a list of expectations about the markets. My list involves events that the average investor thinks have only a one-in-three-chance of happening, but which I believe have more than a 50% chance of occurring. If this approach sounds familiar, it should. It’s modeled after Byron Wien’s annual list of "surprises." Like his, my expectations are designed to provoke thought and discussion.

2014-01-22 The Virtualization of Everything by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at the motivations of participants in capital markets, and how with the advent of synthetic investments and complicated derivatives products, he is concerned that "the stock market has lost its close link to the "real" economy and has become more of a gigantic casino."

2014-01-21 Upstream Companies Set to Benefit if US Allows Oil Exports by Juan Hartsfield of Invesco Blog

US crude oil production is booming, and controversy over possibly exporting some of this abundance has quickly heated up in early 2014. Most recently, Alaska’s Lisa Murkowski, the top-ranking Republican on the Senate Energy Committee, spoke out on Jan. 7 in favor of easing US restrictions on oil exports, which were largely enacted in the 1970s when domestic energy was scarce and lines at the gasoline pump were long. The topic of crude exports is polarizing politically and, given the recent lack of collaboration in Washington, it’s poised to be a recurring headline for some time.

2014-01-21 Superstition Ain\'t the Way by John Hussman of Hussman Funds

When you believe in things that you don’t understand, then you suffer.

2014-01-21 Stocks 2014: Investing for Growth - The Power and Protection of High Compounding Earnings Growth by Chuck Carnevale of F.A.S.T. Graphs

As I become more mature (translate: gotten older), my investment philosophy has slowly evolved into a more conservative posture. When I was a younger investor I felt I had time on my side, and therefore, was willing to take on greater risk as long as I believed that greater rewards could follow. In other words, if I made a mistake by investing in an aggressive and more risky growth stock that went badly, I felt I had adequate time to overcome or recover my losses. Consequently, as a younger investor I relished a good growth stock.

2014-01-21 Weighing the Week Ahead: More \"Experts\" Predicting a Market Top by Jeff Miller of New Arc Investments

Most potential stock investors have been bruised by events over the last decade. They are receptive to a message of fear, and many pundits are happy to satisfy their urges. Calling for a major market turn can be very profitable for the pundit. This is true even if the prediction is very early and the pundit never signals when to shift back.

2014-01-21 Achieving Escape Velocity by Mohamed El-Erian of Project Syndicate

While the prospect of faster global GDP growth in 2014 is good news, it is too early to celebrate. Indeed, there is a risk that, by tempting policymakers into complacency, this year’s economic upturn could even end up being counterproductive.

2014-01-21 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

With a few more days to digest the labor data, investors began the week on another sour note, but a sense of normalcy returned on some other better-than-expected releases. Still, the Fed’s stimulus remains atop the headlines as speculation runs amuck about how the tapering will play out. Earnings season pushes ahead and, thus far, the results are lackluster at best. Don’t forget, as January goes...

2014-01-21 Kansas by Jerome Schneider of PIMCO

In the coming year, traditional money market strategies, long viewed as safe havens, will be challenged by new regulations, near 0% returns and a lack of investable assets. Short-term bond strategies could provide the right balance between risk-taking and liquidity management, and offer the potential for positive returns. Active managers have a distinct advantage because they can manage interest rate volatility and potentially source assets by identifying underappreciated sectors.

2014-01-21 The Deflation Menace by Peter Schiff of Euro Pacific Capital

Dedicated readers of The Wall Street Journal have recently been offered many dire warnings about a clear and present danger that is stalking the global economy. They are not referring to a possible looming stock or real estate bubble (the paper sees few threats there). Nor are they talking about other usual suspects such as global warming, peak oil, the Arab Spring, sovereign defaults, the breakup of the euro, Miley Cyrus, a nuclear Iran, or Obamacare.

2014-01-21 Digging for Natural Resource Opportunities in 2014 by Frederick Fromm, Stephen Land, Matthew Adams of Franklin Templeton

The natural resources sector has been through a period of transition in the past year, one which has pushed many companies toward cost reduction and greater capital discipline amid an environment of rather sluggish global economic growth. Franklin Equity Group Analysts Fred Fromm, Stephen Land and Matthew Adams think an improving economic outlook could set the stage for potentially stronger commodity demand going forward, and see healthy potential demand growth for energy in particular. They share their outlook for the natural resources sector in 2014, and where they are finding opportunities.

2014-01-21 Emerging Markets 2014 Outlook: Shaping the Next Decade by Mark Mobius of Franklin Templeton

As we embark upon a new year, the Templeton Emerging Markets Group believes 2014 could be an important year for many emerging markets, possibly establishing trends that could play out through much of the remainder of the decade. In particular, Chinese government reform initiatives announced in late 2013 could have far-reaching significance. And, major elections in a number of countries in 2014 could bring dramatic (or not-so-dramatic) changes. Here are a few themes and countries we’ve got our eye on in the new year.

2014-01-21 Brother, Can You Spare a Bitcoin? by Milton Ezrati of Lord Abbett

The electronic currency has attracted attention from speculators and financial media, but it’s unlikely to upend the existing monetary order.

2014-01-18 Dialing Down the Drama by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

We remain optimistic on stocks for 2014, but there will likely be bumps in the road. Investor sentiment is elevated, complacency seems to be building, and the valuation story is less compelling. But waiting for a correction can be quite detrimental to portfolio performance, evidenced by last year. QE tapering will likely continue at a very modest pace and U.S. interest rates will likely drift higher throughout the year. We remain positive on Europe and our outlook toward China is improving, while we are in at wait-and-see sort of mode with Japan.

2014-01-18 Forecast 2014: \'Mark Twain!\' by John Mauldin of Millennium Wave Advisors

The surface of the market waters looks smooth, but the data above suggest caution as we proceed. Perhaps slowing the engine and taking more frequent soundings (or putting in closer stops!) might be in order. The cry should be "Mark twain!" Let’s steam ahead but take more frequent readings and know that a course correction may soon be necessary.

2014-01-17 Rebalancing the U.S. Economy by Marie Schofield of Columbia Management

It’s happening again-a fourth quarter bounce in economic activity that extends into the first quarter and supports the view that growth really, finally, has started to accelerate. Such bounces have disappointed so far, although it does appear to be more than just hope this time.

2014-01-17 The Big Four Economic Indicators: Real Retail Sales and Industrial Production by Doug Short of Advisor Perspectives (dshort.com)

With yesterday’s release of December’s CPI, we can now calculate Real Retail Sales for December. Month-over-month real sales came in at -0.07% (-0.1% rounded to one decimal). This indicator is now fractionally off its all-time high set the previous month. Although real December sales were a bit disappointing, this indicator rose 3.57% year-over-year, and it was positive for nine of the 12 months.

2014-01-17 Asia\'s Evolving Science and Tech Space by Michael Oh of Matthews Asia

The main growth drivers of Asia’s science and technology industries are changing to become more domestically driven and service-oriented. These changes are happening as rising disposable income enables more Asian consumers to embrace new technologies.

2014-01-17 Digging for Natural Resource Opportunities in 2014 by Frederick Fromm, Stephen Land, Matthew Adams of Franklin Templeton

The natural resources sector has been through a period of transition in the past year, one which has pushed many companies toward cost reduction and greater capital discipline amid an environment of rather sluggish global economic growth. Franklin Equity Group Analysts Fred Fromm, Stephen Land and Matthew Adams think an improving economic outlook could set the stage for potentially stronger commodity demand going forward, and see healthy potential demand growth for energy in particular. They share their outlook for the natural resources sector in 2014, and where they are finding opportunities.

2014-01-17 Continuing a Winning Formula for 2014 by Frank Holmes of U.S. Global Investors

In any competition, sports or investment management, there are lessons to learn to improve and better results.

2014-01-17 Getting Lucky by Howard Marks of Oaktree Capital

Sometimes these memos are inspired by a single event or just one thing I read. This one - like my first memo 24 years ago - grew out of the juxtaposition of two observations. I’ll introduce one here and the other later on. Contrary to my wife Nancy’s observation that my memos are "all the same," the subject here is one I’ve rarely touched on.

2014-01-17 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 134.5, up from last week’s 133.4 (an upward revision from 133.0). The WLI annualized growth indicator (WLIg) to one decimal place rose to 3.7, up from last week’s 2.5.

2014-01-17 The Profits Bubble by Chris Brightman of Research Affiliates

Profits are dangerously elevated by all reasonable measures. S&P 500 Index real earnings per share are far above their long-term historical trend. Industry profit margins are at or near all-time highs. Corporate profits, both as a percentage of GDP and relative to labor income, are at or near record levels. The dramatic rise in income inequality is a direct consequence of this spectacular reallocation of income to capital and away from labor.

2014-01-17 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Co.

Some of the things we’ve been talking/warning you about in recent years came to fruition in 2013. Specifically, medium- and long-term interest rates rose and commodity prices declined.

2014-01-17 What Does It Take to Be in the Top 1 Percent? Not As Much As You Think by Frank Holmes of U.S. Global Investors

You might be surprised to learn that the top 20 percent of income earners bring in a household income of just over $100,000. The top 10 percent of earners have a household income of more than $148,687. To be considered in the top 1 percent, household income is at least $521,411.

2014-01-16 A Flight to Quality by Ben Fischer of Allianz Global Investors

CIO NFJ Ben Fischer delivers his 2014 outlook, focusing on the Fed’s tapering of its bond-buying program and how high-quality, dividend-paying stocks should respond.

2014-01-16 Reversal of Fortune - Competitive Advantages Redefining Industrial Investment in the U.S. by Niall O'Malley of Blue Point Investment Management

As an investment manager, I seek investments with sustainable growth. I have the freedom to look anywhere in the world. Quietly, the U.S. has developed a competitive advantage in energy costs that is rewriting the history books. For the first time in generations an abundant energy supply has the potential to improve the air we breathe while creating hundreds of thousands of new jobs. It is creating opportunities where just five years ago energy intensive industrial production was being shuttered in the U.S.

2014-01-16 Keep Optimistic and Carry On by Scott Minerd of Guggenheim Partners

This is likely to be another good year for risk-on investing, as an improving economic outlook supports stocks and bonds in an environment marked by less volatility than 2013.

2014-01-16 Let the taper begin! Fixed Income Investment Outlook by Team of Osterweis Capital Management

At the December meeting, the Federal Reserve (the Fed) decided to reduce its purchases of Treasury and mortgage securities (a.k.a. quantitative easing/QE) beginning in January 2014. This answered the question of when the taper would begin, and the markets reacted predictably. Two questions remain, however: How long until the Fed completely winds down QE; and when will short rates begin to reflect the improving economy? We feel it may be sooner on the former and could be quite some time on the latter.

2014-01-16 2014: Once more for \'84 by Team of Smead Capital Management

Since our thinking is always dominated by owning businesses which meet our eight investment criteria in a long-duration time frame, we continue to remain vigilant of the circumstances around us. To that end, we thought it would be helpful to review a similar historical situation and glean a feel for what was wise behavior back then and what might be wise behavior as we look forward to the year 2014.

2014-01-16 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Last year ended very well for us! The New Year has started slowly both because of the weather and because of the middle of the week timing of the holidays. Last Friday’s employment report for December was the 1st real piece of economic data which the financial markets could sink their teeth into, and the results have most people (not us) confused.

2014-01-16 A Disappointing Jobs Report: 3 Investing Takeaways by Russ Koesterich of iShares Blog

Last Friday’s non-farm payroll report was a huge disappointment. Russ explains what this means for investors.

2014-01-16 Stocks for 2014: Something for Everyone: Part 1 by Chuck Carnevale of F.A.S.T. Graphs

My biggest pet peeve regarding common stock investing is how so many people have a tendency to over-generalize this asset class. Commonly held beliefs such as investing in stocks is risky, or that the stock market is overvalued, or that the fed is driving stock prices, etc., are just a few examples illustrating my point. In truth, common stocks are as individually different as people are individually different. When dealing with human beings, most reasonable thinking people would reject prejudicial statements. Personally, I believe we should have the same attitude about common stocks.

2014-01-16 Fiscal Policy: Nothing\'s Certain with Debt and Taxes by Milton Ezrati of Lord Abbett

After the budget deal, markets will have to contend with two wild cards in Congress: the debt ceiling and tax reform.

2014-01-16 EM Sovereign Debt 2014: Neither Phoenix nor Failure by Paul DeNoon of AllianceBernstein

Emerging-market (EM) sovereign bonds were burned badly in 2013. Will they rise from the ashes in 2014? We believe some will and some won’t. The watchword for 2014 will be selectivity.

2014-01-15 The Haves and the Have Nots by Scott Migliori of Allianz Global Investors

CIO Equity US Scott Migliori’s 2014 outlook calls for moderate growth, an accommodative Fed and a stock-picker’s market, favoring areas of the economy that are insensitive to growth.

2014-01-15 AdvisorShares Active ETF Market Share Update - Week Ending 1/10/14 by AdvisorShares Research of AdvisorShares

The active ETF market experienced a sizable increase, with total net assets exceeding $14.8 billion. The total number of active ETFs rose to 74 with State Street launching three equity products: SPDR MFS Systematic Core Equity ETF, SPDR MFS Systematic Growth Equity ETF and SPDR MFS Systematic Value Equity ETF last week.

2014-01-15 Fed Tapering -- Shades of 1937? by Paul Kasriel of Econtrarian, LLC

In the press conference immediately following the December 17-18, 2013 FOMC meeting, Fed Chairman Bernanke indicated that it was the FOMC’s current plan to have terminated Federal Reserve outright securities purchases by the end of 2014, commencing with a $10 billion reduction in securities purchases immediately after the December 2013 FOMC meeting and then continuing to taper its purchases by about $10 billion after each 2014 FOMC meeting. Of course, this tapering plan is subject to modification in either direction depending on forthcoming economic and financial market developments.

2014-01-15 The Employment Picture: Clear As Mud by Scott Brown of Raymond James

On balance, most of the economic reports in recent weeks have been consistent with a moderate increase in momentum heading into 2014. However, the December Employment Report showed a surprisingly soft gain in nonfarm payrolls. Is this a sign of another false dawn in the recovery?

2014-01-15 Investment Insights from a Road Warrior by Frank Holmes of U.S. Global Investors

As part of our investment process, we often take the explicit knowledge learned from our statistical models and overlay them with global travel.

2014-01-14 Fed Taking a More Holistic View of Data by Kristina Hooper of Allianz Global Investors

Recently released FOMC minutes and jobs numbers show why the Fed wants to add a qualitative dimension to its forward guidance, writes Kristina Hooper: The unemployment rate can fall significantly, but it may be for the wrong reasons.

2014-01-14 Income Market Insight by Payson Swaffield of Eaton Vance

In 2013, the markets got their first taste of what I referred to in my last report as the post-post-crisis era. It was a year in which talk of "tapering" dominated the financial headlines - a reference to the U.S. Federal Reserve’s plans to scale back its purchases of long-term bonds, as a first step toward reducing its accommodative monetary policy.

2014-01-14 The Great Man or the Great Wave by Bill O'Grady of Confluence Investment Management

One of the seminal debates among historians is how the process of history develops, characterized as the "great man versus the great wave" debate. In this report, we will begin by developing this debate with relation to America’s superpower role; specifically, we will examine whether the U.S. is struggling with the superpower role because of a lack of leadership (a great man position) or because the wave of history is aligned against the U.S. keeping that role. As always, we will conclude with potential market ramifications.

2014-01-14 Merk 2014 Dollar, Currency & Gold Outlook by Axel Merk of Merk Investments

Rarely has the future been so clear. Really?? A lot of money has been lost jumping on the bandwagon. Let’s do a common sense check on the greenback to gauge where risks might be lurking and where there might be profit opportunities for investors.

2014-01-14 Investing Today with Long-Term Trends in Mind by Team of Manning & Napier

Short-term news may drive day-to-day market volatility, but over time the long-term trends ultimately matter. In this post, we examine the long-term trends that most investors are not focusing on today, and the potential risks and opportunities that lie ahead for those most affected - the Boomers (those commonly born between 1946 and 1964, and the Millennials (oftentimes those born between 1980 and 1999).

2014-01-14 Market Outlook by Scotty George of Alexander Capital

The stock market’s valuation expansion has left a bittersweet taste in the mouths of some who believe that this historic sequence of "new highs" is simply smoke and mirrors and accelerated expectations. Indeed, while the wealth effect is improving the lot of many, it is also exacerbating the gap between "reality" and "perceived-reality".

2014-01-13 Hovering With an Anvil by John Hussman of Hussman Funds

In my view, the stock market is hovering in what has a good chance of being seen in hindsight as the complacent lull before a period of steep losses. Meanwhile, we would require a certain amount of deterioration in stock prices, credit spreads, and employment growth to amplify our economic concerns, but even here we can say that there is little evidence of economic acceleration. Broad economic activity continues to hover at levels that have historically delineated the border of expansions and recessions.

2014-01-13 Weighing the Week Ahead: Can Earnings Growth Propel Stocks Higher? by Jeff Miller of New Arc Investments

If you could know one thing about stocks in the coming year, it would be what to expect from corporate earnings. The Q4 2013 reports will provide a preview, with attention starting this week.

2014-01-13 Demographic Trends in the 50-and-Older Work Force by Doug Short of Advisor Perspectives (dshort.com)

In my earlier update on demographic trends in employment, I included a chart illustrating the growth (or shrinkage) in six age cohorts since the turn of the century. In this commentary we’ll zoom in on the age 50 and older Labor Force Participation Rate (LFPR).

2014-01-13 \"New Bubble\" Talk, Premature by Brian Wesbury, Bob Stein of First Trust Advisors

That was fast. A little over two years ago, we declared that housing had not only bottomed, but was about to start its first real growth spurt since the bubble (Housing At An Inflection Point 11/2/2011). While some agreed, others expressed polite disagreement or, in some cases, incredulity.

2014-01-13 Stocks Rise Modestly in First Full Week of Trading by Bob Doll of Nuveen Asset Management

U.S. equities finished mostly higher for the first full week of the year, with the S&P 500 gaining approximately 0.6%. There were no meaningful directional drivers behind the price action, which is a dynamic that has been prevalent so far in 2014.

2014-01-13 Equity Bubble? No. by Richard Bernstein of Richard Bernstein Advisors

The US stock market performed very well during 2013. The S&P 500’s total return of nearly 33% far outpaced the returns of most asset classes. A growing contingent of market observers is fearful that the US equity market is in some sort of a bubble. We disagree completely with this notion. A strong market rally that many investors have missed is hardly sufficient grounds for a financial bubble.

2014-01-13 3 Reasons the Dollar Should Strengthen This Year by Russ Koesterich of iShares Blog

Russ explains why the U.S. dollar is likely to strengthen in 2014, and what this means for various asset classes.

2014-01-12 Forecast 2014: The Killer Ds by John Mauldin of Millennium Wave Advisors

We’ll continue our three-part 2014 forecast series this week by looking at the significant economic macrotrends that have to be understood, as always, as the context for any short-term forecast. These are the forces that are going to inexorably shift and shape our portfolios and businesses. Each of the nine macrotrends I’ll mention deserves its own book (and I’ve written books about two of them and numerous letters on most of them), but we’ll pause to gaze briefly at each as we scan the horizon.

2014-01-10 5 Investor Tips for 2014 by Kristina Hooper of Allianz Global Investors

While the winding down of QE signals better times ahead, investors need to be selective and focused in taking smart risks, says US Investment Strategist Kristina Hooper.

2014-01-10 Automation and Lean Manufacturing: Boost Profits, Squeeze Employment by Tyler Howard of Saturna Capital

Despite industrial production reaching all-time highs in August of this year, employment in the manufacturing sector remains substantially below levels witnessed before the 2008-2009 recession. When looking at longer term employment trends in manufacturing, it becomes clear that companies increasingly boost production without adding incremental labor. Profit margins, while not yet recovered to pre-recession peaks, endure at historically high levels. Several long-term changes in the manufacturing economy contribute to this divergence: outsourcing, automation, and lean manufacturing.

2014-01-10 High Yield and Bank Loan Outlook- January 2014 by Team of Guggenheim Partners

Improving U.S. macroeconomic conditions should spur additional investor demand for high-yield bonds and bank loans, particularly with defaults exceptionally low. Still, investors should monitor trends pointing to an erosion of safety in leveraged credit.

2014-01-10 Macro Strategy Review by Jim Welsh of Forward Investing

Heavy emphasis on the fundamentals factors driving the U.S., European Union, China, and Emerging economies, and how the fundamentals are likely to impact markets.

2014-01-10 Hasenstab: Fed Tapering Was Inevitable by Michael Hasenstab of Franklin Templeton

The US Federal Reserve (Fed) announced its decision to reduce its $85 billion monthly asset purchase program by $10 billion starting in January 2014. What might the eventual end of the Fed’s policy of aggressive money printing mean for fixed-income investors? Michael Hasenstab, Ph.D, executive vice president, chief investment officer, Global Bonds, Franklin Templeton Fixed Income Group, believes there’s no reason for investors to panic. He outlines why he thinks that’s the case, and where on the map he’s spotting fixed income opportunities.

2014-01-10 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.0, up from last week’s 133.0. The WLI annualized growth indicator (WLIg) to one decimal place came in at 2.5, up from last week’s 1.9.

2014-01-10 The Big Four Economic Indicators: Today\'s Strange Nonfarm Payrolls in Context by Doug Short of Advisor Perspectives (dshort.com)

The January Employment Report gives us a look at the December Nonfarm Employment along with extensive revisions back to January 2009. The big stunner today was the meager 74K new jobs in December against expectations of around 196K. This sucker punch from the Establishment Data was accompanied by the equally stunning news that the unemployment rate declined from 7.0-6.7%. The two numbers, of course, are from two completely different surveys - the jobs number from the Establishment Survey of business and government and the unemployment rate from the Household Survey of the general population.

2014-01-10 Weekly Economic Commentary: December U.S. Employment Report by Carl Tannenbaum of Northern Trust

December U.S. employment report clouded by weather-related factors. A review of the two U.S. employment surveys. The ECB reaches a critical stage.

2014-01-09 The U.S. Begins an (Un)employment Experiment by Sam Wardwell of Pioneer Investments

Extended unemployment benefits stopped for 1.3 million people at year-end. This doesn’t change their employment status...they just stop getting unemployment compensation. Extended benefits (of up to 99 weeks) was part of the recession-fighting fiscal stimulus package. A question was: did this create a dis-incentive to find a job (aka "funemployment").

2014-01-09 A Great Time for Investors by Scott Minerd of Guggenheim Partners

Last January, the global economy faced myriad headwinds, choppiness lay ahead, and we expected plenty of volatility. Nevertheless, I said then that risk assets were the best choice for investors. Now, the headwinds of 2013 have largely dissipated, and the outlook is benign for risk assets for the first three to six months of 2014, if not longer.

2014-01-09 Seesaw Rider by William Gross of PIMCO

There’s 50 ways to leave your lover and maybe more than that to lose your money or "break the buck," as some label it in the money markets. You can buy the Brooklyn Bridge, bet on the Cubs to win the World Series or have owned 30 year Treasury bonds in 2013, to name just a few. But bridges and baseball aside, what you’re probably interested in hearing from me is how to avoid breaking your investment buck in 2014.

2014-01-09 The Price Action of Stocks Trumps Fundamentals by Robert Mark of Castle Investment Management

Perhaps the best argument that one can make for stocks is that many hold doubts about the continuing bull market. The reasons for these doubts are understandable, as the economic recovery has been anemic and growth has slowed significantly - likely leading to lower profits in the future. As a result, corporations have aggressively cut costs, increased productivity and preserved cash - pushing profit margins to historically high levels.

2014-01-08 Accessing Fundamentals: A Differentiated Approach or Just Another Weighting Game? by Ryan Ballantyne of Reality Shares

Stocks give investors an ownership stake in corporate America, but they can also introduce high levels of volatility and uneven growth to a portfolio.

2014-01-08 Consumer Confidence Jumped in December, But Why? by Gary Halbert of Halbert Wealth Management

Today we’ll look at several economic reports, including a big jump in consumer confidence last month. That seems a little odd given that over 63% of Americans still believe the country is headed in the wrong direction as I reported last week.

2014-01-08 AdvisorShares Weekly Market Review by AdvisorShares Research of AdvisorShares

In this new year, the magnitude of 2013 comes full circle. The S&P 500 and the Dow finished the year with 29.6% and 26.5% gains, respectively. For the Dow, that was the biggest annual gain since 1995, and the fifth consecutive positive year. Most impressive in the developed markets was Japan’s Nikkei Stock Average, which surged 57%.

2014-01-08 Rehab World by Niall Ferguson of Project Syndicate

The late English chanteuse Amy Winehouse sang, "They tried to make me go to rehab, but I said ’No, no, no.’" Perhaps 2013 should be known as the year of Winehouse economics, with the singers being the world’s most important central banks, led by the Federal Reserve.

2014-01-08 When the QE Tide Recedes, Focus on What is Revealed by Robert McConnaughey of Columbia Management

While there is fierce debate on the ultimate effectiveness of monetary stimulus surging from the central banks, one cannot dispute the boost that it has given to asset prices. While we may be seeing some "green shoots" of overall growth pick-up in the developed world, the post-crisis recovery in asset values has not been primarily driven by economic or earnings growth. Instead, we have been in a high correlation environment where the rising tide lifted most diversified investor boats as repressed "risk-free" rates pushed money out into riskier asset classes.

2014-01-08 Ready For Lift-Off? by Scott Brown of Raymond James

While some had expected a quick recovery from the recession, that was never likely to be the case. Recessions that are caused by financial crises are different from the usual downturns - they are more severe, they last longer, and the recoveries take a long time. The economy has been in recovery mode for the last four and a half years, but finally appears to be poised for an acceleration in 2014.

2014-01-08 I\'m Back by Jeffrey Saut of Raymond James

Well, I’m back after roughly a two-week hiatus where I didn’t do very many strategy calls, or strategy reports. I did, however, pen a letter regarding my forecast for 2014 dated 12/30/13. And for those who, like me, kicked back over the past two weeks to spend time with family and rejoice in the holidays, and did not read anything, I urge you to peruse my "2014" report.

2014-01-07 Where are Margins Headed? by Mark Oelschlager of Oak Associates

The fourth quarter was another good one for stocks, with the S&P 500 returning 10.5%, and 32.4% for the year. This was the best calendar-year performance by the index since 1997. All four quarters of 2013 produced positive returns, with the first and fourth quarters, typically the strongest seasonally, both hitting double-digits. For the year Consumer Discretionary and Healthcare were the standout sectors, while Utilities and Telecom lagged. The laggards are not surprising, as they are income-oriented - an area of the market that was hurt by the backup in bond yields.

2014-01-07 More Jobs to Turn Up the Taper Dial - But Not Yet by Kristina Hooper of Allianz Global Investors

The job market is a focal point for the Fed and early signs point toward further progress in reducing unemployment. But don’t expect central bankers to speed up the tapering process until there’s more evidence of a turnaround, writes Kristina Hooper.

2014-01-07 Dow 19,500, S&P 500 2,150 by Brian Wesbury, Bob Stein of First Trust Advisors

Last year was the best for equities since 1997. The Dow Jones Industrial Average rose 26.5%, the S&P 500 was up 29.6% and the Nasdaq was up 38.3%. Despite these outsized gains, and in spite of all the talk of a bubble, we still think stocks are cheap.

2014-01-07 A Healing Economy by Richard Michaud of New Frontier Advisors

The quarter continued the theme of the year, with U.S. equities continuing their dramatic performance. For the quarter, the Dow was up 9.6%, the S&P 9.9%, and the NASDAQ 10.7%. The year’s returns substantially exceeded last year"s "expert predictions" and much of this year’s punditry with the Dow up 26.5%, S&P up 29.6%, and NASDAQ up 38.3%.

2014-01-07 Is 2014 the Year That Alternatives Matter Again? by Chris Maxey, Ryan Davis of Fortigent

In the wake of the financial crisis of 2008, investors piled into alternative investments en masse to help insulate their portfolios from another dramatic market decline. For those who had not yet bought into the idea of improving portfolio risk-adjusted returns, the 50% drawdown in the S&P 500 provided all the convincing needed.

2014-01-07 Waiting for the Great Pumpkin by James Moore of PIMCO

Shortly before Thanksgiving, I had the privilege of being on an investor panel at Bank of America’s Debt Capital Markets and Derivatives Conference. On the panel before me was a trio of BofA’s chief strategists, among them Michael Hartnett, their chief investment strategist. Mr. Hartnett reminded the audience that he was the man who coined the phrase "The Great Rotation" and after much anticipation, at long last, it was here.

2014-01-07 Emerging Markets 2014 Outlook: Shaping the Next Decade by Mark Mobius of Franklin Templeton

As we embark upon a new year, the Templeton Emerging Markets Group believes 2014 could be an important year for many emerging markets, possibly establishing trends that could play out through much of the remainder of the decade. In particular, Chinese government reform initiatives announced in late 2013 could have far-reaching significance. And, major elections in a number of countries in 2014 could bring dramatic (or not-so-dramatic) changes. Here are a few themes and countries we’ve got our eye on in the new year.

2014-01-07 The Big Transition: A Letter to an Entrepreneur Friend by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, presents a letter he has written to friend, a senior executive at a successful public company in the internet sphere. The friend has realized that 90% of his personal worth is tied up in his company. He is considering diversifying. Mr. Sicart’s letter posits that for his entrepreneur friend, the decision to diversify is not "primarily an investment question" but rather "a patrimonial question, which must be considered in a much longer time frame."

2014-01-07 Turn the Page: Outlook for Economy/Stocks in 2014 by Liz Ann Sonders of Charles Schwab

In this comprehensive (read: long...sorry!) 2014 outlook report, we assess the likelihood a correction is in the offing given the strong gains since 2009.

2014-01-06 Confidence Abounds by John Hussman of Hussman Funds

It’s the very nature of a peak that it can’t be produced except by unusual optimism.

2014-01-06 2014 Housing Predictions by Logan Mohtasham of AMC Lending Group

A tale of 2 halves with lingering questions characterizes what we can say was the story for housing for 2013. In the first half of the year, rates were low as the 10 year note was well under 2%. People were still refinancing, as home prices rocketed. Multiple bids were common, and pundits like Ivy Zelman cheered the improving market with praise like "Housing is in Nirvana".

2014-01-06 Reflections on 2013: What\'s Important, What\'s Not, and What\'s Ahead by Mike Shedlock of Sitka Pacific Capital Management

A tale of 2 halves with lingering questions characterizes what we can say was the story for housing for 2013. In the first half of the year, rates were low as the 10 year note was well under 2%. People were still refinancing, as home prices rocketed. Multiple bids were common, and pundits like Ivy Zelman cheered the improving market with praise like "Housing is in Nirvana".

2014-01-06 Weighing the Week Ahead: Will \"Good News\" be Good for Markets? by Jeff Miller of New Arc Investments

Suppose you knew -- right now, at the start of the week -- that the payroll employment report would show an extreme number. With 200K jobs expected, suppose it were to be 350K? Or 50K? If you had advance information from Mr. Beeks would you even know what to do?

2014-01-06 The Great Malaise Drags On by Joseph Stiglitz of Project Syndicate

Maybe the global economy will perform a little better in 2014 than it did in 2013, or maybe not. Seen in the broader context of the continuing Great Malaise, both years will come to be regarded as a time of wasted opportunities.

2014-01-06 Value Stocks Beckon in Emerging Markets by Henry D'uria, Morgan Harting of AllianceBernstein

Years of playing defense have left many emerging-market (EM) equity portfolios laden with pricey safe-haven stocks. We think they risk missing the big opportunity that’s brewing in value stocks, especially as EM economies begin to stabilize.

2014-01-06 ProVise Bullets by Ray Ferrara of ProVise Management Group

To say that 2013 was an interesting year would be a bit of an understatement. We learned a long time ago not to make predictions about the stock market because no matter what is predicted, it is likely to be wrong. Even if we get lucky one year, we are not likely to even get close the following year. We do try to give guidance, however. Last year we suggested that, given the late run in the market in 2012 and its 15% return, investors should be happy with a return of 8 to 10% in 2013. Obviously, investors enjoyed much better returns.

2014-01-06 2013: A Review of the Past, the Present and the Future by Ron Surz of PPCA Inc

This commentary is divided into three sections. I begin with a review of current U.S. and foreign stock markets, examining the year 2013 and the past six years, including the crash of 2008. This perspective serves as a launch point into the future, specifically 2014 and the remainder of this decade. I conclude with a review of the past 88 years of U.S. stock and bond markets.

2014-01-04 Forecast 2014: The Human Transformation Revolution by John Mauldin of Millennium Wave Advisors

It is that time of the year when we peer into our darkened crystal balls in hopes of seeing portents of the future in the shadowy mists. This year I see three distinct wisps of vapor coalescing in the coming years. Each deserves its own treatment, so this year the annual forecast issue will in fact be three separate weekly pieces.

2014-01-03 Municipal Bonds: Back to Basics in 2014 by Rafael Costas, Sheila Amoroso of Franklin Templeton

Municipal bonds faced some ups and downs in 2013, falling victim to Fed taper speculation and negative press that dogged Detroit and Puerto Rico and understandably scared off some investors. Sheila Amoroso and Rafael Costas, co-directors of our Municipal Bond Department, note that while there are still some issues to work through and even despite the sometimes-shocking headlines, not all news in the world of munis is bad news. They say investors need to get back to the basics and re-examine the reasons for investing in municipal bonds.

2014-01-03 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.9, up from last week’s 131.9. The WLI annualized growth indicator (WLIg) to one decimal place came in at 1.8, unchanged from last week.

2014-01-03 A More Market-Friendly China by Henry Zhang of Matthews Asia

My last visit to Beijing happened to coincide with the Communist Party’s Third Plenum Meeting. General business sentiment was just as upbeat as it had been earlier last autumn. But through my discussions with different businesspeople, I came away with a distinct new optimism over the leadership’s more market-oriented stance on policies.

2014-01-03 Gold Stocks: What to Expect in the New Year by Frank Holmes of U.S. Global Investors

After three years of pain, can gold stocks break their losing streak and see a gain in 2014? History says chances are good.

2014-01-03 Six Questions for 2014 - January 3, 2014 by Carl Tannenbaum of Northern Trust

Our economic outlook for this year will be available next week. To provide a taste of what’s ahead, here are six of the key questions we’ll focus on during the coming months.

2014-01-02 Slow Growth and Short Tails by Nouriel Roubini of Project Syndicate

The global economy will grow faster in 2014 than it did in 2013, while tail risks will be lower. But, with the possible exception of the US, growth will remain anemic in advanced economies, and emerging-market fragility - including China’s uncertain efforts at economic rebalancing - could become a drag on global growth.

2014-01-02 The Enduring Nature of Saving Mr. Banks by Bill Smead of Smead Capital Management

Warren Buffett has admitted that selling Disney in 1966 was the biggest mistake of his entire career.

2014-01-02 2013 - Good Year Or Good Riddance? by Gary Halbert of Halbert Wealth Management

It’s New Year’s Eve, so I thought it might be interesting to look at some recent polls to get a sense of how Americans feel about how things went in 2013 and what they considered to be the most important news stories of the year.

2014-01-02 2013 in Review: Best of the \"Silver Bullet\" Awards by Jeff Miller of New Arc Investments

Regular readers of my "Weighing the Week Ahead" series know that I occasionally give the Silver Bullet Award. This recognizes writers who take it upon themselves to debunk dangerously misleading financial analysis. Their often thankless work reminds me of the Lone Ranger, whose adventures often upheld the notion that "...that all things change but truth, and that truth alone, lives on forever."

2014-01-02 The Long and The Short of Gold Investing by Peter Schiff of Euro Pacific Precious Metals

There are two types of gold investors: those trying to make money on short-term market timing and those looking for long-term asset preservation. It was the fear-driven trading of the former that helped gold break $1900 in 2011, and for good reason - stormy markets steer investors to safe havens.

2014-01-02 The World Economy\'s Shifting Challenges by George Soros of Project Syndicate

As 2013 comes to a close, efforts to revive growth in the world’s most influential economies are exerting competing pressures on the global economy. Perhaps not surprisingly, while Europe and the US will continue to play an important global role, developments in Asia will determine the worldwide outlook in 2014 and beyond.

2013-12-31 The 10 Most-Read Articles of 2013 by Various (Article)

As is our custom, we conclude the year by reflecting on the 10 most-read articles over the past 12 months. In decreasing order, based on the number of unique readers, those are...

2013-12-31 Tech Bubble Circa 1999, or Something Different? by J.P. Scandalios of Franklin Templeton

Technology sector stocks have been investor favorites in 2013, pushing the tech-heavy Nasdaq Composite Index to its highest level since 1999 and drawing comparisons to the "dot com" bubble which burst soon thereafter. Will we see a redux of the tech bust in 2014? John P. Scandalios doesn’t think so. Investor fever for anything "dot com" in the late 1990s was built more on promise than actual results.

2013-12-31 A Look Ahead at 2014 by Russ Koesterich of iShares Blog

Last week, Russ shared his annual look back at his 2013 economic and investment calls. Now, it’s time for his annual look forward.

2013-12-31 2014? by Jeffrey Saut of Raymond James

Year-end letters are difficult to write because there is always a tendency to discuss the year gone by or, worse, attempt to forecast the coming year. Typically, when the media asks where the S&P 500 (SPX/1841.40) will be at the end of the new year, I tell them you might as well flip a lucky penny.

2013-12-31 China\'s Policy Disharmony by Stephen Roach of Project Syndicate

China was hardly lacking in policy pronouncements in the final months of 2013. Given the likely tradeoffs between strategy and tactics - that is, between long-term reforms and short-term growth - can Chinese policymakers really accomplish all of their objectives?

2013-12-30 Weighing the Week Ahead: How Should Investors Judge the Prospects for 2014? by Jeff Miller of New Arc Investments

Sometimes the calendar of news and events makes it easy to predict what will grab our attention in the week ahead. In the last few weeks leading up to the Fed tapering announcement, I highlighted the following.

2013-12-30 NYSE Margin Debt Is Fractionally Off Its Real All-Time High by Doug Short of Advisor Perspectives (dshort.com)

The New York Stock Exchange publishes end-of-month data for margin debt on the NYXdata website, where we can also find historical data back to 1959. Let’s examine the numbers and study the relationship between margin debt and the market, using the S&P 500 as the surrogate for the latter.

2013-12-30 Predictions for the 2014 U.S. Financial Markets by Dawn Bennett of Bennett Group Financial Services

I’ve had so many phenomenal and diverse guests on my syndicated radio show, Financial Myth Busting, this year: Steve Forbes, Mort Zuckerman, David Stockman, Michael Belkin, David Walker, Dr. Ben Carson, Marc Faber, and even Ted Nugent. This is a very eclectic group, but they all have certain opinions in common. They all share the same concerns that the U.S. economic growth remains anemic and the continued economic instability and political deadlock along with business community’s mistrust of the U.S. government will continue to destroy America’s bottom line in the future.

2013-12-30 Plow Horse, Trotting by Brian Wesbury, Bob Stein of First Trust Advisors

What a year 2013 has been. Remember how it started, with the media hyperventilating over the "fiscal cliff" deal and spending sequester? The vast majority of economists, pundits and politicians believe in Keynesian economics. So, it’s not surprising that higher tax rates and spending cuts sent them into an intellectual and theoretical funk.

2013-12-30 What Does US Tapering Mean for Asia? by Paul Chan of Invesco Blog

The US Federal Reserve (Fed) took its first step toward unwinding its unprecedented monetary stimulus. Beginning in January 2014, the Fed will reduce monthly asset purchases by $10 billion to $75 billion. The scale of the tapering was very much in line with market expectation. While timing may have surprised some investors, the market had already priced in the Fed’s imminent move.

2013-12-27 A Look Back at 2013 Calls by Russ Koesterich of iShares Blog

It’s time again for Russ K’s annual look back at his economic and investment calls. Find out what he got right - and what he got wrong.

2013-12-27 Global Equity Outlook: Clouded by Uncertainty by Norman Boersma of Franklin Templeton

Global equity investors generally had reason to cheer in 2013, and seemed more willing to embrace risk as the year progressed. Will the bullish mood persist in 2014? Norm Boersma, Chief Investment Officer, Templeton Global Equity Group, says that while it’s clear global investors have been allocating more dollars toward equities in recent days (particularly US equities), there are still a number of unknowns that make it hard to be overly exuberant.

2013-12-27 The Risk Tolerance Paradox....And What You Can Do About It by Ken Mungan, Matt Kaufman of Milliman Financial Risk Management

The risk tolerance level many investors expect to achieve over the long-term rarely equals the same tolerance investors actually experience over shorter periods. This paper provides a brief introduction to this paradox, explores the main reason we think it exists, and introduces a risk management strategy that seeks to solve the problem.

2013-12-27 Gary Shilling: Review and Forecast by John Mauldin of Millennium Wave Advisors

It’s that time of year again, when we begin to think of what the next one will bring. I will be doing my annual forecast issue next week, but my friend Gary Shilling has already done his and has graciously allowed me to use a shortened version of his letter as this week’s Thoughts from the Frontline. So without any further ado, let’s jump right to Gary’s look at where we are and where we’re going.

2013-12-27 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.9, up from last week’s 130.9. The WLI annualized growth indicator (WLIg) to one decimal place, slipped to 1.9, down from 2.1 last week.

2013-12-27 2013: Looking Back at the Year of the Bull by Frank Holmes of U.S. Global Investors

Will stocks continue to climb in 2014? Odds are "very good," finds BCA Research. According to historical data going back to 1870, there were 30 times when annual returns in domestic stocks climbed more than 25 percent. Of these, 23 experienced an additional increase, resulting in a mean of 12 percent, says BCA. Thinking back to January 2013, investors had a very different frame of mind. While we recently talked about the year’s biggest stories in U.S. energy and gold, today, we recap our popular commentaries focused on the domestic market.

2013-12-26 Creating a Reliable Lifetime Income by Ken Mungan of Milliman Financial Risk Management

With the baby boomer generation rolling into retirement, financial advisors have been faced with increased demand to assist with retirement income planning. As the financial advisory community struggles to address this demand, advisors are realizing that their traditional planning techniques must improve. In this white paper, we analyze the problem of providing a reliable lifetime income. We compare several approaches and demonstrate that risk management is a key element to a successful investor outcome.

2013-12-26 A Strong Finish for 2013 by Bob Doll of Nuveen Asset Management

For our weekly subscribers, we wanted to take an opportunity to look back on the year. We began 2013 with an outlook for the prospect of improvement for the global economy and risk assets. We thought global policymaker’s unprecedented attempts to reflate global growth would show some signs of bearing fruit, especially in the United States and China. In our forecast, equity markets would continue to be choppy in light of the fiscal cliff issues, but an inevitable political compromise would reduce the economic drag.

2013-12-26 Does the CAPE Still Work? by William Hester of Hussman Funds

We feel no particular obligation defend the CAPE ratio. It has a strong long-term relationship to subsequent 10-year market returns. And it’s only one of numerous valuation indicators that we use in our work - many which are considerably more reliable.

2013-12-26 Economy Surprises On The Upside, But Is It Real? by Gary Halbert of Halbert Wealth Management

In today’s abbreviated holiday E-Letter, we’ll look at last Friday’s surprising report on 3Q GDP. In its third estimate of 3Q GDP, the Commerce Department reported that the economy surged by more than anyone expected. Given the surprisingly strong numbers, more than a few are questioning the report’s accuracy and wondering if it will be revised lower in January.

2013-12-24 The Price America Pays for Global Leadership by Bob Veres (Article)

America’s political debates inevitably default to finding ways to contain our federal deficits, and our investment debates focus on whether we’re facing a secular bear or bull market - and how to maneuver within that environment. I had never imagined that these two debates could be related until I heard a presentation by Bill O’Grady, of Confluence Investment Management in St. Louis, MO at the Insider’s Forum conference in Dallas.

2013-12-24 How Much Should We Pay to Emit Carbon? by Michael Edesess (Article)

Many consider emissions of greenhouse gases to be what economists call a ’negative externality,’ meaning that they are likely to impose a cost on society through climate change and ocean acidification. The cost of that externality should, in principle, be borne by the emitters, who should pay a price to emit. But what should that price be?

2013-12-24 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

vestors thanked Bernanke this week for what they perceived as an early holiday present. While no one knew how they would react once the Fed began to taper its bond purchases, many surprised analysts by lifting stocks to one of the best showings of the year (and a new record on the Dow). And now that that uncertainty is out of the way, let the vacations begin.

2013-12-24 A Spoonful of Sugar by Peter Schiff of Euro Pacific Capital

The press has framed Ben Bernanke’s valedictory press conference last week in heroic terms. It’s as if a veteran quarterback engineered a stunning come-from-behind drive in his final game, and graciously bowed out of the game with the ball sitting on the opponent’s one-yard line. In reality, Bernanke has merely completed a five-yard pass from his own end zone, and has left Janet Yellen to come off the bench down by three touchdowns, with no credible deep threats, and very little time left on the clock.

2013-12-24 Fed Taper Brings Us Back to the Future by Kristina Hooper of Allianz Global Investors

A return to normal economic conditions is now more palpable following the Fed’s decision to start unwinding QE and early signs of a revival in consumer spending, growth and jobs, writes Kristina Hooper.

2013-12-24 Is 2% Growth The New Normal For Consumption? by Team of GaveKal Capital

From 1960 to November 2007 (the 2007-2009 recession started December 2007 according to NBER), real personal consumption expenditures grew at just about 3.5% trend growth. In this recovery, consumption as only mustered a growth rate just above 2%. Is this another permanent downshift in consumption growth or will consumption ratchet back up? Something we will be keeping an eye on.

2013-12-24 A Surprising Way to Participate in Today\'s Tech Boom by Frank Holmes of U.S. Global Investors

If I asked you to name the biggest online shopping day of the year, what would you guess?

2013-12-23 Risk Assets Take Fed Taper Announcement in Stride by Roger Bayston of Franklin Templeton

The US Federal Reserve (Fed) delivered an early holiday surprise to some market participants, announcing at its December 18 policy meeting it would start slowing its asset purchase program known as quantitative easing in January. For some thoughts on what this may mean for the markets in the new year, we turned just after the announcement to Roger Bayston. He believes the markets should be able to take the Fed’s tapering in 2014 in stride, although investors should prepare for the proposition of higher Treasury yields.

2013-12-23 Welcome, Taper by Dianne Lob of AllianceBernstein

The Federal Open Market Committee’s statement that it will begin to taper its bond purchases in January is a good sign that the US economy continues to heal, in our view.

2013-12-23 The Diva is Already Singing by John Hussman of Hussman Funds

The bell has already rung. The diva is already singing. The only question is precisely how long they hold the note.

2013-12-23 China\'s Consumer Stocks: Opportunities Despite Slower Growth by Richard Flax of PIMCO

A weaker macro environment and curbs on spending by government bureaucrats have hit a range of consumer businesses and, in some cases, forced a reassessment of expansion plans. While Chinese consumption may be challenged in the near term, we think the impact will be felt most in the retail sector where slowing demand is compounded by oversupply. We see opportunity in other sectors that benefit from secular demand growth and constrained supply or strong brands, notably casinos and luxury sectors.

2013-12-23 401(k) Makeover: Future Trends by Jon Vogler of Invesco Blog

Retirement experts believe your 401(k) plan will take on a new look and focus over the next few years as the industry introduces changes aimed at getting participants to save more money and do more planning for retirement.

2013-12-21 Start Me Up: Fed Announces a Much-Anticipated Taper by Liz Ann Sonders of Charles Schwab

The Fed decided to begin tapering its QE-related bond purchases with a reduction of $10 billion; split evenly between Treasuries and mortgage-backed securities. In a sign that tapering was already priced in, the stock market surged on the announcement; while bond yields remained quite tame. The Fed announced slightly sunnier economic forecasts, suggesting quantitative easing could wind down within a year.

2013-12-21 What Has QE Wrought? by John Mauldin of Millennium Wave Advisors

Now that we have begun tapering, we will soon see lots of analysis about whether QE has been effective. What will the stock market do? The US economy seems to be moving in the right direction, but the Fed has forecast Nirvana (seriously) - do we dare hope they can finally get a forecast right? Or have they jinxed us?

2013-12-20 Celebrating Asia\'s Growth Past and Present by Taizo Ishida, Mark Headley of Matthews Asia

Today, Matthews Asia celebrates 10 remarkable years that have passed since we launched our Asia Growth strategy to U.S. investors. During this time, the region has evolved in many significant ways. In the early 2000s, only the "Asian Tiger" economies had managed to reach GDP per capita levels considered the tipping point for consumption growth. More recently, consumption has been on the rise in many of the region’s economies, laying the foundation for Asia’s ongoing prosperity.

2013-12-20 Staying Power by Kapish Bhutani of Diamond Hill Investments

In addition to reducing the risk of a permanent loss of capital, the staying power of a company allows for capital to compound over long periods of time. While the defensive and less cyclical nature of many consumer staples companies indicates an ability to survive, most are able to invest only a portion of earnings at historical rates of return.

2013-12-20 The Challenges of Year-End Forecasting by Jason Hsu of Research Affiliates

Many investors piled on the equity bandwagon this year, pushing prices up to dizzying heights. With current yields for U.S. equities at record lows, is it time to get off the bandwagon?

2013-12-20 Five Resolutions for 2014 by David Kelly of J.P. Morgan Funds

Entering 2014, the global investment environment is as challenging as ever. After a super 2013 in returns, U.S. equities can no longer be considered inexpensive and yet still look attractive relative to the prospective returns on savings accounts and long-term bonds. Long-term bond yields are higher than a year ago but could still rise further as the Federal Reserve begins to reduce quantitative easing.

2013-12-20 PIMCO Cyclical Outlook for the Americas: Riding the Cross-Currents of Higher U.S. Growth and the Fed by Mohit Mittal, Lupin Rahman, Ed Devlin of PIMCO

In the U.S., lower fiscal drag and the possibility of higher consumer and corporate spending should drive growth higher in 2014. Supported by higher U.S. growth and stabilization in Europe and China, Latin America is set to grow 3%-4% on average, but with a large dispersion across countries. Canada should benefit from the U.S. recovery but will likely lag U.S. growth due to lower consumption and residential investment.

2013-12-20 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

As this will be our last weekly of the year, we thought we would offer some parting reflections on the year just past.

2013-12-20 Strategies for a Runaway Market (year-end edition) by Robert Isbitts of Sungarden Investment Research

It seems to me that the best advice for the upcoming year as an investor is "don’t anticipate what will happen, just balance reward potential and risk potential for each client situation and be ready for anything." This is very similar to the feeling the surrounded markets in 1999 just before the dot-com bubble burst, and again in late 2007 when the credit crisis started to become more widespread. So, here is my advice for those investors and financial advisors who wish to start getting mentally ready for surviving 2014.

2013-12-19 The Great Experiment by Miguel Perez-Santalla of BullionVault

After 100 years of the US central bank, does it deserve another try...?

2013-12-19 Coal in the Fed\'s Stock-ing by Tony Crescenzi, Lupin Rahman, Ben Emons of PIMCO

Forward guidance has become an increasingly common practice among global central banks. Communicating a possible change in the policy rate could have a large effect on long-term interest rates. Capital has moved literally around the globe as a result of central bank activism in developed countries. Looking ahead, we expect 2014 to be a year of increased differentiation across emerging markets in terms of economic fundamentals, policy reactions and market outcomes.

2013-12-19 A Dovish-Bullish Taper by Brian Wesbury, Bob Stein of First Trust Advisors

They finally did it. At Chairman Bernanke’s next to last meeting, the Federal Reserve announced a modest tapering of quantitative easing, reducing its monthly purchases of Treasury securities and mortgage-backed securities by $5 billion each ($10 billion total) to $75 billion starting in January. As a result, the size of the Fed’s balance sheet will continue to rise, but slightly more slowly than before.

2013-12-19 Market\'s Fed Frenzy Can Finally End by Scott Minerd of Guggenheim Partners

The Fed surprised many investors by announcing it will taper in January, but made clear that interest rates will remain near the zero-bound as forward guidance becomes its primary policy tool.

2013-12-19 Georgia on My Mind by Mark Mobius of Franklin Templeton

My team and I recently traveled to Georgia, a small country in the Caucasus Mountains straddling the border between Europe and Asia. Why are we interested in Georgia? One word: reform. Georgia, which can be considered a frontier market, is on the cusp of burgeoning change.

2013-12-19 One of the Most Notable Stories of the Year: Energy Renaissance in the U.S.A. by Frank Holmes of U.S. Global Investors

As we come to the end of 2013, it’s a good time to reflect on some of the biggest resources stories of the year. One that immediately comes to mind is the U.S. energy resurgence and its tremendous effect on oil and gas.

2013-12-19 What the Fed\'s Taper Means for Investors by Kristina Hooper of Allianz Global Investors

Kristina Hooper breaks down the Federal Reserve’s surprise move to begin unwinding its bond-buying program and its implications for markets and monetary policy.

2013-12-18 Australia Inc. by Adam Bowe, Robert Mead of PIMCO

In 2013, real growth in business investment in Australia outside the mining sector slowed to almost zero, in part due to the high exchange rate. While some sectors of the economy such as housing appear to be improving, we continue to expect sub-trend growth in 2014 due to the subdued outlook for business investment. The RBA will most likely have to keep interest rates low for an extended period to ease the transition away from mining-assisted growth and encourage a weaker exchange rate.

2013-12-18 PIMCO\'s Cyclical Outlook for Asia: Growth Is Stabilizing but Not Stellar by Ramin Toloui, Tomoya Masanao, Robert Mead of PIMCO

In China, near-term economic performance will be dominated by the dialing back and forth of credit conditions by policymakers, while long-term reform progresses incrementally. Japan’s GDP growth will slow in 2014 due to a consumption tax hike but will still be above the country’s potential growth as it is assisted by reflationary policies. The pace of Australia’s growth will slow due to weakness in manufacturing and mining, reflecting tempered growth in China.

2013-12-18 Three Investments that Could Return to Favor in 2014 by Jeffrey Knight of Columbia Management

When investors lose confidence in an asset class, especially one that had been popular enough to attract outsized allocations, subsequent rebalancing generally leads to prolonged periods of underperformance. Technology stocks after 1999, for example, underperformed the S&P 500 in eight of the next 10 years and by a cumulative total of more than 40 percentage points. Today, many believe that interest rate sensitive bonds might have just begun a similar era of waning investor confidence, portfolio reallocation and underperformance.

2013-12-18 Beware the Haunting of Stock Market Corrections Past! by Dawn Bennett of Bennett Group Financial Services

I do think the ghosts of stock market corrections past are haunting us. Those who forget the lessons that history teaches us are predestined to repeat them. As an apprentice of U.S. stock market history, I’ve seen this maxim made true, time and time again. I believe I have seen the ghosts of the 1929, 1987, 2000 and 2008 U.S. Stock market crashes because they have materialized in 2013 and are appearing in front of everyone.

2013-12-17 Gundlach - Don’t Plan on Tapering by Robert Huebscher (Article)

Investors face many concerns as the new year approaches, but a recurrence of May’s "taper tantrum" should not be high on their lists, according to DoubleLine’s Jeffrey Gundlach. With the majority of Fed governors staking a dovish position, "quantitative stimulus is likely to remain with us longer than people think," Gundlach said.

2013-12-17 Optimizing Asset Location: Is It Worth the Effort? by Joe Tomlinson (Article)

Asset location - the choice of whether to hold stocks and bonds in taxable or sheltered accounts - is receiving increased attention as advisors seek more ways to add value. New research has challenged long-held beliefs. I’ll examine that research and answer a question that should concern every advisor and client: Does the value provided by asset-location advice justify the fees for the work involved?

2013-12-17 Letter to the Editor by Various (Article)

A reader responds to Dan Richards’ article, How Service Screw-ups Can Create Happier Clients, and a reader responds to Patrick McVeigh’s article, Low Demand Will Depress Oil Prices, both of which appeared last week.

2013-12-17 Five Strategies for a Rising-Rate Environment Revisited by Kane Cotton, CFA and Jonathan Scheid, CFA (Article)

In June 2010, we recommended five strategies for a rising-rate environment, acknowledging that we had no idea when or how abruptly rates would rise. Indeed, rates fell since we wrote that article. But they are on the rise again. After reviewing how our original five strategies performed, we’ll now present our revised recommendations for investing as rates increase.

2013-12-17 Will 2014 Bring an End to Central Bank Intervention? by Chris Maxey, Ryan Davis of Fortigent

Nearing the final two weeks of the year, it is customary to look forward to the trends and events that will shape the coming year. A theme that may come to the fore in 2014 revolves around central bankers, specifically the diverging fates in various economies of the world.

2013-12-17 The Monster That Is Europe by John Mauldin of Millennium Wave Advisors

This week, Geert Wilders and his Party for Freedom in the Netherlands and Marine Le Pen of the Front National (FN) of France held a press conference in The Hague to announce that they will be cooperating in the elections for the European Parliament next spring and hope to form a new eurosceptic bloc.

2013-12-17 2013 A Pretty Good Year by Mike Temple of Pioneer Investments

This time last year we were bullish about equities and positive on the slow but steady strengthening of the economy. The market did not disappoint. The economy was almost heroic, you might say, with its performance enduring government sequestrations and higher taxes almost a 2% drag on GDP but comporting with our expectations of 2 - 2.5% growth. 2013 is ending with GDP and the markets coming fairly close to what we thought they’d achieve. Now the year is almost out, so let’s take stock of 2013 but look ahead to 2014.

2013-12-17 5 Takeaways from the Mini-Budget Deal by Kristina Hooper of Allianz Global Investors

The bi-partisan budget agreement inked last week has real implications for investors, including its impact on consumers, the stock market and the Fed, writes Kristina Hooper.

2013-12-17 The 2014 Geopolitical Outlook by Bill O'Grady of Confluence Investment Management

As is our custom, we close out the current year with our outlook for the next one. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international situation in the upcoming year. It is not designed to be exhaustive; instead, it focuses on the "big picture" conditions that we believe will affect policy and markets going forward. They are listed in order of importance.

2013-12-17 Rare Washington Compromise Plus Rising Consumer Debt Equals Modestly Higher 2014 GDP by Russ Koesterich of iShares Blog

Russ explains the two reasons why the U.S. economic growth picture looks a little rosier in 2014.

2013-12-17 The One Percent by Jeffrey Saut of Raymond James

I read the Pope’s words about inequality following a meeting of our newly formed Consumer Analysts Panel. The panel consists of our consumer analysts, our lodging/housing analysts, our economist, senior management of our institutional sales team, and me. Interestingly, the recurring theme over the course of said meeting was that the top 20% of wage earners are doing fine, but the bottom 20% are not.

2013-12-17 Taper Time? by Scott Brown of Raymond James

There are many arguments for and against an initial reduction in the Fed’s monthly rate of asset purchases, but the balance has shifted toward a December taper. It appears to be a very close call, but even if the Fed decides to delay again, we all know (or should know) that QE3 is going to wind down in 2014.

2013-12-16 The Coming Retreat in Corporate Earnings by John Hussman of Hussman Funds

The problem is not simply that earnings are likely to retreat deeply over the next few years. Rather, the problem is that investors have embedded the assumption of permanently elevated profit margins into stock prices, leaving the market about 80-100% above levels that would provide investors with historically adequate long-term returns. An equivalent way to say this is that stocks are currently at levels that we estimate will provide roughly zero nominal total returns over the next 7-10 years, with historically adequate long-term returns thereafter.

2013-12-16 A Much Better Dilemma by Mike Amey of PIMCO

While the UK economy is likely to avoid reverting to growth levels of recent years, it must transition into a more durable recovery involving business investment, higher productivity and stronger real wages. However, headwinds for domestic demand look significant and the banking system appears to favour secured lending to consumers over businesses. We believe that much of the rise in bond yields is already behind us. With clearer value in shorter bonds, our preference lies in short and intermediate gilts.

2013-12-16 The World We Live In by Michael Kayes of Willingdon Wealth Management

For me, the final month of the year has always been a time to reflect upon the past as well as plan for the future. Analyzing the year soon to pass provides a valuable perspective with which to evaluate the important issues that will impact our country and economy going forward. In this context, 2013 sure has been a memorable year highlighted by horrific natural disasters, the deaths of Margaret Thatcher and Nelson Mandela, and on the lighter side, the unforgettable ending to perhaps the greatest Iron Bowl ever played.

2013-12-16 Debt Crisis Recovery: Bell Curves and Balance Sheets by John Greenwood of Invesco Blog

This three-part series examines the life cycle of a debt crisis and looks at where the US, UK and eurozone are in the recovery process. This second post looks at where the US stands in the deleveraging process. Part 1 explained the phases of a debt crisis, while Part 3 will focus on why the UK and eurozone lag the US in balance-sheet repair.

2013-12-16 Absolute Return Letter: Squeaky Bum Time by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners

QE has led to asset price inflation. That much we established in the November Absolute Return Letter. In this month’s letter we go one step further and look at whether we are now in bubble territory. Considering the strong bull-run we have experienced in 2012-13 it is perhaps surprising to learn that, in a historical context, it is not an outsized rally, nor are equity markets - with the possible exception of the United States - particularly expensive.

2013-12-16 The Power of the Platform: The Promise and Peril of Technology Investing by Ryan Jacob of Jacob Asset Management

Without question, technology’s rapid development during the past 20 years has played an incredibly powerful and largely positive role in furthering the progress and productivity of modern economies throughout the world. Technology’s track record as a profitable investment theme, however, is a bit cloudier.

2013-12-16 A Budget Deal Wimpy Would Like, Saturday Night Debate & A Word on Pensions by Gregg Bienstock of Lumesis

Saturday evening, I was asked by a reader (I was surprised to learn she was a regular reader) why I am always pointing out the potential pitfalls associated with data we capture and why so harsh on the good folks in our nation’s capital. "Things are actually pretty (darn) good - a deficit reducing budget is about to be passed, unemployment is the lowest it has been in years and the housing market is abuzz. Not to mention, the stock market has been pretty good to those that have invested." I responded that I respected her view but was truly bothered by the data, as evidenced by this weekl

2013-12-16 2014 Investment Outlook: Economic Growth Should Broaden by Bob Doll of Nuveen Asset Management

For the first time in several years, we approach the new year without big clouds on the horizon. In the United States, accommodative monetary policy has healed many of the wounds from the 2008-2009 crisis.

2013-12-16 Settling In by Mark Kiesel of PIMCO

An improving outlook for U.S. housing will be constructive for consumer spending, confidence and jobs. There are many ways to invest directly and indirectly in companies that should benefit from higher housing prices, a pickup in home repairs and remodeling, and residential investment spending. We continue to favor select investments in homebuilders, building materials, appliance manufacturers, lumber, home improvement, banks, title insurance, mortgage origination and servicing, and non-Agency mortgage-backed securities.

2013-12-13 The Impact of the Great Recession and Federal Reserve Accommodation on Households by Matt Lloyd of Advisors Asset Management

The latest release of macro data came out today from the Fed Flow of Funds report generated by the Federal Reserve. We monitor this with great anticipation so as to measure possible direction changes or momentum of a current direction. There are a myriad of data points, however, a few select charts should continue to raise confidence in the direction of the economy and, at worst, a liquidity-driven backstop to maintain consumption at minimum agreeable levels.

2013-12-13 The Year of the Horse: 3 Reasons Chinese Stocks Could Gallop Ahead in 2014 by Russ Koesterich of iShares Blog

While Chinese stocks have massively underperformed their U.S. and developed market counterparts year to date, Russ explains the three reasons why he’s still bullish on China.

2013-12-13 They Bravely Chickened Out by Peter Schiff of Euro Pacific Capital

Earlier this week Congress tried to show that it is capable of tackling our chronic and dangerous debt problems. Despite the great fanfare I believe they have accomplished almost nothing. Supporters say that the budget truce created by Republican Representative Paul Ryan and Democratic Senator Patty Murray will provide the economy with badly needed certainty.

2013-12-13 Small (Cap) but Mighty by Michael McCarthy of Franklin Templeton

Despite a number of economic and political headwinds in 2013, US stocks have powered ahead, and not just the large-cap names that equity investors tend to gravitate toward during times of uncertainty. Small-cap stocks have also been looking pretty mighty overall this year. Michael McCarthy, portfolio manager for Franklin Small Cap Growth Fund, believes there are still reasons to be bullish in 2014, although careful stock selection could be even more important after 2013’s small-cap run.

2013-12-13 Where Have All the Savings Gone? by Giordano Lombardo of Pioneer Investments

The last six years have witnessed the most severe financial crisis since the end of World War II, with household earning capacity and saving ability experiencing significant changes due to the downturn in the real economies. This challenging economic situation definitely affected household saving behavior, although the impact has been different in various countries - for some, the impact on household earning capacity was more intense than others.

2013-12-13 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

No one deserved a break more than investment guys/gals (except maybe politicos). Unfortunately, Thanksgiving holiday was too "short and sweet" for many and the economic week that followed was crazy. Number after number depicted an economy on solid ground with strong confirmation from the late-week labor releases. Investors took profits throughout much of the week as the final month of the year began, but the Bulls were back in force to conclude the week.

2013-12-13 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The past two weeks were pretty quiet as the Thanksgiving holiday combined with conflicting economic data produced a stalemate on Wall Street.

2013-12-13 The Future in Focus: Relieving Labor Strains by Milton Ezrati of Lord Abbett

Demographic trends point to an expanding population of retirees and a relative shortage of working-age people. Here’s how the U.S. economy can adapt.

2013-12-13 Stanley Black & Decker: Powering Its Way Toward Fair Value by Team of F.A.S.T. Graphs

Stanley Black & Decker (SWK) is a machine tools company built on namesakes of - you guessed it - three individuals with the last names: Stanley, Black and Decker. Frederick Stanley started a hardware manufacturing company in 1843. Duncan Black and Alonzo Decker started a similar shop in 1910, becoming known for the world’s first patent for a portable power tool. In 2010 the two companies merged to form what is today Stanley Black & Decker.

2013-12-13 A New Blueprint for China\'s Development by Mark Mobius of Franklin Templeton

China’s government set out its plans for the rest of the decade in a document called "The Decision on Major Issues Concerning Comprehensively Deepening Reforms." Known as "The Decision," it emerged from the Third Plenary Session of the 18th Communist Party of China Central Committee, which took place in early November. The document set out a series of planned reforms that assigned a more central role to markets as President Xi Jinping’s administration seeks to maintain China’s enviable record of long-term growth.

2013-12-13 Glance Back...Focus Forward by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

A great market year for stocks is about to be capped off...can the run continue into 2014?

2013-12-13 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.4, down from last week’s 132.7 (adjusted from 132.8). The WLI annualized growth indicator (WLIg) to one decimal place, slipped to 2.8, down from 2.9 last week.

2013-12-13 Hedged Dividend Investing: The Best Strategy You\'ve Never Heard Of? by Robert Isbitts of Sungarden Investment Research

Our industry’s challenge: How to deal with that via creation of intelligent investment strategies that allow advisors and their clients to follow through on their desire to skirt both the bond and stock bubbles of the future, while still striving for a competitive yield for their retirement portfolios.

2013-12-12 The Fed, Inflation, and the Perfect Storm in Gold Miners by Clyde Kendzierski of Financial Solutions Group

Neither hopes of job creation nor fears of inflation (based on the massive expansion of the monetary base since late 2008) have thus far materialized. Total credit creation (i.e. money supply) during most of the last five years either shrank or barely grew despite massive growth in the monetary base. Nominal GDP (growth plus inflation) grows in response to total expansion of credit (both from the Fed and the banking system), not just the monetary base.

2013-12-12 All News is Good News by Scott Minerd of Guggenheim Partners

Financial markets have been discounting the end of tapering for months, and whether it happens in December or March is less important than the reality that the U.S. economy is recovering amid a global synchronous expansion.

2013-12-12 Stay the Course or Take an Unconstrained Approach to Bonds by Matthew Pasts of BTS Asset Management

BTS Asset Management contends that today’s bond market environment calls for an unconstrained approach to bonds with the ability to move between bond asset classes based on economic indicators and market opportunities. The potential discrepancy in results among bond asset classes may be more pronounced than we have seen in the past 30 years which creates opportunity for a more tactical approach. Now may be the time for an unconstrained approach to the bond market.

2013-12-12 AdvisorShares Active ETF Market Share Update by AdvisorShares Research of AdvisorShares

Activity for the active ETF market was fairly mild for the previous week with net assets increasing slightly higher, reaching about $14.7 billion. No active ETF products launched last week, but there was growth in the short term bond category, as well as downward movement among the global bond and foreign bond categories, which included PIMCO’s Total Return ETF as a notable decliner.

2013-12-12 Payment Industry - Follow the Money by Team of Baird Investment Management

The substantial growth in credit and debit card usage is a multi-decade trend driven by increased global consumer activity and a shift in behavior to less transactions completed by cash or check. As the buzz of the holiday season takes hold, consumers wouldn’t think twice about leaving home with just a debit or credit card in hand. The simple act of a purchase followed by swiping a plastic card occurs a staggering several hundred million times each day, with a step up in activity during the holiday season.

2013-12-12 A Budget Compromise is Reached, But Unresolved Issues Remain by Andy Friedman of The Washington Update

The agreement reached last October to raise the nation’s debt ceiling established a bipartisan committee to negotiate a budget to run the federal government in 2014 and 2015. The committee’s primary focus was to replace the next round of across-the-board "sequestration" cuts, which otherwise would significantly reduce spending on defense and domestic programs during those years.

2013-12-12 PIMCO Cyclical Outlook: Synchronized Optimism by Saumil Parikh of PIMCO

In the U.S., the abatement of fiscal policy tightening combined with steady improvements in labor market demand and higher asset valuations is likely to drive an increase in real growth. The eurozone should finally emerge from recession in 2014, and Japan is likely to continue to grow with the continued assistance of extraordinarily expansive policies. In China, external demand will likely improve, but domestic demand will likely slow somewhat.

2013-12-11 What Will 2014 Bring for The Equity Markets? by Marco Pirondini of Pioneer Investments

As the year draws to a close, investors are searching for clues as to what may be in store for the economy and markets in 2014. What have we learned from the markets in the month of November? Honestly, not very much. The scenario has not changed much in the last 30 days.

2013-12-11 AdvisorShares Weekly Market Review by AdvisorShares Research of AdvisorShares

In our last commentary, we noted the slow holiday week that did not provide us with much economic fodder. This week, the unemployment rate dropped to 7% and payrolls jumped more than expected. Third quarter GDP rose more than expected, and hit its highest mark since Q1 2012. Although the status of the U.S. budget remains up in the air, many expect Janet Yellen to maintain Chairman Bernanke’s accommodative policies. With the hectic holiday schedules nearing, it is difficult to predict what we will see this month.

2013-12-11 Year in Review: A Note from Robert Kleinschmidt by Robert Kleinschmidt of Tocqueville Asset Management

In his latest piece, Robert Kleinschmidt, President, Chief Executive Officer and Chief Investment Officer of Tocqueville Asset Management, looks back at the last year and the "remarkable" lack of impact that many economic and political events had on the markets, despite the "dire rhetoric" surrounding many of them.

2013-12-11 The Fed is Playing Hamlet to the Markets by Sam Wardwell of Pioneer Investments

To taper or not to taper-that is the question the Fed is asking itself. What’s moving the market is (it appears) the odds of Fed action. For the first half of last week, "good news was bad news" as stock and bond markets apparently interpreted better economic data as suggesting an earlier QE (Quantitative Easing) Taper. On Friday, the market apparently decided the jobs report was good enough to further reduce downside risks to the economy but not strong enough to spur the Fed to action.

2013-12-11 Fed: No More Excuses Not To Taper - Just Do It! by Gary Halbert of Halbert Wealth Management

We had some terrific economic news late last week. The 3Q GDP report and the November unemployment report were so strong that some are wondering if the data are credible, and are likely to be revised lower next month. The government reported that 3Q Gross Domestic Product jumped from 2.8% as reported last month to a whopping 3.6% in its second estimate last Thursday, well above the consensus estimate of 3.1%.

2013-12-11 Muddling Through: The \'Realpolitik\' of the Eurozone Crisis by Andrew Bosomworth of PIMCO

The long-term cost of Europe’s economic recovery is likely to challenge social tolerance and political will to achieve a fully integrated fiscal and political union. Although able to exploit the untapped potential of European treaties, the soon-to-be-elected 8th European Parliament looks more likely to continue to muddle through. We see low medium-term risk for government and corporate bonds with maturities of up to three years, but caution may be required for securities with longer maturities and lower down in the capital structure.

2013-12-11 A Week To Remember in Muni Land! Detroit and Illinois and Must Read Employment Data by Gregg Bienstock of Lumesis

What a week! Illinois passed pension legislation (I would have lost that bet) and Detroit can proceed with its bankruptcy. On the former, let’s see if the long-overdue pension fix survives legal challenges from unions and helps Chicago address its pension issue. Perhaps those contemplating the legal challenge will look to Judge Steven Rhodes’ opinion in the Detroit bankruptcy case to find that he believes pension obligations are no different than any other contractual obligation.

2013-12-11 Q3:2013 Flow-of-Funds Report - \'Tis the Season to Be Jolly by Paul Kasriel of Econtrarian, LLC

I know that being a Debbie Downer gets more face time on cable news, but after looking at the Fed’s latest Financial Accounts of the U.S. report, formerly known as the Flow-of-Funds report, I cannot contain my optimism about the economy’s prospects in the New Year.

2013-12-11 Municipal Bond Outlook - Institutional Fixed-Income Sector Report by Team of Guggenheim Partners

Volatility induced by headline events has created attractive price dislocations in the municipal bond market, which may now present the best buying opportunity for investors since late 2010.

2013-12-10 A Framework for Understanding Bond Portfolio Performance by Laurence B. Siegel (Article)

Investors are legitimately concerned that interest rates, after falling reliably for decades, are on their way up and that bond portfolio values are on their way down. Investors now seek interest-rate protection. I provide a framework for analyzing and, hopefully, predicting the returns on actively managed portfolios of bonds - a task different from analyzing the bond market itself.

2013-12-10 Best Practices for an Effective Teambuilding Exercise by Beverly Flaxington (Article)

I want to hold a teambuilding session. I don’t like to take everyone away from client calls for the day. Should we have this on a weekend? Or stay late one night? Do I include everyone, from our receptionist to senior advisors?

2013-12-10 Low Demand Will Depress Oil Prices by Patrick McVeigh (Article)

The U.S. - and indeed, the world as a whole - is approaching the threshold of peak oil demand, rather than peak supply. Prices will fall in the coming years, regardless of fluctuations in supply.

2013-12-10 Fiscal Policy and Monetary Policy - Update by Scott Brown of Raymond James

Market participants expected the November Employment Report to be the deciding factor on whether the Federal Reserve would begin to slow its rate of asset purchases this month. However, officials aren’t going to react to any one piece of data. The best argument for tapering is that it has to start sometime. However, the key factors that delayed the tapering in September and October are still with us to some extent.

2013-12-10 Christmas by Jeffrey Saut of Raymond James

Well it is official, Christmas has begun. For me it began with the private wine and dinner party at Morrell, arguably the finest wine store I have ever seen, and anyone that knows me knows I have seen a lot of wine stores! Morrell is located at 1 Rockefeller Center between 5th Avenue and 6th Avenue overlooking the Christmas tree at Rockefeller Center. I had done a gig on Bloomberg radio at Morrell last Tuesday with my friends Carol Massar and Pimm Fox and got invited to the party the next evening to watch the lighting of the Christmas tree.

2013-12-10 Best Consumed Below Zero? by Bill O'Grady, Kaisa Stucke of Confluence Investment Management

In this report, we will turn our attention to Denmark to study its decision to undertake the below-zero rate, the specifics of the situation that prompted it and the effects of the negative rate on financial conditions and the broader economy. We will then briefly look at the possibility of a below-zero rate policy for the ECB and, most importantly, the geopolitical ramifications of the decision by the world’s second largest currency block to ease into unknown consequences of negative rates to stimulate the economy.

2013-12-10 The Myth of the Most Efficient Market by Patrick O'Shaughnessy of O'Shaughnessy Asset Management

Perception of the U.S. large cap value market is that it’s the most efficient in the world, and therefore the hardest category for managers to outperform the benchmark. As a result, index funds and ETFs have been gaining dramatic market share. Our latest whitepaper debunks conventional thinking with empirically-proven factors that have significantly outperformed in the U.S. large cap space.

2013-12-09 Fed Creating More Financial Market Uncertainty by John Browne of Euro Pacific Capital

Although the U.S. stock market continues to hit new nominal highs on a nearly daily basis, the U.S. economy bumps along at a lackluster pace. This disconnect has been achieved by a massive Fed experiment in monetary stimulation.

2013-12-09 America\'s Partisan Peril by Mohamed El-Erian of Project Syndicate

Many Americans started 2013 with high hopes that congressional leaders would overcome, even if only partly, the polarization and political dysfunction that had slowed recovery. But optimism foundered over the course of 2013, while frustration soared.

2013-12-09 Improving Economic Data Imply Further Global Recovery by Bob Doll of Nuveen Asset Management

U.S. equities finished last week in barely negative territory, ending the positive streak for the market. Economic data concerning the post-government shutdown climate has improved. Employment data beat estimates and increased by 203,000 jobs in November, and the unemployment rate fell to 7.0%, also surpassing expectations.

2013-12-09 Debt Crisis Recovery: Bell Curves and Balance Sheets by John Greenwood of Invesco Blog

This three-part series examines the life cycle of a debt crisis and looks at where the US, UK and eurozone are in the recovery process. This first post explains the phases of a debt crisis. Part 2 will look at where the US stands in the deleveraging process, while Part 3 will focus on why the UK and eurozone lag the US in balance-sheet repair.

2013-12-09 Pessimists Get Desperate by Brian Wesbury, Bob Stein of First Trust Advisors

Payrolls keep growing. Economic data stays positive. The stock market makes new highs. It’s been consistent for nearly five years. And so has the pessimism. In fact, the pouting pundits of pessimism get more determined each month, trying to prove that things are really bad out there.

2013-12-09 Gauging Tapering Post November Jobs Report by Chris Maxey, Ryan Davis of Fortigent

With another month down in 2013, last week came time to dissect the latest report on employment. If the market reaction was indicative, the highly anticipated November labor report did not disappoint, sending stocks up more than 1% on Friday.

2013-12-07 Interview with Steve Forbes by John Mauldin of Millennium Wave Advisors

For whatever reason, Steve Forbes seems to bring out the passion in me. When I think about what central bank policies are doing to savers and investors, how we are screwing around with the pension system, circumventing rational market expectations because of an untested economic theory held by a relatively small number of academics, I get a little exercised. And Steve gives me the freedom to do it.

2013-12-06 Like a Shakespearean Script by Richard Bernstein of Richard Bernstein Advisors

Shakespearean plays follow a pattern. The underlying plots and storylines change from play to play, but the five-act construction is a common overlap. Market cycles tend to follow a similar pattern cycle after cycle. Like the different plots in various Shakespearean plays, the catalysts that begin and end each cycle, and the events during the cycle are always different. However, market cycles seem to follow a script and, so far, this cycle seems to be following the script almost perfectly.

2013-12-06 Vibrant Vietnam by Lydia So of Matthews Asia

I recently made my first visit to Vietnam and spent several days in Ho Chi Minh City. Considered by the investment community to be a frontier market, Vietnam has a low per capita income (approximately US$1,600), a relatively young population and less mature capital markets.

2013-12-06 To Taper Or Not To Taper? Digging In To Today\'s Employment Report by Team of GaveKal Capital

Today’s employment and personal income and outlays reports may be strong enough for the Fed to begin tapering later this month. November employment came in at 203k jobs and the unemployment report dipped to a 5-year low (7%). The net revisions for September and October were also 8k higher.

2013-12-06 Gold: Currency or Commodity? by Anthony Wile of J.P. Morgan Funds

Despite gold traditionally serving as a safe haven asset, investors should be wary of fear-inflated investments given the potential for improving global growth.

2013-12-06 Weekly Economic Commentary by Team of Northern Trust

The U.S. employment report puts taper onto the table. Don’t expect further rate cuts from the ECB or the Fed. Auto sales have been a bright spot amid sluggish consumer spending.

2013-12-06 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.8, up from last week’s 132.3. The WLI annualized growth indicator (WLIg) to one decimal place, rose to 2.9, up from 2.6 last week.

2013-12-06 Did the Government Shutdown Help the Economy? by Frank Holmes of U.S. Global Investors

Take the government shutdown in October, when the House and Senate fought over the debt ceiling. Economic data wasn’t released, services were halted, national parks were closed, and "non-essential government workers were told to stay home. As a result, GDP was expected to collapse. Yet, data released this week reveal a different, stronger image of the U.S. economy. I think Shakespeare would deem the media’s fear mongering tactics as Much Ado About Nothing.

2013-12-06 Going Against the Grain, Again by Cindy Sweeting of Franklin Templeton

Going against the grain is never easy, particularly when it comes to investing. But if you don’t take the risk of moving out of the crowd and taking a different path, you can’t really stand out. Templeton has focused on bottom-up value investing, which often puts it at odds with the broader market consensus. We go back in history to describe how the strategy has persevered through different market cycles, and why the Templeton team has been going against the grain by investing in Europe at a time when other investors had lost faith.

2013-12-05 A Synchronous Expansion by Scott Minerd of Guggenheim Partners

Major developed economies are all contributing to global economic growth, and this improving fundamental picture, coupled with ongoing monetary accommodation, bode well for risk assets.

2013-12-05 10 for \'14 by Richard Bernstein of Richard Bernstein Advisors

Each December we publish a list of investment themes that we feel are critical for the coming year. We continue to believe the US stock market will continue its run through one of the largest bull markets of our careers. Our positive outlook extends to the following areas: US Equities, Japanese Equities, European small cap stocks, high yield municipals.

2013-12-05 Another Step Forward for US DC Plans: Managing Volatility by Daniel Loewy of AllianceBernstein

We’re seeing more US defined contribution (DC) plan sponsors looking at a variety of ways to help their participants manage volatility-and the accompanying anxiety and doubts that can often push participants to abandon their long-term investing goals.

2013-12-05 Running Out of Time by Jeffrey Saut of Raymond James

Well, so far the Federal Reserve is winning out over my timing models that continue to suggest caution should be the preferred strategy in the short-term; and last week that strategy was wrong footed as the D-J Industrial Average notched another new all-time high.

2013-12-05 Gimme Three Steps...on the Path of Deleveraging by Liz Ann Sonders of Charles Schwab

Debt (and Fed policy) continue to be my biggest longer-term concerns; even with the progress made over the past few years by the household sector. The budget deficit is plunging; and that’s great news, but more is needed to bring overall debt growth down to more reasonable levels. The solutions stool is three-legged: spending, revenues...and growth!

2013-12-05 Response to Gulliver Travails\' Comment on \"Unless the Fed Goes Cold Turkey...\" by Paul Kasriel of Econtrarian, LLC

Notice that my definition of TOTAL thin-air credit is the SUM of Fed credit and depository institution (bank) credit. This is important when analyzing the effect of a Fed purchase of securities FROM the banking system. So, let’s start with that scenario -- the Fed purchases $X of securities from the banking system.

2013-12-05 No Silver Bullets in Investing by James Montier of GMO

In a new white paper today, James Montier of GMO’s asset allocation team reviews recent "innovation in our industry." He argues, "one of the myths perpetuated by our industry is that there are lots of ways to generate good long-run real returns, but we believe there is really only one: buying cheap assets."

2013-12-05 US Corporate Profit Margins Increase Again In The 3Q by Team of GaveKal Capital

US corporate profit margins are at their second highest level ever at 10.14%. The highest level was reached in the 4Q11 when profit margins spiked to 10.27%.

2013-12-04 Why Investing in High Quality Companies is More Important Today than Ever by Kendall Anderson of Anderson Griggs

One of the first rules a new financial advisor learns is that success in the business has nothing to do with how well your clients do in creating or maintaining wealth. Success is measured by how much wealth the advisor creates for him or herself. The same rule extends beyond the local advisor to the great halls of institutional management.

2013-12-04 ACA: The Importance of Being Transparent by Harlan Sonderling of Columbia Management

President James A. Garfield survived an assassin’s bullet in 1881, only to die several months later of complications from the infection that developed from his doctors’ probing his healing wound with their unclean hands and instruments, contrary to the developing understanding of the need for sanitary medical treatment. In effect, the President was a victim of his doctors’ inattention to or ignorance of medical best practices. As well, one can’t help inferring that the President’s doctors were among the best paid in the nation, regardless of their disastrous outco

2013-12-04 What\'s the Problem With Advanced Economies? by Kenneth Rogoff of Project Syndicate

Is today’s slow growth in advanced economies a continuation of long-term secular decline, or does it reflect the normal aftermath of a deep systemic financial crisis? Fortunately, we do not need to answer that question definitively in order to boost the pace of economic recovery.

2013-12-04 The Eastern Lust for Gold by Peter Schiff of Euro Pacific Precious Metals

Having replaced savings with debt on both the national and individual levels, I think it’s well past time for Westerners to take a few lessons from our creditors in the East. Many Americans consider gold a "barbarous relic," but in Asia, the yellow metal remains the bedrock of individual savings plans. This means that either greater than half of the world’s population are barbarians, or they’ve held onto an important tradition that our culture has forgotten.

2013-12-04 Patience in Asia by Mark Mobius of Franklin Templeton

Investing in a multitude of markets and companies as we do within the Templeton Emerging Markets Group means that at any given point in time it may appear to some that they are underperforming or outperforming any particular benchmark index or market. Such is the nature of global financial markets. Of course, we’d like all of our investments to go straight up, but at the same time continually like to find new bargains for investors.

2013-12-04 An Agenda to Save the Euro by Joseph Stiglitz of Project Syndicate

It has been three years since the outbreak of the euro crisis, and only an inveterate optimist would say that the worst is definitely over. It is not, and it won’t be unless and until the eurozone’s structure is fundamentally reformed.

2013-12-04 Emerging Asia Pacific: Regional Economic Review - Q3 2013 by Team of Thomas White International

The second half of 2013 has posed significant challenges to growth in major Emerging Asia Pacific economies. Almost all emerging Asia Pacific economies showed signs of strain arising from stubborn inflation, higher interest rates, slower consumer spending and lukewarm exports.

2013-12-04 US Economic Data Round-Up by Team of GaveKal Capital

ADP payroll data surprised to the upside today (215k vs 185k expected). It was the highest reading so far this year. Perhaps most encouragingly the gain was lead by small businesses.

2013-12-04 ProVise Bullets by Ray Ferrara of ProVise Management Group

For the 7th year in a row, the US Postal Service lost money. After setting a record loss last year of $15.9 billion, it pared the losses to $5 billion in the current year. The USPS showed its first growth in revenue since 2008, rising 1.2% to $66 billion. In no surprise, the USPS asked Congress for help. Wonder how that is going to work out for them?

2013-12-04 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

And stocks just keep rolling along. November ended with another bang as the Blue Chips climbed 3.5% for the month and The Dow Jones extended its weekly winning streak to eight. But did anyone even notice? Happy Thanksgivukkah.

2013-12-04 Dramatically Dropping Deficits? Keep Dreaming by Milton Ezrati of Lord Abbett

A smaller U.S. budget shortfall for fiscal 2013 will be largely due to transitory factors.

2013-12-03 Jeremy Siegel - The Market is 10% to 15% Undervalued by Robert Huebscher (Article)

According to Wharton’s Jeremy Siegel, ’the fair market value for the stocks today is 10% to 15% higher, and that might even be on the conservative side.’

2013-12-03 What Matters More When Investing: A Good Company or Good Price? by John Alberg and Michael Seckler (Article)

Which approach will serve you best in the uncertain periods ahead - investing in the best companies, or finding the lowest priced opportunities? How did value-oriented investment approaches, such as Joel Greenblatt’s "magic formula," perform when price-to-earnings multiples compressed in the past? A recent study we completed yields some perspective on those two questions.

2013-12-03 Looking Out on the Horizon for Equities by Bob Doll of Nuveen Asset Management

U.S. equities finished higher for an eighth consecutive week as the S&P 500 increased 0.1%, representing the longest positive streak since 2004. Inertia may have carried markets forward in a relatively quiet trading week without major headlines. Retail news appeared fairly positive in anticipation of a strong start to the Thanksgiving shopping weekend. Economic data was mixed.

2013-12-03 Philly Fed, the Geo Score and A Housing Stat Making Some Blue by Gregg Bienstock of Lumesis

Following a wonderful Thanksgiving holiday that involved way too much food, I found myself doing all I could to avoid the Black Friday masses and succeeded until I took to the highway for a journey to Albany, NY - they were leaving the malls and, perhaps it was exhaustion from their day of shopping, but the traffic and driving skills left something to be desired. Those weary shoppers amassed along I-87 brought to mind the question of how healthy (or not so healthy) is the economy?

2013-12-03 Turning Over Rocks by Herbert Abramson, Randall Abramson of Trapeze Asset Management

The S&P 500 is at a record high and we believe the markets generally are fully valued. Corporate revenue growth is anemic, profit margins are stretched, and the prospect of earnings rising meaningfully is not high. And, the outlook for the U.S. and global economy is still uncertain. Market psychology is at a level suggesting the market is overbought. Margin debt is at record levels and the current popularity of stocks by retail investors at market highs is in itself a red flag.

2013-12-03 Secular Bull or Secular Bear? by Leo Cesna of Relevant Investments

Applying statistical control limits to Dr. Shiller’s CAPE Index reveals where the S&P 500 is likely headed.

2013-12-03 Is the Fed Increasingly Monetizing Government Debt? by Axel Merk of Merk Investments

Fed Chair Bernanke vehemently denies Fed "monetizes the debt," but our research shows the Fed may be increasingly doing so. We explain why and what the implications may be for the dollar, gold and currencies.

2013-12-03 On the Wings of an Eagle by William Gross of PIMCO

I’ve always liked Jack Bogle, although I’ve never met him. He’s got heart, but as he’s probably joked a thousand times by now, it’s someone else’s; a 1996 transplant being the LOL explanation. He’s also got a lot of investment common sense, recognizing decades ago that investment managers in composite couldn’t outperform the market; in fact, their alpha would be negative after fees and transaction costs were factored in.

2013-12-03 Nasdaq 4000: Stocks are Not Behaving Like It\'s 1999 by Russ Koesterich of iShares Blog

The Nasdaq Composite made news last week, moving past the 4,000 mark for the first time in 13 years. But, according to Russ, the current trip above the 4,000 level looks quite different from what was happening in 1999 and 2000.

2013-12-03 From the Taj Mahal to Westminster Abbey: Notes from a Global Investor by Frank Holmes of U.S. Global Investors

I recently returned from India, a nation where an incredible 600 million people are under the age of 25. That’s nearly double the entire population of the U.S.!

2013-12-03 High Quality and Time-Horizon Arbitrage by Bill Smead of Smead Capital Management

At Smead Capital Management, we love to acknowledge financial journalists who really demonstrate an understanding of the underlying truths associated with high-quality and long-duration common stock investing.

2013-12-02 Economic Cycle Update: Evidence Suggesting Slow Growth Reigns by Team of Manning & Napier

Since the start of the current recovery, we have made the case that the economy would grow at a slower pace compared to most other expansions in recent memory. The consumer factored prominently in this outlook as they embarked on a long overdue period of balance sheet repair. Corporations would have little reason to invest if consumer growth was weak and large fiscal deficits would limit the ability of the federal government to contribute to growth.

2013-12-02 Investing in China? What You Should Know About Gaining Access to the Markets by Ted Samulowitz, Graham Day of Invesco Blog

Investors with exposure to China and those interested in gaining a foot into the country received some good news last month when it was announced that China’s GDP grew by 7.8% in the third quarter. The news was a sigh of relief for investors as China’s economy appears to have avoided the hard landing economists and investors had feared.

2013-11-30 Arsonists Running the Fire Brigade by John Mauldin of Millennium Wave Advisors

In the old days, central banks raised or lowered interest rates if they wanted to tighten or loosen monetary policy. In a Code Red world everything is more difficult. Policies like ZIRP, QE, LSAPs, and currency wars are immensely more complicated. Knowing how much money to print and when to undo Code Red policies will require wisdom and foresight. Putting such policies into practice is easy, almost like squeezing toothpaste. But unwinding them will be like putting the toothpaste back in the tube.

2013-11-29 Back to Housing Bubbles by Nouriel Roubini of Project Syndicate

What we are witnessing in many countries looks like a slow-motion replay of the last housing-market train wreck. And, like last time, the bigger the bubbles become, the nastier the collision with reality will be.

2013-11-29 ING Fixed Income Perspectives - November 2013 by Christine Hurtsellers and Matt Toms of ING Investement Management

Given rich valuations globally, we remain broadly neutral on interest rate risk with the exception of Japan.

2013-11-28 The Race is On by Howard Marks of Oaktree Capital

There’s a race to the bottom going on, reflecting a widespread reduction in the level of prudence on the part of investors and capital providers. No one can prove at this point that those who participate will be punished, or that their long-run performance won’t exceed that of the naysayers. But that is the usual pattern.

2013-11-28 U.S. Housing Sector - Losing Ground? by Carl Tannenbaum of Northern Trust

The powerful momentum that drove the American housing sector forward in the past three years may be dissipating. And it is clear that higher mortgage rates have a pronounced impact on demand. The Federal Reserve will therefore have to proceed with caution as it considers when and how to reduce its asset purchases.

2013-11-28 Five Reasons Inflation Is Still Missing by Chun Wang of Leuthold Weeden Capital Management

Apart from a couple of market-oriented drivers that could reverse course on a short-term basis, we are not seeing convincing evidence of an imminent pick-up in inflation. Let us be clear. There is most definitely inflation in the financial markets, but that does not seem to benefit the average person in the U.S. The liquidity injected by various central banks went mostly into the financial markets first and foremost; only a small fraction of it trickled down to the average person. That is why all this money printing has not been reflected in various inflation measures.

2013-11-28 Bringing the Chinese Consumer to Life by Stephen Roach of Project Syndicate

There is good reason to believe that China’s recently completed Third Plenum will come to be regarded as a pivotal point in the country’s development. At long last, China’s senior leadership has endorsed a raft of reforms that could impel the economy’s shift from reliance on exports to consumption-led growth.

2013-11-27 Passing the Wall of Worry by Scott Minerd of Guggenheim Partners

As this bull market climbs its "wall of worry," we can see its underlying strength. Valuation concerns and the risk of a major correction appear overblown, as we should see a continued rebound in economic fundamentals over the coming months.

2013-11-27 Housing Outlook 2014: Holding Our Breath by John Burns of John Burns Real Estate Consulting

As a kid, I remember the Apollo lunar module losing all communication for about one hour as it orbited around the back of the moon. We all held our breath for that hour, waiting to hear that all was okay.

2013-11-27 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

This has been another quiet week for stocks which closed at their highs for the year. The Dow Jones Industrial Average even closed above 16,000 for the 1st time.

2013-11-27 Emerging Markets Equity Commentary - October 2013 by Team of Thomas White International

Equities Gain as Currencies Remain Stable and Data Trends Show Positive Signs.

2013-11-27 Global Economic Overview - October 2013 by Team of Thomas White International

Global economic trends continue to see gradual improvement, though the progress has become less steady. The developed economies remain the major drivers of global growth, but data from some of the regions have not met expectations.

2013-11-27 International Equity Commentary - October 2013 by Team of Thomas White International

Equities Advance as Global Manufacturing and Services Activity Gains Momentum

2013-11-27 The Future in Focus: Our Demographic Destiny by Milton Ezrati of Lord Abbett

In the first of a series on population trends that will shape the U.S. economy, Milton Ezrati looks at the policy challenges posed by an aging America.

2013-11-26 Why a Shrinking Deficit Means Lower Earnings by Robert Huebscher (Article)

Proponents of tax increases or government spending cutbacks will have to reckon with something they never anticipated: depressed corporate earnings that will reduce equity prices. As our government deficit shrinks - whether through sequestration or by any other means - so will corporate profits, the primary driver of equity prices.

2013-11-26 Elections in Chile by Bill O'Grady of Confluence Investment Management

On November 17, Chileans went to the polls to vote on a new president and parliament. In this report, we offer short biographies of the two Chilean presidential candidates, focusing mostly on Michelle Bachelet. From there, we will provide a short history of Chile, primarily to highlight the tensions between the forces of liberalization and reaction. An examination of the Allende-Pinochet period will detail the factors that have affected Chile’s political structure over the past five decades. As always, we will conclude with market ramifications.

2013-11-26 While You Were Sleeping: Asian Developments Loom for Financial Markets by Chris Maxey, Ryan Davis of Fortigent

Amid all the Fed talk dominating airwaves and headlines, a few key developments occurred overseas last week that could shape financial markets significantly in the quarters ahead.

2013-11-26 Wal-Mart: Fairly Valued Retail Powerhouse by Team of F.A.S.T. Graphs

This Bentonville, AR based mega-retailer perennially ranks amongst the top of the Fortune 500 list and likely needs no introduction. In lieu of a business summary, we thought it might be interesting to highlight some prominent statistics. For instance, every week more than 245 million customers visit Wal-Mart’s (WMT) 11,000 stores under 69 banners in 27 different countries. Last year alone the company had sales of about $466 billion while employing 2.2 million associates.

2013-11-26 For Whom the Nobel Tolls: Efficient Market or Irrational Exuberance? by Francois Sicart of Tocqueville Asset Management

In his latest essay, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at the work of two of the recent recipients of the Nobel Prize in Economic Science. While the work of Eugene Fama and Robert Shiller might at first seem to be in direct conflict, Sicart explores how simultaneously recognizing Fama’s "efficient market hypothesis" and Shiller’s work on investor psychology may be "less of a contradiction than meets the eye."

2013-11-25 Recent Economic Trends Help Make Korea a Hidden Gem in Asia by Paul Chan and Simon Jeong of Invesco Blog

After more than two decades of financial setbacks, recent macroeconomic data is helping Korea overcome the negative economic stigma associated with its economy and equity markets.

2013-11-25 Talkin\' Baseball and the Game (Data Really) of the Week by Gregg Bienstock of Lumesis

A lot to cover as we head into the Thanksgiving holiday. Last week saw some very interesting data - some of which I will get to and the balance of which I encourage you to explore (see the last page for "Data Updates"). Before I get to the data of the week, I take a look at baseball - well, not really. I offer some perspective around the Braves picking up and moving from Atlanta to nearby Cobb County.

2013-11-25 An Open Letter to the FOMC: Recognizing the Valuation Bubble in Equities by John Hussman of Hussman Funds

The Fed has done enough, and perhaps dangerously more than enough. The prospect of dismal investment returns in equities is an outcome that is largely baked-in-the-cake. The only question is how much worse the outcomes will be as a result of Fed policy that has few economic mechanisms other than to encourage speculative behavior.

2013-11-25 Equities Extend Gains for the Seventh Consecutive Week by Bob Doll of Nuveen Asset Management

U.S. equities finished higher again last week as the S&P 500 increased 0.4%. The Fed continued to dominate headlines, with heightened emphasis on the distinction between tapering and tightening. Bubble speculation continued to receive attention in the press, while many articles refuted such concerns. The financial sector performed well, led by banks.

2013-11-25 Permanently Depressed? by Scott Brown of Raymond James

One of the main economic debates of the last few years has been whether weakness is cyclical or structural. If the downturn is due to a temporary (albeit, severe) shortfall in domestic demand, then growth should pick up sharply at some point as the economy returns to its potential. If it’s structural, fiscal and monetary policy can do little to help. Opinions differ, but while the consensus may see the sluggish economy as reflecting mostly cyclical forces, cyclical weakness is more likely to become structural the longer it lasts.

2013-11-25 Unless the Fed Goes Cold Turkey on Us, Expect a Bountiful Economic Harvest for Thanksgiving 2014 by Paul Kasriel of Econtrarian, LLC

If your Thanksgiving family dinner conversation is anything like mine this Thursday, it will be dominated by a discussion of how the U.S. economy and its financial markets will be behaving after nearly a year of Dr. Janet Yellen at the helm of the Fed. Well, I am going to give my family an advance copy of what I plan to say so that we can just concentrate on willing a Packers victory over the Lions. As a preview, I am bullish about what things will look like by Turkey Day 2014 even if Chairwoman Yellen becomes a little hawkish. (Perhaps too cute with the animal references?)

2013-11-25 Why It\'s (a Little) Too Quiet on the Market Front by Russ Koesterich of iShares Blog

Stock market volatility remains unusually low. While this is partially justified by loose credit conditions and strong market momentum, the drop in volatility looks exaggerated and suggests investors are becoming too complacent.

2013-11-24 Game of Thrones - European Style by John Mauldin of Millennium Wave Advisors

The Eurozone crisis is not over, and it will not end quickly or soon. Even if it seems to unfold in slow motion - like the slow build-up in a Game of Thrones storyline to violent internecine clashes followed by more slow plot developments but never any resolution, the Eurozone debacle has never really gone away. The structural imbalances have still not been fixed; politicians and central bankers have still not agreed to solve major fiscal problems; the overall economy still disintegrates; unemployment is staggeringly high in some countries and still rising; and the people are growing restless.

2013-11-22 What is the Current Market Reality? by Giordano Lombardo of Pioneer Investments

At this year’s Global Investment Forum, the discussion among Pioneer investment professionals was generally positive. Of course, everyone was conscious of the current market reality: that the major force behind recent positive, though benign, market trends is the unprecedented creation of liquidity and extremely loose stance of monetary policies around the world. Monetary policy alone cannot be the only conduit to a new economic model of income growth and job creation.

2013-11-22 Dividend Season Scorecard by Don Taylor of Franklin Templeton

As consumers gear up for the upcoming holiday shopping season, many investors in individual equities are eagerly anticipating another season that, instead of draining their wallets, might actually fatten them-dividend season. Don Taylor, portfolio manager of Franklin Rising Dividends Fund, is on the lookout for companies which not only have a track record of paying regular dividends, but increasing them. Here are some of Taylor’s thoughts on the early dividend season scorecard.

2013-11-22 Shifting Global Fortunes by Mark Mobius of Franklin Templeton

Most investors, particularly those who live in developed markets, probably aren’t aware of the influence emerging markets have on the global economy. I’m not just talking about China or just about governments. More and more large corporations are headquartered in emerging markets, a trend that I expect to continue. In addition, more of those companies that are located in emerging markets are also joining the ranks of the top companies in the world. In fact, some might be surprised to hear that some of the world’s largest initial public offerings (IPOs) have been in emerging m

2013-11-22 The Big Four Economic Indicators: Real Retail Sales by Doug Short of Advisor Perspectives (dshort.com)

The underlying sales data were stronger than expected, and the disinflationary October headline CPI boosted the number higher. in light of the general pessimism over the government shutdown and congressional face-off on debt ceiling, the October numbers are indeed surprising.

2013-11-22 Weekly Economic Commentary by Carl Tannenbaum, Asha Bangalore of Northern Trust

The world needs to do more to stimulate spending. Moderate gains are seen for U.S. holiday sales. The Federal Reserve may change its policy mix.

2013-11-22 Understanding the Rise of China by Frank Holmes of U.S. Global Investors

If the sweeping economic reforms planned by Chinese leaders during the Third Plenum can be our guide, it looks to be a promising decade for global investors. Details released this week confirmed President Xi Jinping’s concerted efforts to move China toward a market-based economy that mirrors the West.

2013-11-22 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.2, up from last week’s 131.0 (revised from 131.1). The WLI annualized growth indicator (WLIg) to one decimal place, rose to 2.4, up from 2.2 last week.

2013-11-21 Time to Be Bullish on Europe by Raul Elizalde of Path Financial

For the last four years US stocks outperformed European equities (and much of the world outside the US) by a large margin. Investors may conclude that investing abroad, even in the name of diversification, is nothing but a waste. But this may be a mistake. The very wide gap between US and European stocks seems overdone. US stocks have climbed to unprecedented and precarious levels while Europe has improved on many fronts without much effect on equity prices. This could be the time to diversify away from US stocks, and Europe seems to be the appropriate choice.

2013-11-21 Looking Beyond Inventories by Team of Northern Trust

Inventories have the habit of offering surprises in reports of real gross domestic product (GDP). The third quarter GDP report was one such occurrence, with inventories making an unexpectedly hefty contribution. A reversal of this event is most likely to influence the headline GDP number in the final three months of the year.

2013-11-21 The Fed and the Economy: “Don't Shoot Until You See the Whites of Their Eyes” by Scott Minerd of Guggenheim Partners

The Federal Reserve has started to highlight “forward guidance” as a way to keep interest rates lower for longer and get the exhausted hamster off the treadmill of quantitative easing. We still think tapering remains farther off than most investors expect.

2013-11-21 An Update on the Affordable Care Act by Harlan Sonderling of Columbia Management

Regardless of one’s political views, recall that the Affordable Care Act (ACA) passed in early 2010 was a draft House bill approved in late 2009 as a basis for reconciliation with an expected Senate bill. The law was amended only slightly in 2010, and its regulatory and operating deficiencies have become apparent with the troubled launch last month of the federal and state health insurance exchanges, a topic we will address next week.

2013-11-21 The Missing Ingredient of the Economic Recovery (Hint: It's Not Jobs) by Russ Koesterich of iShares Blog

Despite an improving labor market, household spending isn’t picking up enough to fuel a faster U.S. recovery. This missing ingredient of the economic recovery is to blame, says Russ.

2013-11-21 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

Up, up, and away. Stocks surged for the sixth straight week, the S&P 500’s longest such streak since February 2013, as institutional investors welcomed remarked from the future Fed Chair (?) and "mom and pops" finally decided to join in the fun (better late than never). Suddenly Dow 16k, Nasdaq 4k, and, heck, even S&P 2k are well within reach. What financial debacle?

2013-11-21 Developed Asia Pacific: Regional Economic Review Q3 2013 by Team of Thomas White International

Developed Asia Pacific economies were back on their feet during the second quarter of 2013 as economic growth gained momentum, inflation fell mildly and exports climbed strongly. Most developed countries in the region such as Japan, Australia, and New Zealand reported a sharp positive swing in consumer and business confidence. Predominantly expansionary monetary and fiscal policies also helped keep the pace of economic recovery.

2013-11-21 Some Small-Caps Are More Global Than Others by Francis Gannon of The Royce Funds

How much of a contribution have overseas revenues made to this year’s dynamic domestic small-cap rally? Part of the answer lies in where portfolios invest and where they do not. Portfolio Manager and Principal Francis Gannon notes the emerging strength shown by those more economically sensitive sectors that are closely tied to global economic activity.

2013-11-21 Two Nobel Laureates...Two Tales of Value by Vitali Kalesnik of Research Affiliates

How can you build a better value stock portfolio? The key is discerning whether the value premium stems from mispricing or risk.

2013-11-21 US Stocks for a Baby Boom by Bill Smead of Smead Capital Management

As contrarians, we at Smead Capital Management frequently get questions about stocks like Gannett (GCI), Bank of America (BAC) and eBay (EBAY). To understand how excited we are to own these common stocks you need to understand how a long-duration common stock portfolio would benefit from the coming baby boom in the developed world. Thanks to wonderful research from The Bank Credit Analyst (BCA), we can understand the demographics of developed nations like the US. BCA concluded that a "baby boom" is coming in the US and in other developed nations.

2013-11-20 Entrepreneurship in Asia by Jerry Shih of Matthews Asia

Using Silicon Valley as a yardstick to measure the success of Asia’s entrepreneurs is an interesting exercise. But it offers little insight into the development of more creative processes in Asia. Many policymakers in the region have declared innovation to be a national, strategic prioritycreating policies aimed at spurring growth to increase R&D expenditure, attract knowledge-intensive foreign direct investment and building more skilled labor pools. This month, Jerry Shih, CFA, takes a look at what changes are occurring around Asia to build more robust start-up ecosystems.

2013-11-20 Yellen's Testimony Not Surprising: Fed Has More Work to Do by Sam Wardwell of Pioneer Investments

Janet Yellen’s Senate testimony in last week’s confirmation hearings was very dovish and offered no real surprises. She did not signal or hint at any change in Fed policy (it was a confirmation hearing), but suggested that the best way to achieve an exit from unconventional policy is to deliver a stronger recovery . . . and the Fed has "more work to do" to support that recovery. The risk that she will not be confirmed is considered negligible.

2013-11-20 Valuing Quality by Bhavik Kothari of Diamond Hill Investments

As industry specialists, our analysts make key assumptions when we value a company, which are based on our in-depth research of a company’s future prospects. One of the most important assumptions we make is the multiple applied to future earnings to derive the terminal value of a company at the end of our explicit forecast period. The terminal multiple is a critical assumption because it typically accounts for a significant portion of our overall value and it captures a host of assumptions about the quality of the firm such as return on capital and future growth prospects.

2013-11-20 The Disinflationary Developed World: 2 Investment Implications by Russ Koesterich of iShares Blog

Inflation remains close to historic lows, not just in the United States but also in other large developed markets. Russ explains why this is the case and what it means for investors (hint: low-for-longer rates and another reason to consider underweighting Treasury-Inflation Protected Securities (TIPS)).

2013-11-20 Yellen: “Farther To Go” by Scott Brown of Raymond James

Janet Yellen gave a balanced assessment of how monetary policy will be conducted during her tenure as Fed chair. However, the financial markets perceived a “dovish” tilt. She stressed that conditions in the labor market are still far from normal and noted that inflation has been running below the Fed’s goal of 2% “and is expected to do so for some time.” However, Yellen noted that there were risks of removing support too late as well as too soon. QE3 can’t go on forever.

2013-11-19 Asset Class Allocation and Portfolios: Critique and Complication by Adam Jared Apt (Article)

In Part 1 of this essay, I explained that for asset class allocation to become an investment practice, it required a foundation of theory. And Modern Portfolio Theory was that foundation. But today, most financial journalists and investment advisors who proffer advice centered on asset class allocation are—if I may judge from their writings—oblivious of this. And why shouldn’t they be? Theory is abstract and difficult to apprehend.

2013-11-19 New Research on How Much Clients can Spend in Retirement by Wade Pfau (Article)

A major problem remains unsolved in the discipline of financial planning: How should clients adjust their spending patterns in response to changes in the value of their retirement portfolios? The original research on this topic was based on a fixed percentage of assets, adjusted for inflation. Numerous refinements to that model have been proposed, and I will look at how the updated models can help clients maintain their desired standard of living without depleting their assets.

2013-11-19 Research from Yale on Commodities by Robert Huebscher (Article)

Many would consider the practice of placing assets in a commodity fund to be speculation rather than investing. That perception was amplified by a recent Bloomberg article, which reported the dismal performance of many managed-futures funds and commodity-trading advisors (CTAs). Contrary to that image, Geert Rouwenhorst, a Yale University professor, claims he has found a way to construct a commodity-based fund that earns a significant premium over inflation.

2013-11-19 The Quality that Predicts Success by Dan Richards (Article)

What predicts the chances that a new member of your team will succeed?

2013-11-19 Letters to the Editor by Various (Article)

A reader responds to Robert Huebscher’s article, Reflections on a Week in Cuba, which appeared last week, and a reader responds, to Bob Veres’ article, Why Deficits Don’t Matter, which appeared on October 29.

2013-11-19 Howard Marks: Equities are Under-owned and Un-loved by Robert Huebscher (Article)

According to Oaktree’s Howard Marks, U.S. equities are ’under-owned and un-loved, and I like to buy assets like that.’

2013-11-19 Where Will the Holiday Shopping Season Lead Us This Year? by Chris Maxey, Ryan Davis of Fortigent

The unofficial start to the holiday shopping season kicks off in a few short days. Economic uncertainty abounds, raising fears that consumers will pull back from spending, but some positive developments suggest consumers will be just fine.

2013-11-19 Breaking News! U.S. Equity Market Overvalued! by Ben Inker of GMO

In GMO’s quarterly letter to institutional clients today, co-head of asset allocation Ben Inker outlines the reasoning behind GMO implementing a new forecast methodology for the U.S. stock market. While the new methodology has slightly increased GMO’s seven-year forecast for U.S. equity returns, Ben notes, "The basic point for us remains the same -- the U.S. stock market is trading at levels that do not seem capable of supporting the type of returns that investors have gotten used to receiving from equities."

2013-11-19 Ignoble Prizes and Appointments by Jeremy Grantham of GMO

Chief investment strategist Jeremy Grantham comments on this year’s Nobel Prize in economics and "the most laughable of all assumption-based theories, the Efficient Market Hypothesis"; candidates to succeed Chairman Bernanke at the Fed; the impact of commodity price rises and the housing bubble in the crash of 2008; and prospects for the U.S. equity market.

2013-11-19 France and the Iranian Negotiations by Bill O'Grady of Confluence Investment Management

Earlier this month, negotiations between Iran and the P5+1 failed to reach an agreement despite great hopes that one was near. In this report, we will examine the reasons behind French objections to a nuclear deal with Iran. We will begin with an examination of France’s relations with the Middle East, focusing on its relations with Israel. Using this history as a guide, we will analyze why the French scotched the potential agreement. A short discussion will follow of the impact of France’s objection on the evolution of U.S. policy with Iran. As always, we conclude with market ramif

2013-11-18 Under the Spotlight, Pensions and “Damn it Janet” by Gregg Bienstock of Lumesis

Recently, I spoke on a panel regarding the State of Illinois (our panel literally “Under the Spotlight”). Our panel touched on many topics affecting the State but, when all was said and done, it seemed that the panel uniformly recognized that Illinois needed to do something about their pension problem (we had an interesting discussion about one party rule and speculated as to why they can’t seem to get anything done on pension reform can you say re-election).

2013-11-18 Two Investments to Consider when You're Coming off the Sidelines by Russ Koesterich of iShares Blog

For investors on the sidelines of the equity market, Russ offers his take on which market segments to consider now and which to remain cautious of.

2013-11-18 Chumps, Champs, and Bamboo by John Hussman of Hussman Funds

At bull market peaks, it often seems that the market is simply headed higher with no end in sight, and “buy-and-hold” appears superior to every alternative. Meanwhile, the reputation of value-conscious investors and risk-managers goes from “champ” to “chump.” Then, the bamboo tree suddenly sprouts, and the entire lag is often replaced by outperformance in less than a year. Only after the fact does the reputation of risk-managed strategies surge from “chump” to “champ.”

2013-11-18 Willing a Fiscal Win by Christine Hurtsellers, Matt Toms of ING Investment Management

Why can’t we just will our desired political outcomes the way the most fervent seemingly can impact ballgames? After watching Fenway Park packed to the rafters with Red Sox faithful exercising their sovereign and ethereal right to psychically encourage baseballs out of the yard and knowing that millions of others in Red Sox nation were doing the same in front of their televisions we’re left wondering if the fans of Team U.S.A. can apply a little of that classic Carlton Fisk mojo a few hundred miles down I-95.

2013-11-18 The Muddle-Through Economy and Grind-Higher Equity Market Continue by Bob Doll of Nuveen Asset Management

U.S. equities finished higher last week as the S&P 500 and Dow Jones Industrial Average closed at record highs, marking the sixth straight week of advances.1 Several macroeconomic themes are important as third quarter earnings season comes to an end. Fed Chairman nominee Janet Yellen spoke before the Senate in support of current monetary policy and suggested a similar path under her leadership. Economic data was mixed for the week, and any economic weakness continues to be perceived as supporting a delay in tapering. In turn, this can be seen as positive for equities.

2013-11-18 Are You Managing Volatility or Is It Managing You? by Timothy Atwill, Richard Bernstein, Eric Stein, Bradford Godfrey, Chris Sunderland of Eaton Vance

Market volatility has caused investors to make emotional decisions, resulting in performance that may have hindered their ability to reach investment goals. Eaton Vance believes that sound investment strategy should provide investors with tools for managing volatility, so the market’s inevitable fluctuations may work on their behalf. We discuss four approaches to managing volatility: reducing, navigating, harnessing and monetizing.

2013-11-17 The Unintended Consequences of ZIRP by John Mauldin of Millennium Wave Advisors

Two recently released papers make an intellectual and theoretical case for an extended period of very low interest rates and, in combination with other papers from both inside and outside the Fed from heavyweight economists, make a strong case for beginning to taper sooner rather than later, but for accompanying that tapering with a commitment to an even more protracted period of ZIRP. We are going analyze these papers, as they are critical to understanding the future direction of Federal Reserve policy. Secondly, we’ll look at some of the unintended consequences of long-term ZIRP.

2013-11-16 Gliding to Year End? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Although we remain optimistic, the path to year-end may have some potholes. US stocks are among the more attractive investment options available, but there is the risk of a pullback in the near term should sentiment conditions continue to be elevated. There is also a risk of a melt-up in stocks given recent momentum. Europe is dealing with falling inflation and weak growth, although expectations are low, leaving investment opportunities somewhat attractive. Both Japan and China appear to be at a crossroads and we are watching political and monetary developments carefully.

2013-11-15 In the Wake of Disaster by Robert Horrocks of Matthews Asia

As humanitarian organizations scrambled to send relief to the Philippines this week following the country’s battering by Typhoon Haiyan, foreign governments prepared to support the rebuilding and economists looked to assess the tragedy’s near-term impact.

2013-11-15 Has Washington Drama Taken Its Toll On MLPs? by David Chiaro of Eagle Global Advisors

“They did it! They blew it up!” shouts Charlton Heston in the iconic ending scene of the film Planet of the Apes when he finds out he has been living on a post-nuclear war planet Earth. Americans are probably having some of the same feelings about our current world resulting from the ongoing political “nuclear war” raging in our nation’s capital.

2013-11-15 “Great Rotation?” How About “Selective Rotation?” by Eric Takaha of Franklin Templeton

A few months ago there was a lot of buzz about a so-called “Great Rotation,” used to describe an investor exodus from fixed income and into equities, conjuring up images of a massive herd of wildebeest on the African plain racing for greener pastures. Oftentimes, when investors react to the market with a herd mentality, they can wind up losing sight of where they are going, and why. Eric Takaha, senior vice president and portfolio manager for Franklin Strategic Income Fund, says what he’s seen is more of a “selective rotation.”

2013-11-15 The Big Four Economic Indicators: Industrial Production by Doug Short of Advisor Perspectives (dshort.com)

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.

2013-11-15 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The Federal Reserve’s policies may remain easier for longer than previously thought. What’s the best way to arrest falling labor force participation? Look for the Fed to adopt a lower unemployment target.

2013-11-15 Are You Prepared for Economic Recovery? by Nanette Abuhoff Jacobson of Hartford Funds

Nanette Abuhoff Jacobson discusses how many portfolios are out of balance today and explains why investors should consider increasing their equity exposure.

2013-11-15 The Future of the Indian Rupee Is Tied to Oil Imports by Ignatius Chithelen of Knowledge @ Wharton

The weakness or strength of the Indian rupee will continue to be largely determined by the level and costs of the country’s crude oil imports, according to Ignatius Chithelen, managing partner of Banyan Tree Capital Management.

2013-11-14 In a Real (But Uneven) Recovery: Where to Remain Cautious by Russ Koesterich of iShares Blog

Last week brought evidence that while the U.S. recovery is uneven, it’s happening. For investors, the big takeaway is to remain cautious on interest-rate sensitive assets. Russ explains.

2013-11-14 No Man is an Island by Mark Mobius of Franklin Templeton

When your territory spans hundreds of countries on just about every continent and time zone, the importance of teamwork cannot be underestimated. I am extremely fortunate to have the support of a tremendous team of currently 90 professionals in the Templeton Emerging Markets Group, including 52 analysts and portfolio managers, spanning 26 countries and speaking 24 languages. I couldn’t do what I do without them! For the past 25 years, I’ve had the pleasure of working with Tom Wu, whose research responsibilities include companies in Hong Kong and the Philippines, as well as the bank

2013-11-14 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

Data keeps coming fast and furious and (for the most part) it has been favorable. Investors remain torn between being ecstatic about the solid recovery or worried about the implications for another Fed move. Stocks were mixed throughout the week with the Dow Jones staying in record territory. Is that worth a Tweet (now that it’s public)?

2013-11-14 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

There were several news surprises to trade around last week, but when the music ended stocks were mixed as the charts above illustrate. The Dow Jones Industrial Average gained nearly 1 percent while the NASDAQ Composite was virtually flat.

2013-11-13 Why I Sell the Dollar: From Dollar Strength to Dollar Weakness by Axel Merk of Merk Investments

To those that say the U.S. has the cleanest of the dirty shirts, we would like to point out that it hasn’t helped the greenback, as evidenced by the euro outperforming the dollar both so far this year, as well as last year. Yes, we have a mess in the Eurozone that won’t be resolved anytime soon. But we also have a mess in the U.S., Japan, and many other places around the globe.

2013-11-13 Accenture: Continuing To Deliver A Growth Story by Team of F.A.S.T. Graphs

Accenture (ACN) is a global management consulting, technology services and outsourcing company with approximately 275,000 people serving clients in more than 120 countries. As of the end of fiscal year 2013, the company had revenues just shy of $29 billion and a market capitalization that was roughly double that amount. Additionally, Accenture provides services to a wide spectrum of industries ranging from Automotive and Aerospace to Energy and Travel. Effectively, Accenture wants to deliver a high performance solution to whatever problem you have on hand.

2013-11-13 Markets On Cruise Control And Why There Will Be No Dectaper by John Rothe of Riverbend Investment Management

We are now post shutdown, post debt ceiling and post election, and equity markets are now on cruise control.

2013-11-13 Twenty Five by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

I am not a particularly good salesman. From the time I first meet a prospect to when they become a full-fledged client, it can often take two years even when they initiate the first meeting. Fortunately, growing the firm isn’t one of my primary roles, a responsibility that does fall to Bill Hoover, my business partner. The beauty of our relationship is that while Bill devotes his time to our firm’s “outside” efforts, I am able to spend almost all of my attention tending to the portfolios of those who have already hired us. (View a printable version of this Economic

2013-11-12 Beware of Financial Planning’s Misguided Rules-of-Thumb by Joe Tomlinson (Article)

Lacking better insights, financial planners cling to rules of thumb, such as allocating a percentage of assets to fixed income based on a client’s age. More recently, those rules have been institutionalized through products like target-date funds, which maintain a fixed glide path for all investors. But new research has led to the development of software products that allow advisors to easily improve on the suboptimal outcomes to which clients were previously destined.

2013-11-12 The Bomb Shelter Portfolio: Maximum Income with the Least Risk by Geoff Considine (Article)

Conservative investors are faced with unappealing choices. They can reduce risk and accept low yields and high exposure to rising rates, or they can push the bounds of their risk tolerance to increase yield. My analysis shows a way out of this predicament: a “bomb shelter” portfolio of ETFs, which offers attractive yield with minimal volatility and exposure to rising rates.

2013-11-12 Reflections on a Week in Cuba by Robert Huebscher (Article)

My recent one-week visit to Cuba revealed why our relationship with this island country – less than 100 miles off the coast of Florida – has been problematic for the U.S. for the last half-century. Once the Castro brothers are gone, the government of Cuba may change in dramatic ways. But such a transition would have to be accompanied by a change in U.S. policy to Cuba. Pictures from my trip are also provided.

2013-11-12 Markets Vacillate Between Stronger Economy and Fed Accommodation by Bob Doll of Nuveen Asset Management

U.S. equities finished mostly higher last week as the S&P 500 increased 0.6%, ending higher for the fifth straight week. The return of central bank action was a primary concern. The European Central Bank (ECB) surprised investors with a 0.25% rate cut, while the debate over the Federal Reserve’s impending tapering decision continued in earnest.

2013-11-12 Taper Talk by Brian Wesbury, Bob Stein of First Trust Advisors

Taperingplease bring it on. We wanted it yesterday, or last month, or even years ago. We never thought QE helped the economy and certainly don’t think keeping it around is a good idea. It’s created uncertainty at an unprecedented level.

2013-11-12 Currency Markets Show Signs of Reversal by Chris Maxey, Ryan Davis of Fortigent

A mixture of surprising economic data and changing central bank policy led to sharp moves in currency markets last week. This came after several gyrations in FX markets earlier this year. Looking forward, volatility is likely to remain, but many signs point towards a strengthening U.S. dollar.

2013-11-12 New Fed Papers Foreshadow a Dovish Fed Policy Under Yellen by Sam Wardwell of Pioneer Investments

New Fed Papers Foreshadow a Dovish Fed Policy Under Yellen Two new Fed papers presented at the International Monetary Fund (IMF) argue for prompt lobbying for continued aggressive monetary policy, but suggest prompt tapering of quantitative easing (QE) and more emphasis on forward guidance. The assumption is that these papers would not have been released if Janet Yellen intended to push policy in a different direction . . . and they reinforce the message of papers released at Jackson Hole this summer, suggesting that QE wasn’t acting as effective economic stimulus.

2013-11-12 Let's Party Like it's 1978 by Bill OGrady, Kaisa Stucke of Confluence Investment Management

A twice yearly meeting of the Chinese government officials, formally known as the third plenary session of the 18th CPC Central Committee, started on Saturday and will end tomorrow. Chinese General Secretary Xi Jinping has indicated that this session could be as consequential as the plenary session in 1978 which introduced policies that set in motion the Chinese growth engine. We are going to take a closer look at the changes from the plenary session 35 years ago, the circumstances leading up to the session and how China changed following the meeting.

2013-11-12 Big Ideas on Gold and Resources in the Big Easy by Frank Holmes of U.S. Global Investors

For nearly four decades, curious investors have made their way to the Big Easy for a taste of New Orleans and several helpings of advice and perspective at the New Orleans Investment Conference.

2013-11-12 EPV: Establishing Predictive Value (i.e., Relative Outperformance) by David Kleinberg of Universal Orbit

EPV: Establishing Predictive Value (i.e., Relative Outperformance) is a linear narrative outlining general limitations in third party data provider presentations and implied effects on peer group analytics. Reconciling the modulation of data with nomenclature is one facet of the qualitative assessments associated with quantitative analysis.

2013-11-12 Dream to Outperform the Market by Bill Smead of Smead Capital Management

If you dream about investment market outcomes which are already popular in the marketplace, your dreams can turn into nightmares. The Everly Brothers 1958 hit song, “All I have to do is Dream” tells us a great deal about the long-term posture of investors in late 2013 and how dreams can turn to nightmares. On the other hand, if you dream about an outcome which most experts aren’t expecting, the rewards can be explosive.

2013-11-12 Will 39% Hike in Minimum Wage Tank The Economy? by Gary Halbert of Halbert Wealth Management

President Obama called for a whopping 39% increase in the minimum wage from $7.25 to $10.10 per hour last Thursday. There is already a bill working its way through in the Senate to do the same thing. If this legislation passes, the minimum wage will be increased 95 cents each year for the next three years starting this year, to bring it to $10.10 by 2015.

2013-11-11 The Uncertain Future of Central Bank Supremacy by Mohamed El-Erian of Project Syndicate

Advanced countries’ central banks were among the first to warn that their ability to compensate for other policymakers’ inaction is neither endless nor risk-free. The trouble is that few outsiders seem to be listening, much less preparing to confront the limits of monetary policy’s effectiveness.

2013-11-11 Confounding Friday Report, Pesky Housing Details, Stamps and Election Results by Gregg Bienstock of Lumesis

The markets rallied on Friday ostensibly because of the First Friday employment data was it good news (job creation) or bad news (rate is up and the Fed will keep juicing the market). Read on. Next, it is on to a look at housing data that seems to have been under the radar screen of the media. I conclude this week with a look at my election predictions. While I hit a touch over 50% (worthy of baseball hall of fame induction) the folks at the major networks won’t be inviting me to work the election map anytime soon.

2013-11-11 Tech in the Time of Twitter: From Growth to Value Play by Russ Koesterich of iShares Blog

Despite the hype surrounding Twitter’s IPO, technology is a very different industry today than it was fifteen years ago. While a few high profile companies are making headlines, the sector is no longer a growth story. Nevertheless, tech still looks attractive as a value play.

2013-11-11 Surprise, Surprise, Surprise! by Scott Brown of Raymond James

The economic data were mostly stronger than anticipated last week. GDP growth exceeded expectations, although the details were a bit troublesome. With everyone anticipating some impact from the partial government shutdown, nonfarm payrolls accelerated in October. Moreover, revisions to August and September, painted a much stronger picture of job growth. What does this mean for the Fed and its decision to taper?

2013-11-11 That Was the Week That Was?! by Jeffrey Saut of Raymond James

That Was the Week That Was, informally TWTWTW or TW3, was a satirical comedy program on BBC television in 1962 and 1963. It was devised, produced, and directed by Ned Sherrin and presented by David Frost. An American version by the same name aired on NBC from 1964 to 1965, also featuring David Frost. And last week was just such a week for me.

2013-11-11 Health Care: Rx for Growth and Defense by Ted Samulowitz of Invesco Blog

The Capital Asset Pricing Model, used to price risky securities, suggests growth and defensive investments are mutually exclusive because the more an asset can return, the higher its risk must be. But growth itself can provide defensive benefits when a secular growth story occurs regardless of the business cycle.

2013-11-08 U.S. Shale Oil: A Central Banker\'s Best Friend by Charles Wilson of Thornburg Investment Management

After nearly a decade of sustained high energy prices , U.S. oil and natural gas producers responded to the market’s call for supply with newly exploitable shale resources. The fresh supply helped reduce concerns about global spare production capacity and limited upward pressure on energy prices. Central bankers around the world were able to maintain highly accommodative monetary policies for prolonged periods as a result.

2013-11-08 China at a Crossroads by Anthony Chan of AllianceBernstein

Expectations are high that President Xi Jinping and Premier Li Keqiang, nearly one year into their likely 10-year reign, will unveil reform policies that will define China’s social and economic development over the next decade and beyond. After the proposals are made public, the new leaders must prove that they can implement substantial change without derailing the growth of the world’s second-largest economy.

2013-11-08 Penske Automotive Group: Fast Cars, Fast Growth by Team of F.A.S.T. Graphs

If we told you about a company that saw earnings per share drop by nearly half from $1.49 a share to $0.86 during the recession, what would you think? Before you answer, it’s important to also point out that the company suspended its dividend from late 2008 until early 2011 as well. At first blush this might seem like a worst case scenario. Usually we go about our research time looking for the best companies that have held up even in the worst of times this type of company does not fit the bill. Yet what is not readily obvious is the fact this would have been the best time to buy.

2013-11-08 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.0, down from last week’s 131.4 (revised from 131.5). The WLI annualized growth indicator (WLIg) to one decimal place, rose to 1.8, up from 1.7 last week.

2013-11-08 Asset Allocation: Pie in the Face? by Robert Isbitts of Sungarden Investment Research

The typical approach to spreading one’s assets in order to diversify and conquer, is to have the client complete a risk tolerance questionnaire. That survey is important not only to establish guidelines for how the assets will be managed, but also because some form of it is required by securities regulators to make sure advisors know who their clients are. The magical conclusion usually includes a color pie chart, representing a variety of asset classes that are assumed to be a path toward asset growth and preservation of capital.

2013-11-08 Government Shutdown Doesn't Shut Down Markets in October by Karen Cavanaugh of ING Investment Management

The stage was set for an October selloff, but markets treated investors to another round of across-the-board gains. Headlines comparing today’s equity market with 1999 are way off; the current rally has been driven by solid corporate fundamentals, and the market remains compellingly valued. Global economic growth remains sluggish, and eventual Fed tapering is likely to introduce volatility into markets worldwide.

2013-11-08 Taking Stock in the Economy by Ken Taubes of Pioneer Investments

Now is a good time to take stock in the current macro environment from a market perspective. Here’s what we think could happen at the end of this year and next year.

2013-11-08 Equality of Opportunity by Michael Kayes of Willingdon Wealth Management

Countless statistics show that the gap between the rich and poor has widened considerably and continues to widen. To an extreme, an economics professor at George Mason recently published a book in which he predicts the population will be divided into two groups: those who are good at working with intelligent machines, and those who can be replaced by them. This is obviously a scary outcome, but are we focusing on the wrong thing?

2013-11-08 Should You Walk Away from a Fed that Prints Money? by Tad Rivelle of TCW Asset Management

Either the markets or the Fed itself will come to accept that financial repression is a “box canyon” whose only escape is by climbing out through higher rates and wider spreads on risk assets. Staying “risk on” requires the investor to underwrite the exacerbating risks inherent in an economy that is being given bad signals and is accumulating a menagerie of mispriced assets and bad loans. Yes, you should walk away from a Fed that prints money.

2013-11-07 Gold: Hold It or Fold It? by Peter Schiff of Euro Pacific Precious Metals

It’s starting to feel like we are part of a giant poker game against the US government, whose hand is the true condition of the American economy. The government has become so good at bluffing that most people feel compelled to watch how the biggest players in the game react to determine their own investment strategy.

2013-11-07 EM: The Growth Story That Isn't by Richard Bernstein of Richard Bernstein Advisors

We remain very concerned about emerging market stocks and bonds. The recent outperformance of EM stocks is again luring investors to once again touch the hot stove. Emerging markets seem to have some significant structural and cyclical issues about which investors seem unaware or seem to be ignoring.

2013-11-07 Global Forecast: Synchronized Growth - So Long as Governments Behave by Andrew Pease of Russell Investments

Russell Investments released its Q4 Strategists’ Outlook and Barometer report, a quarterly update to its Annual Global Outlook which helps inform the short to medium term asset allocations in Russell’s multi-asset strategies and portfolios.

2013-11-07 Welcome to the Two-Speed Economy by Russ Koesterich of iShares Blog

Russ explains why the U.S. economy is starting to look like a two-speed economy and what this means for investors.

2013-11-07 Absolute Return Letter: Euthanasia of the economy? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners

QE has had two noticeable and positive effects. It has saved the world from a financial meltdown not once, but twice, and it has had an overwhelmingly positive impact on asset prices, so in that respect QE has been a success. However, there are growing signs that QE may be beginning to impair economic growth and it may even cause dis-inflation, precisely the opposite of what was widely expected. For these reasons we believe it is time to call it quits and begin to tackle the root problem a banking industry still suffocating from bad loans.

2013-11-07 Putting Macro Trends in Context: What do They Mean to a Bottom-Up Investor? by Will Nasgovitz of Heartland Advisors

For some time now, we’ve had a generally positive economic outlook. The occasional setback is assured, but on the whole we believe that the U.S. economy is still in the early stages of a multi-year recovery.

2013-11-07 Global Inflation: A Mixed Picture by Monty Guild, Anthony Danaher of Guild Investment Management

Many investors and global macro economists have been on vigil for a ramp up in global inflation spurred by immense central bank QE and other forms monetary stimulus. All of the money printing from around the globe has helped keep the financial system functioning, and it continues to help weak developed economies get back on firmer growth footing. However, it has not translated to rapidly rising prices for goods and services that many expected.

2013-11-06 The Underperformance Culprit by Tony Scherrer of Smead Capital Management

Each year we are reminded of the fact that active management systemically underperforms the benchmark. The scorecards come in, and the tally is drilled back into our consciousness. But has the now long-tenured debate of active versus passive offered us much in the way of new perspective over the last several decades?

2013-11-06 Why Worry About a Melt-Up? by Liz Ann Sonders of Charles Schwab

The risk of a melt-up in stocks is garnering more attention; and is something we’ve been discussing recently, too. Sentiment does appear stretched in the near-term and warns of a possible pullback. But there are few, if any, bubble-like conditions present and fundamentals ex-sentiment appear healthy.

2013-11-06 Welcome to the Two-Speed Economy by Russ Koesterich of iShares Blog

Russ explains why the U.S. economy is starting to look like a two-speed economy and what this means for investors.

2013-11-06 Tighter Fiscal Policy Not Helping by Scott Brown of Raymond James

We are now more than five years into the economic expansion, but to many Americans, it still feels like a recession. Many of the headwinds that restrained the recovery early on, such as housing and state and local government, have turned to modest tailwinds, and monetary policy remains highly accommodative. The biggest restraint on growth this year has been fiscal policy. There is a near-term focus on a long-term budget deal, but an agreement seems rather unlikely. Sequester spending cuts set for mid-January should be a more important consideration for lawmakers.

2013-11-06 Sergeant Friday Questions a Treasury Spokeswoman -- Just the Facts, Ma\'am by Paul Kasriel of Econtrarian, LLC

Sergeant Friday: What has been the behavior of total federal outlays in the past five fiscal years? Treasury Spokeswoman: As shown in Chart 1, the year-over-year change in federal outlays ballooned to 17.9% in FY 2009 because of the sharp increase in income security expenditures (e.g., unemployment insurance benefits, food stamps) due to the most severe recession since the early 1930s, TARP expenditures to recapitalize our financial system and a fiscal stimulus program.

2013-11-06 The Top 10 Investor Worries Right Now by Robert Isbitts of Sungarden Investment Research

In the first of a regular series in my Informed Investing blog, let’s count down the top 10 things that give investors the willies in today’s investment environment. These are situations known to even casual investors, but may or may not be communicated to them effectively by their financial advisors.

2013-11-05 The Key Issues in Today’s Muni Bond Market by Hildy Richelson and Stan Richelson (Article)

Investing in high quality municipal bonds paying a predictable cash flow and returning your principal at the end of the investment is a well-trodden system for lifetime economic success. In this article we discuss some key issues in purchasing municipal bonds to help you make wise choices for your investing system.

2013-11-05 Combating Climate Change - And Responding to Skeptics by Michael Edesess (Article)

The climate-change threat is real, even if it is only a matter of probabilities. What action we should take, and how action should be brought about, are knotty problems. Harvard Business School’s Business and Environment Initiative (BEI) says they can be attacked with a business approach.

2013-11-05 Three Articles to Help Clients to Happy Retirements by Dan Richards (Article)

For many clients in their 50s and early 60s, the challenges to achieving happy and secure retirements have never been greater. Three recent articles will help you when talking to clients about retirement.

2013-11-05 Skepticism Still Abounds by Bob Doll of Nuveen Asset Management

U.S. equities were mixed last week as the markets were broadly unchanged. The October FOMC statement was a bit more hawkish than expected, causing concern that the recent delay in tapering may have been too aggressive. Other worries appear to be tail risks surrounding a possible Fed liquidity trap and accompanying asset bubbles. Economic data were mixed as markets struggle with the trade-offs between recovery and policy normalization.

2013-11-05 Ex-US Property Bubble Peaking? by Chris Maxey, Ryan Davis of Fortigent

For several years now, a common storyline on China was the immense overcapacity in the country’s housing market. A mixture of easy credit policies and officials’ explicit economic growth plans based on capital investment yielded construction on a massive scale across the countryside. So-called ghost towns emerged as the pace of building and the migration of rural citizens into these cities fell out of sync.

2013-11-05 The Saudi Tribulation by Bill OGrady of Confluence Investment Management

In this report, we will discuss the basic history of U.S. and Saudi relations, focusing on the historical commonality of goals between the two nations. We will detail how the aims of the two nations have diverged since the Cold War ended and use this to examine America’s evolving plans for the Middle East. We will discuss how the evolution of U.S. policy is affecting Saudi Arabia and the pressures these changes are bringing to the kingdom. As always, we will conclude with market ramifications.

2013-11-05 Stormy Weather by David Wismer of Flexible Plan Investments

Young and old alike celebrated Halloween last week, albeit in soggy fashion in much of the nation.

2013-11-05 Even Economists Get Stuck Looking in the Rearview Mirror by Bill Smead of Smead Capital Management

Will the US economy grow in an above-average way in the next ten to twenty years or do we need to resign ourselves to an era of anemic economic growth? Two pieces of information came out this week, adding to existing information on the subject and speak to this core debate in the US stock market. The first piece was called “Slowing to a Crawl” by Jonathan Laing from Barron’s.

2013-11-05 Fed in Holding Pattern, but for How Long? by Christopher Molumphy of Franklin Templeton

At its October 29-30 policy meeting, the US Federal Reserve (Fed) again put off the so-called “tapering” of its $85 billion-a-month asset purchase plan, now over a year old, until some future date. In an official statement released at the conclusion of the meeting, the Fed cited fiscal policy issues as restraining growth and said it will continue its quantitative easing program (known as “QE”) until the job market improves “substantially.”

2013-11-04 Bubbles in the Broth by Nouriel Roubini of Project Syndicate

As below-trend GDP growth and high unemployment continue to afflict most advanced economies, their central banks have served up an alphabet soup of unconventional monetary policy measures. But, with asset prices continuing to rise, many countries may have more helpings than they can stand.

2013-11-04 Steve Jobs Didn\'t Give a *!@% About the Debt Ceiling by Jeffrey Bronchick of Cove Street Capital

A quick nod to Bloomberg columnist Caroline Baum from whom we lifted our title. Anything else you might have been (or will be) subjected to on the subject of how the government operates pales in materiality to the headline. And as miserable as our predicament seems to anyone over the age of 13, it really and truly is old and increasingly dull news. To wit, I present the following, highly curated list of quotes-please note the timeline.

2013-11-04 Sovereign Ambitions to Develop Infrastructure Benefit Emerging Asia's Utilities Sector by Raja Mukherji, Emily Au-Yeung of PIMCO

The scope for infrastructure development in emerging Asia is tremendous, and the utilities sector has potential to contribute to and benefit from that growth. In general, we have found that state-owned utilities benefit from a range of operational advantages, partly as a result of the government’s vested interest. PIMCO’s bottom-up research allows us to analyze evolving company- and sector-specific factors within the greater macroeconomic picture to identify the best investment ideas in Asia’s utilities sector.

2013-11-04 Leash the Dogma by John Hussman of Hussman Funds

It’s fascinating to hear central bankers talk about the economy, because in the span of a few seconds they can say so many things that simply aren’t supported by the evidence. For anyone planning to watch the confirmation hearings for the next Fed Chair, the evidence below is provided as something of a leash to restrain the attacking dogma.

2013-11-04 How I Explain Amazon's Stock Performance by Chuck Carnevale of F.A.S.T. Graphs

Amazon (AMZN) is a stock that seems to defy conventional wisdom about how a stock is, or should be, valued. Fundamental investors, like yours truly, recognize and respect the importance of the earnings and price relationship. Moreover, I will be so bold as to emphatically state that in the long run profitability (earnings) will be the primary determinant of a businesses’ fair value, any business. However, my bold statement is predicated on the longer run. In the short run it is often a truth that all bets are off.

2013-11-04 What Price for Growth? by Equity Investment Team of Janus Capital Group

Cloud computing and social media are bringing a level of disruption and innovation not seen in the technology sector since the dot-com era. The troubling aspect is that valuations for many of these companies seem just as stretched as Internet stocks were back then. We think investors may be paying too much for the growth inherent in these companies.

2013-11-04 More #PlowHorse in Q3 by Brian Wesbury, Bob Stein of First Trust Advisors

Despite the shutdown, the sequester, talk of tapering, and meteors in the night sky, the US economy just keeps plowing along. Reported later this week, we expect Q3 real GDP grew right on trend at a 1.9% rate another, #PlowHorse report.

2013-11-04 The Great Stall of China by Steve Cao, Mark Jason of Invesco Blog

While China is without question the growth driver and the outperformer among Asian emerging markets, it’s clear the country is transitioning toward slower growth because of demographic factors and domestic rebalancing. In our view, China is entering a multiyear period of slower growth, but we consider its future growth robust and sustainable when compared with overall global gross domestic product (GDP) growth -- albeit below the annualized pace of more than 10% China experienced from 2001 to 2010.

2013-11-02 Bubbles, Bubbles Everywhere by John Mauldin of Mauldin Economics

The froth and foam on markets of all shapes and sizes all over the world. It is an exhilarating feeling, and the pundits who populate the media outlets are bubbling over with it. There is nothing like a rising market to help lift our mood. Unless of course, as Prof. Kindleberger famously cautioned, we are not participating in that rising market. Then we feel like losers. But what if the rising market is a bubble? Are we smart enough to ride and then step aside before it bursts? Research says we all think that we are, yet we rarely demonstrate the actual ability.

2013-11-01 Bank Reform: Europe's Slow and Steady Progress Continues by Monty Guild, Tony Danaher of Guild Investment Management

When Spain’s real estate bubble burst in 2008, the country went into a recession. The country was returning to growth in 2010, just in time to be taken down by the continent’s emerging banking and sovereign debt crisis.

2013-11-01 4 Reasons Japan Could Continue to be the Land of the Rising Stock Market by Russ Koesterich of iShares Blog

Japan has been the land of rising stocks this year -- Japanese equities are up nearly 40% year-to-date. Russ explains why he believes the market offers more upside potential and a near-term opportunity for tactical investors able to hedge the currency exposure.

2013-11-01 Where Do Profits Go from Here? Up. Here's Why. by Joseph Tanious, Anthony Wile of J.P. Morgan Funds

After record-setting earnings in the first two quarters of 2013, the S&P 500 is on track to hit another historic high in profits for 3Q13. If this occurs, the first three quarters of this year will have been the most profitable ever in the 56-year history of the S&P 500. Future earnings growth through margin expansion seems unlikely, as an improving labor market and higher interest rates will most likely squeeze margins. However, stable revenue growth, share buybacks and the additional use of debt financing should support modest earnings gains in the year ahead.

2013-11-01 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.5, up from last week’s 131.1. The WLI annualized growth indicator (WLIg) to one decimal place, dropped to 1.7, down from 2.0 last week.

2013-11-01 When Small is Big by Mark Mobius of Franklin Templeton

There’s a popular saying in the US, “good things come in small packages,” which is generally a statement about gifts of jewelry. My team and I find this saying can apply to the investment world, too, as we often find companies that are small in size, but which may have big long-term potential.

2013-11-01 Emerging Markets Equity Commentary by Team of Thomas White International

Emerging market equity prices saw a robust recovery in September as investor concerns about slower capital inflows to these markets faded after the U.S. Federal Reserve unexpectedly decided to delay the tapering of bond purchases.

2013-11-01 Weekly Economic Commentary by Team of Northern Trust

The public needs to move beyond its bad feelings toward financial institutions. Should we modify the price stability mandate of central banks? The Fed offers no surprises.

2013-10-31 Third Quarter Letter by Team of Grey Owl Capital

Despite the recent shenanigans in Washington concerning funding the government and raising the debt ceiling, as well as the constant news coverage of the quantitative easing “taper” that the Federal Reserve may or may not begin, we are going to spare (at least for this quarter) both you and us another long discussion of these very real issues.

2013-10-31 Global Economic Outlook by Carl Tannenbaum of Northern Trust

The United States avoided a fiscal accident after Congress struck a deal to end the partial government shutdown and bought time to resolve differences over the federal budget. Assuming political discord will not result in another standoff, the U.S. economy is projected to show steady and stronger growth in 2014 compared with 2013.

2013-10-31 A Bit More Hawkish, All Things Considered by Brian Wesbury, Bob Stein of First Trust Advisors

Today’s statement from the Federal Reserve was almost a carbon copy of the last one in September. No changes to the pace of quantitative easing or interest rates, which is exactly as the consensus expected. The Fed made only minor changes to the text of the statement, making it slightly more hawkish in one spot and slightly more dovish in another.

2013-10-31 A Rebound in Global Equities by Scott Minerd of Guggenheim Partners

With the U.S. economic expansion entering its fifth year and the global economic picture improving, it appears equities in Europe and Asia can still rise.

2013-10-31 Fed Outlook for the Short and Longer Run by Zach Pandl of Columbia Management

One of the ironies of Ben Bernanke’s tenure is that he set out with a goal to improve Fed communication while in office. Immediately after his first meeting as chairman in March 2006, Bernanke set up a subcommittee tasked with facilitating debate around communication issuesincluding inflation targeting, post-meeting statements and minutes and public speeches by individual Fed officials.

2013-10-31 The Age of Experimentation (Global Economic Outlook for Fourth Quarter 2013) by Robert Scherfke of Hartford Funds

Macroanalyst Robert Scherfke, PhD discusses the progress global economies have made since 2008 and the challenges officials face as they normalize fiscal policies.

2013-10-31 Scrooge McDucks by William Gross of PIMCO

With the budget and debt ceiling crises temporarily averted, perhaps a future economic priority will be to promote economic growth; one way to do that may be via tax reform. How to proceed depends as always on the view of the observer and whether the glasses are worn by capital, labor or government interests.

2013-10-31 International Equity Commentary by Team of Thomas White International

International equity prices saw robust gains in September as the U.S. Federal Reserve unexpectedly refrained from reducing its bond purchase programs. In addition, the lowering of the U.S. growth forecast by the Fed lifted investor optimism that the quantitative easing is likely to be wound down at a very gradual pace.

2013-10-30 The Thermometer of the Stock Market by Bill Smead of Smead Capital Management

As long-duration owners of common stock, we believe it is the wealth created by the businesses which causes the owners to prosper. We have also been participants in the US stock market since 1980 and are very aware of big swings in enthusiasm for owning common stocks. So we thought it would be helpful to share our opinion on the current temperature of the market. To take the temperature of the market we need to examine the thermometer readings.

2013-10-30 US Economy Mired in a Sea of Contradictions by Gary Halbert of Halbert Wealth Management

Consumer confidence has plunged over the last month, due in large part to the government shutdown and fear that the US might default on its debt because of the ineptitude of our leaders in Washington. Normally, when consumer confidence plunges, we would expect a significant slowdown in consumer spending, which accounts for 70% of GDP.

2013-10-30 Bernanke vs. Yellen: A Spooky Outlook? by Axel Merk of Merk Investments

Fed Chair nominee Janet Yellen will take over where her predecessor Ben Bernanke leaves off. Not just operationally, but also philosophically. To understand where the Fed and the U.S. dollar may be heading, we take a closer look at where Bernanke and Yellen are coming from.

2013-10-30 Fed Tapering Could Be Off The Table Until 2014 by Michael Materasso of Franklin Templeton

Sometimes, hindsight is insight. The mystery of why the Federal Reserve didn’t start pulling back or “tapering” its prolonged quantitative easing program at its September policy meeting seems more clear now that we’ve experienced the fallout from the fraying of US fiscal policy soon thereafter, including a 16-day government shutdown in October. Given that the Congressional agreement reached in October only funds the government through January 15 and extends the debt ceiling through February 7, more political grandstandingand economic consequencescould lie ahead.

2013-10-30 Why Stocks Advance Despite Mediocre Economic Data by Russ Koesterich of iShares Blog

The basic takeaway from last week’s economic data seems to be that we’re still in a world of 2% US economic growth with little evidence of a pickup. Yet stock markets have advanced and can move higher over the next six to 12 months? Russ explains why.

2013-10-29 Defining the EM Corporate Bond Opportunity by Sponsored Content from Loomis Sayles (Article)

Finance is a numbers business. Investors study prices, yields, rates of return. However, when it comes to sizing up emerging markets, we think they should also pay attention to semantics. In the past, terming a country “emerging” made it synonymous with low credit quality and higher risk. But today, many emerging markets boast strong credit profiles while parts of the developed world buckle under heavy debt loads.

2013-10-29 Why Deficits Don’t Matter by Bob Veres (Article)

Stephanie Kelton, Associate Professor of Economics at the University of Missouri/Kansas City, believes that the root of our deficit problems can be found in a fundamental misunderstanding – shared by Democrats, Republicans and mainstream voters alike – about the government’s balance sheet. She argues, plausibly, that the whole idea that we should control the deficit at all is costing our nation trillions of dollars in lost output. The result is lost income, savings, wealth and prosperity.

2013-10-29 Can Financial Engineering Cure Cancer? by Robert Huebscher (Article)

Securitization and the collateralized obligations it produced led to the financial crisis and the near-collapse of the financial markets. But financial engineering’s bad reputation could turn around. Andrew Lo, a professor at the MIT Sloan School of Management and director of its Laboratory for Financial Engineering, thinks financial engineering can cure cancer.

2013-10-29 Puerto Rico: “Always the money owing” by Hildy and Stan Richelson (Article)

We have not recommended or purchased Puerto Rico bonds for 12 years. This is not because we thought that Puerto Rico would imminently default. Rather, we did not like the low ratings and the Commonwealth’s ubiquitous and growing debt. We view an investment in bonds as a way to control risk, not to make outsized returns.

2013-10-29 Six Tips for Better Communication by Beverly Flaxington (Article)

As an industry, we lack communication and people skills. Here are six tips to complement your technical and financial abilities with communication skills.

2013-10-29 Letters to the Editor by Various (Article)

Readers respond to Michael Edesess and Kwok Tsui’s article, How Many Monkeys Does it Take to Find a Successful Strategy?, which appeared last week.

2013-10-29 Is This the New Normal'? by Sam Wardwell of Pioneer Investments

Markets Settle into a New “Normal” All sorts of economic data were released last week, but volatility has dropped: rightly or wrongly, market forecasts about the pace of quantitative easing (QE) and earnings growth in the U.S. appear to have coalesced around an outlook for “slow growth with ongoing QE”.

2013-10-29 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

Nice to have a week free of politico rhetoric and distractions for a change (don’t get used to it). With little in the way of budget battles, investors focused on earnings and generally liked what they saw. Add in some positive economic news from China and a labor picture that should prompt the Fed to stay put (for now) and you have another record for the S&P.

2013-10-29 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

With most of the political wrangling and debate nearly over, one hopes, we are left to deal with the residue of their cacophony. Politically, I’m not astute enough to try and unravel the truths and un-truths spoken during the government budget debate and shutdown. But as an economic scientist, the numbers reveal an extraordinary landscape of congruent trendlines, missed opportunities, and plausible strategies for safely navigating the next 3 months.

2013-10-29 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

A very quiet week for stocks as earnings season kicked into high gear at last.

2013-10-29 Equities Reach All-Time HighsYet Again! by Bob Doll of Nuveen Asset Management

U.S. equities marked another all-time high last week as the S&P 500 increased 0.9%. (1) Global equities reached new cycle highs for the second week in a row. Many investors have concerns that the gains will not last since the world economy remains lackluster and the liquidity driving the current rally will eventually stop.

2013-10-28 How Real Estate Impacts the US Economy by Russ Koesterich of iShares Blog

Despite appreciating more than 10% over the past year, home prices still look reasonable and housing affordable. However, while there is little risk of another housing bubble, a significant pickup in interest rates could dampen housing activity and by extension, the recovery.

2013-10-28 The Grand Superstition by John Hussman of Hussman Funds

One thing that separates humans from animals is the ability to evaluate whether there is really any actual mechanistic link between cause and effect. When we stop looking for those links, and believe that one thing causes another because “it just does” we give up the benefits of human intelligence and exchange them for the reflexive impulses of lemmings, sheep, and pigeons.

2013-10-28 For Maximum Total Return Go for Growth by Chuck Carnevale of F.A.S.T. Graphs

Not all investors are the same. Therefore, not all investors share the same goals and objectives. Consequently, there are numerous strategies and investing methods available to choose from. Moreover, it also goes without saying that the investment strategy that’s right for me may not be right for you. For that reason, it’s imperative that each individual looks for the strategy that is right for their own individual goals, objectives, risk tolerances and status. By status, I’m referring to how many years you have left before retirement.

2013-10-28 Beyond the Noise, More of the Same? by Scott Brown of Raymond James

Delayed economic data reports have begun to arrive. The figures point to a disappointing 3Q13 (relative to expectations) and the partial government shutdown is unlikely to help in 4Q13. The recovery had been poised for improvement this year, but fiscal policy has been a major headwind. Economic figures will be distorted in October (due to the government shutdown) and in November (due to the rebound from the shutdown). Yet, beyond the noise, the underlying pace of growth is likely to remain disappointing in the near term. Is there hope for 2014?

2013-10-28 Crawling, Economic Impact of Stubbing Your Toe and Employment by Gregg Bienstock of Lumesis

I have to admit, I had a lot of trouble figuring out where to start this week -- unemployment from last week, post-shutdown observations, exports or sobering observations around expected growth of the US economy and expected implications. It was a Barron’s article, “Slowing to a Crawl” that pushed me to address the latter first. Why? Much of what the article focuses on hit very close to home the impact of demographics and economic data on our economies.

2013-10-28 The Markets in a Tug of War in the Short Run by Matt Lloyd of Advisors Asset Management

As the damage to sentiment that was brought about by the Washington “Drama Club,” a somewhat cautious number has come about. On October 21, 2013, the Wall Street Journal had an article detailing margin debt hitting new highs which counteracts some of the investor sentiment numbers that are detailed by several sources. To get a better understanding, we ran the margin debt as a percentage of corporate equities over the last 25 years.

2013-10-28 Fear of Debt Spiral Misplaced by Brian Wesbury, Bob Stein of First Trust Advisors

Now that things have settled down in Washington DC, politicians are focusing on a “grand compromise” to fix the budget. Without reform, growth in entitlements will eventually push federal spending back to levels last seen in World War II.

2013-10-28 Jobs, Jobs, Jobs by Chris Maxey, Ryan Davis of Fortigent

Following an extended delay, investors were disappointed (sort of) to learn that the September payroll report was another dud. The headline figure was below expectations, but investors were largely comforted by knowing this likely extended QE3 further into the future.

2013-10-28 Healthcare Costs: Relief at Last? by Milton Ezrati of Lord Abbett

Some observers believe medical cost increases have begun to abate amid the onset of the Affordable Care Act. The evidence isn’t there yet.

2013-10-28 Why Growth is Deep in the Heart of Texas by Frank Holmes of U.S. Global Investors

A recent TIME Magazine cover features an engaging collage of the 50 states reassembled to fit within the boundaries of Texas. With a growing number of solid-paying jobs, affordable housing, and low taxes, “the Lone Star State is America’s Future,” declares economist and writer Tyler Cowen.

2013-10-26 Housing Bargains Harder to Find by John Burns of John Burns Real Estate Consulting

While mortgage rates remain near historical lows, home prices have come back strong.Thanks to strong price appreciation, the ratio of Median Home Price / Median Household Income now exceeds historical averages (since 1981) in 20 of the top 21 housing markets.

2013-10-26 Inflation Update by Team of North Peak Asset Management

Historically the larger the increase in monthly inflation, the worse mainstream stocks and nominal bonds perform.

2013-10-26 Why U.S. Dollar Will Remain World\\\'s Reserve Currency, Despite Political Brinkmanship by Tatjana Michel of Charles Schwab

The U.S. dollar is not likely to lose its premier world reserve-currency status anytime soon. But continuing U.S. political brinkmanship could drive foreign countries into other currencies faster. With the market focus shifting to monetary policy and growth, we expect a Fed taper delay to give foreign currencies some time to recover.

2013-10-25 The Deserted Island Portfolio by John West of Research Affiliates

What would a Deserted Island investment portfolio look like, managed without the distractions of cable news and short-term benchmark comparisons?

2013-10-25 Environmental Awareness in Asia by In-Bok Song of Matthews Asia

I traveled to China in September, quite possibly one of the best times of the year to visit in terms of weather. The air quality in both Beijing and Shanghai was actually pleasant and was very different from how it seemed during my previous visits as well as from the typical accounts one usually hears of the notorious smog in China’s major cities. It made me think about growing up during the industrialization of my home country, South Korea.

2013-10-25 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.1, up from last week’s 130.3 (revised from 130.4). The WLI annualized growth indicator (WLIg) to one decimal place, dropped to 2.0, down from 2.7 (a downward revision from 2.8).

2013-10-25 Weekly Economic Commentary by Team of Northern Trust

The upcoming check-up of eurozone banks is long overdue. Quantitative easing is having little impact on U.S. bank lending. China needs to do more to stress consumption.

2013-10-25 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

When an economy is excessively over-indebted and disinflationary factors have forced central banks to make overnight interest rates as close to zero as possible, central bank policy has repeatedly proved powerless to further move inflation or growth metrics. Four considerations suggest the Fed will continue to be unsuccessful in engineering stronger growth and higher inflation with their continuation of the current program of Large Scale Asset Purchases.

2013-10-24 Risk-On Returns by Scott Minerd of Guggenheim Partners

Ultra loose U.S. monetary policy continues pushing asset values higher at home and abroad. Seasonal factors should also provide a tailwind and lift asset prices across nearly every investment class.

2013-10-24 Trying to Stop a Bull Market Has Risks by Frank Holmes of U.S. Global Investors

U.S. stocks have been on a tear. The S&P 500 Index has climbed a surprising 20 percent so far this year, as a global synchronized recovery takes shape and funds flow back to equities. As I often say, investors take risks when they try to stop a bull run, and plenty of data suggest you might regret taking that action this year.

2013-10-24 Putting Tax-Deferred Accounts to Best Use by Kathleen Fisher, Tara Thompson Popernik of AllianceBernstein

The common wisdom about retirement planning is to fund tax-deferred vehicles such as 401(k) plans and IRAs to the maxand we agree. But how to put these accounts to best use is more complicated.

2013-10-24 Going Defensive? 3 Things to Consider First by Russ Koesterich of iShares Blog

With the threat of a default merely pushed out a few months, many investors continue to allocate to so-called “defensive” investments. However, because going defensive is not a free lunch, Russ says it’s important for investors to consider three aspects of their potential defensive postures.

2013-10-23 Singaporean Consumer Consumption and Confidence is Weak - Should Investors Worry? by Team of Manning & Napier

Singapore is the world’s 35th largest economy by nominal GDP, yet ranks 6th in the world by GDP per capita, signifying its position as an advanced and highly-productive economy. With an efficient regulatory framework, low tax rates, and a flexible labor market, Singapore has a reputation for being one of the most business-friendly countries in the world.

2013-10-23 At 40 I\'m Half Dead by Liam Molloy, Bethany Carlson of Galway Investment Strategy

So goes comedian Louis CK’s bit about hitting middle age. “Not old enough for anyone to care that you’re old. Not young enough for anyone to be proud of you or impressed.” And as we head into the backstretch of this economic cycle, that same cynicism and resignation seems to be settling right in. The glory days of riding the upward slope when almost everything was screamingly cheap in 2009 are behind us.

2013-10-23 The Right Investment Vehicle by Craig French of WBI Investments

Remember your first car? You probably had some good times in it passing your driver’s license exam, going to the prom, driving to your first job. You most likely have a different car now that you’re older one more suited to your current lifestyle and needs. I’ll bet your current car is a lot safer and more reliable than that first one. A car is a motor vehicle you use to reach your destination. Like a car, an investment portfolio is a vehicle you use to reach your clients investment goals.

2013-10-23 Lack of Earnings of U.S. companies Scarier Than Washington Grid-lock by Dawn Bennett of Bennett Group Financial Services

I think U.S. investors believe whatever happens in Congress, there will always be a last minute deal, which is the main reason for the recent major stock market surge on nothing more than hope. The markets, of late, have not been trading on fundamentals; they have been trading on news. This is a dangerous phenomenon, when news is bad; there is no backstop to the market. It causes volatility to surge and institutional confidence to falter.

2013-10-23 Shifting Gears: The Fed Turns from Tapering to Tempering Expectations by Nanette Abuhoff Jacobson of Hartford Funds

Federal Reserve (Fed) Chairman Ben Bernanke surprised markets on September 18 by announcing a continuation of the Fed’s $85 billion-per-month bond purchases and more muted expectations for economic growth and inflation. With this proverbial monkey wrench thrown into the gears of financial markets, investors are now asking how the Fed’s new course changes the investment outlook.

2013-10-23 What a Yellen Fed Could Mean for Interest Rates by Zach Pandl of Columbia Management

A major question among investors after Janet Yellen’s nomination for Fed Chair is whether she will be too soft on inflation. Part of Yellen’s dovish reputation stems from a debate among the FOMC in July 1996, in which she warned the committee about the risks of pushing inflation too low. With the passage of time, however, the views Yellen expressed at that meeting now come across as very sensible. Indeed, today they would be considered uncontroversial among most economists. In reality Yellen is closer to the Fed consensus on inflation than her reputation in markets would suggest.

2013-10-23 Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management

The portfolio enjoyed another index-beating month with a gain of 0.9% versus 0.6%, so improving further the long term numbers. As noted in previous Bulletins, correlations between growth and equity market returns are low. Investors remain fixated otherwise, but some confusion is reasonable given that growth in earnings per share is also slowing. Yet strong equity markets can be justified by the Free Lunch Theory.

2013-10-23 Can Kicked Down the Road Once Again... by Blaine Rollins of 361 Capital

Donkeys 1, Elephants 0, Congress -535. The can was kicked down the road once again. We would all like to think that Congress will avoid another last minute battle in early 2014, but unfortunately we can’t put it past the current list of non-negotiators. The only thing that is certain in the future is that it will be many election cycles before a member of Congress makes it into the World Series of U.S. Presidential ballots.

2013-10-23 Positioning for Municipal Market Volatility by Joseph Deane, David Hammer, Sean McCarthy of PIMCO

We do not anticipate a significant increase in the frequency of municipal defaults, but there are pockets of credit stress in U.S. municipalities and territories, particularly those with unfunded pension obligations and unsustainable budget imbalances. Large concentrations of exposure to Puerto Rico within subsets of the municipal market will likely lead to an increase in spread volatility across other municipal sectors in the coming quarters.

2013-10-23 Economic & Capital Market Summary by Gregory Hahn of Winthrop Capital Management

It has been five years since the Financial Crisis wreaked havoc on the economy and capital markets. With equity markets trading near record highs and new issue corporate bonds coming to market regularly, the capital markets have largely recovered. However, we are concerned that the economic recovery is just an illusion that exists in spite of the efforts in Washington D.C. to kill it.

2013-10-23 Cirque du Ben by Liam Molloy, Charlie Mas of Galway Investment Strategy

The Cirque du Ben will soon be leaving town for good. Some have cheered while others have watched in horror waiting for the disaster, but all were treated to a high wire act unlike any other Fed chairman has ever performed. Fed chairmen are often defined by the consequences of the previous performer. Bernanke had a couple of tough acts to follow in Volcker and Greenspan. Volcker had to guide an economy out of stagflation while Greenspan presided over 9/11, two recessions, and a full market crash in 1987. By the end of his his show, Greenspan had an oversized influence on policy.

2013-10-23 Emerging Europe: Regional Economic Review - 3Q 2013 by Team of Thomas White International

In its latest World Economic Outlook, the International Monetary Fund (IMF) further trimmed its forecast for global growth. The Washington-based lender said expansion will be driven more by developed economies as emerging markets grapple with slowing growth and a tighter global financial scenario as interest rates hint of trending higher in advanced economies such as the United States. However, a reading of economic tea leaves for the Euro-zone and economies such as Russia, Turkey, Poland, Hungary, and the Czech Republic offers room for optimism.

2013-10-22 Recession-Proof Your Marketing by Kristen Luke (Article)

The choices you make and actions you take today will influence how your business fares following the next market crash. Here are two marketing strategies you can implement now to prepare for the future.

2013-10-22 Bond Legend Dan Fuss on Rising Rates by Robert Huebscher (Article)

Having just celebrated his 80th birthday, Dan Fuss can claim a unique achievement – his tenure in the fixed income markets has spanned a full market cycle, from the great bear market that began in the early 1950s through the equally great bull market that commenced in 1981. Fuss said today’s environment most closely resembles what he confronted in the late 1950s, when long-term rates were 3% and beginning their march upwards.

2013-10-22 Revisiting the Debate Over the DFA Research by Scott MacKillop (Article)

DFA’s supporters have elevated that firm’s investment philosophy to the level of religious doctrine. The pitch and fervor expressed in the recent debate over its research suggest that Michael Edesess sinned mightily by questioning the faith. However, an examination of DFA’s approach to investing suggests a more measured reaction: The firm’s approach is sound, but it falls short of the magic that its disciples impart to it.

2013-10-22 Inching Closer by Sponsored Content from Janus Capital Group (Article)

How is the recent flooding in Colorado related to global economies and the financial crisis of 2008? Get a unique perspective from Colleen Denzler, CFA, Janus’ Global Head of Fixed Income Strategy, on how global economies are grappling to wean themselves off government support and grow their economies from within.

2013-10-22 Washington Strikes a No-Surprise Deal - Now What? by Sam Wardwell of Pioneer Investments

Congress called a time-out in the budget/debt fight last week, striking a deal to avoid default and fund the U.S. government through January 15, 2014 and raise the debt limit through February 7, 2014. While the parties agreed to budget talks, they did not commit to reaching an agreement (technically, Paul Ryan and Patty Murray, the House and Senate budget committee chairs will begin a process of fiscal negotiations, due to wrap up by mid-December).

2013-10-22 Earnings Season Hides in the Government Shadow by Chris Maxey, Ryan Davis of Fortigent

Lost in all the discussion about Washington is the fact earnings season is in full swing.It is shaping up to be another interesting reporting season, on account of volatility in the markets and economy.So far, companies are beating expectations, but the broader trend is lower.

2013-10-22 A Green Light for Gold? by Peter Schiff of Euro Pacific Capital

It is rare that investors are given a road map. It is rarer still that the vast majority of those who get it are unable to understand the clear signs and directions it contains. When this happens the few who can actually read the map find themselves in an enviable position. Such is currently the case with gold and gold-related investments.

2013-10-22 Fixing Economy As Easy As 1-2-3 by Axel Merk of Merk Investments

With the economy stuck in first gear, a couple of common sense steps that wouldn’t cost taxpayers an arm and a leg could help the economy shift into a higher gear.

2013-10-22 Could US Issues Lead Investors to Emerging Markets? by Mark Mobius of Franklin Templeton

The US government had been shuttered for more than two weeks, and investors around the world, including those in emerging markets, have been watching the impasse and beginning to plan in the event of a default of US government debt. Late Wednesday, the US Congress agreed to a short-term extension of the debt ceiling until February and set the stage for the government to reopen. However, a definitive, long-term solution to the nation’s debt issues was still not reached and we could see a repeat of the political dysfunction.

2013-10-22 After the Minimalist Debt Ceiling Deal: The Good & Bad News by Russ Koesterich of iShares Blog

Last week, investors cheered that Washington finally reached a last-minute debt ceiling deal. But despite their big sigh of relief, the debt ceiling deal wasn’t all good news. Russ provides a quick look at the good, the bad and the investing implications of the compromise.

2013-10-22 A by Milton Ezrati of Lord Abbett

State and local government revenues have finally started growing again. The resultant boost to spending and hiring should aid the economy.

2013-10-22 The Fiscal Follies, the Economy, and the Fed by Scott Brown of Raymond James

The deal reached last week does not remove uncertainty about the budget and debt ceiling. We could go through a similar crisis in three months. The hope is that lawmakers will learn from the recent experience and work together.

2013-10-22 The Boys Are Back in Town by Jeffrey Saut of Raymond James

The boys are indeed back in town as Washington D.C. opened its doors for business as usual last week following a contentious debt ceiling debate and a 16-day shutdown of the government. This outcome had been anticipated in these letters for often-stated reasons, and just like when the ”fiscal cliff” was averted, I now expect the media to turn its focus to the next Armageddon.

2013-10-22 ProVise Bullets by Ray Ferrara of ProVise Management Group

Last month, a Wells Fargo/Gallup survey of non-retired investors showed just how lingering the hangover is from the financial crisis five years ago. Much like the Great Depression financially scared their great grandparents and grandparents, the Great Recession is impacting investors’ expectations about the future.

2013-10-22 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

The gov is back in biz (so get back to work). Investors were pleased (for now).

2013-10-22 Middle East/Africa: Regional Economic Review - 3Q 2013 by Team of Thomas White International

Economic activity in the Middle-East and North Africa (MENA) has been hindered by prolonged political unrest and civil strife. The region’s vulnerability has increased over the last two years due to mounting structural challenges. What’s more, widening fiscal deficits due to the economic slowdown and dwindling foreign currency reserves remain sources of concern, as noted by a World Bank report.

2013-10-21 A Last Minute Deal Averts Default - For Awhile by Andy Friedman of The Washington Update

With the deadline for the United States to avoid defaulting on its debt fast approaching, Congress reached another late night compromise to reopen the government and raise the nation’s debt limit. The deal also called for yet another bipartisan committee to try to set a budget for future government spending. Before discussing what that committee is likely to do, let’s compare the predictions I’ve been making since early this year against the reality of what ultimately occurred.

2013-10-21 Puerto Rico - What do you think of? by David Lieberman (Article)

The name should conjure up images of beautiful beaches, warm weather, and Old San Juan. But, for U.S. investors, it is increasingly conjuring up images of debt run amuck. Make no mistake, Puerto Rico has massive amounts of debt; nearly $70 billion, and that excludes their unfunded pension liabilities.

2013-10-21 Did Monetary Policy Cause the Recovery? by John Hussman of Hussman Funds

Much of the present faith in monetary policy derives from the belief that it was the central factor in ending the banking crisis during what is often called the Great Recession. On careful analysis, however, the clearest and most immediate event that ended the banking crisis was not monetary policy, but the abandonment of mark-to-market accounting by the Financial Accounting Standards Board on March 16, 2009, in response to Congressional pressure by the House Committee on Financial Services on March 12, 2009.

2013-10-21 Looking Past the Politics: What Does the Market Need to Grow? by Ron Sloan of Invesco Blog

As the tone of the debt ceiling negotiations in Washington wavered over the past several days, equity markets rose and fell in kind. While lawmakers were able to come to a last-minute agreement to raise the debt ceiling and end the 16-day federal government shutdown, the key to putting the markets on a solid foundation for the longer term is for corporations to generate earnings growth through increased revenues.

2013-10-21 Fourth Quarter Investment Outlook by Bob Doll of Nuveen Asset Management

The macro theme of the fourth quarter and early 2014 is monetary reflation and global growth resynchronization. The Fed’s surprising decision to postpone tapering its QE program will likely encourage further risk-taking. In the meantime, we observe increasing signs of a synchronized improvement among the four important economies - the United States, Europe, Japan and China.

2013-10-21 Europe Turning a Corner? by Brandon Odenath of J.P. Morgan Funds

Since late last year, investors have seen periods of strong outperformance by assets from the most impacted parts of Europe, leaving many observers wondering if Europe is turning a corner. Intervention by the ECB and the ability of those liquidity injections to stop the bleeding in the economy has helped. The reduction of austerity and drag coming from fiscal policy should be the key to faster economic growth.

2013-10-18 United States Debt Default Averted - For Now by David Edwards of Heron Financial Group

The US Senate passed H.R. 2775 Continuing Appropriation Act, 2014 Wednesday afternoon 81 votes to 18. The House of Representatives passed the bill around 10PM Wednesday night 285 to 144, and the bill was signed into law by President Obama at 12:30 AM Thursday morning. 100% of Democratic Representatives voted for the bill, but only 37% of Republican Representatives in what is widely regarded as a disastrous outcome for the Republican strategy of shutting down the government in order to “defund ObamaCare.”

2013-10-18 Headwinds Give Way to Bullishness by Scott Minerd of Guggenheim Partners

With the partial government shutdown and Washington gridlock behind us for now, interest rates should continue declining and conditions are pointing to a period of renewed strength across asset classes.

2013-10-18 Just Like Yesterday by Francois Sicart of Tocqueville Asset Management

In his latest essay, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, with help from Chetan Parikh, of India’s Capital Ideas Online, provides excerpts from and commentary on a 1971 speech by iconic investor David L. Babson. He begins by noting: "It is eerie how timely this speech, delivered 42 years ago, remains today."

2013-10-18 Connecting the DOTs: The Role of North America's Emerging Markets' in Achieving Energy Independence by John Devir of PIMCO

The midstream energy sector is likely to grow more quickly than the overall U.S. economy over the next several years, creating the potential for attractive investment opportunities. North Dakota, Oklahoma and Texas, or the “DOTs” for short, stand to disproportionally benefit from strong growth in onshore U.S. oil and gas shale development. PIMCO’s approach is to identify and invest in the companies, including pipeline operating companies, favorably positioned to benefit from prolific oil production.

2013-10-18 Despite Uncertainty, the Market Still Looks Strong by Charlie Dreifus of The Royce Funds

Although it was an ugly battle, on Thursday morning October 17 President Obama signed a bill that reopened the government into January 2014 and raised the debt ceiling until early February of next year.

2013-10-18 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 130.4, down from last week’s 130.3 (revised from 130.4). The WLI annualized growth indicator (WLIg) to one decimal place, dropped to 2.8, down from 3.6 (a downward revision from 3.9).

2013-10-18 Fall is in the Air by Christopher Singleton of Kanawha Capital Management

Autumn has arrived, and many creatures have been making dutiful preparations to survive the winter months. But not all are so inclined, particularly our political leaders. Indeed, along with crisper air temperatures and more vibrant colors, it would just not feel like fall without the annual Washington squabbles to fund the federal government and increase its borrowing authority.

2013-10-18 High Yield Bond Outlook: A Time for Unconstrained Management by Vilis Pasts, Matthew Pasts, Isaac Braley of BTS Asset Management

Using our unconstrained approach, BTS indicators signaled a move back into High Yield bonds near the end of September.BTS Asset Management views the High Yield bond sector as exhibiting solid fundamentals. Based on historical comparisons, High Yields have strong cash flow coverage for interest payments, due to conservative use of leverage. Post 2008, companies hired less people and have kept other fixed costs down.

2013-10-18 Debt Limit Extended, Fed Policy in the Wings - What to Expect from the Markets by Paresh Upadhyaya of Pioneer Investments

Last night Congress reached an agreement to raise the debt limit and end the 16-day shutdown. After all the acrimony and tense negotiations, the deal passed by a comfortable margin with 81-18 vote in the Senate and 285-144 in the House.

2013-10-18 Trying To Beat The Market Is A Fool's Errand by Chuck Carnevale of F.A.S.T. Graphs

Proponents of indexing as the best investment strategy seemed to take great delight in reporting how the vast majority of professionally managed portfolios (mutual funds, separately managed accounts, hedge funds, ETFs, etc.) fail to outperform the S&P 500. Therefore, they argue, it is best not to even try. Investors should simply invest in index funds and forget about it.

2013-10-18 Trying to Stop a Bull Market Has Risks by Frank Holmes of U.S. Global Investors

U.S. stocks have been on a tear. The S&P 500 Index has climbed a surprising 20 percent so far this year, as a global synchronized recovery takes shape and funds flow back to equities. As I often say, investors take risks when they try to stop a bull run, and plenty of data suggest you might regret taking that action this year.

2013-10-18 Is Your Portfolio a Five-Tool Player? by Robert Isbitts of Sungarden Investment Research

In baseball a “5-Tool Player” is one who has high-level abilities in these areas: hitting for power, hitting for average, running, fielding and throwing. 5-Tool Players are a special breed, and teams covet them. I have identified 5 tools a premier investment approach should have in order to be successful in our arena, the achievement of client goals and growth of advisory practices.

2013-10-18 In Other News by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

It will take some time to gauge the full impact of the government shutdown and data is likely to be somewhat skewed over the next couple of months. However, sitting on the sidelines isn\’t a great option and stocks still appear to us to be the best place to invest money for the longer term. International growth, although not robust, appears to be more supportive as we head into 2014 than it has since the financial crisis, and we favor developed over emerging markets for the time being.

2013-10-17 Fixed Income Investment Outlook by Team of Osterweis Capital Management

Last quarter we wrote about the confusion that can be created by the Federal Reserve’s (Fed’s) two official mandates: keeping inflation in check and ensuring full employment. We also pointed out that given the rather fragile economic backdrop, talk of letting the economy stand on its own two feet by reducing their bond buying might be premature. During the third quarter, it appeared most economists felt comfortable that the Fed would indeed begin “tapering” its purchase of Treasuries and mortgage securities after the September Federal Open Market Committee (FOMC) meetin

2013-10-17 Yellen to the Rescue? by Axel Merk of Merk Investments

While Democrats and Republicans fight with water pistols, the President may be readying a bazooka by nominating Janet Yellen to succeed Ben Bernanke as Fed Chair. You may want to hold on to your wallet; let me explain.

2013-10-17 Global Brand Companies: Well Positioned to Deploy Incremental Capital at High Rates of Return by Jenny Hubbard of Diamond Hill Investments

Achieving an optimal balance between growth and return on invested capital is critically important to value creation. Many discretionary product companies attain this equilibrium for a short period of time, but fickle and geographically divergent consumer preferences make it challenging to sustain over the long-term.

2013-10-17 The Short & Long-Term Implications of A Minimalist Debt Ceiling Deal by Russ Koesterich of iShares Blog

A deal to extend the debt ceiling and reopen the government is emerging. If it passes by tomorrow or shortly thereafter, the economy and markets will be spared the worst case scenario of a technical default. However, Washington’s inability to strike a more substantial bargain will have negative repercussions, over both the short and long term.

2013-10-17 Investing in Retirement: Bonds Aren't Enough by Kathleen Fisher, Tara Thompson Popernik of AllianceBernstein

What should you invest in after the spigot of earned income is turned off? It’s a vexing question, especially since we expect lower stock and bond returns going forward.

2013-10-17 Politics Secondary to US Equity Fundamentals by Grant Bowers of Franklin Templeton

It’s easy to get caught up in the tense drama surrounding the government shutdown and the debt ceiling squabble between Congressional Republicans and Democrats, but Grant Bowers, portfolio manager of Franklin Growth Opportunities Fund, maintains that looking beyond the political posturing and focusing instead on US corporate fundamentals is his preferred approach. Read on for more from Bowers on how he views the issues at hand, and why, even in the face of another political showdown in the Capitol, he thinks the US still presents a strong investment case.

2013-10-17 Some Encouraging News, but Further Uncertainties by Scott Brown of Raymond James

Financial market participants welcomed signs that leaders in Washington were at least willing to talk to each other. However, it remains unclear what sort of agreement will be reached. A temporary extension of the debt ceiling sidesteps a near-term financial catastrophe, but does not remove uncertainty completely.

2013-10-17 The U.S. Budget Deal: Peace, for a Time by Team of Northern Trust

Less than 24 hours before the U.S. Treasury Department ran out of room to borrow, Congress arrived at an agreement to reopen the government and steer away from debt default. This news came as a great relief, but that feeling may only last a few months. Following are some highlights and an initial analysis of the accord.

2013-10-17 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

The gov is closed for business. Nuff said. (But help may be on the wayor not?)

2013-10-17 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

October 17th looms large as a critical inflection point in our economic/political discourse. On that date the U.S. Congress is supposed to “raise the debt limit”, which simply means allocating the funds to cover debts already incurred by the Federal government. The date is being held hostage by both political parties in order to relegitimize the previous election (2012) and to dial-up the rhetoric of disparate political ideology.

2013-10-17 ProVise Bullets by Ray Ferrara of ProVise Management Group

Last month, a Wells Fargo/Gallup survey of non-retired investors showed just how lingering the hangover is from the financial crisis five years ago. Much like the Great Depression financially scared their great grandparents and grandparents, the Great Recession is impacting investors’ expectations about the future. 41% indicated they were concerned about another global crisis during their retirement years, and 28% were convinced they would have a lower standard of living during retirement.

2013-10-16 Pacific Basin Market Overview - September 2013 by Team of Nomura Asset Management

North Asian markets ended higher during the quarter after comments from Federal Reserve Chairman Bernanke appeared to infer that the Fed’s asset purchase program would be extended for a while longer. On the other hand, India and the ASEAN (Association of Southeast Asian Nations) region underperformed along with weakening currencies and continued fund outflows. In China, Premier Li Keqiang’s statement that China would meet its gross domestic product (GDP) growth target this year, coupled with better-than-expected economic data, brought some relief to the equity markets.

2013-10-16 Economic Assessment Without Government Reports by Team of Northern Trust

The very near-term economic outlook is unclear and will remain so until the political impasse in Washington over the government shutdown and debt ceiling is settled. If differences are resolved in a day or two, the damage could be about 0.2 percentage points to fourth quarter real gross domestic product (GDP). A failure to raise the debt ceiling would more of a calamity, which we hope not to encounter.

2013-10-16 Equity Outlook by Team of Osterweis Capital Management

As we write this outlook, our political leaders once again have succeeded in holding the U.S. government budget, and by extension the financial markets and the broader economy, hostage to their respective political agendas. We believe it is important to avoid getting caught up in the drama on Capitol Hill and remain focused on the slow but continued healing taking place in the U.S. economy.

2013-10-16 Two More Reasons to Like Equities: Growth & Inflation by Russ Koesterich of iShares Blog

Russ offers more evidence supporting his preference for equities over bonds: Historically equities have tended to outperform bonds on a monthly basis in a growth and inflation scenario like the one we’re in today.

2013-10-16 Being Contrarian Could Lead to Lucrative Energy Plays by Frank Holmes of U.S. Global Investors

Sometimes the most attractive energy assets aren’t found in the ground. Rather, at times like today, they are listed on the stock exchange.

2013-10-15 A Q3 client letter: Mike Tyson on Sticking to Your Plan by Dan Richards (Article)

Each quarter I post a template for a client letter, as a starting point for advisors who want to send clients an overview of the three months that just ended and the outlook for the period ahead.

2013-10-15 Five Ways Robo-advisors Will Change the Way Advisors Work by Raef Lee (Article)

Even the name robo-advisor is derisive. It evokes an image that is uncaring, lacks humanity and is inflexible. But it is the term being used by advisors to describe a new breed of startups that directly connect tech-savvy investors with suites of analytic tools to create financial plans or investment portfolios. A name this disparaging makes us ask why advisors fear this new model of financial advice.

2013-10-15 Investing in the U.S. Energy Revolution by Sponsored Content from OppenheimerFunds (Article)

This whitepaper discusses how: Technological advances have made immense reserves of U.S. oil and natural gas economically recoverable; Consumers and industry may see cost reductions, and U.S. productivity and trade balance stand to improve; A wide range of companies may encounter transformational growth opportunities.

2013-10-15 The Science of Forensic Accounting by Sudarshan Murthy of Matthews Asia

The financial reporting of corporations in Asia is complex, and having a solid grasp of all the nuances involved in these accounting practices is critical when making investment decisions. This month Research Analyst Sudarshan Murthy, CFA, kicks off the first in a series of commentaries on the science of forensic accounting. This first issue focuses on “the numbers,” and examines what is considered in order to understand a company’s accounting decisions and the implications they can have on financial reports.

2013-10-15 The Turmoil in Washington by Bill OGrady of Confluence Investment Management

At the time of this publication the budget situation has not been resolved, although it appears that both parties are backing away from the default abyss. However, given that these crises seem to come once or twice a year, it seemed appropriate to weigh in on the geopolitical impact of the intractable problems of American government.

2013-10-15 A Degree in Debt: Student Loans and the Economy by Team of Manning & Napier

Recent times have drawn concerns about student loan debt and rising delinquencies. Anecdotes of unfortunate individuals struggling financially to cope with massive student loans raise fears of broader risks to the US economy and financial markets.

2013-10-14 Equity Market Review & Outlook by Richard Skaggs of Loomis Sayles

Equities generally performed well across the board in the third quarter. The S&P 500 Index’s solid 5.24% return built on strong gains from earlier in the year. The Index has returned more than 19% through September, surpassing expectations at the start of the year. Slow but steady economic growth in the US, support from the Federal Reserve (the Fed), and more recently, signs of potentially better growth in Europe and Asia have been important positive catalysts.

2013-10-14 Waiting for the Fed by Charles Lieberman (Article)

The Fed is waiting for evidence of stronger economic growth before it tapers monetary policy, which requires new data that won’t be available until the budget and political impasse is settled. Measured GDP, when it becomes available, will be weakened by the shutdown, but workers will be paid and underlying trends remain fairly positive. The negotiations may be protracted and highly distracting while underway, but equities should rally as soon as the budget issue is either resolved or reduced in severity, as hinted by last week’s sharp rally in reaction to progress in the talks.

2013-10-14 Short Horizon, Long Horizon by John Hussman of Hussman Funds

On all evidence, we’re far more inclined to view the position of stock prices as a temporary overextension of already extreme conditions than some durable change in the workings of the financial markets.

2013-10-14 A Look at “Stale Data” (Not Due to Gov't Shutdown) and Housing by Gregg Bienstock of Lumesis

I am confident that some type of deal will be reached to avert a default. And, let’s keep in mind that, according to the CBO, the 10/17 deadline is really just a deadline to start making decisions about what to pay with the remaining $30 or so billion as they project another one or two weeks before the “day of reckoning” when there is only enough money to pay about 70% of the government’s bills which bills to pay.

2013-10-14 Me and My Horse by Jim Goff of Janus Capital Group

This is not a story about getting back on the horse that throws you. It is about just staying on the horse. It is also a market story.

2013-10-14 Move Along, Market: It's Only a Gaper's Delay by Rick Golod of Invesco Blog

After several days of stalemate between the White House and Congress, House Republicans have offered a six-week debt ceiling extension conditional on negotiating a package of fiscal concessions. The debt ceiling offer is straightforward, but the shutdown would continue until the fiscal concessions are agreed on. While this may dampen the economy and equity market, at least in the short run, I believe long-term investors should stay put and be patient.

2013-10-14 Can Markets Remain Resilient in Light of Political Dysfunction? by Bob Doll of Nuveen Asset Management

Equities were mixed again last week, and the markets remain focused on the budget impasse in Washington, D.C., after the second week of the partial government shutdown. The S&P 500 closed the week in positive territory, increasing 0.8%.1 It is hard to ignore headlines and market volatility, but the real issues for markets are the debt ceiling debate and third quarter corporate earnings announcements.

2013-10-14 No Sign of Economic Problems by Brian Wesbury, Bob Stein of First Trust Advisors

With the federal government partially shut for the past couple of weeks, the normal steady stream of economic indicators has slowed to a trickle. We’ve missed reports on employment, construction, retail sales, international trade, and inventories.

2013-10-12 A Special Note on Potential Government Debt Default by Richard Bernstein of Richard Bernstein Advisors

We find it incredible that the government is, once again, on the verge of a default on US debt. Although we doubt that the US will actually default, it is unfathomable that elected officials would even consider such an event. Worse yet, some officials apparently believe that a default might benefit the US.

2013-10-12 Debt Ceiling Delusions by Peter Schiff of Euro Pacific Capital

The popular take on the current debt ceiling stand-off is that the Tea Party wing of the Republican Party has a delusional belief that it can hit the brakes on new debt creation without bringing on an economic catastrophe. While Republicans are indeed kidding themselves if they believe that their actions will not unleash deep economic turmoil, there are much deeper and more significant delusions on the other side of the aisle.

2013-10-12 These Could be the Most Lucrative Energy Plays by Frank Holmes of U.S. Global Investors

Sometimes the most attractive energy assets aren’t found in the ground. Rather, at times like today, they are listed on the stock exchange.

2013-10-12 Sometimes They Ring a Bell by John Mauldin of Millennium Wave Advisors

Three items have come across my screen in the past month that, taken together, truly do signal a major turning point in how energy is discovered, transported, and transformed. And while we’ll start with a story that most of us are somewhat aware of, there is an even larger transformation happening that I think argues against the negative research that has come out in the last few years about the reduced potential for growth in the world economy.

2013-10-11 Now Showing in Macau by Taizo Ishida of Matthews Asia

What is most impressive about Macau today is the strong sense of collaboration and commitment from all involved parties: both Macau and mainland Chinese government officials and casino operators. While Asia’s other gambling centers (Singapore, Malaysia, Cambodia and the Philippines) have also seen waves of notable development in recent years, Macau, in my opinion, should be recognized as the gold standard of the gaming space in Asia.

2013-10-11 The Fed's Surprise and Yellen's Challenge by Mohamed A. El-Erian of Project Syndicate

To ask what Janet L. Yellen, the nominee to succeed Ben Bernanke as Chair of the Federal Reserve, has in store for US monetary policy is to pose the wrong question. The real issue is the decline of the Fed’s policy effectiveness.

2013-10-11 Flying Blind: Forecasting with No Data or Endgame by Diane Swonk of Mesirow Financial

Everything from the government shutdown to posturing regarding the lifting of the debt ceiling has heightened uncertainty about the economic outlook. Consumer and business confidence have fallen since the threat of a shutdown emerged, while the reality has taken a toll on communities where a large number of federal workers have been furloughed. Everyone, from cab drivers to restaurant owners, small retailers and (largely) defense manufacturers, were affected in the early days of the partial shutdown of government agencies.

2013-10-10 Frustrating the Most People by Bill Smead of Smead Capital Management

A venerable sage once said, "The markets do whatever they have to do to frustrate the most people." For the long-duration investor, this means that you need to look at what people are invested in to determine where the frustration will come from. Thanks to the Associated Press, we know what the masses have done with their investments in the last five years.

2013-10-10 Tipping the Scale Toward High Yield Bonds by Scott Minerd of Guggenheim Partners

The U.S. Federal Reserve’s decision in September to delay at least for now any reduction in its asset purchases drove U.S. Treasury rates down materially from the highs seen over the summer, easing concerns about the impact of higher rates on economic growth. Now as we start the fourth quarter, the below-investment grade investment outlook appears positive, and more positive for high yield bonds than bank loans.

2013-10-10 Can You Hear Me Now? by Marie Schofield of Columbia Management

Under normal circumstances, I provide insight and analysis on the monthly jobs report at the beginning of each month. This month Washington politics has interrupted my routine with the partial government shutdown postponing several important data releases this week and pessimistically next week as well. Not only that but several agencies have completely shut down their websites denying access to already released data and historical databases, which is completely unnecessary.

2013-10-10 What Is Due Diligence? Here's How I Do It by Chuck Carnevale of F.A.S.T. Graphs

The lexicon of the financial world is full of phrases and jargon that are often tossed about without considering that there may be those who are not exactly familiar with the true meaning of the terms. It recently came to my attention that due diligence may be one of those idioms. In my own writings, I routinely recommend that readers conduct their own due diligence and/or comprehensive research. However, I recently had a reader ask me exactly what due diligence was and how to do it?

2013-10-10 The Fire Fueling Gold by Frank Holmes of U.S. Global Investors

Gold took quite a beating in September, bucking its seasonal average monthly return of 2.3 percent. The political battle between President Barack Obama and Congress, China’s Golden Week, and India’s gold import restrictions likely weighed on the metal.

2013-10-09 Little Visible Progress on the Budget Shutdown, but Some Inside Baseball In Play by Sam Wardwell of Pioneer Investments

President Obama canceled his planned visit to Asia and participation in the Asia-Pacific Economic Cooperation summitciting the inconvenience caused by the government shutdown (“the difficulty in moving forward with foreign travel in the face of a shutdown), sending John Kerry in his place, and reiterating his unwillingness to negotiate with Republicans.

2013-10-09 Equity ETF Flows Send Bullish Signals by Minyi Chen of AdvisorShares

U.S. Equity ETFs gave up $4.3 billion in the week ended October 1, reversing a $3.4 billion inflow in the previous week. This week’s outflows signal low demand for stocks, a bullish short-term indicator from a contrarian perspective.

2013-10-09 The U.S. Can\'t Default On Its Debt. Right? by Gary Halbert of Halbert Wealth Management

The Treasury Secretary has warned that his agency will exhaust the “extraordinary measures” it has used to fund the government on October 17. On the Sunday talk shows, he warned of “catastrophic consequences” if Congress doesn’t raise the statutory debt ceiling by then. So, over the next nine days, you’ll be hearing ominous forecasts of what will happen if the US defaults on its nearly $17 trillion national debt, or even some of it. Sound familiar?

2013-10-09 The Squeeze Play by Jerome Schneider of PIMCO

Reductions in Treasury bill and commercial paper issuance compounded by developments on the demand side mean the “squeeze play” is on for many short-term portfolios. Investors should consider the potential for substantive changes to liquidity conditions as banks contend with increases in capital requirements due to updated Basel III regulations. Active management of short-term investments is important: Don’t rely on static regulatory frameworks or traditional indexes to determine a portfolio’s unique liquidity needs.

2013-10-09 Taper Time - Mining, That Is by Adam Bowe, Robert Mead of PIMCO

Recent data suggest that mining investment is tapering, with the sector detracting from real growth in the first half of 2013. We see three possible growth scenarios: a handoff to the corporate sector; no handoff, with demand continuing to slow; or a handoff to the highly levered household sector, which would create long-term risks. Until we see meaningful signs of a growth handoff from the mining sector to a new balance sheet that has the capacity to expand, our base case calls for sub-trend growth and low interest rates, supporting bond prices over the cyclical horizon.

2013-10-09 Getting Serious About Investing Responsibly by Luke Spajic, Josh Olazabal of PIMCO

To date, much of ESG-related investing has focused on negative screening, but we believe there is a better approach. This approach rests on three pillars: identifying and analyzing key ESG issues facing a given investment sector, engaging with the issuers of securities, and supporting the development of markets for ESG investments.

2013-10-09 An Unnecessary Crisis by Scott Brown of Raymond James

With the lapse in appropriations, the federal government slipped into a partial shutdown last week. The economic impact will depend on how long the standoff lasts, which could be a couple of weeks or more. Recent economic data suggest that third quarter growth was a lot lower than anticipated. So, the crisis in Washington arrives at a particularly bad time. Lawmakers appear to be taking the debt ceiling more seriously, and we could see action on that before the budget authorization is settled but it’s unclear how the situation will be resolved.

2013-10-09 Ashes to Ashes by Jeffrey Saut of Raymond James

The phrase “ashes to ashes, dust to dust” is derived from the Biblical text of Genesis 3:19 and was adapted to its present form at an old English burial service. Last week I repeated those words as I scattered my father’s ashes next to my mother’s in the memorial garden of the church they loved so much in Richmond, Virginia. Indeed, my week was spent in Richmond, Washington D.C., and Baltimore seeing institutional accounts, consulting with political types, and speaking at various events for our financial advisors and their clients.

2013-10-09 Emerging Values by Cliff Stanton of Envestnet

The current valuations and fundamentals in Emerging Markets make for an attractive entry point, if you can stomach the increased volatility and risk associated with the asset class.

2013-10-08 Four Lessons from Sport’s #1 Overachiever by Dan Richards (Article)

A New York Times article pointed out that this year’s baseball playoffs have more teams from the bottom 10 in payroll than from among the top 10 spenders. Here are four ways you can do more with less, drawing lessons from a baseball team that has outperformed despite being consistently outspent.

2013-10-08 What Happens if the Government Shuts Down and Nobody Notices? by Michael Temple of Pioneer Investments

Yes, this is a facetiously philosophical title (what is the sound of one hand clapping?) that pokes fun at the current situation in Washington. And we’re well aware that if Republicans and Democrats can’t reach a compromise in a couple of weeks to deal with the debt ceiling “time-bomb”, none of us will be joking around.

2013-10-08 Government Shutdown Masks Pending Debt Ceiling and Third Quarter Earnings by Bob Doll of Nuveen Asset Management

Equities were mixed last week as the markets were focused on the budget impasse in Washington, D.C., that forced the federal government into a partial shutdown. As with the 17 prior shutdowns, we do not anticipate a lasting impact on the economy or markets. While the shutdown makes headlines, the issues that will likely have the most impact are the debt ceiling debate and third quarter corporate earnings announcements, which could mean a bumpy ride for investors.

2013-10-08 The Only Story in Town by Brian Wesbury, Bob Stein of First Trust Advisors

It’s strange times in the United States. The government is partially shut down and isn’t releasing any statistics. Even John Muir wouldn’t be allowed to hike in a national park. All the while, the President and the Treasury Secretary are predicting an economic calamity for the US (and maybe the globe) if the debt ceiling isn’t raised. Yet, they refuse to negotiate to prevent that from happen.

2013-10-08 The Market May Be Signaling a Return to a More Typical Recovery by Whitney George of The Royce Funds

Despite the Fed’s indecision about whether or not to taper, we see evidence that business activity is normalizing and the global economy is getting healthier. Co-CIO, Managing Director, and Portfolio Manager Whitney George talks about how economically sensitive sectors have begun to benefit from rising rates in the small-cap rally, how recent news coming out of China has affected certain portfolio investments, where he is currently seeing long-term opportunities, and stocks in which he has high confidence.

2013-10-08 The Death of Fixed Income? Not so Fast . . . by Giordano Lombardo of Pioneer Investments

Recent market movements have reminded investors that the fixed income market is facing a secular change, after a 30-year-long bull market driven by a continuous decline in interest rates. I believe the announcements of the death of fixed income as an asset class are greatly exaggerated, and in order to face the new reality, fixed income investors and asset allocators need to adopt a significant change of approach.

2013-10-08 Maybe Mark Twain Said It Best... by Blaine Rollins of 361 Capital

President Barack Obama and his top economic officials appear to be pushing for some market unrest to exert pressure on the GOP to throw in the towel. Asked in his CNBC interview Wednesday whether Wall Street is right to remain calm over the standoff, Mr. Obama replied: “No.”

2013-10-08 Q3 Brings Plot Twists; Volatility to Continue in Q4 by Russ Koesterich of iShares Blog

Russ reviews how the third quarter shaped up vs. his expectations, noting which calls he got right and which he got wrong, and he updates his outlook for this quarter.

2013-10-08 And That\'s The Qaurter That Was by Ron Brounes of Brounes & Associates

An obsession with Fed policy; troubles in Syria; new concerns in DCand yet the market kept rolling (for a while).

2013-10-08 And That\'s The Week That Was by Ron Brounes of Brounes & Associates

The gov is closed for business. Nuff said. Coming up in the week ahead: ISM Fed Minutes (Wednesday) Retail Sales (Friday), PPI (Friday)or maybe not.

2013-10-08 Absolute Return Letter: Heads or tails? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners

Demographics captivate me. There are around 7.1 billion of us occupying planet earth today, going to 10 billion by 2050. I often think about how good old mother earth will cope with the additional 3 billion people we are projected to produce between now and 2050. More people translate into increased pressure on already scarce resources, but that is only part of the story and a story well covered by now.

2013-10-07 Goose Bump Stuff... by Michael Kayes of Willingdon Wealth Management

Scientific research and discovery has always been an important aspect of American life. This, in itself, should make us hopeful.

2013-10-07 A Decade of Low Volatility with High Dividends by Ryan Issakainen of First Trust Advisors

Over the past few years, both “low volatility” and “dividend” strategies have resonated with ETF investors, many of whom were seeking more conservative approaches by which to increase exposure to stocks. Adding further demand for these strategies is a growing body of evidence that suggests an association between both factors and improved risk-adjusted returns.

2013-10-07 Defining the EM Corporate Bond Opportunity by Elisabeth Colleran, Peter Frick, Peter Marber, David Rolley, Edgardo Sternberg of Loomis Sayles

Finance is a numbers business. Investors study prices, yields, rates of return. However, when it comes to sizing up emerging markets, we think they should also pay attention to semantics. In the past, terming a country “emerging” made it synonymous with low credit quality and higher risk. But today, many emerging markets boast strong credit profiles while parts of the developed world buckle under heavy debt loads.

2013-10-07 Earnings Preview by Mark Ungewitter of Charter Trust Company

There’s an old saying on Wall Street: “The market never discounts the same thing twice.” With government-shutdown and debt-ceiling theatrics becoming an annual ritual, perhaps there’s something else behind the recent loss of market momentum.

2013-10-07 Ted Williams, Ford F-150\'s, and Market Valuations by Robert Mark of Castle Investment Management

In late 2008 Lehman Brothers had just collapsed, AIG needed help from the US government and markets around the world were in a tailspin. Today, five short years later, we find it strange how the strength of the stock market defies a climate of declining earnings. With another quarter of corporate results behind us, equities continue to rally despite corporate earnings offering no material support, with many companies actually talking down their future growth prospects.

2013-10-07 When Economic Data is Worse Than Useless by John Hussman of Hussman Funds

Investors and analysts fall over themselves daily to analyze and interpret the latest data from regional Fed surveys (e.g. Philly Fed, Empire Manufacturing), purchasing managers indices (e.g. national manufacturing, national services, regional PMIs), and other economic measures (e.g. new unemployment claims, average weekly hours). The problem is that virtually all of these measures have become not only uncorrelated with subsequent economic outcomes, but negatively correlated with subsequent outcomes.

2013-10-07 Charles Wheelan’s Tips for Separating Economic Truth from Fiction by Jeff Briskin (Article)

The world of numerical obfuscation is a topic covered in an informative and surprisingly entertaining ‘statistics primer’ by economist Charles Wheelan. In a recent conversation with Wheelan, we discussed his book and the lessons it offers to financial advisors, whose decision-making processes are influenced by the seemingly endless stream of economic and market data posted every day.

2013-10-05 Pinch Yourself. U.S. Stock Markets Have Grown 145% in Four-Plus Years by Ron Surz of PPCA

Thankfully, 2008 has become a distant memory. We’ve made back its 37% loss and a lot more. Things are good, but are they going to stay that way? We still face anemic economic growth, burgeoning debt, global social unrest and more. The S&P 500 has returned 145% in the past 55 months (4.5 years).

2013-10-04 After Detroit: Rigorous Research and Credit Selection Is the Key to Investing in Municipal Bonds by David Hammer, Sean McCarthy of PIMCO

Detroit recently declared bankruptcy, setting off the largest municipal Chapter 9 proceeding in history. There has been and will continue to be a lot of noise in the media, underscoring challenges but also presenting opportunity for experienced investors. PIMCO has long favored special revenue essential service bonds over GO bonds. Detroit Water and Sewer bonds are payable by a pledge of and statutory lien on net revenues of the water or sewer system, and as such benefit from provisions in the federal bankruptcy code ensuring that the pledge is not affected by the petition.

2013-10-04 The New Normalization of Fed Policy by Tony Crescenzi of PIMCO

The Fed is sending a message that the unwinding of its extraordinary accommodation will be done with great care and patience, and will take time - a long time. In delaying a taper, not only did the Fed show markets it has little tolerance for any tightening of financial conditions, it also strengthened its forward guidance considerably. The Fed’s decision to delay a taper will likely relieve some of the upward pressure on longer-term interest rates.

2013-10-04 Are Investors Paying More Attention to Quality Small-Caps? by Francis Gannon of The Royce Funds

Although it covers only a brief time period, recent research by Furey Research Partners showed that since the beginning of May 2013 through September 30 the lowest leveraged companies outperformed the highest leveraged companies within the Russell 2000to us a long-anticipated reversal and an encouraging signal that suggests investors have not abandoned quality despite an environment of easy money and near-zero interest rates.

2013-10-04 The Economy, the Fed, and Politics by Richard Michaud of New Frontier Advisors

It was a good quarter to invest in equities, and despite a down second quarter, overall a good year as well. The Dow was up 1.5%, the S&P 4.7% and the NASDAQ 10.8%. Year-to-date returns were very positive with the Dow up 15.5%, S&P up 17.9%, and NASDAQ up 24.9%. International equities were also positive for the quarter and year with the MSCI ACWI ex US up 9.4% and up 7.5% year-to-date. While emerging market equity indices were up 5% for the quarter they remained negative -6.4% for the year.

2013-10-04 New Experiment in Shanghai by Sherwood Zhang of Matthews Asia

In an attempt to further liberalize China’s economy, central government officials have created an experimental new free trade zone, which officially opened for business this week. The zone combines four existing but smaller development areas within Shanghai that are already exempt from import and export tariffs.

2013-10-04 The Banking Sector: Better, with Room for Improvement by Russ Koesterich of iShares Blog

Russ K. explains the good news behind his recent upgrade of the global financial sectors as well as the bad news keeping his sector outlook somewhat subdued.

2013-10-04 The Debt Ceiling Drama is Heating Up by Team of Northern Trust

The debt ceiling drama is heating up. Threatening default is reckless, but long-term budget issues require attention. Measures of policy uncertainty show a link to economic performance

2013-10-04 Is the Pump Primed for Emerging Markets Investors? by Mark Mobius of Franklin Templeton

The vulnerabilitiesor rather, perceived vulnerabilitiesof emerging markets have been the focus of heightened discussions over the past few months. Concerns about the health of emerging markets came on the heels of political upheavals in Egypt, economic deceleration in China and protest demonstrations in Brazil and Turkey this summer.

2013-10-04 What Is The Correct Discount Rate To Use? Part 2B by Chuck Carnevale of F.A.S.T. Graphs

One of the most widely-accepted and utilized methods of valuing a business in today’s world of modern finance is discounted cash flow (DCF) analysis. Obviously, in order to calculate valuation, practitioners must rely on mathematical formulas. However, the challenge with utilizing mathematical formulas to determine the net present value (NPV) of a future stream of income is in determining the proper inputs. Consequently, the accuracy of our result is subject to the principle “garbage in garbage out.”

2013-10-04 Washington's Prolonged Saga and the Market's Reaction by Josh Timmons and Libby Cantrill of PIMCO

The federal government shutdown represents yet another self-inflicted wound to already modest growth. While the market seems to be mostly sanguine about the government shutdown, a breach of the debt ceiling which we feel is highly unlikely would be incredibly negative for financial markets.

2013-10-04 Don\\\'t Fret the Shutdown by Brian Wesbury, Bob Stein of First Trust Advisors

The shutdown allows money that would have been diverted to the government to be kept in the private sector. This may actually lift growth and profits in the quarters ahead. Don’t fret the shutdown.

2013-10-04 The Malfunctioning United States Government by Gene Goldman of Cetera Financial Group

Overall, we are entering a potentially volatile period for the financial markets. Increased uncertainty combined with below-trend economic growth will likely lead to sharp market fluctuations. To mitigate the risk of volatility, we remain committed to increased diversification. Within equities, we would begin reducing exposure to U.S. stocks and instead focus on better areas of opportunity international developed markets. Within fixed income, we would maintain a bias toward spread product, such as corporate bonds, which generally pay a higher yield compared to similar Treasuries.

2013-10-04 Introducing the Tortoise Economy by Sam Stewart of Wasatch Funds

All things considered, large U.S. companies that operate globally appear to be particularly attractive right now. Because many of these companies are generating significant portions of their sales outside the U.S., investors are effectively getting some international exposure with what I consider to be more-quantifiable risks.

2013-10-04 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.1, down from last week’s 132.9. The WLI annualized growth indicator (WLIg) to one decimal place, remains unchanged at 4.8% (with last week’s number revised downward from 4.9).

2013-10-04 Government Shutdown and Beyond by Team of Neuberger Berman

After months of eerie quiet in Washington, DC, fiscal conflicts have taken center stage, most prominently with the October 1 "shutdown" of U.S. government services. Markets are nervously watching if Congress can move past current wrangling to create a workable budget while navigating both the debt ceiling and shutdown-related fallout. In this issue of Strategic Spotlight, we consider how the budget debates could play out and the implications for investors.

2013-10-03 United States GDP (Gross Domestic Product), a Sign of Things to Come or of Things past? by Miguel Perez-Santalla of BullionVault

Today’s United States GDP (Gross Domestic Product) report of 2.5% was nearly as expected so lower. The actual expectation was 2.6% that puts our average for the year now at 1.8%. This is not a good GDP. The United States GDP indicates what direction the country is going. It tells us whether we are growing and getting stronger or just stumbling by. Quarter to quarter it is much better but the number for the year so far tells us we have a long way to go.

2013-10-03 Third Quarter Market Commentary: Let's Reminisce by Robert Stimpson of Oak Associates

US stocks have risen each quarter of 2013, outperforming most other asset classes and emerging markets along the way. In the third quarter, the S&P 500 Index rose 5.24% and pushed the year-to-date gain to 19.79%. All sectors within the S&P 500 have produced positive returns this year, although the pro-cyclical groups have outperformed the defensive ones.

2013-10-03 Buying the Shutdown by Scott Minerd of Guggenheim Partners

Volatility from the government shutdown and other political developments in Washington D.C. will likely continue to rise. Despite this, the reduction in output from this will be short-term, and investors still have several attractive options for deploying capital across asset classes in the United States and globally.

2013-10-03 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs fell by almost $40.9 million. Assets in the two largest categories “Short Term Bond” and “Global Bond” fell by $7.74 million and $10.156 respectively. In addition, the “Foreign Bond” category decreased by $36.33 million, while AUM in “Currency” active ETFs fell by almost $5.2 million.

2013-10-03 More Heat Than Light by Zach Pandl of Columbia Management

Following their surprising decision to maintain the current pace of quantitative easing (QE), Fed officials provided more detailed reasoning last week in public remarks and interviews with media outlets. Unfortunately, the latest comments added more heat than light to the QE debate in our view. Much like Chairman Bernanke’s post-meeting press conference, officials expressed contradictory views on several major policy questions.

2013-10-03 PIMCO Cyclical Outlook for the Americas: A Slow-Moving Fed Benefits Economies on Both Continents by Mohit Mittal, Lupin Rahman, Ed Devlin of PIMCO

PIMCO expects the U.S. economy to grow 2.0%2.5% over the next year. However, a continued government shutdown would be a drag on growth. In Latin America, we see growth picking up to 3.0%3.5%, but the outlook varies by country. Mexico should fare well, but Brazil’s story is more mixed. In Canada, we believe the housing correction will be less severe than many are predicting, and we expect GDP to grow 1.5%2.0% over the cyclical horizon.

2013-10-02 Countdown to a Government Shutdown (Sept. 30) by Liz Ann Sonders of Charles Schwab

Unless an 11th hour deal is struck, the government will shut down at midnight tonight. Memories are fresh from similar "fiscal follies" in the summer of 2011 and we’ll compare and contrast. The last shutdown was 17 years ago and a look at that history may also be instructive.

2013-10-02 Chuck Royce on 3Q13: Quality Small-Caps Can Continue to Bear Fruit by Chuck Royce of The Royce Funds

Co-CIO, President, and Portfolio Manager Chuck Royce discusses his outlook on the current state of the small-cap market, his continued confidence in quality despite the Fed’s announcement in September to prolong its ongoing stimulus efforts, and the current case for active small-cap management.

2013-10-02 The Death Knell of Global Synchronized Trade by Bill Smead of Smead Capital Management

At Smead Capital Management, we believe the interest on September 18th in emerging markets, oil and gold are the last gasps of a dying trend. Our discipline demands that you must avoid popular investments and completely avoid investments attached to a perceived “new era.” We argue that the international investment markets reaction to Bernanke’s reprieve on September 18th is proof of a vision we have of the future.

2013-10-02 What's easy about Quantitative Easing? by Gene Goldman of Cetera Financial Group

Recently you may have read or heard in the news about the possibility of the Federal Reserve (Fed) “tapering” its Quantitative Easing (QE) program. The topic can be so ingrained in the news cycle that few newscasters take the time to cover the details. So we thought we’d spend a few minutes discussing the background and recent developments on the QE program, and why it matters to investors.

2013-10-02 Weak Credit Growth Main Reason for Lackluster Economic Recovery by Minyi Chen of AdvisorShares

The U.S. economy is a credit-based economy. Economic expansion is fueled mostly by borrowing and consuming rather than saving and investing. A continuous expansion of credit is needed for the economy to grow. The main reason the economic recovery has been so lackluster is that credit growth has remained weak despite the Federal Reserve’s continuing liquidity injections.

2013-10-02 And That\'s The Week That Was by Rob Brounes of Brounes & Associates

Move over Ben BernankeTed Cruz has the floor. (Somehow investors seem more interested when Dr. B speaks.) With politicos facing debates on debt ceilings and budget funding, few have confidence that they can act reasonably and with compromise (and the Cruz debacle did not help matters). Stocks fell over five consecutive days as portfolio managers set up positions for the next quarter. Labor and manufacturing releases highlight a hectic week on the economic calendar, but shenanigans from DC may steal the headlines.

2013-10-02 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Financial markets have now become a function of how investors are guessing the drama in Washington DC will play out.

2013-10-02 Quarterly Market Commentary by Scotty George of du Pasquier Asset Management

Many of us bear emotional scars from the excesses of a debt-driven, casino-like mid-2000 decade. The last recession was punctuated by lost jobs, lowering wages, diminishing portfolio valuations, putrid returns on cash savings, and a total decimation of confidence in the so-called “Titans” who drove the Wall Street bus during that period.

2013-10-02 ProVise Bullets by Ray Ferrara of ProVise Management Group

Effective October 1st, the health exchanges are open for business and enrollment can occur over the next 90 days. It will be interesting to see just how many people feel compelled to sign up under the individual mandate. While the premiums are not inexpensive for most of the eligible people, many will receive tax credits to help offset the cost. Nonetheless, others will find it a significant burden to the budget, and there is great debate over just how this will affect the economy long-term.

2013-10-01 The Looming Threat to China’s Economy by Marianne Brunet (Article)

The debate over China’s economic prospects centers on its real-estate bubble, excessive leverage and rising labor costs. But regardless of its short-term fate, China’s economic growth will ultimately be limited by the availability of a key resource. China ranks second lowest in the world for water availability per capita. Water-scarcity poses a threat to its future growth. The challenge is determining how severe this will be.

2013-10-01 The Key Succession Issues for an Advisory Practice by Bob Veres (Article)

Succession planning has moved to the top of the practice management priority list for tens of thousands of advisory firms. As the average age of founder/advisors creeps ever closer to traditional retirement age, the profession is asking itself a lot of hard questions about how to keep these businesses alive – and take care of clients – after the founder retires.

2013-10-01 The Eight Principles of Value Investing by Scott Clemons and Michael Kim (Article)

In any environment, but especially one characterized by uncertainty, eight principles of investing are critical. These bedrock beliefs help guide our thinking at the levels of asset allocation, security selection and identification of the third-party managers we engage to help manage our clients’ assets.

2013-10-01 Europe Pokes Its Head Out From the Shadows by Chris Maxey, Ryan Davis of Fortigent

With all the focus on affairs in the US, China and developing nations, Europe has largely been given a free pass in recent months. The lack of attention gave Europe the opportunity to fix some of its troubles, but challenges remain and are likely to surface in the weeks ahead.

2013-10-01 Putin's Gambit by Bill OGrady of Confluence Investment Management

Earlier this month, President Obama found himself in a very difficult position regarding Syria. An ill-advised comment about making the use of chemical weapons a “red line” forced a response when the weapons were clearly used in Syria. The administration began moving toward a military response. However, support for military operations was lacking both domestically and internationally. The clearest signal of this opposition was the British Parliament’s vote to prevent P.M. Cameron from authorizing military action in support of the expected U.S. military strike.

2013-10-01 The Most Predictable Economic Crisis? by Axel Merk of Merk Investments

Forget about a government shutdown. The quibbling over concessions to keep the government funded distracts from what might be the most predictable economic crisis. We have problems that may affect everything from the value of the U.S. dollar to investors’ savings, but also to national security.

2013-09-30 Teenage Melodrama and the Market's Infatuation with QE by Michael Temple of Pioneer Investments

Like a teenager caught between the decision of going to college and leaving friends behind or living in the comfort of home and going nowhere, debt markets have been reeling between taper angst and infinite quantitative easing euphoria.

2013-09-30 The Global Sea Change Continues by Richard Bernstein of Richard Bernstein Advisors

Most investors will readily admit the global credit bubble is deflating, yet continue to favor credit-based asset classes within their portfolios. Whereas many investors still believe that the emerging markets are a growth story, the data tell us that U.S. investors can find growth in their own backyard.

2013-09-30 Investing in a Fairly Valued World by Herb Abramson, RJ Steinhoff, Randall Abramson, Anthony Visano, Jeff Sayer of Trapeze Asset Management

For several years we have been arguing that global equity markets are undervalued and represent the best investment alternative given growing corporate profits (S&P 500 Index earnings have nearly doubled in the last five years), a favorable monetary backdrop and a recovering economy.

2013-09-30 DC Follies, Puerto Rico and A Report on Defaults and Bankruptcy by Gregg Bienstock of Lumesis

I start this week with some observations on the follies taking place in our nation’s capital, then provide some data around Puerto Rico and, finally, a look at a recently released report around municipal defaults. One might argue a common thread just might run thru this commentary. Be on the lookout for a special release later this week as the Geo Score is updated for States, Counties and over 330 Cities.

2013-09-30 Congress Holds Equities Hostage by Bob Doll of Nuveen Asset Management

U.S. equity advances ended last week and the S&P 500 declined -1.0%.1 Markets appeared concerned about overbought conditions from a strong run up over the past three weeks and uneasy about Federal Reserve (Fed) monetary policy normalization as well as the credibility of its communication strategy. Other widespread reasons for the downturn included increased focus on the fiscal battles in Washington, D.C., heightened worries about a possible near-term government shutdown and the contentious debt ceiling debate.

2013-09-30 Fourth Quarter Outlook: A Turning Point? by Gene Goldman of Cetera Financial Group

It seems sometimes that the outlook for the global economy and the markets has been unchanged for years. Since the end of the recession, each year has commenced with forecasts that the United States economy would break out of its below-trend growth mode, only to see expectations dashed. Meanwhile, Europe has been mired in its own recession as it struggles with heavy post-crisis debt burdens. Growth has slowed in the emerging markets, ending the commodity boom of the first decade of this century.

2013-09-30 Government Shutdown Could Lead to a Buying Opportunity by Matt Lloyd of Advisors Asset Management

As we approach yet another self-induced “the sky is falling and the other guy is to blame” environment, recall that this situation is not uncommon. We have had 17 of these budget debt ceiling deadlines and yet we have unbelievably (said with extreme rolling of the eyes) been able to overcome our elected officials’ calls for the end of the world. The most recent time when the U.S. government shutdown was in November 1995 concluding in January 1996,when arguably the animosity and polarization was as pronounced as it is today.

2013-09-28 The Renminbi: Soon to Be a Reserve Currency? by John Mauldin of Millennium Wave Advisors

Contrary to the thinking of fretful dollar skeptics, my firm belief is that the US dollar is going to become even stronger and will at some point actually deserve to be the reserve currency of choice rather than merely the prettiest girl in the ugly contest the last currency standing, so to speak. But whether the Chinese RMB will become a reserve currency is an entirely different question.

2013-09-27 Read My Lips... by Dimitri Balatsos of Tesseract Partners

Chairman Ben Bernanke’s press conference this week, commenting on the decision by the Federal Open Market Committee (FOMC) not to “taper,” reminded us of the famous slogan of Presidential hopeful George H.W. Bush at the 1988 Republican National Convention “Read my lips: no new taxes.” Yet, after he won the election, he raised taxes in an effort to reduce the public deficit.

2013-09-27 Party like it's 1999? Not with your investments by Dawn Bennett of Bennett Group Financial Services

“Party over, oops out of time?” I wasn’t dreamin’ when I wrote this, but these financial markets in the U.S. are beginning to feel like 1999. Back in the 1980s musician Prince, in all his purple majesty, urged people to party like it was 1999. Strangely when that year came, people did just that, but a year later they got clobbered by a horrific hangover by way of their investment portfolios. Investors need to prepare yet again for those times because these parties weren’t meant to last.

2013-09-27 Inflow into Equity Funds in September Fourth-Highest Ever by Minyi Chen of AdvisorShares

Although the S&P 500 sits just below a record closing high, we think the path of least resistance for stock prices is higher. The Federal Reserve seems as determined as ever to inflate asset bubbles by funneling $85 billion per month in newly printed money to the primary dealers, and our demand indicators continue to turn more favorable for the intermediate term.

2013-09-27 Global Destinations for Yield by Scott Minerd of Guggenheim Partners

While U.S. stocks are increasingly due for a consolidation, the outlook for global equities is improving. Now appears to be a good time for investors to increase allocations toward Asia and Europe.

2013-09-27 Decomposing Today's Record Profit Margins by Doug Ramsey of Leuthold Weeden Capital Management

Again, the popular perception is that this cycle’s record margins stem from dramatic strides in corporate efficiency, driven in good part by the outsourcing of manufacturing/assembly operations to lower labor cost countries. But most margin expansion since the 1990s is attributable to a couple of other players -- specifically, the “Bond Bulls and the Bookkeepers” (we know, it sounds like a cheap romance novel).

2013-09-27 GDP, a Sign of Things to Come or of Things past? by Miguel Perez-Santalla of BullionVault

Today’s GDP report of 2.5% was nearly as expected so lower. The actual expectation was 2.6% that puts our average for the year now at 1.8%. This is not a good GDP.

2013-09-27 Give Me Tapering... Just Not Yet by Zach Pandl of Columbia Management

Last week Federal Reserve (the Fed) officials surprised investors by choosing not to begin slowing the pace of quantitative easing (QE) despite months of setup in their public comments. Instead, the latest iteration of the Fed’s bond buying strategy will continue at $85 billion per month. At this point our best guess is that the decision was a path of least resistance among a divided committee: there seemed to be a number of officials who were concerned about downside risks to growth from fiscal policy uncertainty and higher interest rates.

2013-09-27 Bridging the Gap: Global Listed Infrastructure by Wilson Magee of Franklin Templeton

Simply spreading your investments across a smattering of asset classes with the idea that diversification should automatically produce a positive result is an approach that’s maybe a little too similar to a roll of the dice. For investors hunting for classes to diversify into, Wilson Magee, Director of Global Real Estate and Infrastructure Securities, Franklin Templeton Real Asset Advisors, and co-manager of Franklin Global Listed Infrastructure Fund, has one word: infrastructure.

2013-09-27 Celebrate with Tokyo by Kenichi Amaki of Matthews Asia

Many in Tokyo erupted with delight and excitement following the recent news of the city’s selection as host to the 2020 Summer Olympic Games. Following a failed bid in 2016, Tokyo edged out rivals Istanbul and Madrid on its way to becoming the first Asian city to host the Games for a second time.

2013-09-27 Calculating A Stock's Fair Value Based On Future Growth Expectations: Part 2A by Chuck Carnevale of F.A.S.T. Graphs

In part one of this two-part series I focused primarily on calculating the intrinsic value of a common stock based on an analysis and review of historical information and data. Although I strongly believe that there is much that investors can learn by studying the past, I even more strongly believe that since we can only invest in the future, that it is also implicit that we embrace a rational method of forecasting.

2013-09-27 3 Reasons the Labor Market Will Continue to Frustrate the Fed by Russ Koesterich of iShares Blog

The Fed’s decision to delay tapering is an implicit acknowledgment that the labor market is far from healed. Russ explains why the labor market is likely to continue to frustrate the Fed and gives two implications for investors.

2013-09-27 How to Profit from a Changing China by Frank Holmes of U.S. Global Investors

We believe China’s rebalancing is positive for investors who selectively invest in its stocks. As Jim O’Neill puts it, “When a country is embarking on a significant compositional change to its economy, stock-pickers rather than index-trackers have the upper hand.”

2013-09-27 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.9, up from last week’s 132.3 (revised down from 132.4). The WLI annualized growth indicator (WLIg) rose to 4.9% from last week’s 4.5%.

2013-09-27 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Merkel’s win is unlikely to lead to any changes in the Eurozone. Extra lift from exports is not guaranteed. Robust growth is a challenge in India, Brazil and Indonesia.

2013-09-27 You Never Know by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Surprises come at any moment in the investing world, reinforcing the need to have both a long-term view and a balanced/diversified portfolio. We believe signs are pointing to better US and European growth, a near-term rebound in China, and some possible positive momentum building in Japan. But near-term fiscal policy risks abound. Investors that need to add to equity positions should use pullbacks to do so.

2013-09-26 One Trick Pony: Whipping the GDP Donkey into a Stallion by Cliff Draughn of Excelsia

The difficulty since 2012 has been that if you are not significantly overweight US equities, then your returns are less than stellar. Employing a diversified, risk-averse investment strategy in 2013 has in hindsight been the wrong thing to do, given that every other asset class is negative year-to-date, while US stocks are up double digits. The combination of the Fed’s Zero Interest Rate Policy and the artificial bubble in Treasury bonds has forced conservative investors into riskier positions in order to find risk-adjusted returns.

2013-09-26 PIMCO Cyclical Outlook for Europe: Near-Term Recovery, Long-Term Risks by Andrew Balls of PIMCO

While Europe has emerged out of recession, the relative tightness of monetary policy means the eurozone is still struggling to get back to potential pre-Lehman growth rates. The European Central Bank should be able to maintain stability over the cyclical horizon while policymakers continue to address outstanding issues as they look to build a less vulnerable monetary union. We are selective in our approach to regional credit and remain neutral on the euro, balancing our cyclical outlook with longer-term secular concerns on the eurozone outlook and valuations.

2013-09-25 Surprise... by Blaine Rollins of 361 Capital

Clearly, the numbers didn’t meet the Fed’s preconditions for tapering. And while the jobless rate has fallen to 7.3% (from 8.1% when QE3, the current round of quantitative easing began), Bernanke had to acknowledge what’s been obvious to all. The decline in the jobless rate hasn’t occurred just because more folks are getting jobs; it’s because many are dropping out of the workforce, which means they’re not counted as unemployed by the government.

2013-09-25 Surprise! No Tapering and More Budget Progress than Meets the Eye by Sam Wardwell of Pioneer Investments

On Monday, Larry Summers exited the pool of candidates for the next Federal Reserve (Fed) chairman. (Only the timing was really a surprise.) On Wednesday, the Fed didn’t taper and de-emphasized several of the targets they’d set earlier. (Big surprise versus consensus - not central bank best practices). Municipal bond offerings by Puerto Rico, California, and Illinois were met with strong investor demand.

2013-09-25 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs increased by almost $80.2 million. Assets in the two largest categories “Short Term Bond” and “Global Bond” fell by $20.65 million and $38.585 respectively. As the dollar weakened on the Federal Reserve’s decision to delay tapering, the “Foreign Bond” category increased by $65.725 million and “Currency” active ETFs added $7.43 in value. Just like the previous week, the second largest increase in AUM came in the “High Yield” ETF category, which this time rose by over $44.35 million, main

2013-09-25 Muni Market Resurgent by Andrew Clinton of Clinton Investment Management

In light of the recent recovery in fixed income markets and the outperformance of the municipal bond market in particular, I thought I would send a note to provide a brief update since we last sent our market observations in July and August. As you may recall, we stated in the clearest terms that we felt the recent rise in interest rates provided an attractive entry point for municipal bond investors.

2013-09-25 Secular Trends in Asian Credit Markets Shape Long-Term Investment Themes by Robert Mead, Raja Mukherji of PIMCO

The next several years will likely see many Asian corporate issuers to come to the market for financing, whether to pursue long-term business plans or to employ traditional corporate finance and leverage strategies. Rigorous credit research, flexible resources, experienced local portfolio management and strong relationships with local stakeholders are all crucial to uncovering attractive opportunities while monitoring volatility in Asia’s credit markets.

2013-09-25 Fiscal Policy: Once More, with Ceiling by Milton Ezrati of Lord Abbett

Will the upcoming congressional debate on interim financing and raising the debt limit lead to a government shutdownand market turmoil? Not likely.

2013-09-25 How To Calculate The Intrinsic Value Of Your Common Stocks: Part 1 by Chuck Carnevale of F.A.S.T. Graphs

Every investor in common stocks is faced with the challenge of knowing when to buy, sell or hold. Additionally, this challenge will be approached differently by the true investor than it would by a speculator. But since I know very little about speculation (trading or market timing), this article will be focused on assisting true investors desirous of a sound and reliable method that they can trust and implement when attempting to make these important buy, sell or hold investing decisions.

2013-09-25 Thank You! by Jeffrey Saut of Raymond James

Thank you Franklin Templeton for allowing me to speak at your world headquarters in San Mateo, California last week. I had the privilege of meeting John Templeton on a number of occasions and it is heartwarming to see your organization carrying on with Sir John’s impeccable traditions. Thanks to all the portfolio managers (PMs) that met with me in the San Francisco Bay area, as we swapped ideas and renewed friendships.

2013-09-25 Misplaced Budget Priorities by Scott Brown of Raymond James

The Federal Open Market Committee delayed the initial reduction in the pace of its asset purchases, citing concern about the recent tightening of financial conditions (higher long-term interest rates). However, Bernanke also noted uncertainty in fiscal policy. He recognized the improvement in economic activity and labor market conditions since the Fed began QE3, which was achieved in spite of a federal fiscal retrenchment. He also suggested that the debates on the government’s spending and borrowing authorities may create downside risks.

2013-09-25 More Than a “Sugar High” by Pamela Rosenau of HighTower Advisors

The recent decision by the Fed to delay any tapering may be a preview of what to expect by a “Yellen Fed”. As the Fed appeared to remove “virtually every yardstick or goal post” that they have provided recently, one thing is certain, “they seem determined to keep the accelerator nailed to the floor as they drive the economy at full speed.” According to Cornerstone Macro, based on the Fed’s move, it appears increasingly likely that “growth is more likely to reaccelerate.”

2013-09-24 Michael Aronstein’s Warning to Fund Investors by Robert Huebscher (Article)

Fixed-income investors may think rising interest rates are their biggest worry. But bond funds face a new risk, driven by their need for liquidity to service investors’ daily redemptions, according to Michael Aronstein.

2013-09-24 Four Ways to Attract Affluent Clients by Dan Richards (Article)

Attracting HNW clients is all about credibility – as a result, it’s typically lower key, takes longer and requires an upfront investment of time and effort to position yourself to interact with HNW prospects.

2013-09-24 The Elements of a Successful Succession Plan by Mary Ann Buchanan (Article)

While the idea of “yielding to maturity” and dying in your boots feels right, you need to think about contingency and succession planning for the continuity of care for your clients, family and staff. It’s a challenge that hangs over you like Damocles’ sword.

2013-09-24 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

Hail the Almighty Fed. Despite a rather hectic week on the economic calendar, investors instead focused primarily on news from the Federal Reserve. They rejoiced the end of Summer’s campaign for Chair and further rejoiced another Fed meeting with far more words than action. The week ended with profit-taking and plenty of uncertainty heading into the homestretch of the year.

2013-09-24 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

The Federal Reserve kept its word last week: until they see an improvement in jobs growth and wages they simply won’t budge on their mission to keep interest rates low to stimulate borrowing and economic expansion. What this means to the markets, however, is more ambiguous.

2013-09-24 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Financial markets have found out the answer to important questions in the last week. While there have alternatively been both positive and negative reactions, the net result is lower interest rates and higher stock prices.

2013-09-24 The U.S. Deficit Shrank, but Will It Come Back Bigger Than Ever? by Team of Knowledge@Wharton

The U.S. deficit has fallen to its lowest level since 2008. Experts weigh in on how this will affect upcoming budget negotiations.

2013-09-24 The Brazil Conundrum by Bill OGrady, Kaisa Stucke of Confluence Investment Management

The last decade has been exceptionally good for emerging markets. Never before have so many countries grown so rapidly, and at the same time. The average growth rate from 2003 to 2012 was 13.1% for emerging markets, while the long-term average stands at 5.0%. This growth rate was partly due to mean reversion after sluggish growth periods in the 80s and 90s, when the average growth rate for the group stood at 3.5%.

2013-09-24 Is The Dividend Mania Ending? by Doug Ramsey of Leuthold Weeden Capital Management

In the last couple of months, there’s been an unusually high number of stocks making new 52-week lows even though the S&P 500 remains 24% above its own 52-week low set last November. This disjointed type of internal market action is usually not healthy, but it can persist for awhile before the warning flag turns from yellow to red.

2013-09-24 Has the Fed Lost Its Credibility? by Chris Maxey, Ryan Davis of Fortigent

Any economics student will tell you central banks must achieve three things to effectively implement monetary policy: (1) independence; (2) credibility; and (3) transparency.For most of the Fed’s history, the first two characteristics were arguably well attained.However, the group was never well known for clarity into its thinking.

2013-09-24 The U.S. Economy: Poised for Growth? by Jeremy Boynton of Laureate Wealth Management

The Federal Reserve decided to delay the beginning of the end of quantitative easing (QE). The markets were very surprised by this as nearly all Fed watchers were expecting at least a small reduction in QE. In explaining its course of action, the Fed cited economic conditions that are currently too weak and/or fragile to begin removing QE. Ironically, the bond and stock markets rallied on this news.

2013-09-24 Lehman Five Years LaterLessons and Threats by Dean Curnutt of Macro Risk Advisors

The five-year anniversary of the Lehman bankruptcy and onset of financial crisis is here and so too is the raft of opinion pieces around what caused the meltdown and how it is different this time.In a recent interview with Charlie Rose, when asked about the risk of another 2008 event, Morgan Stanley CEO James Gorman said, “The probability of it happening again in our lifetime is as close to zero as I could imagine.”

2013-09-23 A Gross Failure of Communications by Charles Lieberman (Article)

Everyone was totally caught by surprise when the Fed announced it would maintain the $85 billion monthly rate of bond buying after Fed officials had carefully signaled for months that it would soon start tapering purchases. Moreover, the Fed’s justification was not compelling and the decision wrecked havoc with the Fed’s efforts to improve transparency. Investors are right to be confused. Still, bonds remain at risk, while stocks should continue to do well.

2013-09-23 Seeking Global Growth: Our Outlook for Credit by James Balfour of Loomis Sayles

Global business and credit cycles are nothing new to investors. The familiar sequence of recession, recovery, expansion and slowdown plays out over time, influencing interest rates, credit availability, business climate and capital markets. It’s a time-honored process, but in practice, no two business and credit cycle pairings are exactly alike. Business and credit cycles tend to be driven by specific but varying factors that accumulate until an economic “tipping point” is reached, after which the business and credit climates deteriorate.

2013-09-23 The Euro Tug-of-War by Thomas Kressin of PIMCO

Faced with lingering economic stagnation, record unemployment and continued political strife in the region, the common consensus for a depreciation of the euro seems only natural and very much required to counter the weak cyclical position of the eurozone. The rising current account surplus in combination with net long-term capital inflows point to a stronger euro that could stay with us for an extended period; such a development could potentially undermine the fragile social consensus to continue with the necessary structural and fiscal reforms.

2013-09-23 Enhanced Dividend for Income by Jim O'Shaugnessy of O'Shaughnessy Asset Management

It is axiomatic in the financial planning canon that investors searching for a steady source of income should rely heavily on bonds. Stocks are for capital appreciation and bonds for income. The practice is so ingrained, that I have not heard of many investors who would make the case for using an equity portfolio to generate income. Bonds also appeal to advisors because of their inherent principal protection advantage. As a bond owner, you are a creditor, not an owner.

2013-09-23 Credit Rating Agencies: Can They Get It Right? Part 3: Five Years After the Fall by Michelle Shwarzman of Invesco Blog

This three-part series takes a critical look at the growing role of credit rating agencies (CRAs) in the global financial system. This post reports on the United Nations General Assembly (UNGA) debate about the role of CRAs in the international financial system. Part 1 focused on the involvement of CRAs in recent financial and economic crises in the US and Europe, while Part 2 described post-crises attempts to reform CRAs.

2013-09-23 Shake & Bake and Pension Woes, One Man's “Thoughts From the Frontline” by Gregg Bienstock of Lumesis

This week I take a departure from form. After a few brief words around the Fed’s Shake and Bake maneuver and a very quick look at Food Stamp data, I return you to the capable hands of John Mauldin to dive into the Pension woes. We are honored that Mr. Mauldin based his work on DIVER’s data and some of our tools. If you decide to follow John’s advice around your city, let us know if we can help. Be sure to check out the “Data Released this Week” as our data team was hard at work.

2013-09-23 Loose and Looser by Brian Wesbury, Bob Stein of First Trust Advisors

Larry Summers took his name out of the hat and won’t be considered for the top spot at the Federal Reserve. And while nothing is a slam dunk, it looks very much like current Vice Chair Janet Yellen is going to get the call from President Obama to step up and replace Bernanke.

2013-09-23 Fed Inaction Lengthens Reflationary Economy by Bob Doll of Nuveen Asset Management

U.S. equities advanced last week as the S&P 500 increased 1.32%.1 The Federal Reserve (Fed) delivered a big surprise by leaving intact the current $85 billion monthly purchase program. The Committee appears nervous about the resiliency of the economy. Chairman Bernanke pointed to three factors for postponing tapering: 1) the need for more labor market data to be confident in the outlook, 2) a desire to assess the degree to which tighter financial conditions, particularly mortgage rates, are affecting the real economy and 3) an interest in gaining clarity on “upcoming fiscal debates.̶

2013-09-23 Post Fed, Expect More Surprises by Kristina Hooper of Allianz Global Investors

Kristina Hooper says investors should brace for more big market swingsand some fiscal curveballsin the wake of the FOMC’s decision not to taper in September. But the economy is throwing some good surprises our way too.

2013-09-23 Aberdeen Global Investment Outlook: September 2013 by Mike Turner of Aberdeen Asset Management

The point of maximum policy accommodation may now be in sight: Markets volatile as investors forced to contemplate U.S. Federal Reserve (Fed) exit strategy. Slowing growth in China is putting pressure on Asian and emerging markets to develop domestic led demand. This time really could be different for Japan - however reflating the economy was never going to be easy.

2013-09-21 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Global deleveraging has a long way to go. Fiscal drama and the economy. Funding for economic statistics needs to be enhanced

2013-09-21 This Will Not End Well by Robert Mark of Castle Investment Management

How do you justify higher equity valuations if profit margins are more likely to contract than expand and revenue growth is stalling? Why naturally you discount those future cash flows by a lower cost of capital! But to my eye, the Federal Reserve appears to be slowly losing control of the bond market interest rates are separating from the raw pressure of central bank interventions. We know why this will end badly, we just don’t know when.

2013-09-21 Stock Buyback Announcements Slow to $2.3 Billion Daily in Third Quarter by Minyi Chen of AdvisorShares

Due to the acceleration in buyback volume in previous quarters, we are not reducing our $2.0 billion daily estimate of actual stock buybacks. Actual stock buybacks tend to track new stock buybacks closely with a lag. If the volume keeps falling in Q4 2013, however, we will likely reduce our estimate.

2013-09-21 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.4, to one decimal place unchanged from last week’s 132.4 (revised down from 132.3). The WLI annualized growth indicator (WLIg) rose to 4.5% from last week’s 4.3%.

2013-09-21 India's Need for Labor Reform by Siddharth Bhargava of Matthews Asia

India has long been recognized as a country of vast potential. With over 1.2 billion people, it boasts nearly one-fifth of the world’s working age population. However, the country’s laws hark back to a period when India’s political philosophy was still rooted in socialisma time when the government ran its own factories. Such laws have failed to keep pace with the economic liberalization program that began in 1991.

2013-09-21 Fifty Shades of Gold by Frank Holmes of U.S. Global Investors

Unlike many commodities, there are many shades to gold, such as the Love Trade’s buying gold for loved ones and the Fear Trade’s purchasing gold as a store of value. An additional “shade” investors need to be aware of is how the Fed interprets the recovery of the U.S. economy.

2013-09-20 Rising Interest Rates Must End Soon by Scott Minerd of Guggenheim Partners

The yield on the benchmark 10-year U.S. Treasury bond has risen by more than 84 percent from May to early September, one of the most violent and rapid increases on record. This spike has caused severe convulsions in the bond market, leading many investors to wonder how long the torment can last.

2013-09-20 Will Europe's Improving Economy Push Interest Rates Higher by Giordano Lombardo of Pioneer Investments

Gross Domestic Product (GDP) increased in the second quarter after six straight declines. Data expectations were on the optimistic side, but investors appeared to become more confident before the release, thanks to encouraging evidence from supposedly reliable forward-looking indicators.

2013-09-20 U.S. Commercial Real Estate: Will the Good Times Last? by Devin Chen of PIMCO

The CRE market has experienced a gradual recovery in asset pricing since the 2008 financial crisis. Despite the duration of the recovery, there continues to be dislocation in the CRE market that astute investors can capitalize on. We believe certain properties in non-major markets look attractive for acquisition, and have been acquiring residential land on an opportunistic basis.

2013-09-20 The Fed's About-Face by Scott Minerd of Guggenheim Partners

The Federal Reserve’s decision not to taper quantitative easing telegraphed a mixed signal to markets about policy guidance while tempering forward economic growth expectations. Dramatically lower interest rates can be expected.

2013-09-20 Q&A: Emerging Markets Powerhouses China and India by Mark Mobius of Franklin Templeton Investments

Given their heft in the emerging markets world, China and India are among the countries I get asked most often about, particularly when they show market distress signals like economic slowing.This past week, the Templeton emerging markets team and I have been in China as part of a large research trip, doing further analysis on the market and key company prospects. I thought it would present a good opportunity to share a few of my answers to recent questions on both China and India.

2013-09-20 Companies Can Do More to Unlock Shareholder Value by Kurt Feuerman of AllianceBernstein

As the global recession and financial crisis move further back in the rearview mirror, companies have been more proactive about using their balance sheets in ways that enhance shareholder value. But we think they can do a lot more.

2013-09-20 5 Years Later: The Crisis We Haven't Tackled Yet by Russ Koesterich of iShares Blog

Five years after the Lehman bankruptcy, the proximate causes of the 2008 crash are no longer threats. But while the risk of another imminent financial system crisis has abated, there are two major issues that foretell a coming retirement funding crisis.

2013-09-20 Growth and Rising Stars by Mark Kiesel of PIMCO

While developed market growth in several regions is picking up cyclically from low levels, overall global economic growth should remain subdued over the next several years. We believe credit spread tightening and rating upgrades are most likely for specific companies in industries and areas with strong growth. We see these "rising star" companies in the U.S. and European auto sector, the gaming, energy and chemical industries and in sectors tied to the U.S. housing market.

2013-09-20 Investment Bulletin: Emerging Markets Equity by Team of Bedlam Asset Management

Since the start of the year to date, the portfolio has whupped the index by over 1,100 basis points, with a real gain against an index loss. Overall, the developed market (DM) index easily outperformed that for emerging markets (EM). This is expected to continue at the index level, partially because of weaker earnings growth and for political/social reasons. Analysts crank out studies on their companies, yet few look up from their spreadsheets to take a wider view encompassing politics and real people.

2013-09-20 Investment Bulletin: Global Income Strategy by Team of Bedlam Asset Management

The Global Income equity strategy is unconstrained by geography, sector or stock, and is committed to achieving the target yield based on the opening NAV at the beginning of each financial year of 4.5%, payable in equal quarterly dividends with any excess paid out at the end of the year. It may only invest in companies with an historic dividend yield of at least 2.5% based on the price at the date of purchase. There is a bar on using derivatives or options to achieve the target yield and it must invest in a company on its merits rather than rotational dividend stripping.

2013-09-19 Intermodal Transportation: Finding Value in a Growing Segment of the Transportation Industry by Jason Downey of Diamond Hill Investments

As intrinsic value based investors, we view growth as a potential source of value for shareholders; however, we are careful not to overpay for it. Intermodal shipping is one of the fastest growing modes of domestic freight transportation, and also an area where we have found two companies trading below our estimates of their respective intrinsic values.

2013-09-19 The Taper That Wasn\'t by Peter Schiff of Euro Pacific Capital

The Fed’s failure today to announce some sort of tapering of its QE program, despite the consensus of an overwhelming percentage of economists who expected action, once again reveals the degree to which mainstream analysts have overestimated the strength of our current economy. The Fed understands, as the market seems not to, that the current "recovery" could not survive without continuation of massive monetary stimulus.

2013-09-19 Will Healthcare Reform Raise the Economy\'s Pulse? by Milton Ezrati of Lord Abbett

The prognosis is by no means clear. Ambiguity surrounding the implementation of the Affordable Care Act will create further uncertainty for the economy in the years ahead.

2013-09-19 When Doves Cry, \"Not Yet\" by Liz Ann Sonders of Charles Schwab

The Fed surprised markets and the consensus by maintaining its full QE bond buying program; while both stocks and bonds soared on the news.

2013-09-19 A Fine Balance in the Global Profits Cycle by Saumil Parikh of PIMCO

In the U.S., we expect growth to accelerate over the cyclical horizon, but to disappoint elevated consensus expectations. In Europe, we also expect growth to accelerate, but just barely, and also below consensus. In Japan, we expect growth to remain heavily reliant on aggressive fiscal and monetary policies. And in emerging markets, we expect a stabilization in growth assisted by central banks regaining control of currency and financial market conditions. The outlook for global corporate profits is a key measure of success in determining the handoff to self-sustaining growth going forward.

2013-09-18 White Noise by Jeffrey Saut of Raymond James

Most recently, I have been in a cautious mode, believing we were involved in a short-term pullback that would carry the S&P 500 (SPX/1687.99) down about 10%. That strategy was working until the Syrian compromise wrecked the rhythm of the decline. Bear in mind, however, the anticipated decline was always couched within the context of a longer-term secular bull market.

2013-09-18 Bernanke Gets Another Chance to Communicate by Scott Brown of Raymond James

It seems clear that most Fed policymakers have not decided whether to begin reducing the pace of asset purchases. Officials will review a wide range of data and anecdotal information this week. It’s generally (but not universally) expected that this will lead the Federal Open Market Committee to begin tapering, but modestly, while signaling a wait-and-see attitude on further action. The Fed should continue to stress that short-term interest rates will remain low for some time. The economy is still far from being fully recovered, but we’re well on our way.

2013-09-18 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks rallied last week as military options in Syria no longer look likely given the disapproval of the American people and Congress. Additionally, this embarrassing agreement reached with Russia is an admission that the USA will not intervene.

2013-09-18 Weekly Market Commentary by Scotty George of du Pasquier Asset Management

Depending upon where you reside, or on which side of the issues you fall, it was a good week last week. We averted a military strike on Syria by the U.S., at least temporarily; we had reasonable adjustments to economic growth statistics; and most made some money in their portfolios. While cyclical dynamics are relatively benign, the broader secular outlook continues to build a solid foundation for recovery.

2013-09-18 Smart Beta and the Pendulum of Mispricing by Vitali Kalesnik of Research Affiliates

The Research Affiliates approach to equity investment management is based upon the insight that stock prices are “noisy” and “mean-reverting.”

2013-09-18 Larry Summers Helps Clarify the Future Path of Fed Policy by Sam Wardwell of Pioneer Investments

Last Monday, at a London press conference, U.S. Secretary of State John Kerry responded to a reporter’s question about what might avoid a military move against Syria by ad-libbing that Assad could give up his chemical weapons. As you probably know, Russia promptly endorsed the idea and Assad promptly agreed. The long-term implications of this development are unknowable; what matters now is that the risk of a U.S strike declined sharply last Monday. Over the most recent weekend, the U.S. and Russia have apparently agreed on key details, further reducing the probability of an attack.

2013-09-18 The End Times for Strategic Ambiguity by Bill O'Grady of Confluence Investment Management

Strategic ambiguity is defined as a condition where various parties say something similar but believe something entirely different. A good example of this is U.S. and Chinese policy toward Taiwan. Both nations say Taiwan is part of China. The U.S. believes that Taiwan’s democratic government should become the model for the mainland, whereas China believes Taiwan should be part of its nation as it is currently structured. Because both nations say the same thing, the policy difference is not publicly obvious and thus not a problem, at least as long as the ambiguity lasts.

2013-09-18 Is the Commodity Supercycle Dead? by Nicholas Johnson, Greg Sharenow of PIMCO

While commodity price appreciation won’t likely mirror the supercycle, this shouldn’t necessarily imply a negative view on commodity returns going forward. We believe commodity prices are at reasonable levels from a long-term valuation perspective. In addition, the roll yield from investing in commodities is the highest it’s been since 2005. The outlook for commodity returns today seems broadly consistent with historical returns, and commodities remain an important tool for hedging inflation risk.

2013-09-18 Dow Changes as a Contrary Indicator by Bill Smead of Smead Capital Management

The folks who select the companies in the Dow Jones Industrial Average (DJIA) came out with their latest changes on Monday, September 9, 2013. They removed Bank of America (BAC), Hewlett Packard (HPQ) and Alcoa (AA) from the DJIA. Added to the index were Visa (V), Nike (NKE) and Goldman Sachs (GS). At Smead Capital Management, we are always looking for important psychological clues to human behavior as it pertains to the popularity of common stocks.

2013-09-18 Stock Funds' 5-Year Track Records Set to Double by Gary Halbert of Halbert Wealth Management

Many investors focus on the previous five years annualized return when analyzing which mutual funds to buy. We also pay a good deal of attention to the 5-year performance number when analyzing mutual fund and ETF returns at Halbert Wealth Management. And currently the 5-year average returns for most equity mutual funds are not all that attractive.

2013-09-18 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs increased by over $68.76 million. Assets in “Short Term Bond” active ETFs increased by nearly $140 million. The second largest increase in AUM came in the “High Yield” ETF category, which rose by about $20.366 million, largely due to creation units. “US Equity” active ETFs also saw a significant increase in AUM of over $8.68 million. The biggest decreases in AUM came in the “Global Bond” and “Foreign Bond” categories, which fell by $58.85 million and $44.3 million respectively.

2013-09-17 Gundlach – Where to Expect the Next Crisis by Robert Huebscher (Article)

Unless there is a crisis, don’t expect a major decline in interest rates, according to Jeffrey Gundlach. And if such a crisis occurs, Gundlach warned, it will most likely take place in this emerging market.

2013-09-17 Investing for Real People by Sponsored content by Oppenheimer Funds (Article)

Investor goals are the same, but solutions have changed. Today, aiming to meet basic needs requires new solutions. Laser focus on investor goals will help uncover appropriate investment opportunities. Expanding the opportunity set beyond the usual suspects will be critical to long-term success.

2013-09-17 The Debate on DFA’s Research by Various (Article)

We received many responses to Michael Edesess’ article, Why DFA’s New Research is Flawed, which appeared last week. We provide the responses from individuals who disagreed with Edesess’ findings, followed by Edesess’ response and then by responses in agreement with his findings.

2013-09-17 High Yield Market Overview August 2013 by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch U.S. High Yield Master II Constrained Index, was down 0.62% for the month of August. Political uncertainties continue to weigh on investor sentiment, including a potential military response to Syria and the U.S. approaching the debt ceiling limit in mid-October. Uncertainty about Fed policy and who will be the next Chairman are also in the background.

2013-09-17 “Risk-On” Resumes as Uncertainty Subsides by Bob Doll of Nuveen Asset Management

Equity markets rallied last week with the hope of a diplomatic solution to the crisis between Syria and the United States. The S&P 500 advanced 2.03% for the week.1 Broadly, the S&P 500 is in a churning phase after witnessing an all-time high of 1709 on August 2 and then stalling.1 We believe the market has been on hold while waiting for lower oil prices, progress on Syria, further global growth and successful Federal Reserve tapering.

2013-09-17 Doesn\'t Government Lie? by Brian Wesbury, Bob Stein of First Trust Advisors

Like a Plow Horse, the US economy keeps plodding along GDP and payrolls keep growing. This confounds many pessimistic, debt-focused, perma-bear investors, who fall back on the belief that anything good must simply be a lie.

2013-09-17 The Upside of Low Expectations by Kristina Hooper of Allianz Global Investors

The stock market has benefited from a pessimistic outlook recentlyand so could the consumer, writes Kristina Hooper.

2013-09-17 Consumers Face An Economy at a Crossroads by Chris Maxey, Ryan Davis of Fortigent

As the Federal Reserve prepares to debate the merits of tapering its asset purchase program this week, a key area of the economy that will be closely analyzed by Bernanke and Co. is the health of the American consumer. There are tenuous signs that consumers are spending more, but attitudes towards the economic recovery are hardly encouraging. Consumers will find it difficult to stay the key cog of economic growth in the U.S., but at the very least, their participation in the recovery is imperative, and leaves much to be desired.

2013-09-16 U.S. Equity ETF Flows Send Bullish Signals Despite Recent Inflows by Minyi Chen, TrimTabs of AdvisorShares

Minyi Chen, CFA, Chief Operating Officer of TrimTabs Investment Research and Portfolio Manager of AdvisorShares TrimTabs Float Shrink ETF (NYSE Arca: TTFS) shares recent fund flow trends.

2013-09-16 FOMC Preview: Taper Likely To Be Deferred or Minimal by Team of Northern Trust

Market participants have been working overtime to refine their expectations of what the Federal Open Market Committee (FOMC) might do at its meeting next week. Many are calling for a cut in the Fed’s pace of asset purchases from the current level of $85 billion per month.

2013-09-16 Syria: Foreign Policy Turmoil is a Distraction for Investors by Charles Lieberman (Article)

The equity and bond markets have been buffeted by the turn of events in Syria, although incoming economic data is vastly more important than political developments. Syria remains a mess on many levels. But it is essentially irrelevant in affecting labor scarcity, inflation or possible changes in monetary policy. Many politicians and analysts consider the pace of growth unsatisfactory, but the moderate growth rate has been sufficient to bring down the unemployment rate, while corporate profits have increased.

2013-09-16 Europe's Fragile Recovery by Tucker Scott of Franklin Templeton Investments

Investors have tentatively begun to buy into the European recovery story, but remain fearful of the region’s fragility. A few bits of upbeat economic data recently have provided grounds for optimism, and the European Central Bank’s continued commitment to holding the Eurozone together has boosted confidence. Tucker Scott, portfolio manager forTempleton Foreign Fund, still sees a few economic roadblocks in Europe but also plenty of progress. He shares where he’s finding signs of strength and investment opportunities.

2013-09-16 Time to Bench the Equity Benchmark Too? by Patrick Rudden of AllianceBernstein

While fixed-income investors are growing increasingly aware of the risks of benchmark-oriented bond portfolios in a period of rising rates, equity investors have recently also started to question the wisdom of cap-weighted indices. We would go even further and argue that the performance of a cap-weighted benchmark may be irrelevant for the long-term goals of many institutional investors.

2013-09-16 From the Fed to Congress: 4 Washington Issues to Watch by Russ Koesterich of iShares Blog

After the Fed announcement next week, market attention is likely to shift toward Congress for the remainder of the fall. According to Russ, four key issues up for debate have the potential to add to near-term volatility.

2013-09-16 Opportunities in Uncertainty by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Uncertainty and volatility are elevated, which we believe provides opportunities for investors.

2013-09-13 Trumping Cheap Labor by Teresa Kong of Matthews Asia

Wages in China have surely risen, and some pundits argue that this growth will eventually make the country less competitive. But more nuanced and recent theories suggest that manufacturing centers can cluster around pools of more skilled labor, transportation networks and economies of scale. This month, Teresa Kong, CFA, examines the reasons why China is about more than just low-cost workers.

2013-09-13 Pacific Basin Market Overview August 2013 by Team of Nomura Asset Management

Asian equity markets ended lower in August, chiefly due to concerns about currency weakness in India and Indonesia, while improved macroeconomic data from China contributed to this market’s outperformance. The MSCI AC Asia Pacific Free Index including Japan fell by 1.3% while the MSCI AC Asia Pacific ex Japan Free Index closed 0.71% lower during the month. (All performance figures are based on MSCI indices in U.S. dollar terms with dividends included unless otherwise stated.)

2013-09-13 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs increased by around $38.2 million.As in previous weeks, assets in “Short Term Bond” active ETFs increased, this time by almost $61.7 million, while AUM in the “Global Bond” category fell by about $39 million.The “Global Bond” category had another bad week, ending over $18.3 million below where it began.The “Alternative Income” category increased again but by less than in previous weeks; AUM increased by nearly $4.26 million. The “Alternative” active ETF category’s AUM rose by approximately

2013-09-13 What's Developing in Emerging Markets by Gene Goldman of Cetera Financial Group

Despite strong returns in United States equity markets, a different story has played out in the emerging markets. The MSCI Emerging Market Index, a proxy for emerging market equity returns, has fallen 9.94 percent year-to-date through Aug. 31, 2013. In contrast, the S&P 500, a proxy for U.S. equity markets, has risen 16.15 percent over that same span.

2013-09-13 Waiting for Clarity From the Fed and Congress by Team of Northern Trust

U.S. economic growth averaged roughly 2.0% in the first half of the year and the average gain of real gross domestic product (GDP) during the entire 16-quarter economic recovery is 2.2%. Real GDP is projected to grow close to this trend in the second half of the year.

2013-09-13 Start Bargain Hunting in Asian Stocks Again? by Frank Holmes of U.S. Global Investors

If you compare the Asian stock market these days to prior years, it’s looking like “dj vu” all over again, says Credit Suisse.

2013-09-13 Invest In Stocks With A Margin of Safety To Reduce Risk And Enhance Returns by Chuck Carnevale of F.A.S.T. Graphs

Of all of the many sound investing principles that legendary teacher and investor Ben Graham put forward, he believed that his concept of “margin of safety” was the most important of all. This investment lesson was so deeply ingrained into the mind of Ben Graham’s most famous student, Warren Buffett, that he created his two most important rules of sound investing. Rule number one: Never lose money. Rule number two: Never forget rule number one. Clearly, both of these renowned sages understood the importance of minimizing risk, especially when investing in equities.

2013-09-13 September Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management

Year-to-date end-August the strategy performed well with a gain of 22.2% vs. 14.6% for the benchmark. During the month, the index “tumbled” 3.9%, partly out of fear of foreign military action in Syria and partly that central banks would cease printing money to hold down interest rates commonly known as tapering. Even so, the portfolio held up in August, with a much lesser 2.4% fall, thereby further widening outperformance over the index to 760 basis points so far in 2013.

2013-09-13 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.3, an increase from last week’s 131.5. The WLI annualized growth indicator (WLIg) rose to 4.1% from last week’s 3.9%.... At this point the company is still featuring a commentary posted at the end of July, Becoming Japan, which highlights the decline in GDP growth for Japan and seven other major economies, including the US.

2013-09-13 The View from Here - September 13, 2013: Five Years After by Carl Tannenbaum of Northern Trust

How much have we recovered from the global financial crisis?

2013-09-13 Open for Business Down Under by Kenneth Lowe of Matthews Asia

Swiftly after fighting off what most observers deemed to be a fairly weak incumbent Labor opposition in the recent Australian election, the leader of the Conservative coalition and the country’s newly crowned Prime Minister, Tony Abbott, firmly declared Australia to be “once more open for business."

2013-09-12 The Best Time to Own Cash: No Return is Better than a Negative Return by Francois Sicart of Tocqueville Asset Management

In his latest essay, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, writes about "the best time for an investor to own cash," which somewhat counter-intuitively, he believes is when that cash pays nothing.

2013-09-12 Rates Update: Rationale for the Continuing Sell-off and Distinctions between 1994 & 2003 by Brian Smith of TCW Asset Management

The bond market continues to struggle to find support, with 10-year Treasury yields touching 3%, a sell-off of roughly 140 bps in the last 4 months! While reduced dealer risk capacity and impaired investor loss tolerances are two underlying factors contributing to recent rates volatility, this violent move to higher yields has been primarily led by expectations that the Fed will begin to taper asset purchases in their upcoming meeting on September 18th.

2013-09-12 Approaching a Turning Point by Scott Minerd of Guggenheim Partners

Higher interest rates continue to negatively affect the real economy, increasing the susceptibility of risk assets to downside risk.

2013-09-12 Brave New World by Christine Hurtsellers, Matt Toms of ING Investment Management

If the monotony of high school lulled you into a catatonic state the semester you were supposed to read Brave New World, here’s the CliffsNotes summary of what you missed. Aldous Huxley imagined a futuristic utopia in which the government promotes economic and emotional stability through the plentiful use of a soporific opiate called “soma”. Soma allows the mind to take a holiday from worldly problems via a gram, or two or three. Imagine the chaos into which this fictional world would descend were the government to abandon its role as pharmacist to the masses.

2013-09-12 Unemployment, Participation and the Fed by Zach Pandl of Columbia Management

Despite a mediocre August jobs report, we still expect the Federal Reserve to announce a slowing of the pace of bond purchases when it meets next week. One reason for this view is that Fed officials care more about the level of the unemployment rate than the pace of job creation. We often write that monetary policy is about “gaps” not growth: the Fed is trying to reduce spare capacity in the economy, not bring about a rapid expansion per se.

2013-09-12 Opportunity Out of Uncertainty: Finding Investment Ideas in a Rising Market by Jay Kaplan of The Royce Funds

Portfolio Manager and Principal Jay Kaplan talks about investing in a slow-growth, high-price environment and discusses where we are in the current retail cycle, companies in which he has high confidence, and his experience with a long-term holding.

2013-09-12 2 Unresolved Issues Challenging the Case for European Stocks by Russ Koesterich of iShares Blog

Russ explains the two key unresolved issues that are keeping his view of European stocks somewhat cautious, and he gives the next signposts to watch to gauge whether any near-term resolutions are likely.

2013-09-11 Demand and Supply Fundamentals Point to Continued Price Growth by Adam Artunian of John Burns Real Estate Consulting

Will home price appreciation remain strong in the face of modest job growth and the recent uptick in mortgage rates?

2013-09-11 Absolute Return Letter: A Case of Broken BRICS? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners

EM currencies, stocks and bonds have struggled since the Fed signalled its intent to change course in late May. This has seemingly triggered an exodus of speculative capital from emerging markets but, as is always the case, there is more to the story than that. EM countries (ex. China) no longer run a current account surplus with the rest of the world, and this hurts global liquidity. It is not yet a re-run of the 1997-98 Asian crisis, but it has the potential to become one with all sorts of consequences for bond yields in developed markets, currency wars, etc.

2013-09-10 Why DFA’s New Research is Flawed by Michael Edesess (Article)

DFA is a company with a laudable history, founded on solid principles and a valuable product concept. From its launch, the investment firm identified and filled a need at low cost to the client, based on elementary but sound theory and simple, compelling, transparent empirical research. It later increased its value to clients by pioneering passive trading strategies. I admire its founders and their accomplishments. But I am afraid the company has succumbed to a dreadful descent into scientism.

2013-09-10 Why Isn’t Our Practice Growing? by Beverly Flaxington (Article)

Our advisory firm has not grown much over the last five years. Except for death and divorces, we haven’t lost clients. But we haven’t obtained new assets. We have been to conferences and heard other advisors speak about their explosive growth, but I am dubious. Are advisory firms really growing so significantly or are we experiencing what most advisors have been over the last few years?

2013-09-10 The Party's Over. Why Own Commodities? by Jon Ruff, Seth Masters of AllianceBernstein

Commodity prices soared during the first decade of this century. But now the party’s over: new sources of supply are coming on line just as demand from China is slowing, leading to expectations of price declines. So should investors shun commodity-related investments?

2013-09-10 Capital Spending: A Double-Edged Sword by Milton Ezrati of Lord Abbett

Rising business outlays on equipment and technology will likely contribute to a subpar pace of hiringand help boost corporate profit margins.

2013-09-10 Notable Lines by Michael Kayes of Willingdon Wealth Management

One of President Obama’s most notable lines, "you didn’t build that," sent chills up my spine when I first heard it. As an entrepreneurial-minded business owner, I found that statement shocking, to be honest. But maybe there is some truth to it...

2013-09-10 QE Tapering: Why Whether' or When' Doesn't Really Matter by Sam Wardwell of Pioneer Investments

We didn’t go to war last week what will happen is highly uncertain but the perceived probability of an imminent U.S. attack on Syria seemed to drop as the week proceeded.

2013-09-10 Investor Anxiety + Uncertainty = More Volatility Ahead by Russ Koesterich of iShares Blog

As Russ expected, both equity and bond market volatility have risen in recent weeks. Russ explains why this rocky road is likely to continue, and he provides two ideas for potentially insulating portfolios amid volatility.

2013-09-10 The Suit? by Jeffrey Saut of Raymond James

Bernie Cornfeld, of IOS Fund fame, coined the phrase, “Do you really want to be rich?” At the time I was working as a stock broker, and writing investment strategy for E.F.Hutton, having penned in December 1974 that, “I recommend a gradual return to significant common stock accumulation” (I still have that report). I also learned that you have to evaluate the risks, because sometimes when you go after the “big bucks” you lose. Then you end up with small change!

2013-09-10 The August Employment Report Enough to Taper? by Scott Brown of Raymond James

The August Employment Report was not as strong as expected, but it wasn’t terribly weak either, making the Fed’s decision to taper a bit more difficult. Still, QE can’t last forever.

2013-09-10 Raising the Bar on Target Date Due Diligence by Manning & Napier/Strategic Insight of Manning & Napier

Deeming whether target date fund investments are appropriate for a specific participant population is an arduous and imperfect task, made more complicated by a lack of full transparency. Fiduciaries should question whether the underlying securities of target date funds are appropriate to meet the retirement saving needs of plan participants. However, the question itself raises concern about what it would take to examine the funds in such detail.

2013-09-10 Oil Has Too Many Plumbers by Bill Smead of Smead Capital Management

We’ve never quite understood why most sensible people don’t apply the same economic logic to investing that they do to any other business. Take plumbing for example. If your town has 10 main plumbing companies and 10 more move into town, your economic mind tells you that the added competition will drive down profits. On the other hand, if five of the plumbing companies go out of business, profits should rise over time.

2013-09-10 Some Scary Bumps in the Road Just Ahead by Gary Halbert of Halbert Wealth Management

The major stock indexes moved lower after setting new record highs in early August, although prices have recovered somewhat in the last few days. So was the weakness in August just an overdue correction before moving even higher? Maybe, but there are a number of things coming up in the next month or so that could rattle the markets even more, including whether or not we go to war with Syria. We’ll talk about those today.

2013-09-10 Check or Checkmate... by Blaine Rollins of 361 Capital

The White House’s goal is to persuade Congress to authorize a limited military strike against Syria to punish it for a deadly chemical weapons attack. But after a frenetic week of wall-to-wall intelligence briefings, dozens of phone calls, and hours of hearings with senior members of Mr. Obama’s war council, more and more lawmakers, Republican and Democrat, are lining up to vote against the president.

2013-09-10 Taper Vs. No Taper - Let\'s Meet Somewhere In The Middle by John Rothe of Riverbend Investment Management

Volatility in the US equity and bond markets has risen since Ben Bernanke and the rest of the Federal Reserve Board mentioned the possibility of tapering its bond purchase program - in other words, a potential end to the "free ride" the Fed has been giving investors. However, economic data is still weak and a reduction in economic stimulus by the Fed may harm the US economy.

2013-09-09 Get Ready for “Taper Lite”: 3 Signs the Labor Market Isn't Picking Up by Russ Koesterich of iShares Blog

While the overall US economy is healing, the labor market’s recovery continues to be frustratingly slow. Friday’s payroll report suggests investors should prepare for a less aggressive Fed, a more muted backup in interest rates and a bond market that can go up as well as down.

2013-09-09 The Lesson of the Coming Decade by John Hussman of Hussman Funds

Even if the S&P 500 Index goes nowhere over the coming decade - as historically reliable measures of valuation suggest - it will probably go nowhere in an interesting and volatile way, providing better value and opportunities that are well-supported by historical evidence. The challenge will be to maintain discipline even when frustration begs investors to abandon it.

2013-09-09 Moving On - Five Years After Lehman by John Petrides (Article)

This month marks the fifth anniversary of the Lehman Brothers failure and the start of worst financial crisis in American history since the Great Depression, and yet to some investors, it seems like only yesterday. Investors still hold onto that period of volatility as if it will happen again tomorrow, paralyzing and confusing their investment decisions. Consequently, many investors have watched from the sidelines as the stock market has recovered solidly year after year.

2013-09-09 Reasons for Optimism in a Sloppy Third Quarter by Ron Sloan of Invesco Blog

Investors are anticipating the day that we transition from a market dominated by monetary stimulus to an earnings-driven market. The problem is that earnings aren’t cooperating yet. In my view, we’ve still got a sloppy third and maybe fourth quarter to get through, but I think 2014 will likely be a much better earnings market.

2013-09-09 The Shape of Things to Come by Kristina Hooper of Allianz Global Investors

With a week to go before the September FOMC meeting, there’s little that stands in the way of Fed tapering. Friday’s jobs report didn’t impress but it probably wasn’t bad enough to stop central bankers from pulling some punch, writes Kristina Hooper.

2013-09-09 Equities Advance Despite Concerns Over Weak Employment and Growth by Bob Doll of Nuveen Asset Management

U.S. equities moved higher last week, with the S&P 500 advancing 1.40%.1 In the face of another disappointing employment report, positive recovery expectations provided tailwinds. Key manufacturing and service sector data surprised to the upside, and improved corporate confidence was highlighted by merger and acquisition activity. Developments outside the U.S. supported recovery and reform, and emerging market fears lessened. A potential U.S. military strike on Syria was an overhang as President Obama’s decision to seek congressional approval raised concerns about other looming battles.

2013-09-09 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

A couple of holidays during the week prompted some light volume and volatility as investors were forced to digest a slew of key economic releases and some potentially concerning geopolitical developments on a limited work schedule. In the end, investors took advantage of bargains leftover from a poor August, but many still maintain the same uncertainties that caused the pullback in the first place. Syria and the Fedthe headlines should be around for the foreseeable future.

2013-09-09 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks finished higher last week, but August was a down month as worries about monetary policy including who will lead the Federal Reserve next year, along with the confusion surrounding the Obama administration’s Syria decisions have put a damper on things for now.

2013-09-09 Market Technicals Signal Trouble Ahead by Chris Maxey, Ryan Davis of Fortigent

Bear market enthusiasts have so far been disappointed in September after the sudden market rally last week. With equities up more than 1% on the month, many bears pointed to the historically poor performance of equity markets during this month as a reason to remain cautious. Bear enthusiasts need not fear, as markets appear to be converging toward an inflection point right around the Fed meeting in the middle of the month.

2013-09-07 Unrealistic Expectations by John Mauldin of Millennium Wave Advisors

Two well-respected analysts of pension funds have produced reports this summer suggesting that pensions are now underfunded by more than $4 trillion and possibly more than $5 trillion. I would like to tell you that the underfunding is all the bad news, but when you probe deeper into the problems facing pension funds, it just gets worse.

2013-09-06 The Emerging Markets Debt Evolution by Giordano Lombardo of Pioneer Investments

My colleagues Mauro Ratto, Head of Emerging Markets, and Yerlan Syzdykov, Head of Emerging Markets Bond & High Yield, offered these thoughts on emerging markets.

2013-09-06 Weekly Market Review by AdvisorShares Research of AdvisorShares

The major US stock indexes fell once again last week, capping off the worst monthly performance of the S&P 500 in over a year. However, the index is only 4.69% below its all-time intraday high reached on August 2nd. While fear that the Fed would vote to start ending extraordinary stimulus measures at the next meeting late in September was the main reason cited for the decline, thin trading volume in August and especially the week before Labor day may have made led to increased volatility and price declines.

2013-09-06 The Growth Mirage by Scott Minerd of Guggenheim Partners

Despite disappointing economic data, there continues to be widespread expectations of a period of stronger economic growth just ahead. This growth mirage draws thirsty investors and increases the likelihood that interest rates will continue rising over the near-term.

2013-09-06 Markets Focused on the Wrong Target by John Browne of Euro Pacific Capital

In recent months economic commentators and financial markets have focused almost excessively on the Federal Reserve’s quantitative easing ("QE") policy as the market’s main driver. However, last month two senior economists at the Federal Reserve published a report entitled ’How Stimulating Are Large-Scale Asset Purchases’ which calls this devotion into question.

2013-09-06 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

Last year ECRI switched focus to their version of the Big Four Economic Indicators that I routinely track. But when those failed last summer to "roll over" collectively (as ECRI claimed was happening), the company published a new set of indicators to support their recession call in a commentary entitled The U.S. Business Cycle in the Context of the Yo-Yo Years (PDF format). Subsequently the company took a new approach to its recession call in a publicly available commentary on the ECRI website: What Wealth Effect?.

2013-09-06 The Big Four Economic Indicators: Nonfarm Employment by Doug Short of Advisor Perspectives (dshort.com)

I’ve now updated this commentary to include today’s release of the August Nonfarm Employment data. As the adjacent thumbnail illustrates, the trend in this indicator has been ever upward, but at a frustratingly slow pace. Today’s announcement of only 169K new jobs was below forecasts. Moreover, the nonfarm jobs number for July was revised downward from 188K to 172K and the June number was revised downward from 162K to 104K for a combined decline of 74K from last month’s report.

2013-09-06 The Good, The Bad and The Ugly by Douglas Cote of ING Investment Management

“Good” economic news in developed markets has been overshadowed lately by the “bad” (burgeoning Asian currency crisis) and the “ugly” (Syria). Unwinding central bank support from the markets will be arduous; it is already contributing to destabilization of certain emerging market currencies. News out of Washington this autumn tapering, Fed leadership and the debt ceiling has the potential to add volatility and uncertainty. The U.S. equity market has been the place to be this year, but diversification remains key.

2013-09-06 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Manufacturing surveys are upbeat, but should we trust them? The August employment report leaves lots of room for improvement.

2013-09-06 Will Gold Follow Its Seasonal Pattern This Year? by Frank Holmes of U.S. Global Investors

There are factors beyond Syria this week driving gold. That’s the Love Trade. This group gives gold as gifts for loved ones during important holidays and festivals. This is the time of the year that we are in the midst of right now. Historically, September has been gold’s best month of the year. Looking at more than four decades of monthly returns, the precious metal has seen its biggest increase this month, averaging 2.3 percent.

2013-09-05 Congress Returns from Recess to Face Fiscal Deadlines by Andy Friedman of The Washington Update

Congress returns from its August recess facing two imminent deadlines.First, Congress has appropriated funds to keep the federal government operating only through September 30, 2013.If Congress does not appropriate additional funds during September, on October 1 the federal government will shut down.House Speaker Boehner has said he will propose short term “stop gap” legislation without conditions that would fund the federal government for a few more months at 2013 levels.If Congress adopts such a resolution, the funding deadline will be pushed later into 2013.

2013-09-05 India and Indonesia by Team of Matthews Asia

Comments from the Federal Reserve to begin reducing its stimulus operations have weighed heavily on markets across Asia in recent weeks. Growing investor concerns have largely centered on those economies that have been running current account deficits and that are likely to be further impacted by lower growth forecasts and reduced capital inflows. More short term, speculative flows from investors into fast-growing Asian economies have also fallen as expectations for higher interest rates in the U.S. have risen.

2013-09-05 Seventh Inning Stretch by William Gross of PIMCO

They say that reality is whatever you wish it to be and I suppose that could be true. Just wish it, as Jiminy Cricket used to say, and it will come true. Reality’s relativity came to mind the other day as I was opening a box of Cracker Jacks for an afternoon snack. That’s right I said Cracker Jacks! I can’t count the number of people who have told me during the seventh inning stretch at a baseball game to make sure I sing Cracker Jack (without the S) because that’s what the song says. I care not. No one ever says buy me some “potato chip” or some “pea

2013-09-05 Dividends Matter by Mark Mobius of Franklin Templeton Investments

Many people think of emerging market stocks as pure growth plays, and may not realize that there is a separate potential benefitdividendsthat can also be available to investors in these markets. A prolonged period of easy monetary policies in many developed nations (particularly the US) has left income-seeking investors searching for alternatives to traditional fixed income, including dividend-paying stocks. Many investors may not realize dividends aren’t just a developed-market phenomenon.

2013-09-04 Fixed Income - Where to Now? by Chris Maxey, Ryan Davis of Fortigent

Since the end of the Global Financial Crisis (GFC), investors moved aggressively into fixed income asset classes. They were quickly rewarded in the years following the crisis with a combination of falling interest rates and tighter credit spreads, which led to positive absolute returns. The easy money in fixed income is gone, however, and now is the time for careful asset class selection.

2013-09-04 The Vultures' Victory by Joseph Stiglitz of Project Syndicate

The recent decision against Argentina by a United States appeals court threatens to upend global sovereign-debt markets. Indeed, a basic principle of modern capitalism that when debtors cannot pay back creditors, a fresh start is needed has been overturned.

2013-09-04 Abe Wins - Does Japan Benefit? by Milton Ezrati of Lord Abbett

The Japanese seem willing to give Abe room to reform when he decides to act.

2013-09-04 4 Signposts To Watch for an Emerging Markets Turnaround by Russ Koesterich of iShares Blog

When will we see a significant and prolonged reversal in emerging markets (EM) stock performance? Russ says to watch for four signposts that could signify the EM underperformance tide is turning.

2013-09-04 How Strong is the Job Market? by Scott Brown of Raymond James

A year ago, as the Fed was about to embark on its third large-scale asset purchase program (QE3), the policy focus shifted to the labor market. In announcing QE3, the Federal Open Market Committee indicated that purchases would continue “if the outlook for the labor market does not improve substantially.” A year later, how much improvement have we seen?

2013-09-04 Money and Savings? by Jeffrey Saut of Raymond James

I spoke to Ben Stein (American actor, writer, lawyer, and commentator on political and economic issues) a few weeks ago, and his parents sound a lot like my grandparents. My grandparents, and their peers, were just starting out in life during the depression. After experiencing those horrible economic times, saving for a rainy day became second nature.

2013-09-04 In a Little While: Market\'s Not Out of the Woods Yet by Liz Ann Sonders of Charles Schwab

Since moving into the "pullback" camp in early August, the market has had a mini-correction and it may not be over. Sentiment and technical conditions have improved; as has the economic backdrop, but risks remain. Until we get past Syria, Fed tapering and the debt ceiling, volatility may remain elevated.

2013-09-03 Did Steve Jobs Really Build That? by Michael Edesess (Article)

The conventional wisdom is that only the private sector can marshal the entrepreneurial energy to create innovation and growth, while government can do little more than shift around the wealth that the private sector creates. But is that really true?

2013-09-03 The Hidden Risk in Gold by Robert Huebscher (Article)

Since their introduction a little over a decade ago, gold-backed exchange-traded funds (ETFs) have accumulated more than $500 billion in assets. Investors’ most common rationale for owning gold is that it acts as a hedge against financial instability or a sudden shock to the markets, such as the 9/11 attacks. But what if the flow of assets into gold ETFs plays a greater role in the price of gold than do investors’ fears of instability? Is gold the hedge investors believe it to be?

2013-09-03 Letter to the Editor by Various (Article)

A reader responds to Geoff Considine’s article, Do Income-Oriented Portfolios Reduce Safe Withdrawal Rates?, which appeared last week.

2013-09-03 Are Emerging Markets Submerging? by Kenneth Rogoff of Project Syndicate

After years of solid output gains since the 2008 financial crisis, the combined effect of decelerating long-term growth in China and a potential end to ultra-easy monetary policies in advanced countries is exposing significant fragilities in emerging markets. Is the inevitable “echo crisis” in these countries already upon us?

2013-09-03 Our Views as We Head into Autumn by Charles Lieberman (Article)

Economic growth prospects for the U.S. are slowly improving, implying that the unemployment rate will continue to work its way lower and corporate profits will keep rising. We expect the Fed to start tapering of its bond buying program in September. Interest rates should revert to more normal, higher levels, but stocks should also work their way higher. Nonetheless, investors will be focused on events surrounding Syria, at least over the near term.

2013-09-03 Where's the Job Growth? Puerto Rico & Illinois and the ACA by Gregg Bienstock of Lumesis

Welcome back from your Labor Day weekend. This week we take a look at the employment data (pre-First Friday Employment Report) and try and find where there is Job Growth of any kind. We then take a closer look at Puerto Rico against the backdrop of some recent changes and comparative data, and close out with a look at the Affordable Care Act (aka Obamacare).

2013-09-03 So Step Right Up, Pick Your Favorites... by Blaine Rollins of 361 Capital

So with the backing of The White House, the State Department, the Senate & The Economist, the United States is going to launch Tomahawks on Syrian targets. The President did say that he will let Congress vote on a strike, but both he, Secretary Kerry and Senator Reid let it be known that they will be lighting fuses soon. So as a refresher as to who is supporting whom in Syria, the chart below will both assist and thoroughly confuse you...

2013-09-03 Momentum in Europe by Janus Equity Investment Team of Janus Capital Group

We think now is a good time to be investing in Europe. European equity valuations are at the lowest level in more than 40 years, by some measures, and we are seeing green shoots in the region’s downtrodden economy. Meanwhile, European companies in several industries have right-sized their cost structures or refocused their businesses, setting them up to be more competitive on a global scale.

2013-09-03 As Uncertainty Abounds in September, Sideways Consolidation Continues by Bob Doll of Nuveen Asset Management

Global equities struggled last week, with the S&P 500 declining -1.39%.1 Volatility rose from geopolitical uncertainty over the military strike in Syria.2 Oil prices spiked with concerns about escalation and tension but retreated due to dampened international support and expectations that a military campaign would be short-lived. The U.S. Treasury announced its borrowing capacity will be exhausted by mid-October, exposing contentious fiscal battles. Reports mentioned former Treasury Secretary Larry Summers may be leading the succession race for Fed Chairman.

2013-09-03 Forward Guidance Who Are You Going to Believe, the Fed or Your Lying Eyes? by Paul Kasriel of Econtrarian, LLC

Recently, a commentary published by the Federal Reserve Bank of San Francisco, “How Stimulatory Are Large-Scale Asset Purchases?”, came to my attention.

2013-08-31 How Do I Hate Thee? by John Mauldin of Millennium Wave Advisors

I will list a number of reasons why I hate this market and then suggest a few reasons why that should get you excited. We will look at some charts, and I’ll briefly comment on them. No deep dives this week, just a survey of the general landscape.

2013-08-30 The Unfriendly Skies by Peter Schiff of Euro Pacific Capital

As if the federal government were not already doing enough to kill the U.S. airline industry with restrictive workplace rules, over-regulation, and a monetary policy that supports higher fuel prices, earlier this month anti-trust authorities at the Justice Department blocked the merger between American Airlines and US Air.

2013-08-30 Ramen for Everyone by Kenichi Amaki of Matthews Asia

Matthews Asia’s investment team members regularly travel across Asia to conduct research. Between meeting with management teams, touring factories and catching flights from one destination to the next, we do, on occasion, need to eat. Sometimes it’s room service at midnight while typing up meeting notes, other times we may try some local food. For me, as a ramen lover, the growing number of ramen restaurants across Asia has been a real treat. Apparently, I’m not alone in that thought.

2013-08-30 Look for these European Stocks to Exert a Lot of Horsepower by Frank Holmes of U.S. Global Investors

The Wall Street Journal recently published an article, “Emerging Europe is a Haven in Selloff,” highlighting the region’s recent success in “rising above the storm” that other developing markets have not been able to avoid. Dark clouds have been swirling around emerging markets, with the MSCI Emerging Markets Index falling about 12 percent on a year-to-date basis.

2013-08-30 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Global policy-makers increasingly at odds with one another. Foreign exchange reserves may hold key to stabilizing emerging markets. Geopolitics weigh heavily on energy markets.

2013-08-30 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.3, an increase from last week’s 131.0 (revised from 131.1). The WLI annualized growth indicator (WLIg) declined to 4.2% from last week’s 4.5%.

2013-08-29 High Yield Bond Market Mid-Year Check In by Matthew Pasts of BTS Asset Management

After a prosperous 30-year bull market, the prospect for the future direction of High Yield bonds would seem to hinge on not whether, but when their decline starts.Dan Fuss has been managing bonds for 55 years. His multi-sector bond fund, Loomis Sayles Bond Fund, ranks in the top 10% of its peer group over the last 15- and 10- year periods as of December 31, 2012. Fuss believes that bonds are currently “the most overbought market I have ever seen in my life in the business.”

2013-08-29 More Evidence of Pressure on Housing by Scott Minerd of Guggenheim Partners

The slowdown in housing due to higher mortgage rates is becoming more evident in the data for that market. This comes during a time when the Fed is making a crucial decision about tapering quantitative easing, which is causing market uncertainty to rise further.

2013-08-29 Have Emerging Markets Gotten Oversold? by Mark Mobius of Franklin Templeton Investments

At Templeton, we’ve repeatedly championed our value-driven philosophy by frequently buying at times others are most pessimistic. This is not easy to do, even for seasoned market veterans. During the past few months, emerging markets have been subject to such pessimism. These periods of short-term volatility are certainly not new to us, and don’t change our long-term conviction of the potential emerging markets hold.

2013-08-29 Middle East Tensions, Oil Prices and the US Economy by Russ Koesterich of iShares Blog

A further escalation of violence in the Middle East will not only have a terrible human toll, it could also lead to rising oil prices, which in turn could hurt consumers and the global recovery. Russ explains the situation and shares how investors can prepare.

2013-08-29 Earnings: Just Good Enough by Milton Ezrati of Lord Abbett

Corporate profits aren’t exactly setting the world on fire, but the rate of growth should be sufficient to support further equity market gains.

2013-08-28 On Tapering, All Signs Point to “Maybe” by Scott Brown of Raymond James

Investors looking to the July 30-31 Fed policy meeting minutes for clear clues on future moves were left disappointed. Nearly all senior Fed officials expect that a reduction in the pace of asset sales is likely to be warranted by the end of the year. However, they appear evenly divided on whether that will be sooner (September) or later (December). The economic data remained mixed, suggesting that the decision will be a close call.

2013-08-28 Random Thoughts in the Summer Doldrums by Jeffrey Saut of Raymond James

On October 10, 2008, with the S&P 500 (SPX/1663.50) at 839.80, the bottoming process began when 92.6% of all stocks traded on the NYSE made new annual lows. That’s a six standard deviation event, which is supposed to occur only twice in a lifetime. At the time many investors were liquidating their portfolios because they did not heed Benjamin Graham’s advice in his epic book The Intelligent Investor, “The essence of investment management is the management of RISKS, not the management of RETURNS.

2013-08-28 Forrest Gump Stock Market by Bill Smead of Smead Capital Management

After watching "Forrest Gump" for about the thirtieth time recently, I realized that the US economy and US stock market share a great deal in common with Forrest. In this missive, we will be reminded of the journey of a true American folk hero and of the journey back from the abyss the US economy and stock market have made since early in 2009.

2013-08-28 A Couple of Thoughts on Decoupling by Adam Peck of Heartland Advisors

As equity markets have pushed toward new highs this year, one of the worries lingering in the background has been the potential impact of China’s economic slowdown on the U.S. weakening demand from that country, the thinking has gone, could hurt the broad range of companies that export goods to China.

2013-08-28 A New Leg In The Commodity Decline? by Doug Ramsey of Leuthold Weeden Capital Management

For more than two years we’ve discussed the supply-side risks to commodity producers stemming from capacity built during the manic “Third Act” of last decade’s Three Act Play in commodities. Commodity-oriented equities have indeed underperformed since 2011 (chart 1), but to date, most pundits have laid blame squarely on the demand side (i.e., the sharp deceleration in Chinese economic growth). We don’t have a strong opinion on the short-term direction of the Chinese economy, but the capacity overhang looks like a multi-year story to us, independent of China’

2013-08-28 America is Turning Into a \"Part-Time Nation\" by Gary Halbert of Halbert Wealth Management

Part-time work accounted for a whopping 77% of the jobs the US economy created from January through July, according to household survey data from the Bureau of Labor Statistics. Last year during the same time period, part-time jobs were only 53% of the total versus 47% full-time jobs. This trend toward part-time, low paying jobs is accelerating rapidly.

2013-08-27 Five Essential Lessons from the Author of “Seven Habits” by Dan Richards (Article)

Who’s had the most impact on determining how businesspeople operate today?

2013-08-27 Why Bad Decisions Happen to Good People: An Introduction to Behavioral Finance by Scott Clemons (Article)

Cognitive biases frequently cause even skilled investors to make irrational decisions. Thankfully, irrationality is fairly predictable. Here are four behavioral biases that investors face and techniques for recognizing and overcoming them.

2013-08-27 Will Rate Rise Derail Housing Recovery? by Chris Maxey, Ryan Davis of Fortigent

As the Federal Reserve grapples with when and how to unwind quantitative easing, interest rates climbed more than a point since the end of 2012. This caused mortgage rates to increase to their highest levels in two years last week, with the average conforming 30-year loan jumping to 4.58% from 4.40% the week prior. Rising financing costs is presenting a headwind for one of the biggest bright spots in the US economy over the past 12 months.

2013-08-27 How Real is the Recovery in Commercial Real Estate? by Joel Beam, Ian Goltra of Forward Management

How Real Is the Recovery in Commercial Real Estate? A conversation with Joel Beam and Ian Goltra of Forward’s Real Estate Portfolio Management Team.

2013-08-27 Lehman's Morbid Legacy by Mohamed El-Erian of Project Syndicate

As the fifth anniversary of Lehman Brothers’ collapse approaches, we need analyses of the previously unthinkable outcomes that have become reality with profound implications for current and future generations and that our systems of governance have yet to address properly. Four such outcomes come to mind.

2013-08-27 Emerging Markets Feel the Ripples of Fed Tapering by Sam Wardwell of Pioneer Investments

Many Emerging Market currencies (notably those of India, Brazil and Indonesia) have been weak since the beginning of May. The declines accelerated sharply in recent weeks, leading to something approaching panic in several markets last week.

2013-08-27 Policy Uncertainty on the Rise by Libby Cantrill, Josh Thimons of PIMCO

Congress seems to be digging in and ramping up the rhetoric in advance of a possible government shutdown, a debt ceiling increase and a probable selection of a new Fed chair. We think it is likely policymakers will agree to a short-term deal to fund the government and avert a shutdown, and also cobble together a resolution on the debt ceiling, although neither is likely until the last minute. The Fed chair debate will likely continue to sway markets over the next few months, leading to greater uncertainty and greater market volatility.

2013-08-27 Choose Your Door Wisely.. by Blaine Rollins of 361 Capital

If I was being forced to choose a side for year end 2013 performance, I would have to agree with Mr. Plant. While September is historically a difficult month for the markets, we also know that the Q4 tends to reward the equity markets.

2013-08-26 Inflation Update by Team of North Peak Asset Management

As can be seen in the schematic above, most portfolios are effectively a bet on a low inflation environment due to their heavy reliance on mainstream equities and fixed income securities. In order to protect a portfolio from the damage that inflation can inflict, asset classes that are sensitive to increases in inflation need to be incorporated into the asset mix. These include Inflation Linked Bonds (TIPS), Precious Metals, Global Natural Resource equities and Commodities.

2013-08-26 Chicago Post Script, Reported Data Errors (Really) and What is a “Geo Score”? by Gregg Bienstock of Lumesis

Regular readers know I periodically suggest looking at alternative data points to gain a broader perspective. In this instance, something a little different. At the core of the DIVER platform is our database and we take data integrity very seriously. So much so that we periodically find errors in reported data. Many times, the source will correct the data as we notify them. Typically, when we find an error in a CAFR, the source will defer the correction until the next CAFR is released. In DIVER however, we will display the accurate values.

2013-08-26 Equities Relatively Flat as Crosscurrents Remain by Bob Doll of Nuveen Asset Management

U.S. equities finished mostly higher last week, and the S&P 500 advanced 0.50%.1 The Dow Jones Industrial Average was the only the only major U.S. index to falter last week.1 Market sentiment was dominated by the notion that the market had become too bearish in the wake of the prior week’s sell-off in equities and credit. Continued improvement in global recovery sentiment seemed to provide a notable tailwind. The Fed dominated headlines markets appear obsessed with policy normalization and succession issues.

2013-08-26 The Global QE Exit Crisis by Stephen Roach of Project Syndicate

The global economy could be in the early stages of another crisis and, once again, the Federal Reserve is in the eye of the storm. As the Fed attempts to exit from its unprecedented policy of massive purchases of long-term assets, many high-flying emerging economies suddenly find themselves in a vise.

2013-08-25 France: On the Edge of the Periphery by John Mauldin of Millennium Wave Advisors

Charles de Gaulle said that "France cannot be France without greatness." The current path that France is on will not take it to renewed greatness but rather to insolvency and turmoil. Is France destined to be grouped with its Mediterranean peripheral cousins, or to be seen as part of the solid North Atlantic core? The world is far better off with a great France, but France can achieve greatness only by its own actions.

2013-08-24 Hong Kong: A Gateway to Chinese Companies by Dilip Badlani of The Royce Funds

While many investors and businesses in Hong Kong are struggling with China’s slowed-growth policy, increased rates on commercial rentals, and government intervention to cool the residential property market, we at Royce are looking for opportunities in Hong Kong-listed companiesour primary entrance to gain access to Chinese companieswhose valuations are reflective of the macro challenges facing their economy.

2013-08-24 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.1, a decline from last week’s 131.2. The WLI annualized growth indicator (WLIg) declined to 4.5 from last week’s 4.7%.

2013-08-24 Revisiting the USD Bull Market by Paresh Upadhyaya of Pioneer Investments

The USD bull market has begun with signs that the USD is transitioning to a cyclical currency. Monetary policy divergences in G4, slowing in USD diversification and a dramatic turnaround in the twin deficits, provide a strong fundamental underpinning to a USD rally going forward.

2013-08-23 Economic Update: August 2013 by Lori Liffring, Michael Bridgeman, Gaylan Abood, Justin Anderson, Karen Benefiel of Cambridge Advisors

Stocks had another strong month in July with the large-cap S&P 500 index up 5.0% and the small-cap Russell 2000 up 7.0%. International stocks in developed markets were also 5.2% higher as measured by the MSCI EAFE index while emerging market stocks were up less than 1%. Bond prices stabilized during the month resulting in only a slight 0.1% gain.

2013-08-23 What Does an Improving Economy Mean for Stocks and Bonds? by Charlie Dreifus of The Royce Funds

With the economy improving, inflation tame, and a Federal Reserve meeting approaching in September, Portfolio Manager and Principal Charlie Dreifus believes that small-caps remain an attractive option within the equities market.

2013-08-23 Why We Still Like China by Philippe Brugere-Trelat, Andrew Sleeman of Franklin Templeton Investments

When China, the world’s second-largest economy and an engine of global growth, sneezes many other markets catch colds. A spike in the country’s short-term lending rate in June gave some investors the sniffles at least temporarily, while others have turned bearish on China amid concerns growth rates this year could be under the weather. However, many investors may be overlooking some powerful macro-economic long-term shifts taking place in the economy that could ultimately improve China’s bill of health.

2013-08-23 Utilities - Today's Best Bond Alternative by Chuck Carnevale of F.A.S.T. Graphs

To refer to any stock or equity as an alternative to bonds or fixed income is sure to stir up the ire and consternation of many professional and individual investors alike who deem themselves prudent. Frankly, under normal circumstances I would tend to agree.

2013-08-23 Why it's Time to Reconsider European Equities by Russ Koesterich of iShares Blog

Given recent signs that the eurozone economy is stabilizing, is it time to consider European equities again? Russ explains why his answer is a qualified yes.

2013-08-23 Float Research: Fund Outflows Surge Amid Bond Market Anxieties by Minyi Chen of AdvisorShares

Stock and bond funds have given up a net $32.4 billion in August thanks to strong outflows from ETFs and mutual finds alike. Read this investor insight by Minyi Chen, CFA, Chief Operating Officer of TrimTabs Investment Research and Portfolio Manager of AdvisorShares TrimTabs Float Shrink ETF (NYSE Arca: TTFS) to learn about the recent fund flow trends.

2013-08-23 Buckle Up by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Caution is warranted near-term. For investors that have a solid strategy of dollar-cost averaging into the market, we don’t recommend deviating from that path. However, for investors who are more tactical, better entry points are likely yet to come. Longer-term, we remain bullish on US equities and prefer developed international markets over emerging markets.

2013-08-23 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

India: Broken promise or temporary hiccup? Bond markets appear unmoved by central bank guidance. Rising mortgage rates are taking some of the steam out of housing.

2013-08-22 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week, total AUM in all active ETFs fell by over $60.5 million. AUM in the “Global Bond” category fell by nearly $89 million both because of falling values for ETFs in the category and redemptions in certain ETFs. The “Foreign Bond” category had another bad week, ending almost $36 million below where it began. As in previous weeks, assets in “Short Term Bond” active ETFs increased, this time by almost $36.5 million.

2013-08-22 Summer Whale Watching by David Wismer of Flexible Plan Investments

One of our family’s most memorable and pleasant vacations took place years ago when we visited Cape Cod, Massachusetts for the first time. I thought of this trip in pondering some of the market news this week, where Wall Street was practicing its very own version of “whale watching.”

2013-08-22 Bernanke's Taper Tinkering by Tad Rivelle of TCW Asset Management

For at least the past five years, the Fed has cast an exceedingly long shadow over the capital markets. For this reason, understanding Fed policy has been central towards proper guidance and direction of investor capital allocations. Since Chairman Bernanke’s trial ballooning surrounding a potential “taper” of the Fed’s QE policy, longer maturity Treasury interest rates have soared over 100 basis points.

2013-08-22 Hot Potato: Momentum As An Investment Strategy by Ryan Larson of Research Affiliates

Investors increasingly are attracted to momentum as a key ingredient in their portfolios. But how does momentum fare as a stand-alone strategy? In this issue of Fundamentals, we look at the pros and cons of this important risk factor.

2013-08-22 Determined to Taper by Scott Minerd of Guggenheim Partners

The release of the July Federal Open Market Committee meeting minutes today and the Jackson Hole Economic Policy Symposium starting tomorrow are likely to dominate near-term activity in financial markets. Despite mixed economic data, it appears increasingly likely that some form of tapering will be announced at the FOMC’s September meeting.

2013-08-21 The Danger of Duration: The Damage Potential of Rising Rates by Mike Temple of Pioneer Investments

The Federal Reserve’s initial goals from “The Great Monetary Experiment” are accomplished. Investors could now face the threat of rising bond yields.

2013-08-21 Trickle-Up Economics by Bill Smead of Smead Capital Management

Major magazines have a history of putting a topic on their cover at the end of a long-term trend. For example, “The Death of Equities” was a Business Week cover in late 1979, near the end of a miserable stretch in the US stock market. Time’s recent cover story, “The Childfree Life”, got us wondering about the economics of childbearing in the US? Does Time’s cover mark the end of a trend? Can the US economy succeed without homegrown population increases? Will economic success driven by the current demographics in the US trickle down to unemployed blue collar

2013-08-21 Asia Brief: On Economic Evolution in Cambodia by Edmund Harriss, James Weir of Guinness Atkinson Asset Management

Cambodia’s recent national Assembly elections offer hope that the country may be able to achieve a peaceful political transition in the coming years. The country’s political turmoil has held it back behind its neighbors, but tourism and gar- ment assembly are driving an acceleration in economic output growth. However, Cambodia is at risk from inflation through imported petroleum, and its youthful population will want to see improving GDP per capita feeding through into higher living standards, rather than a higher hydrocarbon bill.

2013-08-21 The Big Secret Mutual Fund Companies Are Hiding by Gary Halbert of Halbert Wealth Management

Do you know that most (if not all) mutual fund and ETF sponsors are keeping vital information about their funds secret from you? We’ll start today’s E-Letter with a discussion about what that valuable information is and why fund companies don’t want you to know about it.

2013-08-20 Target-Date Funds: Why Higher Equity Allocations Work by Joe Tomlinson (Article)

Following the 2008 financial crisis, target-date funds (TDFs) were criticized for exposing investors nearing retirement to excessive equity allocations. Were those criticisms justified? How well do TDFs stack up against the venerable strategy of matching one’s bond allocation to one’s age? My research has yielded surprising answers to those questions and to the proper role of single-premium immediate annuities (SPIAs) alongside TDFs.

2013-08-20 Who Are You Going to Believe-These Non-GAAP Numbers or Your Lying Eyes? by Jeffrey Bronchick of Cove Street Capital

Great performance in the short-run-either absolute or relative-is a mixed blessing. If an investor owns a portfolio of stocks that is embedding 30% undervaluation, and voila, finds himself up 30% (this is a hypothetical number for the purposes of this example but it’s not far from recent reality) in six months, without a concurrent upward improvement in underlying fundamentals, you have to be a regular on CNBC to expect another 30% return over the next six months.

2013-08-20 Change is Coming by Chris Maxey, Ryan Davis of Fortigent

The summer months brought a period of calm to global markets and economies. Nearing the move to autumn, it is time to look ahead and see what resides on the horizon. Investors could be due for a renewed bout of volatility based on any number of events set to happen before year-end.

2013-08-20 Tapering Uncertainty Means Volatile But Range-Bound 10-Year Rate by Chun Wang of Leuthold Weeden Capital Management

The U.S. 10-year yield was pretty much trapped within a 25 bps range between 250 and 275 in July (Chart 1), but intra-day volatility has picked up noticeably. In the last three months, there were 21 days of greater than 5 bps daily moves and 7 days of greater than 10 bps daily moves on the U.S. 10-year yield, the most in the last one and a half years.

2013-08-20 A Lot Of Action In What Was Expected To Be A Quiet Week by Sam Wardwell of Pioneer Investments

Most of the U.S. economic data released last week was rather ho-hum, consistent with continuing slow growth, but markets weren’t boring. Maybe markets are thin because it’s August, but the U.S. Treasury market had one of its worst weeks in a long time, and the selling spilled over into the U.S. stock market.

2013-08-20 The GDP Distractor by Peter Schiff of Euro Pacific Capital

Albert Einstein, a man who knew a thing or two about celestial mechanics, supposedly once called compound interest "the most powerful force in the universe." While the remark was likely meant to be funny (astrophysicists can be hilarious), it sheds light on the often overlooked fact that small changes, over time, can yield enormous results. Over eons, small creeks can carve large canyons through solid rock. The same phenomenon may be at work in our economy.

2013-08-20 August Monthly Investment Bulletins by Team of Bedlam Asset Management

For the first seven months of the year the portfolio rose by 25.2% vs. 19.3% for the index. During the month, the 6.4% gain was 150 basis points ahead. Three trends continued: the gradual increase in fund flows into equity markets relative to other asset classes, slightly improving economic data across most developed countries, and a mild deterioration in many developing nations.

2013-08-20 Epic Climb Up and to the Right... by Blaine Rollins of 361 Capital

Interest rates continue to make an epic climb up and to the right...

2013-08-19 Chicago and Detroit A Guest Commentary by Joshua Laurito of Lumesis

A few weeks back, we brought you a guest commentary by Josh Laurito regarding the City of Detroit. His perspectives were well-received by our readers. This week, Josh is back by popular demand with some thoughts on his home town of Chicago. We believe there is great value in considering fresh perspectives from intelligent people that is precisely what Josh brings to the table.

2013-08-19 A Bear Market Is Here: In Bonds! by Brian Wesbury, Bob Stein of First Trust Advisors

While it certainly hasn’t made the headlines that it should have, the bond market has been kicked in the teeth. After bottoming at 1.61% on May 1, the yield on the 10-year Treasury Note hit 2.84% on Friday, its highest level in two years the worst bear market move in bonds since the end of the 2008-09 financial panic.

2013-08-19 Equity Fatigue Continues with Headwinds from Bond Sell-off by Bob Doll of Nuveen Asset Management

U.S. equities finished lower for the second straight week as the S&P 500 declined 2.04%, narrowly escaping its worst week of the year. A specific catalyst behind the pullback was not identified by us or market analysts.

2013-08-19 What Triggers Would Make Japanese Equities Attractive? by Mark Jason of Invesco Blog

Through the second quarter of 2013, Japan remained Invesco International Growth Fund’s largest underweight versus the Custom International Growth Index because our EQV (earnings, quality and valuation) discipline criteria drive us toward high-quality companies at reasonable valuations, and those are scarce in Japan. Why? Because Prime Minister Shinzo Abe’s success is being priced in, and overcoming two decades lost to stagnation is difficult.

2013-08-19 A Warning Regarding Broken Speculative Peaks by John Hussman of Hussman Funds

We presently observe what might best be called a “broken speculative peak” a strenuously overvalued, overbought, overbullish, rising yield syndrome followed by a breakdown in market internals.

2013-08-19 Consumers: Wallets Open, but Not Too Wide by Milton Ezrati of Lord Abbett

U.S. consumer spending is likely to remain on a slow, but steady, growth trajectory, boosting overall economic growth.

2013-08-19 Preparing Equity Portfolios for Rising Rates by Russ Koesterich of iShares Blog

While Russ doesn’t foresee a bond market meltdown, he does expect that rates will rise in coming years and he offers three suggestions for positioning equity portfolios in preparation.

2013-08-19 What's the Point of Investing in Dreams? by Vadim Zlotnikov of AllianceBernstein

Is innovation dead or are we on the cusp of new technological revolutions? Without resolving this epic debate, we believe that market conditions today are conducive to investing in companies with disruptive potential, but it takes a sober approach to find big dreams that can deliver big returns.

2013-08-19 The Tick-Tock on Tapering by Scott Brown of Raymond James

The Fed’s September 18 decision on whether to begin reducing the pace of asset purchases will depend on the economic data (the job market figures, in particular), but there’s a growing consensus that we’re likely to see a modest initial step, as a compromise between Fed officials who want to end the program sooner and those that want to see it continued. There are other things for policymakers to consider. One is the possibility of an adverse reaction in the financial markets. Another concern is the low underlying trend in inflation.

2013-08-17 Signs of the Top by John Mauldin of Millennium Wave Advisors

The investment media seems obsessed with the question of whether the Fed will taper. The real question should be not about "tapering" but about credibility. What happens when fundamentals become the narrative as opposed to what the central bank is doing? What happens if the Federal Reserve throws a liquidity party and nobody comes? Today we look at some of the fundamentals. The market is in fact overvalued, but that doesn’t mean it can’t become more overvalued. Is this August 1987 or August 1999?

2013-08-16 Pacific Basin Market Overview July 2013 by Team of Nomura Asset Management

Asian markets ended higher in July after comments from Federal Reserve Chairman Bernanke appeared to infer that the Fed’s asset purchase program would be extended for a while longer. In China, Premier Li Keqiang stated that China would meet its gross domestic product (GDP) growth target this year, which brought some cheer to the markets. The MSCI AC Asia Pacific Free Index including Japan gained 1.5% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.0% higher during the quarter.

2013-08-16 The Case for Global Dividends: Valuations and the Impact of Rising Rates by Ehren Stanhope of O'Shaughnessy Asset Management

The S&P 500 Index has risen over 150 percent since March 9, 2009 in what could arguably be deemed the most hated equity rally of all time. The MSCI All Country World Index, one of the broadest global indices, has risen “just” 110 percent since its March 2009 nadir. Evidence indicates that United States (U.S.) investors have not participated in this rallya truly sad state of affairs. It is worthy of noting that over the last several years a number of well known market pundits have viscerally rejected the equity rally due to macroeconomic concerns.

2013-08-16 Purgatory Is Heaven by Tony Crescenzi of PIMCO

Since June, the Fed has stressed three messages: Tapering is not tightening, the federal funds rate will not move in tandem with a slowdown in asset purchases, and any change in Fed policy will rely on data, rather than a date. If Ben Bernanke leaves the Fed when his term expires, whoever is chosen to replace him will be bound by rules and the strength of the institution. The outlook for interest rates depends more on the Fed’s overall approach to the policy rate, and PIMCO believes the Fed will not increase that rate until 2016.

2013-08-16 When Filial Piety is a Legal Obligation by Winnie Chwang of Matthews Asia

Filial piety is a concept well-ingrained in many Asian cultures. Children are often taught to respect their elders, appreciate their hard work of parenting and to reciprocate that gratitude by looking after them in their old age.

2013-08-16 The Telecommunications Services Sector Untethered and Poised to Grow by Chuck Carnevale of F.A.S.T. Graphs

Suffice it to say that the Telecommunications Services sector of today is not your grandfather’s Telecommunications Services sector. The explosion, and rapidly becoming ubiquitous implementation, of wireless technologies have been disruptive and game changing. As a result, the very nature of the established stalwarts within this industry have gone through an extraordinary metamorphosis.

2013-08-16 Weekly Economic Commentary by Team of Northern Trust

The speculation about Fed leadership has gone too far. Eurozone growth should be placed in perspective. The velocity of money may turn around soon.

2013-08-16 What Happens When You Tell Indians to Stop Buying Gold by Frank Holmes of U.S. Global Investors

With the government in India raising its import tax for gold to 10 percent this week, I firmly believe Indians will continue indulging in gold, even if they have to smuggle it in.

2013-08-16 Attention Investors: Don't Fear Rising Rates; Fear Perpetually Low Rates by J.J. Abodeely of Sitka Pacific Capital Management

This month’s Insight will take a look at the performance of bonds during two previous inflationary periods, the 1940s and the 1970s, and illustrate two very different total return experiences. Through these examples, we will show that bond investors-- and by extension, any investor with a traditional balanced portfolio, should not fear rising rates as much as they should fear perpetually low rates.

2013-08-16 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.2, a decline from last week’s 131.5 (a downward revision from 131.8). The WLI annualized growth indicator (WLIg) declined to 4.7 from last week’s 4.9%.

2013-08-15 High Yield Market Overview July 2013 by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch High Yield Master II Constrained Index, was up 1.88% for the month of July. High yield recovered some of the sell-off experienced in May and June as Treasury yields stabilized and mutual fund and ETF (exchange traded fund) flows turned positive. The market’s rally occurred as rate fears subsided, which resulted in retail flows returning to the asset class.

2013-08-15 China and the Outlook for Financial Crises by Scott Minerd of Guggenheim Partners

China’s elevated and rising debt levels appear to be one of the largest risks to the global economy today. Although it is difficult to gauge when the risks in that country could manifest as a crisis, investors should act with the knowledge that the margin of safety in the global investment environment continues to decrease.

2013-08-15 Once-a-Generation European Opportunity? by Cindy Sweeting of Franklin Templeton Investments

Sir John’s contrarian conviction was so strong, that in 1939 when WWII had investors fleeing the markets, he bought every stock on the New York Stock Exchange trading under a dollar. Cindy Sweeting, Director of Portfolio Management at Templeton Global Equity Group, espouses Sir John’s contrarian approach, although as a more selective bottom-up stock-picker today. As the markets have bumped along recently she has also echoed his money-where-your-mouth-is action, avoiding the same trend plays everyone else is making by the doing the far more difficult work of going against the grain.

2013-08-15 What Lies Ahead for China? McKinsey Lists 10 Forces by Frank Holmes of U.S. Global Investors

By 2022, research by McKinsey suggests that 75 percent of urban consumers in China will earn around $9,000 to $34,000. This income level, which is currently between the average earned in Brazil and Italy, is only 4 percent of what Chinese households were bringing home in 2000.

2013-08-15 Correlation and Portfolio Construction by Dean Curnutt of Macro Risk Advisors

We review recent periods of financial market stress, which bring about elevated levels of asset volatility and during which investors are vulnerable to incurring substantial loss of capital. We illustrate that risk is determined both by the volatility of individual investments in a portfolio and the degree to which they are correlated. Often overlooked, correlation is a critical factor. Because assets become more correlated at the same time they become more volatile, we argue that the benefits of diversification often are difficult to achieve when they are most needed.

2013-08-14 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Overall the total AUM in all active ETFs declined by $1.2 million last week, an insignificant amount for the $14.4 billion space. “Short Term Bond” increased by almost $29.3 million, while “Global Bond” fell by around $15.8 million. “Foreign Bond” had another bad week, ending almost $34 million lower than where it began, as did the “Currency” category which declined by more than $8.7 million.

2013-08-14 Why GDP Deserves Less Attention by Zach Pandl of Columbia Management

Before joining Columbia Management I worked for several years as an economist at a few of the large broker-dealers in New York. One of my primary functions was to maintain an ongoing estimate of growth in the nation’s gross domestic product (GDP)a so-called GDP “bean count.” Most investors use GDP as their primary summary measure of overall economic performance, so they are keenly interested in how incoming data are likely to impact the estimates. Our running tally of GDP growth for the current quarter was one of the most sought after pieces of research we produced.

2013-08-14 Focused Only on the US? Here's What You're Missing by Russ Koesterich of iShares Blog

Many investors remain fixated on what’s happening in the United States -- and particularly on what the Federal Reserve will do -- but Russ explains why they shouldn’t lose sight of what’s happening abroad.

2013-08-14 How to Invest in Emerging Markets 3.0 by Sammy Suzuki of AllianceBernstein

It’s been 25 years since the emerging-market equities index was created, and much has changed. Today, we believe that emerging markets are on the cusp of a third phase that might compel investors to shift away from benchmarks and focus on absolute risk.

2013-08-14 Pause: Breather Needed Short-Term, But Longer-Term Still Looks Good by Liz Ann Sonders of Charles Schwab

Sentiment has gotten a little frothy ahead of a typically-seasonally weak period, but valuation remains attractiveoh, and don’t fret low volume.

2013-08-14 Macro View...In Microwave Time (Part 1 of 2) by Rob Isbitts of Sungarden Investment Research

In today’s sound-bite, tweet-driven world, one can’t help but do all they can to keep it simple, keep it brief and resist the temptation many of us Baby Boomers have to fall prey to “paralysis by analysis.” With that spirit in mind, here is a quick, pointed update on the 13 key points for investors I laid out in an article in RIABiz.com on January 14 of this year. These were and are the most significant data and forces for investors to track today, to pursue long-term growth and sidestep major losses.

2013-08-14 What Role for Emerging Markets After the Sell-Off? by Ramin Toloui of PIMCO

While history suggests that the sell-off in emerging market bonds could ultimately offer attractive buying opportunities, it is important to anchor investment decisions firmly within a forward-looking economic and market outlook. Continuing vulnerabilities in global growth suggest there is fundamental value in EM bond yields at present valuations, as interest rate hikes priced into EM yield curves are unlikely to materialize in an environment of tentative growth.

2013-08-14 Macro View...In Microwave Time (Part 2 of 2) by Rob Isbitts of Sungarden Investment Research

Today’s blog post picks up where last week’s left off by updating the 13 key points for investors I laid out in an article in RIABiz.com on January 14 of this year. These were and are the most significant data and forces for investors to track today, to pursue long-term growth and sidestep major losses. As I did last week, I will also note whether I think each point is a positive or negative (or other) for investors now that we are about 3/5 of the way through 2013. The six areas covered last week were generally positive. Let’s see about the final seven on the list

2013-08-13 So Now What? by Scott Brown of Raymond James

What did we learn last week? The Fed may not be in any hurry to begin reducing the rate of asset purchases. The economic data suggest a mixed picture.

2013-08-13 Dog Days! by Jeffrey Saut of Raymond James

The phrase “Dog Days” refers to the sultry days of summer. In the Northern Hemisphere, the Dog Days of summer are most commonly experienced in the months of July and August, which typically experience the warmest summer temperatures of the year. In the Southern Hemispheres, they tend to occur in January and February, in the midst of the austral summer. “Dog Days” is also defined as “stagnation,” so I think “Dog Days” is the proper moniker for last week’s market action as all the markets stagnated!

2013-08-13 China Struggles to Fight the Trend by Chris Maxey, Ryan Davis of Fortigent

Prior to the global financial crisis, decoupling’ was the word du jour. In the years since the crisis began, however, decoupling has vanished from the everyday lexicon. In recent weeks, the financial media noticed a new form of decoupling, one that shows improving growth prospects in the developed world but slower growth in developing economies. Rightly or otherwise, much of that slowdown is pinned on China and recent data continues to suggest a slower pace of growth than investors became accustomed to in prior decades.

2013-08-13 Tapering, Munis and an Uneven Recovery by Gregg Bienstock of Lumesis

This week’s Tidbits are a bit longer text wise than usual. I focus on the end of QE (or the beginning of tapering) and then take a quick look at counties in Michigan feeling the impact of Detroit’s filing. I then move on to a review of a very uneven housing market and offer a quick observation on exports before concluding with some State Geo Scores to consider.

2013-08-13 Emerging Asia Pacific: Regional Economic Review - Q2 2013 by Team of Thomas White International

Asia’s emerging nations, the darling of the world economy since the 2000s, uncharacteristically slowed in the first quarter of 2013. After a decade of robust growth, many of Asia’s fast-growing economies are coming to terms with structural changes. Asian currencies, which had appreciated quite a bit over the past few years thanks to ultra-loose monetary policy in the developed world, came tumbling down at the first talk of a slowdown in the supply of cheap money.

2013-08-13 Developed Asia Pacific: Regional Economic Review Q2 2013 by Team of Thomas White International

Many developed economies in the Asia Pacific region rebounded during the second quarter of 2013 to post a healthy set of growth and inflation numbers. Turning on the monetary spigots during the past one year provided a major fillip to many developed Asian economies. Countries that fumbled in the wake of natural disasters in the recent past, showed marked improvement. Even those countries that were said to be suffering from structural deficiencies, too, responded well to the monetary medicine administered by their various central banks.

2013-08-13 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

When the Fed talks, people listen (and it doesn’t even have to be Bernanke). This week, a few key policymakers (not named Bernanke) expressed their views that the bond buying program may begin to be tapered this year, perhaps as early as the September meeting. Some investors used the opportunity to sell stocks and book some profits, though news from China eased certain concerns that the global economy was on shaky ground.

2013-08-13 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stock prices declined modestly last week. A shrinking trade deficit caused 2nd quarter GDP estimates to increase (over 2% now annualized), thus renewing fears that the Federal Reserve would commence “tapering” at their September meeting.

2013-08-13 The Gordon Dilemma by Bill O'Grady of Confluence Investment Management

In this report, we will discuss Professor Gordon’s thesis, examine the geopolitical impact if he is correct and offer some criticisms of his thesis. We will conclude with potential market ramifications.

2013-08-13 Dog Days of Summer Are Upon Us by Blaine Rollins of 361 Capital

Hopefully you are reading this from the beach, because there is so little news happening in the markets that those of us in the office are about to start making news up to justify stock price movements. But while news and volumes are at August lows, here are some thoughts that might ring a bell to help you to either make some money or to set down your smartphone and get back to the water.

2013-08-13 China's Government Can't Stop the Bust by Bill Smead of Smead Capital Management

On a recent trip to Europe we participated in a forum in Milan of five stock picking organizations. Two were from Brazil, one was from Malaysia and one was picking stocks inside China via the Shanghai Stock Exchange. We believe what they said was an enticement to investors for the purpose of getting them excited about stocks in their country. To us, this reveals a great deal about where prices in emerging stock markets and commodities are headed over the next five to seven years.

2013-08-12 Quantitative Easing: Is it Working? by Mark Ungewitter of Charter Trust Company

In September 2012, the FOMC announced a third round of quantitative easing intended to reduce long-term interest rates. Since then, the New York Fed has purchased about $700 billion of mortgage-backed securities. But a funny thing happened on the way to lower interest rates. During the “QE3” period, the benchmark 10-year US Treasury yield has risen by a full percentage point. The targeted 30-year mortgage rate has also risen by about 100bps.

2013-08-12 Fight Over the Fed: Why So Ugly? by Michelle Shwarzman of Invesco Blog

When President Barack Obama let it slip in a June interview that Federal Reserve (Fed) Chairman Ben Bernanke had “already stayed a lot longer than he wanted or he was supposed to,” the quest for the next Fed chair was underway. But few anticipated it would devolve into a fairly brutal brawl - by economist standards - between two extremely competent and capable PhD candidates: Fed Vice Chair Janet Yellen and former Treasury Secretary Larry Summers, who also served as Harvard’s president and chief White House economic advisor.

2013-08-12 Share Repurchases Reward Everyone But Shareholders by Jeff Middleswart of Ranger International

In summarizing year-end results, company managements often boast about the cash they returned to shareholders through dividends and share repurchases. Certainly hiking the dividend by, say, 10% is something to crow about. But we fail to see why shareholders should applaud share repurchases. After all, they didn’t see any of that money. The beneficiaries of buybacks are sellers of the stock. These aren’t shareholders, they are former shareholders.

2013-08-12 Extreme Brevity of the Financial Memory by John Hussman of Hussman Funds

The period of generally rich valuations since the late-1990’s (associated with overall market returns hardly better than Treasury bill returns since then) has created a tolerance for valuations that, in fact, have led to awful declines, and have required fresh recoveries to elevated valuations simply to provide meager peak-to-peak returns.

2013-08-12 The Key Economic and Market Forces Guiding Equity Markets by Bob Doll of Nuveen Asset Management

This week we want to address important themes that underline our continued cautious optimism for a slowly improving global economy and signs of revenue and earnings growth momentum.

2013-08-12 Lower Your Expectations for Future Return by Cory Fulton of Mesirow Financial Wealth Management

While equities are not priced particularly well and the current environment does not bode well for future long-term expected real returns, they are currently a better choice for investors relative to the alternative. Right now, any meaningful shifts in one direction or the other could be setting the investor up for additional disappointment. At this stage in the game, equities look to offer better prospects in the long-term. However, the time is not right to abandon your long-term investment plan in the face of the positive market headlines and lofty predictions emanating from Wall Street.

2013-08-10 We Can't Take the Chance by John Mauldin of Millennium Wave Advisors

What would it have been like to be a central banker in the midst of the crisis in 2008-09? You’d know that you won’t have the luxury of going back and making better decisions five years later. Instead, you have to act on the torrent of information that’s coming at you, and none of it is good. Major banks are literally collapsing, the interbank market is nonexistent and there is panic in the air. Perhaps you feel that panic in the pit of your stomach. This week we’ll perform a little thought experiment to see if we can extrapolate what is likely to happen in when the nex

2013-08-09 Charts for the Beach by Richards Bernstein of Richards Bernstein Advisors

Our basic positions are now famous (or infamous). We continue to favor US assets and to shield our portfolios from the on-going and broad problems in the emerging markets. In the spirit of August, we forego significant text this month to present a series of charts that outline a few of the opportunities and risks we see in the global markets.

2013-08-09 A Generational Selling Opportunity for the U.S. Long Bond by Jim O'Shaughnessy of O'Shaughnessy Asset Management

Because investors tend to extrapolate what their general experience in markets has been recently well into the future, it’s easy to see why investors are having a long-term love affair with bonds. Yet the data in this paper suggests that a crisis in long bonds is coming and, given this information, individual and institutional investors alike should reconsider the bond portion of their portfolios.

2013-08-09 The Half Full Economy by Peter Schiff of Euro Pacific Capital

The marginal economic strength that was described in the most recent GDP release from Washington has caused many to double down on their belief that the Fed will begin tapering QE sometime later this year. While I believe that is a fantasy given our economy’s extreme dependence on QE, market observers should have learned long ago that the Bureau of Economic Analysis (BEA) initial GDP estimates can’t be trusted. A perusal of their subsequent GDP revisions in the last five years reveals a clear trend: They are almost twice as likely to revise initial estimates down rather than up.

2013-08-09 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The global productivity "bust" is largely cyclical. The Bank of England tries forward guidance. Will low labor force participation keep the Fed from tapering?

2013-08-09 Real-Time Tax Data Indicates U.S. Economy Rapidly Losing Steam by Minyi Chen of AdvisorShares

The U.S. economy real growth is slowing even more now than in July as signs indicate an even weaker economy than we think. Read this investor insight by TrimTabs Asset Management to learn what tax withholdings and recent fund flows may be foretelling.

2013-08-09 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.8, essentially unchanged from last week’s 131.7 (a downward revision from 131.8). At the end of July the company posted a new commentary, Becoming Japan, which highlights the decline in GDP growth for Japan and seven other major economies, including the US. Also this week ECRI’s Lakshman Achuthan defended his company’s recession call on Bloomberg TV.

2013-08-09 The Calm Before the Storm? by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Record highs in US equities have resulted thus far in only modestly elevated investor sentiment and it appears retail investors are returning to the market, which could fuel further gains. However, volatility is likely to increase with political and Fed issues on the horizon. Europe remains attractive, along with Japan, but we are watching the potential consumption tax increase closely, while China’s valuations are improved but concerns remain.

2013-08-08 Market Melt-Up Catches Defensive Investors by Surprise by Douglas Cote of ING Investment Management

Extraordinary returns in the fourth year of a bull market remind us that long-term defensiveness can’t be rationalized. July saw remarkable returns across global equity and fixed income markets, with the exception of U.S. Treasuries. Investors would be well served to ignore media drama and fear mongering and simply follow the fundamentals. Five years spent worrying about Armageddon is too long, but there’s still time to get back to a normal allocation.

2013-08-08 Absolute Strategies Fund Portfolio Commentary by Jay Compson of Absolute Investment Advisers

In our last quarter commentary we posed a simple question: "Why does the economy need so much stimulus and quantitative easing for so little growth?" Over the last two years or so, we feel that we have identified and explained the structural issues and risks very clearly. But in the second quarter, the equity and credit markets may have done a better job offering investors a true glimpse of the realities facing global markets.

2013-08-08 Not an Entry Point for U.S. Stocks by Scott Minerd of Guggenheim Partners

My long-term view of U.S. equities remains bullish, but a number of indicators, as well as near-term macro challenges, point to a pause in the run-up of that asset class.

2013-08-08 Quarterly Letter by Team of Grey Owl Capital Management

To begin, let us state that we are tired of writing about macroeconomic issues. We suspect you are tired of reading about them. We would like nothing more than to send out a quarterly letter full of updates on the companies we own and the rationale for individual buy and sell decisions. Nevertheless, we must address the market action following Federal Reserve Chairman Ben Bernanke’s May 22nd testimony before Congress, where he merely floated the idea of “tapering” the Fed’s quantitative easing efforts.

2013-08-08 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Overall the total AUM in all active ETFs declined by $2.5 million last week, an insignificant amount for the $14 billion space. The biggest change of the week was the “Short Term Bond” category overtaking the “Global Bond” to become the largest category in active ETF space.

2013-08-08 Dcf Vs. Multiples by Kurt Havnaer of Jensen Investment Management

Valuing a stock is arguably one of the investment manager’s most difficult tasks. A variety of tools and methodologies exist to value equities, and the assumptions used in those are estimates of future unknowns. According to Aswath Damodaran, a valuation expert and finance professor at New York University, multiples are the most common method used by investors to value stocks.

2013-08-08 Looking Farther Down the Road by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

The stock market has continued to do very well over the summer months, reaching new, all-time highs and proving to even the most stubborn of skeptics that Great Recessions can become Great Recoveries for those with the appropriate time horizon. While our industry spends a great deal of time and effort focused on relative performance results compared to appropriate benchmarks, the greatest value any financial advisor or money manager can provide is usually addressed far less often; simply keeping you in the game.

2013-08-08 Is The Financial Crisis Over For Financial Stocks? by Chuck Carnevale of F.A.S.T. Graphs

The cause of the financial crisis of 2007 -2008, also known as the Great Recession of 2008, is attributed to many different theories. However, one of the most common theories is an easy money regulatory environment that led to an abundance of subprime loans, which in turn inflated real estate prices to bubble levels. Additionally, many blame the Financial sector, predominantly the money center banks, for exploiting the lax lending requirements with reckless and greedy behavior.

2013-08-08 The Role of Confidence by Howard Marks of Oaktree Capital

The so-called wealth effect plays an important and well recognized part in the functioning of an economy. When assets appreciate in value, the owners translate their increased wealth into increased spending. While at first glance this is unsurprising, it should be noted that this is true even if the appreciation is unrealized, and thus the increased wealth exists solely on paper. The relationship can be stated as follows: the richer people feel, the more they spend. Changes in confidence have an impact on behavior similar to the wealth effect. That’s what this memo is about.

2013-08-07 Adapt or Die... by Blaine Rollins of 361 Capital

Bond king Bill Grosss $261.7 billion Total Return Fund at Pacific Investment Management Co. suffered a $7.5 billion net outflow last month, according to data from fund tracker Morningstar Inc. on Friday. It is the third straight monthly outflow for the Fund, on the heels of nearly $10 billion in redemptions in June. Clients have yanked $15.6 billion from Gross’s Fund in 2013 through July. Jeffrey Gundlach’s $37.9 billion DoubleLine Total Return Bond Fund suffered $580 million net outflow in July, according to Morningstar.

2013-08-07 Japan The Land of the Rising Stock Market by Richard Bernstein of Richard Bernstein Advisors

We have been ardent bulls on the Japanese stock market since last Fall. Our thesis has been a simple one: For the first time in the history of our data, Japan began running consecutive monthly current account deficits.

2013-08-07 Thoughts on the Long/Short Space by Kurt Voldeng of AdvisorShares

This insight from Kurt Voldeng highlights performance in the long/short fund universe.

2013-08-06 Low Quality Jobs Recovery Continues in July by Chris Maxey, Ryan Davis of Fortigent

In a busy week of economic data, investors ended the week on a mixed note.The government jobs report revealed a labor market experiencing steady if not unspectacular growth, as nonfarm payrolls came in below consensus estimates while the unemployment rate surprised to the upside.

2013-08-06 Three Steps to Make your Business Grow by Dan Richards (Article)

If you’ve got ambitious growth plans for your business, you need to track progress against three sets of objectives: three-year goals, one-year/quarterly goals and day-to-day goals. All three of these are essential for success – but few advisors rigorously track progress in all of these categories.

2013-08-06 Is China the New France? by Marianne Brunet (Article)

Imagine a country that grows its economy by greatly devaluing against the reserve currency to develop a strong export sector. As the country becomes a major world power, it accumulates massive amounts of the reserve currency, and fears grow that its actions could destabilize global markets. If you think that description sounds like China today, you’re right. But it also describes France in the 1920s. Lessons from that era are instructive for those seeking to forecast China’s long-term position in the world.

2013-08-06 Human Capital in the Digital Economy by Alan Winger (Article)

Human capital is a key asset that planners manage as they strive to maximize consumption throughout clients’ lives. Human capital, or lifetime income, often peaks in value early in their careers. Moreover, today’s digital economy means human capital is more volatile and less predictable than in the past, and that carries important implications for financial planners.

2013-08-06 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

After a week like this, everyone needs a vacation. Big Oil led the earnings trail and the results were not pretty. Europe and China both expressed nice signs for their previously weaker manufacturing sectors. At home, the labor results were mixed, manufacturing looked solid, the consumer remained active, and Michael delayed the vote yet again.

2013-08-06 The Changing of the Monetary Guard by Joseph Stiglitz of Project Syndicate

With leadership transitions at many central banks under way, many of those who were partly responsible for creating the global crisis that erupted in 2008 are departing to mixed reviews. The main question now is the extent to which those reviews influence their successors’ behavior.

2013-08-06 The “Employment Situation” and A Look at Housing by Gregg Bienstock of Lumesis

This week, we start with a return to our “tidbits” and then insight and thoughts around the Employment Situation as reported on Friday and our take on that and related data. We also take a look at Homeownership data and wonder if the glass is half full or empty.

2013-08-06 Politicizing the Economy by Brian Wesbury, Bob Stein of First Trust Advisors

If we were put in charge of the world, if we had complete control of fiscal and monetary policy, we would change things.

2013-08-06 Equities Grind Higher as the Economy Continues to Muddle Through by Bob Doll of Nuveen Asset Management

U.S. equities advanced last week, with the S&P 500 increasing 1.10%.1 For the month of July, the S&P gained 5.09%, and equities have increased 21.33% year to date. Second quarter earnings season is nearly complete, and there has not been a material change in estimated earnings for the balance of the year or 2014. Revenues were slightly ahead of expectations, and earnings per share were approximately 3% higher than expected, annualizing at about $110 per S&P 500 share.

2013-08-06 China's Slowdown by Bill O'Grady of Confluence Investment Management

Over the past three decades, China has seen its economy grow significantly.

2013-08-06 Will Soft Q2 GDP and Jobs Data Influence Fed Tapering? by Sam Wardwell of Pioneer Investments

As I said mid week, the “fiscal cliff” tax increases were squeezing consumers’ disposable income and spending growth was coming at the cost of a lower savings rate. Suspending the “social security tax” was expected to stimulate the economy, so it’s only logical that it would work in reverse, too.

2013-08-05 Can It Get Any Better Than This? by John Mauldin of Millennium Wave Advisors

What in the world is going on?! As I write this letter from the Maine woods, the S&P 500 has just cleared 1,700 for the first time. The German DAX continues to set all-time highs above 8,400. The United Kingdom’s FTSE 100 is quickly approaching its 1999 record high of 6,930, and its mid-cap cousin, the FTSE 250, just broke through to its all-time level above 15,000. And last but not least, Japan’s Nikkei 225 is extending its gains once more, toward 14,500.

2013-08-05 Weekly Economic Commentary by Team of Northern Trust

July U.S. employment report a bit disappointing. Part-time employment gains are not uniform across nations. Affordable Care Act and small business employment.

2013-08-05 Weak Job Growth? RX: Buy Stocks by Charles Lieberman (Article)

At dinner with friends on Saturday evening, I was asked if I’m still bullish. Another investment guy is now cautious, bordering on bearish. A discussion ensued. The case for being bearish remains weak and unconvincing, hardly even believable in my judgment. Much of the case seems to be driven by the notion that stocks have rallied a lot, so surely they must decline.

2013-08-05 The Minsky Bubble by John Hussman of Hussman Funds

In his classic treatise on speculation, Manias, Panics and Crashes (originally published in 1978), the late Charles Kindleberger laid out a pattern of events that has periodically occurred in financial markets throughout history. Drawing on the work of economist Hyman Minsky, the conditions he described are likely far more relevant at the present moment than investors may recognize.

2013-08-02 Avoiding Pricey Low Volatility Investing by Feifei Li of Research Affiliates

Low volatility investing reduces a portfolio’s exposure to the market factor in favor of other historically reliable sources of equity risk premium.But the alluring risk-adjusted performance characteristics of low volatility strategies have lately attracted serious investors, and many managers have developed products to meet the growing demand.Is it possible to preserve the benefits of low volatility investing when prices rise?Feifei Li, Head of Research, suggests implementation refinements that might make a difference.

2013-08-02 Fed Shows Its Dovish Side by Brian Wesbury, Bob Stein of First Trust Advisors

The Federal Reserve made several small changes to the text of its statement, which, combined, suggest a slightly more dovish posture at this meeting than at the last one in June.

2013-08-02 Second Half Challenges by Michael Kayes of Willingdon Wealth Management

One of the most challenging aspects of managing portfolios is to process the endless information flow and determine what impact it will have, if any, on the markets. Some information, while interesting to read about, has virtually no impact on the future direction of stock and bond prices. Other information may not have an immediate impact, but it may be impactful in the future. This, delayed-impact information encompasses the vast majority of information that surfaces on a daily basis.

2013-08-02 Building Market Intelligence by John Burns of John Burns Real Estate Consulting

The US housing market can no longer be painted with one brush, as the housing recovery is playing out very differently across the country. Here are some anecdotes gleaned from our consulting team.

2013-08-02 The Fed's Outlook and Leadership in Flux by Zach Pandl of Columbia Management

Many observers blamed a lack of clarity from the Federal Reserve (the Fed) for the sharp increase in interest rates after the initial signals about tapering. As a result, in recent weeks Fed officials have tried to calm nerves by stressing that the decision to slow the pace of quantitative easing (QE)now expected to begin after the September FOMC meetingdoes not signal anything about the outlook for the funds rate or their broader policy goals. Unfortunately for the Fed, the policy outlook looks increasingly fluid again.

2013-08-02 A Biotech and Pharmaceutical RX by Evan McCulloch of Franklin Templeton Investments

When you visit your doctor or reach into your medicine cabinet for something to cure your ills, you probably don’t think much about the amount of science and innovation packed into that little pill. Evan McCulloch, portfolio manager of Franklin Biotechnology Discovery Fund, has his eye on products in the healthcare, biotechnology and pharmaceutical sectors that have the potential to change the world of medicine. He says new product cycles and therapies have made it a particularly exciting time for the sector, and potentially for investors.

2013-08-02 QE Why $85 Billion per Month? Why Not $170 or $42 -1/2 Billion? by Paul Kasriel of Econtrarian, LLC

Am I the only one who wondered how the Federal Reserve arrived at a figure of $85 billion as the amount of longer-maturity securities it planned to purchase per month in its third round of quantitative easing (QE)? Why not double that amount? Why not half that amount? How will the Fed know when it is time to “taper” its securities purchases? How will the Fed know by how much to taper? Inquiring minds want to know.

2013-08-02 U.S. Equities: Tapering expectations by Joseph Tanious of J.P. Morgan Funds

Given the market’s strong recent performance, investors are now asking what to expect moving forward. The top of mind question remains: are we likely to see a pull-back and is there still any room for this market to rally further?

2013-08-01 Weekly Commentary & Outlook by Scotty George of du Pasquier Asset Management

Throughout the 1980’s, we heard talk from the investment community to “go global”, invest worldwide, perhaps driven by true globalization of corporate exchange and balance sheets, and perhaps also by the need by firms to create “new” products for their consumers to devour. Mutual funds, brokerages, and private equity companies alike saturated the media with product offerings from every corner of the globe and every possible market sector, including telecom, basic materials, energy and industrial development.

2013-08-01 Lack of US Economic Growth May Slow Fed Tapering by Kevin Mahn of Hennion & Walsh Asset Management

While we are encouraged that the U.S. economy has been growing, as measured by Gross Domestic Product (GDP) growth, for 15 consecutive quarters starting in the third quarter of 2009, we are concerned that the growth rate has been below that of previous economic recoveries and the economy appears to be stalling and struggling to get back above a 2% growth rate thus far in 2013.

2013-08-01 Is It Time for the Fed to Wind Down the Economic Stimulus? by Team of Knowledge@Wharton

Is it time for the Federal Reserve to start tapering down the "quantitative easing" bond-buying program that has helped stimulate the U.S. economy since the financial crisis of 2008? Views are mixed. Several experts, say yes, it’s time. Others worry it could be too soon.

2013-08-01 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

Last week total AUM in all Active ETFs fell by almost $20 million. This was almost entirely due to redemptions in “Foreign Bond” Active ETFs. The “Short Term Bond” category continues to gain assets and increased by $38 million just last week. Total AUM in this category could possibly surpass the “Global Bond” category in the coming months in trends continue.

2013-08-01 Fed in Watch-and-Wait Mode by Team of Northern Trust

The Federal Open Market Committee (FOMC) today held unchanged its current asset purchase program of $85 billion per month. The Federal Reserve avoided providing new nuances to existing forward guidance and re-issued the June policy statement with minor modifications to reflect recent economic developments.

2013-08-01 The Fed's Balance Sheet by Scott Minerd of Guggenheim Partners

The value of the Fed’s portfolio has fallen by about $192 billion as a result of the rise in interest rates over the past quarter. Further losses from rising interest rates could compromise the Fed’s ability to engage in monetary tightening should market conditions warrant such action.

2013-07-31 Calm Has Replaced Fear in the Bond Market by Tony Crescenzi of PIMCO

Calm largely returned to the bond market in July following a bout of turbulence in June. Volatility declined across the broad spectrum of fixed income assets, with interest rates and credit spreads falling from their highs, in some cases dramatically. Flows have also turned positive in many market segments, particularly for high yield and bank loan securities.

2013-07-31 New GDP Revisions to Boost US Economy by 3% by Gary Halbert of Halbert Wealth Management

At the end of April, I pointed out that the Commerce Department’s Bureau of Economic Analysis (BEA) announced it would be making some significant revisions to the way it calculates Gross Domestic Product on July 31. It will revise economic growth for all years going back to 1929. This change is somewhat controversial in that it is expected to add up to 3% to total GDP in one fell swoop tomorrow morning. That’s about $1,500 worth of extra goods and services for every person in the US!

2013-07-31 An Important Week on the Economic Front by Scott Brown of Raymond James

The markets have placed too much emphasis on the Fed tapering. Whether policymakers decide to slow the rate of asset purchases in September or December shouldn’t matter all that much. The Fed’s decision will be data-dependent. Note that it’s not the figures themselves that matter. Rather, it’s what the data imply for the overall economic outlook.

2013-07-31 The Context of Price by Pamela Rosenau of HighTower Advisors

While the stock market has enjoyed a recent rally, some investors are experiencing some “weakness in the knees” as they continue to ascend the climb. These new all-time highs in the market compound the problem for some investors as they suffer from the recency effect, or the not-too-distant memory of significant market losses.

2013-07-30 The Power of Diversification and Safe Withdrawal Rates by Geoff Considine (Article)

When Bill Bengen published his seminal research in 1994, a 4% safe withdrawal rate (SWR) was clearly attainable with a variety of asset allocations. But bond yields are lower now than they were then, and equity returns for the next 20 years are unlikely to exceed those of the prior two decades. Indeed, a new paper by three highly respected researchers showed that SWRs for stock-bond portfolios are well below 4%. But as I will demonstrate, a 4% SWR is still possible with a more diversified portfolio – and without subjecting clients to additional risk.

2013-07-30 Five Web Metrics Advisors Should Be Tracking by Kristen Luke (Article)

Do you look at your website analytics report and have no idea what it means? Don’t worry. Unless you are a professional web marketer, most of the data you see on those reports won’t impact your business in any significant way. But that doesn’t mean you should ignore your website statistics all together.

2013-07-30 A Strategy for Reducing Volatility While Increasing Returns by Steven Farber (Article)

The product on every advisor’s wish list would have the low volatility of fixed income while providing equity-like returns. Although such a product does not exist, equity options, when used properly, will give you the ability to achieve pre-defined goals and objectives.

2013-07-30 Result of Japan's Upper House Election by Team of Nomura Asset Management

The ruling Liberal Democratic Party (LDP) and New Komeito coalition have secured an upper house majority by winning 76 seats in the July 21st House of Councilors election to reach the total of 135 seats together with the seats that were not contested this time (out of a total 242 seats). This has ended the state of a “divided National Diet,” allowing more stable management by the Prime Minister Shinzo Abe cabinet and the ruling coalition parties.

2013-07-30 Get Ready for a Wild Week by Brian Wesbury, Bob Stein of First Trust Advisors

Weeks with lots of data are always interesting; but this one will be more wild than most.

2013-07-30 Conflicting Crosscurrents Move Equities Sideways by Bob Doll of Nuveen Asset Management

U.S. equities finished last week narrowly mixed, with the S&P 500 falling -0.02%.1 While the second quarter earnings per share growth continues to move higher, revenue growth remains below trend. The economic calendar is focused on this week’s release of the July employment report. Global macro headlines generated more uncertainty than direction for the markets.

2013-07-30 Earnings Take a Back Seat to Policy by Chris Maxey, Ryan Davis of Fortigent

Although it was a quiet week on the economic front, there were a few notable indicators to digest.

2013-07-30 Economic & Capital Market Summary by Gregory Hahn of Winthrop Capital Management

We are approaching the five year anniversary of the beginning of the Financial Crisis. By this time in 2008 we had already experienced the complete seizure of the Auction Rate Preferred securities market and the takeover of Bear Stearns by JP Morgan Chase. In August of 2008, we would see the collapse of Lehman Brothers and the government takeover of AIG. We stand here today, shoulders slumped, and heads bowed mourning the lack of real progress in addressing the structural problems that are impeding sustained economic growth and private credit expansion.

2013-07-30 As Finances Mend, Will Consumers Spend? by Milton Ezrati of Lord Abbett

The Federal Reserve recently released first quarter data on household finances. These show continued and welcome improvement. Stronger balance sheets reflect improved real estate prices, rising stock prices, and continued higher rates of household saving.

2013-07-30 The U.S. Energy Revolution by Bill O'Grady of Confluence Investment Management

In March 1971, the Texas Railroad Commission (TRC), which allocated oil production for the state of Texas, announced that producers in the state would be allowed a “full allocation.” This was the first time the TRC had allowed Texas producers to supply an unlimited amount of crude oil since WWII.

2013-07-30 Who Let the Ferrari Out of the Garage? by Blaine Rollins of 361 Capital

With just three trading days left in the month, July is in the running for the title of least volatile month of the year, with the Standard & Poor’s 500-stock index averaging moves of just 0.39% this month through Thursday’s close. That is lower than the 0.41% and 0.42% averages of January and March, respectively, when stocks were grinding slowly, but steadily higher.

2013-07-30 Pennies from Heaven, Irrationality, and “Dys-information” by Chris Richey of Neosho Capital

If QE4 holds to course, ending, not just tapering, sometime in mid-2014, the U.S. will have spent 4+ years out of the past 6 living on monetary stimulus, all the while continuing to pile up ever more claims against future prosperity.

2013-07-30 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stock averages were nearly unchanged last week as earnings reports are being reported mostly in line albeit with the usual concerns about the pace of economic activity. This is reflected once again by a lack of revenue growth for many industries.

2013-07-30 Royal Babies and Economic Growth by Bill Smead of Smead Capital Management

On a recent business trip to Europe, we noticedanecdotallya lack of hope in the economic future of Europe. There is a good reason for the lack of hope. Hope, we believe, comes in the form of new life. When all of the austerity being practiced in developed nations around the world is pretty much done, something else needs to happen for economic growth to take hold. At Smead Capital Management, we believe developed economies need rebirth and the birth last week of a son to the Royal family is a watershed event.

2013-07-30 Leuthold\'s Chun Wang on 10-year Rates by Chun Wang of Leuthold Weeden Capital Management

So now the question is how high can it go? Just like every other market, bond yields tend to overshoot, and we think 3% is the upper bound in the short-term. However, we believe it will settle back closer to 250 bps by the end of the year.

2013-07-30 ING Fixed Income Perspectives July 2013 by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

We are constructive on interest rate risks in many developed and emerging economies as global central banks reinforce accommodative monetary policy. We favor the U.S. dollar versus the Japanese yen, the Euro and other developed market currencies. Credit spreads should narrow from current levels as the markets gain confidence and the Treasury market stabilizes. preads offer more than adequate compensation for likely credit losses and a further rise in interest rates. Spreads have been pressured to pre-QE3 levels and mortgages look attractive at these higher levels as prepayment speeds slow.

2013-07-29 And That\\\'s the Week That Was by Ron Brounes of Brounes & Associates

So now Prez Obama is sharing his two cents about the economy. After weeks of endless babble from the Fed Chief and his partners in crime about the economy and the longevity of the bond buying program, O is now making job creation his number one priority. Is anyone listening to his urgent messages (certainly no one in DC)? Investors (at least those not on vacation) were less than impressed with the less than impressive earnings of the week, though markets held their own.

2013-07-29 Will a New Fed Chairman Derail the Stock Market Rally? by Kipley Lytel of Montecito Capital Management

Over the past two years, investor exuberance has poured over $150 billion into equity funds. The perception of market risk has been sharply lowered over the past years by the central bank’s supportive activities in the capital markets and the high octane fuel of near zero interest rates. Meanwhile, Bernanke’s buyback of treasury and mortgage back securities is at a pace of moving the Fed’s balance sheet to over $4 trillion.

2013-07-29 Driftingbut for How Long? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

Equities have drifted higher during a decent earnings season with few surprises, while yields have calmed and volatility has plunged. Typical lackluster summer action may prevail for the next month, but action is likely to heat up as the weather begins to cool.

2013-07-29 Baked in the Cake by John Hussman of Hussman Funds

Once the risk premium is beaten out of stocks, there is no way out, and nothing that can be done about it. Poor subsequent returns, market losses, and the associated destruction of financial security (at least for the bag-holders) are already baked in the cake. This should have been the lesson gleaned from the period since 2000, but because it remains unlearned, it will also become the lesson of the coming decade.

2013-07-29 Japan: Firing the Third Arrow by Guy Bruten of AllianceBernstein

Japanese Prime Minister Shinzo Abe’s ability to implement his agenda is politically unfettered. But can he deliver, and will his policies work? We remain cautiously optimistic.

2013-07-29 Why China Has Become a Value Play by Russ Koesterich of iShares Blog

Russ explains why it’s time for investors to change how they think about China, and he explains why there’s a strong case for viewing the Chinese market as a value -- rather than a growth -- play.

2013-07-29 Misreading Chinese Rebalancing by Stephen Roach of Project Syndicate

China’s economic slowdown has caused Western pundits to succumb, once again, to the “China Crash” syndrome. But, though the composition of Chinese GDP growth appears disconcerting, the rebalancing of any economy a major structural transformation in the sources of output growth can hardly be expected to occur overnight.

2013-07-29 Global Economic Outlook by Team of Northern Trust

Growth is expected to improve in the United States and the United Kingdom while disappointing in Europe.

2013-07-29 What's Wrong With Indexes? by Brian Evans, Madrona of AdvisorShares

It has been more than 35 years since the first broad market index funds debuted. At the time, they were a cutting edge strategy for core equity allocation. Today, index funds are a major part of 401(k) and other retirement plans, particularly ones tracking the Standard & Poor’s 500. But they have deep flaws.

2013-07-27 A Lost Generation by John Mauldin of Millennium Wave Advisors

This week we will briefly look at why weak consumer spending is going to become an even greater problem in the coming years, and we will continue to look at some disturbing trends in employment.

2013-07-26 The View From Here by Carl Tannenbaum of Northern Trust

Despite the advance of college savings accounts, many families are ill-prepared to pay for school.

2013-07-26 Economic Value Approach to ROIC May Unearth Hidden Value by Team of Jacob Funds

Equity mutual fund managers employ a wide variety of investing approaches in an attempt to outperform the market, but very few stand out from the crowd. The approaches that do work over the long term tend to be very distinctive, focusing consistently on a specific methodology that is executed regardless of the market environment.

2013-07-26 Attention 3-D Shoppers by John West of Research Affiliates

Why do retail shoppers love a sale while capital markets flee from falling prices? Investors should consider starting to fill their shopping carts while inflation hedges are cheap....

2013-07-26 Emerging Markets Equity Commentary June 2013 by Team of Thomas White International

Emerging market equity prices declined appreciably on heightened investor concerns over an early withdrawal of the monetary stimulus measures in the developed world. The most recent policy statement issued by the U.S. Federal Reserve, which was more optimistic about the growth prospects for the U.S. economy, and comments by Fed officials seemed to suggest that the central bank is preparing to wind down its bond purchase program.

2013-07-26 For A Healthier Portfolio - Look Here by Chuck Carnevale of F.A.S.T. Graphs

The Health Care sector is comprised of many diverse companies, as can be seen from the list of subsectors provided below. Historically the Health Care sector has been comprised of a significant number of companies with above-average growth rates of earnings. Consequently, a majority of the companies comprising the Health Care sector could be thought of as growth stocks over dividend growth stocks.

2013-07-26 Wedding Bells in Romania by Mark Mobius of Franklin Templeton Investments

I was invited to attend the wedding of one of our Romanian staff in June, and I jumped at the opportunity to celebrate with the happy couple, visit a different part of Romania, and talk to locals about life there. The celebration represented a microcosm of the juxtaposition of old and new in Romania, and this is similar for investors there as progress continues toward market reform.

2013-07-26 China Property: A Tough \"Bubble\" to Pop by Henry Zhang of Matthews Asia

Irecently came across an old newspaper article from February 1989 that described Beijing’s residential property "bubble," with average selling prices then of about US$430 to US$510 per square meter. The article went on to say that, given that the average college-educated worker typically saved less than approximately US$13 per month, at those prices, it would take a century or so to be able to buy a two-bedroom apartment. The writer concluded that a housing bubble was underway.

2013-07-26 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Income inequality is rising, but it’s not clear what to do about it. Brazil’s struggles come at a delicate time. Detroit’s road to bankruptcy does not set a path for others to follow.

2013-07-26 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.3, up slightly from last week’s 130.2. The WLI annualized growth indicator (WLIg) remains unchanged at 4.5%.

2013-07-25 A Midyear Update: Getting Back to “Normal” by Douglas Cote of ING Investment Management

Though markets were whipsawed by the announcement, the Fed’s plan to step aside and allow normalization is a good thing. Today, the primary risk for investors to hedge is economic growth and the strong equity returns it tends to produce not financial Armageddon. While risks in Europe and China persist, U.S. fundamentals look relatively strong. Two consecutive quarters of S&P 500 earnings growth prompts a forecast update.

2013-07-25 Summer Quarterly Commentary by John Prichard of Knightsbridge Asset Management

Recently the Fed indicated it may begin returning control over market pricing and interest rates to Adam Smith’s invisible hand... and borderline chaos erupted. The episode began mid-day May 22nd as Congress questioned Fed Chairman Bernanke and suddenly the cat was out of the bag and a paradigm shift ensued. Bond funds suffered some of their largest weekly redemptions on record. Rates spiked and markets swooned around the world through late June as investors assumed the worst.

2013-07-25 A One-Pillar Economy by Scott Minerd of Guggenheim Partners

Despite blockbuster new home sales, higher interest rates have put downward pressure on housing activity. This is highly worrisome given the importance of housing to the health of the U.S. economy.

2013-07-25 Perspective by Jim McDonald of Northern Trust

Investors have faced a torrent of central bank actions and communications during the last month, and markets continue to differentiate among economies and companies a welcome maturation from the markets’ prior regime of “risk on/risk off.” We believe the Federal Reserve has moved from an easing bias to one of tightening but at an elongated pace that will remain data dependent. Joining in this parsimony are some key emerging-market central banks, including the People’s Bank of China, which is working to control credit risk in the Chinese economy.

2013-07-25 The Damage Potential of Rising Rates by Michael Temple of Pioneer Investments

The initial goals of the Federal Reserve’s “Great Monetary Experiment” to keep rates low, create negative real yields, spur consumption and cushion the budgetary consequences of fiscal stimulus have largely been accomplished. Investors could now face the threat of rising bond yields. Various bull and bear scenarios might ensue. What are they and what could trigger them? What are the risks to portfolios?

2013-07-25 No Bargains in the Consumer Discretionary Aisle by Russ Koesterich of iShares Blog

Russ has long advocated that investors remain cautious on consumer discretionary stocks. After last week’s weak economic data, he updates the case for this call.

2013-07-24 Average Gas Price Could Hit $4 by Labor Day... Or Not by Gary Halbert of Halbert Wealth Management

With the recent jump in gasoline prices, several energy analysts are forecasting that prices at the pump will top $4 a gallon (national average) later this summer. On the other hand, some analysts feel that gas prices will only go up another 5-10 cents a gallon just ahead, and then move lower in the fall. Of course, no one knows for sure. Today, we’ll take a look at what’s driving gas prices higher.

2013-07-24 Stocks and Bonds Both Again Rally as Bernanke Soothes by Sam Wardwell of Pioneer Investments

Fed Chairman Ben Bernanke’s congressional testimony got more headlines, but Detroit’s long-anticipated formal filing for Chapter 9 bankruptcy was by far the more important development. Billions of dollars of losses will be imposed on general obligation bondholders and/or retired employees.

2013-07-24 Quarterly Review and Outlook by Van Hoisington, Lacy Hunt of Hoisington Investment Management

The secular low in bond yields has yet to be recorded. This assessment for a continuing pattern of lower yields in the quarters ahead is clearly a minority view, as the recent selling of all types of bond products attest. The rise in long term yields over the last several months was accelerated by the recent Federal Reserve announcement that it would be “tapering” its purchases of Treasury and mortgage-backed securities. This has convinced many bond market participants that the low in long rates is in the past.

2013-07-24 Bursting of the Bond Bubble by Clyde Kendzierski of Financial Solutions Group

Our April newsletter focused on the extreme overvaluation in the bond market. I argued that money market funds (or cash) were likely to outperform bonds and bond funds over the next decade. In May I applied the same logic to US stock prices and the inherent fallacy in the prevailing TINA (“there is no alternative” to stocks) hypothesis. Although stocks are likely to outperform bonds over the next decade, both asset classes remain seriously overvalued. In a world of overvalued assets, zero return looks much better than large potential losses even when that means foregoing transitory

2013-07-24 Earnings Acceleration Likely Needed for Next Upturn in Stocks by Bob Doll of Nuveen Asset Management

U.S. equities finished mostly higher last week. For a fourth straight week, the S&P 500 and Dow Jones Industrials were up (returning 0.73% and 0.57% respectively for the week), while the NASDAQ underperformed at -0.34%. It was a busy start for second quarter earnings. More than 70% of the 100 S&P 500 companies that have reported earnings have beaten consensus earnings per share expectations by approximately 3% in aggregate.

2013-07-24 Active ETF Market Share Update & Weekly Market Review by AdvisorShares Research of AdvisorShares

This past week, total assets in the active ETF space increased by over $60 million. The top 3 categories (“Global Bond”, “Short Term Bond” and “Foreign Bond”) all saw increases in AUM. The “Alternative Income” category fell in AUM, after weeks of only going up.

2013-07-24 Blather, Rinse, Repeat by Scott Brown of Raymond James

As expected, Federal Reserve Chairman Ben Bernanke repeated recent themes in his monetary policy testimony to Congress. However, he appeared to make a clearer distinction between the Fed’s two current policies, emphasizing that short-term interest rates will remain low for a long time. Even though there wasn’t anything new in Bernanke’s testimony, the markets took it as “dovish.” Importantly, the Fed isn’t the only central bank placing an emphasis on forward guidance.

2013-07-24 D-Day +1 by Jeffrey Saut of Raymond James

I have termed last Friday (7/19/13) as D-Day because for the past few months my work has targeted that date as a potential turning point for the equity markets. Given the upside stampede, my sense was/is that “turn” would be to the downside for the first meaningful pullback of the year. In past missives I have elaborated on the reasons and clearly the media has “listened.”

2013-07-23 The Price You Pay for Poor Management by Bob Veres (Article)

If you have 100 client meetings a year and could net an additional $65,000 to $70,000 out of them, how much effort would you be willing to put into achieving that?

2013-07-23 Fantasy versus Factors by Michael Nairne (Article)

Investors who wish to earn market-beating returns have a choice. They can indulge in the fantastical quest for “alpha” via high-cost active managers or they can construct factor tilts in their equity allocations via low-cost exchange traded or enhanced index funds. It doesn’t take a PhD in mathematics to determine which route is more likely to take an investor to higher performance.

2013-07-23 Taper Protection: Where to Go when Rates Rise by Casey Frazier, CFA (Article)

I have fielded a number of questions from advisors about the effects of rising interest rates on real estate values. The negative effect of rising rates is predictable for fixed incomes, but real estate returns vary and are dependent on a number of factors. I will start with a historical analysis that demonstrates the strength of real estate returns during periods of rising rates. Then I’ll outline the factors that drive changes in real estate values in a rising-interest-rate environment.

2013-07-23 Emerging Europe: Regional Economic Review Q2 2013 by Team of Thomas White International

Trimming its forecast for global growth, the International Monetary Fund’s mid-year assessment of the world economy highlighted the slowdown in emerging economies such as Russia and recessionary conditions in the Euro-zone. Still, the recent surge in factory production and rise in new orders brought a whiff of optimism to emerging European markets such as Poland, the Czech Republic, and Hungary, which have been reeling under a prolonged downturn due to weak demand from the Euro-zone.

2013-07-23 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

Well, at least, the Tigers are leading the AL Central. The city of Detroit filed for Chapter 9 bankruptcy protection this week and pension owners and creditors are lining up to ask for pennies on the dollars on unpaid moneys owed. Detroit officially becomes the largest city in US history to file for such protection as it continues to suffer from a falling tax base after losing 250k residents between 2000 and 2010.

2013-07-23 Emerging Markets: Undervalued or Value Trap? by Chris Maxey, Ryan Davis of Fortigent

In the first quarter, we explored the divergence of emerging market equities from the US. We noted that a combination of factors likely drove the 12% performance differential, including investor risk appetites, inflationary pressures in developing markets, and reduced commodity price expectations.

2013-07-23 Time to Kick the “Ick” Factor for Energy and Materials by Scott Colyer of Advisors Asset Management

Basic materials have been the “biggest loser” of an asset class for 2012 as well as thus far in 2013. Everything tangible, from gold and copper to coal and steel, has acquired an “ick” factor that makes the asset class nearly uninvestable. Shares of companies in these categories are trading at values not seen since 2009 market lows. We are beginning to see some very important developments that might make the group more palatable. In fact, we believe that metals, mining and energy could again become Wall Street darlings.

2013-07-23 You Thought It Was Hot Outside... by Blaine Rollins of 361 Capital

You thought it was hot outside? Wait until you see the weekly cash inflows into U.S. Equities... Funds that hold only U.S. stocks gained $15.58 billion in new cash, the most since June 2008. ETFs that hold domestic equities attracted $12.45 billion of those gains.

2013-07-23 Dear Bernanke - You Can\'t Have Your Cake And Eat It Too by John Rothe of Riverbend Investment Management

The U.S. stock market continues its euphoric rise into record territory despite continuing weakness in economic data. Recent comments from Federal Reserve Board Chair, Ben Bernanke, indicating that the Fed does not have a predetermined plan to stop its stimulus plan has investors increasing their allocations to equities.

2013-07-23 Will Buffett Be Right on Wells Fargo? by Bill Smead of Smead Capital Management

A long time friend once said, "Bill, on the stocks that worked it didn’t make any difference what you paid!" What he was referring to were the stocks which rose to many times your original purchase price and the investors who participated over the long run in the shares ended up happy and wealthier. Is Wells Fargo (WFC) one of those companies and will Warren Buffett’s recent purchases get vindicated? As we enter the second half of 2013, this is a great discussion point for long-duration common stock investors in a market which has been strong since September of 2011.

2013-07-22 Trouble in Emerging-Market Paradise by Nouriel Roubini of Project Syndicate

Some of the better-managed emerging-market economies will continue to experience rapid growth and asset outperformance in the coming decade. But many BRICS countries and a few other emerging markets may hit a thick wall, with growth and financial markets taking a serious beating.

2013-07-22 A Tale from A Land Afar Comes Home, How Strong is This Recovery? by Gregg Bienstock of Lumesis

A break from our recent practice of tidbits. There’s a story you should read the similarities just might make you take notice. From there, I delve into the “recovery” and provide a bit more around our recently introduced Geo Score.

2013-07-22 Middle East/Africa: Regional Economic Review Q2 2013 by Team of Thomas White International

Moderate growth is anticipated in Middle-East and North Africa (MENA) region as the International Monetary Fund (IMF) notes that economic expansion in the oil exporting countries has slowed down due to subdued global oil demand. While oil importing countries are expected to make a slight recovery, nations in transition are facing complex socio-political issues, which could further delay their recovery.

2013-07-22 More Plow Horse in Q2 by Brian Wesbury, Bob Stein of First Trust Advisors

Forecasting economic growth for the second quarter of the year is always precarious. The reason is that the initial report on the second quarter is when the government goes back and makes revisions to GDP for the past several years. This time around, it’s particularly iffy because the government for the very first time is going to start accounting in GDP for the value of R&D spending by companies.

2013-07-22 Can China Give Credit Where It's Due? by Milton Ezrati of Lord Abbett

June was a rough month for China’s economy and its financial markets. Old concerns about sustainable growth came to the fore, as reports surfaced and resurfaced, recounting liquidity shortages, misdirected and excessive credit growth, gyrating interest rates, and signs of weakness in manufacturing. Commentators and analysts alike voiced fears of a Chinese collapse on a par with America’s subprime crisis. For the second time in as many years, several in the global financial community have prophesized a “hard” landing for China’s economy.

2013-07-22 What the *&%! Just Happened? by Ben Inker of GMO

In a new quarterly letter to GMO’s institutional clients, head of asset allocation Ben Inker highlights the period from May 22 to June 24 characterized by "the universality of the declines" across asset classes.

2013-07-22 4 Reasons to Consider Investing in Frontier Markets by Russ Koesterich of iShares Blog

At a time when investors are worried about Chinese banks and Brazilian riots, investing in the riskiest areas of the emerging world seems counterintuitive. But according to Russ, there are four reasons why many investors should consider having a small allocation to frontier markets.

2013-07-22 If the Fed Wants to Lower Bond Yields, Perhaps It Should Switch to QT by Paul Kasriel of Econtrarian, LLC

Whenever I forget to mute CNBC or Bloomberg TV, I invariably hear some wag explaining to us that the goal of the Fed’s policy of quantitative easing (QE) is to lower bond yields in order to stimulate borrowing by the nonbank public and thus, increase aggregate spending. If, in fact, the Fed’s paramount goal is to lower bond yields, then I suggest that it might want to consider quantitative tightening (QT). Why?

2013-07-20 Any Bonds Today? by John Mauldin of Millennium Wave Advisors

Given the acknowledged limitations of the CPI, we nevertheless use it in myriad ways. It governs cost-of-living adjustments for Social Security beneficiaries, government employees, and many labor union members. CPI is baked into the general cake, even though we know it is an imperfect fit in almost every situation.

2013-07-19 Fixed Income Outlook by Team of Osterweis Capital Management

The question we keep asking is “Will the real Fed mandate, please stand up?” The Federal Reserve (the Fed) traditionally is charged with keeping inflation in check, but it also has a second mandate to ensure full employment. This dual mandate can occasionally create general confusion as to what is the best policy at a given time and which policy goal the Fed is trying to achieve. Today, we are at a juncture where the Fed’s mandates may not clearly align with stated future monetary actions.

2013-07-19 Did Bernanke's Dovish Comments Please the Markets? by Sam Wardwell of Pioneer Investments

The key phrase: “About half of these participants indicated that it likely would be appropriate to end asset purchases late this year. Many other participants indicated that it likely would be appropriate to continue purchases into 2014.” Bonds rallied, suggesting that the sell-off of the past few weeks had exhausted itself or overshot (at least for now).

2013-07-19 Print the Legend by Peter Schiff of Euro Pacific Capital

The Trayvon Martin/George Zimmerman tragedy has become one of those transcendent events that dominates the national discourse and throws light on dimly lit aspects of our society. Obviously, the case touches most closely on issues of race relations, media culture, and the politicization of the justice system. It also reveals how preconceived emotional commitments to a narrative can consistently trump demonstrable facts. These tendencies are also present in the polarized discussion about the persistent weakness of the U.S. economy.

2013-07-19 China's Slowing Growth Who's In the Driver's Seat? by Anastasia Amoroso of J.P. Morgan Funds

After three decades of double-digit GDP growth, China has recently been expanding at a rate much closer to its five-year plan’s established target of 7%. As the pace of growth has changed, so has its composition and trajectory. The focus is shifting away from growth at all costs to a preference for quality over quantity that increases the wellbeing of an average Chinese consumer. The government is intent on rebalancing the economy away from commodity intensive infrastructure spending and towards supporting the middle class by increasing urbanization, private consumption and affordable ho

2013-07-19 European Equities: Beyond the Headlines by Philippe Brugere-Trelat of Franklin Templeton Investments

It’s fairly easy for investors to find reasons to shun European equities. While struggles in some Eurozone “periphery” countries continue to make eye-catching headlines, the broader story of Europe is far less fatalistic, according to Mutual Series Executive Vice President Philippe Brugere-Trelat, who manages the Mutual European Fund, Mutual Global Discovery Fund and Mutual International Fund. When it comes to Europe, he says one shouldn’t throw out the baby with the bathwater, so to speak.

2013-07-19 Brazilians Demonstrate Their Right to be Heard by Mark Mobius of Franklin Templeton Investments

Brazilians have demonstrated their right to be heard. The unprecedented chain of events that started with complaints about inflation (bus and subway tariffs) has led to mass protests over corruption, lack of public services, and taxes. As a result of the tension and uncertainty in the past few weeks, some investors have lost confidence in Brazil’s market. After talking with our analysts on the ground there I wanted to share some perspective on the situation.

2013-07-19 Is Inflation Really Gone Forever? by Jon Ruff of AllianceBernstein

Recent movements in asset prices suggest that markets have forsaken any possibility of an inflation outbreak in the next decade. We believe that view is far too sanguine.

2013-07-19 7 Things Investors Should Know Now by Russ Koesterich of iShares Blog

Can stocks move higher? What are the best opportunities now in stocks and fixed income? Russ answers these questions and others in an update to his mid-year outlook.

2013-07-19 Are Blue-Chip Consumer Staples Worth Today's Premium Valuations? by Chuck Carnevale of F.A.S.T. Graphs

The Consumer Staples sector consists of companies that provide essential products. In other words, Consumer Staples are products that people cannot or are unwilling to do without. As a result of the essential nature of Consumer Staples, there are several attributes that distinguish this sector from most others. First of all, the essential nature of the products that Consumer Staples’ companies produce, are for the most part, non-cyclical. Second, Consumer Staples tend to be very insensitive to economic cycles.

2013-07-19 Egypt: Stating the Obvious by Michelle Shwarzman of Invesco Blog

Although the outcome may have been viewed as a surprise by many, the ongoing economic malaise that partially fueled the revolt against and eventual ouster of Egyptian President Muhammad Morsi, was not.

2013-07-19 Weekly Economic Commentary by Team of Northern Trust

The year’s first half included some big surprises. U.S. wage and salary growth sets the stage for stronger consumption. Don’t be discouraged by the most recent housing report.

2013-07-19 Fixed Income Fed Insight: It's All About Employment by Christopher Molumphy of Franklin Templeton Investments

We can try to guess what the Fed is thinking, but ultimately the Fed is driven by inflation and the labor markets. With inflation seemingly under control, it’s really the labor markets that dominate. So if you want to know what the Fed’s going to be doing, look at the labor markets how many jobs we create each month and, most importantly, the unemployment rate.

2013-07-19 Opportunity in Europe by Team of Neuberger Berman

A striking feature of this year’s global stock market rally is that international markets have significantly trailed U.S. stocks. Nevertheless, Neuberger Berman’s Asset Allocation Committee (AAC) recently made the contrarian call of upgrading its view for international developed markets, particularly Europe. In this Strategic Spotlight, we provide an update on the European economy and lay out some reasons for optimism despite the dour growth outlook.

2013-07-19 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.2, up slightly from last week’s 130.1 (revised from 130.2). The WLI annualized growth indicator (WLIg) rose to 4.5% from 4.3% last week (revised from 4.6%).

2013-07-18 ASEANSeeking Further Integration by In-Bok Song of Matthews Asia

Southeast Asia is pushing ahead with an economic initiative analogous to the E.U. called the ASEAN Economic Community (AEC). The 10-member bloc is striving to make this partnershipwhich envisions creating a single market and production base and developing closer economic ties both within the region and the broader global economya reality by 2015. In-Bok Song, takes a look at the benefits and hurdles that may be expected in this lengthy process for further integration of such aspects as liberalized trade, investment, skilled labor and free flow of capital.

2013-07-18 A U.S. Stock Market Rally to Sell by Scott Minerd of Guggenheim Partners

The longer-term outlook for the U.S. stock market remains favorable, but moves in the NYSE advance/decline line suggest caution in the weeks and months ahead.

2013-07-18 The Death of Disasterism by Steven Vincent of BullBear Trading

From late 2012 I have been gradually layering and developing the thesis that a secular bull market started in November of 2012 (with a possible revised start date of June 2012), ending the sideways secular bear market that started in 2000. Here are the basic components of that thesis through the last report.

2013-07-18 Closed-end Fund Review by Jeff Margolin of First Trust Advisors

Following a quarter in which the average closed-end fund was up 4.31%, the universe of 595 funds was lower by 5.60% on a share price total return basis during the second quarter (both figures from Morningstar). For many funds, most of the weakness occurred during the month of June (when the average fund was lower by 6.09% on a share price total return basis, according to Morningstar).

2013-07-18 What's Next for the U.S. Dollar? by Nic Pifer of Columbia Management

Global government bonds have performed poorly so far this year. Year to date through July 13, the Barclays Global Treasury Index, which covers 30 investment grade domestic government bond markets, is down 5.5% in unhedged U.S. dollar terms. The same index hedged back to U.S. dollars is down 0.6% year to date. This difference in returns highlights a key point.

2013-07-17 China's Curbs on Bank Lending: Implications for the World Economy? by Giordano Lombardo of Pioneer Investments

Banks are by far the top-weighted sector group in China, so there’s little chance for the broad market to buck the trend. Indeed the problem is sector-specific at first glance. Policy makers want to curb excess bank lending in an effort to make the industry better managed and more selective.

2013-07-17 The Bernanke Guessing Game by David Wismer of Flexible Plan Investments

There can be little doubt that US equity markets have become more dependent than ever, at least in the short-term, on the every utterance of Fed Chairman Ben Bernanke and his fellow FOMC members.

2013-07-17 Second Quarter 2013 Newsletter by Steve Wenstrup, Jim Tillar of Tillar-Wenstrup

We wrote after the strong first quarter to expect volatility to increase with stocks remaining the preferred asset class and that is largely what happened in the second quarter. Almost all risk assets wobbled after the Federal Reserve (Fed) hinted at a possible tapering of quantitative easing later this year. Regardless, most domestic stocks did well in the quarter.

2013-07-17 Hopelessly Devoted To You by Bill Smead of Smead Capital Management

A journalist from Fortune magazine once asked Andy Grove, the former CEO of Intel, for the best business advice he’d ever been given. Grove provided a simple quote from a former professor at City College of New York: “When everybody knows that something is so, it means that nobody knows nothin’.”

2013-07-17 Canadian Secular View: Into Darkness? by Ed Devlin of PIMCO

Many investors are buying Canadian federal government bonds, shorting Canadian bank stocks and selling Canadian dollars in anticipation of a prolonged downturn. While significant risks are clearly facing the Canadian economy, our baseline forecast does not justify positioning our portfolios for a prolonged Canadian downturn.

2013-07-17 Bubbles Forever by Robert Shiller of Project Syndicate

In 2006, the largest global real-estate bubble in history imploded, and the collapse of a major worldwide stock-market bubble a year later triggered the global financial crisis. Although one might think that we have been living in a "post-bubble" world since then, talk of new bubbles keeps reappearing.

2013-07-16 Nassim Nicholas Taleb: To Prevail in an Uncertain World, Get Convex by Laurence B. Siegel (Article)

Investment professionals know the value of a convex bond – it gains more from falling rates than it loses from rising ones. According to Nassim Nicholas Taleb, people and institutions can and should position themselves to be convex. Indeed, they should be antifragile – ready to gain from disorder or uncertainty.

2013-07-16 Hedge Funds Can Advertise...But Should They? by Chris Maxey, Ryan Davis of Fortigent

In April 2012, the Jumpstart Our Business Startups (JOBS) Act was signed into law. The legislation eased a number of regulatory burdens on small businesses and private industry in a bid to boost job growth. The bill made additional headlines for lifting an 80-year ban on solicitation for private placements, the restriction that prevented hedge funds from advertising their wares to the general public.

2013-07-16 High Yield Market Overview June 2013 by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch High Yield Master II Constrained Index (the “Index”), was down 2.64% for the month of June. Yields moved sharply higher during the month as the high yield market experienced record retail outflows, quickly adjusting expectations around the Treasury market, and increased equity price volatility. Volatility spiked after a more hawkish message emanated from the Fed after the Federal Open Market Committee (FOMC) meeting on June 19th.

2013-07-16 Don\'t Be Deceived by the Deficit Dip by Milton Ezrati of Lord Abbett

Recent budget reports have been encouraging. Revenues are rising faster than originally expected, and deficits are running lower. Some of this improvement is real, but, sadly, not all of it.

2013-07-16 Investment Bulletin: Global Equity Strategy July by Team of Bedlam Asset Management

For the first half of the year, the 17.7% gain by the portfolio was 390 basis points better than the index; during June, market panic over potential changes in Fed policy resulted in a 3.0% fall in the index, with the portfolio down by a similar amount. US bond funds suffered a record $58 billion outflow during the month, 2%of their assets.

2013-07-16 AdvisorShares Weekly Market Review by AdvisorShares Research of AdvisorShares

The market increased again last week and both the S&P 500 and the Dow Jones Industrial Average reached record highs by the end of the week. The Nasdaq Composite Index also rose significantly, hitting a 12 year high.

2013-07-16 The Great Rotation Continues Forward... by Blaine Rollins of 361 Capital

Fed Chairman Ben Bernanke grabbed the mic on Wednesday and gave a performance that garnered a standing ovation from Stock, Bond, and Commodity investors. Only U.S. Dollar longs went home dragging their programs and spilling their popcorn. As a result, U.S. equity markets ended the week at all-time highs as stocks remained the darlings of the asset classes.

2013-07-16 Deficit? What Deficit? by Brian Wesbury, Bob Stein of First Trust Advisors

Hope that title caught your attention, but, you should know, we are only half joking. In June, the federal government recorded a $116.5 billion surplus! Yep, you read that right surplus! the largest surplus for any June ever. Government spending fell to $170 billion for June, 47% below last year.

2013-07-16 Triangulating a Truer Course Through Emerging Markets by Tassos Stassopoulos of AllianceBernstein

Where can you find a car market which will double in size in the next five years? Brazil and Russia might be obvious places to look, but would you have expected Chile, Colombia, Ukraine and Vietnam? Picking the next big themes in emerging consumer markets is even harder than in the well-researched developed world. To get a better handle, we think, requires a triangular approach.

2013-07-16 Bernanke Still Trying To Get The Message Across by Scott Brown of Raymond James

Economists view the Federal Reserve’s communications with the public as being consistent over the last several weeks. There has been no change in the monetary policy outlook. The Fed had been expected to reduce the pace of asset purchases later this year. The financial markets, however, seem to be hearing different things at different times.

2013-07-16 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks got a boost last week from Fed Chairman Bernanke who decided (as predicted here) he needed to reset market expectations about the economy and Fed policy.

2013-07-16 ProVise Bullets by Ray Ferrara of ProVise Management Group

The big news during the past two weeks has to be the employment numbers that came out about 10 days ago. Most economists were looking for about 165,000 jobs being added to the workforce, but the June number came in at 195,000 jobs. This was higher than even the highest estimates.

2013-07-16 Arc of a Diver: The Budget Deficit\'s Plunge by Liz Ann Sonders of Charles Schwab

The budget deficit has been cut by more than halffrom over 10% of GDP to less than 5% today. June saw a budget surplus! The health of the private sector (given its deleveraging since 2007) more than offsets the drag from public sector deleveraging.

2013-07-15 Beneath the Noise, a Resilient Demand Trend and Clear Fed Plan by Alan Levenson of T. Rowe Price

Available data point to real GDP growth of less than 1% in the second quarter, yet we are looking through the dip: core demand data have been firmer (watch June retail sales on Monday), and a Q2 inventory correction will likely be followed by current quarter re-stocking. The sharp upward adjustment in mortgage rates will not derail the housing recovery. The FOMC has provided substantial clarity, in our view, regarding the monetary policy path that it intends to follow if the economy evolves in line with its expectations.

2013-07-15 Don\'t Forget About Earnings by John Petrides (Article)

Earnings season is upon us! Investors can finally focus on what really matters in driving stock prices...earnings growth.

2013-07-15 Investment Bulletin: Emerging Markets Equity by Team of Bedlam Asset Management

For the half year to end June the index was buffeted, falling 3.1%. In contrast, the portfolio managed a gain of 8.3%, more than 1,000 basis points better. During the month of June, the Emerging Market index was whacked by 6.4%; the portfolio’s value also fell, but by a lesser 6.2%. The relative year-to-date and longer term falls in some of the regional indices have been grim (Chart 1, p.4): for example, in the first six months of 2013, EM equities underperformed those in developed markets on a total return basis by 16%, and by 14% over the last 12 months.

2013-07-15 A Pivotal Point in the Markets by Meggan Walsh of Invesco Blog

Because the market is a forward-discounting mechanism, it’s not unusual for it to have led the economic recovery over the last four years. Today, I believe the market has already discounted a decent economy over the intermediate term and is approximately fairly valued. But that’s not the whole story.

2013-07-15 Mid-Year Outlook: Waiting to Move Beyond a Muddle-Through Economy by Bob Doll of Nuveen Asset Management

By focusing on current economic conditions while giving due importance to the uncertainty created by Fed actions we offer thoughts for consideration in evaluating “risk-on” investments.

2013-07-15 Detroit, Addicted to Fed $$ by Gregg Bienstock of Lumesis

Last week, I left you with a hint that the July 8 commentary was to be a collector’s edition. After reading this week’s you will know why (hint: it is in the title). I start this week with a guest commentary from Kate McDonough who takes a look at the Detroit Emergency Manager’s Proposal for Creditors. I then take a look at just how reliant we are on the Federal Government for revenue (beyond what the Federal Reserve is doing).

2013-07-15 Rock-A-Bye Baby by John Hussman of Hussman Funds

I’ve always thought that singing “Rock-a-bye baby” offers a bizarre lesson to our young, encouraging them to be lulled gently to sleep by describing a scene that should have them wide-eyed with terror.

2013-07-15 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

After weeks of naysaying and fear-mongering about the Fed, investors finally embraced news from Bernanke and friends and equities moved back into record-setting territory. While most accept the fact that the Fed has entered the “beginning-of-the-end” of its bond-buying stimuli, the minutes from the latest policy meeting and a few “comforting” comments from Dr. B. himself helped calm the masses that the program would not end “yesterday.”

2013-07-13 The Bang! Moment Shock by John Mauldin of Millennium Wave Advisors

This week we resume our musings about Cyprus, to see what that tiny island can teach us about our own personal need to engage in ongoing critical analysis of our lives and investment portfolios. Cyprus is not Greece or France or Spain or Japan or the US or (pick a country). I get that. No two situations are the same, but there may be a rhyme or two here that is instructive.

2013-07-12 The Fed's Circular Mess by Adam Thurgood of HighTower Advisors

Market volatility is back. The Fed put the end of QE in play, and as a result, big moves in risk assets have become the norm. The market’s reaction over the past several weeks has brought a disturbing question to the surfacehow is the Fed really going to get out of the mess it has put itself in?

2013-07-12 Weekly Market Review-Highlights of the Prior week by AdvisorShares Research of AdvisorShares

Stocks moved higher but volume was notably low over the holiday shortened trading week. This week for a change, positive economic data, not speculation about the Federal Reserve’s tapering of Quantitative Easing drove the market in the US.

2013-07-12 China\'s Very Relative Malaise by Francois Sicart of Tocqueville Asset Management

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at “China’s Very Relative Malaise”, an observation which he describes as “a vaguely uneasy feeling that seemed to be shared by most (Chinese) but not always for the same reasons.”

2013-07-12 Welcome Back Greece to the High-Potential World of Emerging Markets by Mark Mobius of Franklin Templeton Investments

In June, major international equity index provider MSCI confirmed Greece’s sojourn among the ranks of “developed markets” would end later this year as it will become the first-ever country to lose its “developed market” status in the MSCI universe. Interestingly, Greece was classified as emerging when I started with the Templeton Emerging Markets Group in 1987, and while the recent news might conjure up images of a significant turn for the worse for the country’s economic fortunes, MSCI’s explanation for Greece’s reclassification was actually mor

2013-07-12 Bond Yields Gone Wild? by Frank Holmes of U.S. Global Investors

With the Federal Reserve’s intention to taper its easing, yields have risen quickly, causing municipal bonds to experience their worst decline since September 2008. In the second quarter, the Barclays Capital Municipal Bond Index lost nearly 3 percent, with the long end of the yield curve receiving the biggest blow, as bonds maturing in 20 years fell more than 4 percent.

2013-07-12 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

ECRI posts its proprietary indicators on a one-week delayed basis to the general public, but last year the company switched its focus to a version of the Big Four Economic Indicators I’ve been tracking for the past year. In recent months, however, those indicators have slipped below the fold, replaced by the mixed bag of whatever Indicator du Jour might look recessionary, as in the "Yo-Yo Years" commentary.

2013-07-12 Making Sense of the Bond Market by Phelps McIlvaine of Saturna Capital

The great challenge for investors and advisers today is to forecast where interest rates and bond prices will be once the influence of radical central bank intervention dissipates. Measures of inflation expectations are declining, and deflation remains the dominant influence on interest rates. In assessing whether to trim bond allocations, it is important to revisit the reasons for selecting a particular asset allocation before modifying or abandoning it.

2013-07-12 Weekly Economic Commentary by Team of Northern Trust

The view of Spain’s economy from the ground is no prettier than it is from distance. Not all forward guidance is created equal. China’s suspension of key economic data raises, not quells, concern.

2013-07-12 Global Markets at Mid-Year by Robert Isbitts of Sungarden Investment Research

Most investors based in the U.S. are walking around thinking “the market has gone way up this year.” They are rightif they are talking about certain indexes within a big wide world of markets, including stocks, bonds, currencies and commodities. But the disparity (i.e. lack of correlation) among markets has been striking. I think that the best way to convey this to you is to simply show you how a small group of market indexes have done for the year-to-date yesterday along with brief commentary, in bullet point form.

2013-07-12 Calming Downand Changing Focus by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

Markets are calming and investors seem to be focusing on fundamentals againa nice change from recent history. The bar is relatively low for earnings season but focus will be on the commentary surrounding releases. We believe more sideways movement in both US equities and Treasury yields could prevail over the next couple of months, with summer months muting action; but remain optimistic about stocks longer-term. Likewise, Japan could tread water until new elections are held, but we believe the eurozone provides opportunities that should be looked into at the expense of investments in China.

2013-07-11 The Capital Flight from Safety: It is Not About Tapering it is About Growth by Scott Colyer of Advisors Asset Management

Since Ben Bernanke’s comments seemed to unleash the bond vigilantes on June 19, we have seen a reversal in money flows that have used the U.S. Treasury market and the gold market as a “flight to safety trade.”

2013-07-11 Turmoil and Transition in China by Scott Minerd of Guggenheim Partners

Tensions in Asia are rising, as China attempts to move toward a more market driven economy. This, combined with the ongoing ultra loose monetary conditions in Japan, has elevated the threat of a financial crisis in the region between now and the end of 2013.

2013-07-11 Quarterly Letter by Ron Muhlenkamp of Muhlenkamp & Company

While the economic trends of the past couple of years continue, we’ve just seen an important change in interest rates and the bond markets.

2013-07-11 Pacific Basin Market Overview June 2013 by Team of Nomura Asset Management

Equity markets in Asia ended generally lower in the second quarter of 2013 due to concerns over the U.S. Federal Reserve’s apparent shift towards a more balanced monetary policy stance following Chairman Bernanke’s statements suggesting a “tapering” of its asset purchase program.

2013-07-11 The Taper by Richard Bernstein of Richard Bernstein Advisors

If SNL’s Emily Litella worked on Wall Street, she’d probably be asking “What’s all this hubbub about the Fed’s tapir? After all, it’s a fine animal that never hurt anyone on Wall Street.” It would then be pointed out to her that the word was “taper” and not “tapir”. She would politely end her commentary with her famous “Never mind.”

2013-07-11 Prepare for the 1-2 Punch of Declining Earnings and Multiple Contraction by JJ Abodeely of Sitka Pacific Capital Management

The market today is counting on continued earnings growth driven in large part by ongoing quantitative easing without inflationary consequences. In a recent strategy letter, we show that the market’s expectation for future earnings growth is overly optimistic based on the fact that earnings are currently more than 40% above the long-term trend and mean-reversion and history suggests that real earnings are likely to decline over the next 5 years.

2013-07-10 A Five Question Portfolio Check Up by Kendall Anderson of Anderson Griggs

If the stock or bond market has another panic attack and drops 25% to 50% in the next 1, 2 or 3 years, would this decline make you unable to pay off your mortgage, pay for college, or whatever else you planned on doing? If the stock or bond market has another panic attack and drops 25% to 50% in the next 1, 2 or 3 years, would this decline cause you to: panic, sell everything you own, or worse, jump off a bridge? Do you know what you own? How important is the result of your portfolio entrusted to us in light of your entire financial well being?

2013-07-10 Rising Rate: Challenge and Opportunity by Gibson Smith, Lindsay Bernum of Janus Capital Group

While the prospect of rising interest rates generally strikes fear into the hearts of fixed income investors, it’s important to remember that periods of rising rates are normal and can create opportunities for active bond managers. Since 1970 there have been 21 periods in which interest rates rose significantly. While each has had its own unique characteristics, over the past 20 years equities have rallied during these periods, which has tended to support corporate credit markets.

2013-07-10 Stocks v. Bonds: What Happens When Prices Decouple? by Mark Ungewitter of Charter Trust Company

Are today’s falling bond prices a sign of confidence in economic growth and earnings power? Or might higher bond yields derail the current equity bull market? While the answer is far from clear, history teaches us to be cautious when bond prices decline sharply during an extended equity rally.

2013-07-10 Are You Financially Literate? Take the Test! by Gary Halbert of Halbert Wealth Management

For over a decade, numerous studies have found that most Americans are lacking in their basic knowledge regarding finance and investments. I first reported on this back in 2003 and have done so every few years since then. Unfortunately, things have not gotten better over the years, despite the fact that we went through a major financial crisis in 2008-2009.

2013-07-10 What is Happening to Gold? by John Hathaway of Tocqueville Asset Management

John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), examines in his latest Tocqueville Gold Strategy Investor Letter the dramatic developments in the gold market over the last six months. The letter goes on to discuss the impact the Fed continues to have, and suggests that today’s valuations represent a “compelling entry point.”

2013-07-10 Remember Earnings? by Tom West of Columbia Management

With the ebbing of the quantitative easing taper debate, can we go back to our regularly scheduled programming of earnings driving the stocks? If so, where do we stand? There are certainly some areas where we think estimates are a little high and some where they are too low. But in order to get a better picture of earnings expectations and what is priced in, we need to look at both the earnings and the PE (price-to-earnings) ratio the market has placed on those earnings.

2013-07-10 Market Perspectives Q2 2013: Fed Fears by Richard Michaud of New Frontier Advisors

Investors have been hypersensitive to the inevitable reversal of the Federal Reserve’s bond purchasing economic stimulus program known as QE3. Signs of sustainable economic recovery have been closely monitored as a harbinger of a likely end of the program.

2013-07-10 Beware Of The Valuations On The Best Consumer Discretionary Dividend Growth Stocks by Chuck Carnevale of F.A.S.T. Graphs

The Consumer Discretionary sector consists of businesses that sell nonessential, and therefore, discretionary goods and services. Companies in this sector include retailers, media companies, consumer services companies, consumer durables and apparel companies, automobiles and components companies. Since so much of what this sector offers is discretionary items, companies in the sector tend to do best when the economy is strongest. Unfortunately, as we will soon see, so do the prices of their stocks tend to perform best when the market is performing best.

2013-07-09 The Five Best New Investment Ideas: New Age Paradigms for the Post-MPT World by Bob Veres (Article)

Over the past four years, I’ve been collecting the most tangible, concrete post-Modern Portfolio Theory insights offered by professional investors.

2013-07-09 A Mid-Year Letter to Clients: A Positive Outlook on America by Dan Richards (Article)

Each quarter I’ve posted templates to serve as a starting point for advisors looking to send clients an overview of the three months that just ended and the outlook for the period ahead. This quarter’s letter focuses on why the U.S. is expected to be the leader among global economies.

2013-07-09 Business Building for Advisors by Beverly Flaxington (Article)

I have received so many questions related to sales skills and business building that I will offer some basic tips for readers who want to energize their sales process and grow their firms. It’s no surprise that most advisors don’t sell naturally and in most cases think of selling as unpleasant. ’I want to clients to refer on their own – I don’t want to sell them on doing so,’ is a refrain I hear over and over again.

2013-07-09 U.S. Stocks Continue to Dominate – What’s Next? by Ron Surz (Article)

U.S. stocks earned 2.5% in the second quarter, bringing the year-to-date return up to a lofty 14%. By contrast, the EAFE index lost 1% in the quarter, bringing its year-to-date return down to 4%. In fact, as shown in the following graph, no other asset class comes even close to the return on U.S. stocks so far this year.

2013-07-09 The Germans Deserve Credit for Extending Credit by Sam Wardwell of Pioneer Investments

Germany’s government agreed to (indirectly, via guarantees) provide Spain’s government-run ICO development banks with the funding to make up to 800 million of low-interest loans to small and medium-sized businesses.

2013-07-09 High Yield Munis: Risky Business by Ryan Davis, Jingwei Lei of Fortigent

We shine a spotlight on the obscure market of high yield municipals this week. In the current fixed income selloff, the market has been among the worst performing with a drawdown of 6.1%. Investors could not get enough of the sector in 2012 as they chased yield; the Barclays high yield muni index returned over 18%. Investor sentiment has turned sharply, however, on this asset class. Funds experienced significant outflows over the last couple of months, which is especially troubling for a small and retail dominated market. Why did this onetime darling asset turn into a pariah so abruptly?

2013-07-09 So the Bulls Returned... by Blaine Rollins of 361 Capital

So the Bulls returned to Equities on a holiday shortened week with plenty of news and data to outrun. The Egyptians threw out their President and the Portuguese gave a thumbs down to their government. But dovish comments out of Draghi/ECB, strong data out of Japan, and a 3rd strong month of Non-Farm Payroll growth pushed the Russell 2000 to all-time highs as the rest of the market jumped into its slipstream.

2013-07-09 The Fed\'s Bind: Tapering, Timetables and Turmoil by Scott Minerd of Guggenheim Partners

There are striking parallels between the dramatic recent sell-off in U.S. Treasuries and the Great Bond Crash of 1994. But the summer of volatility now facing financial markets is no doomsday scenario. Instead, it puts the U.S. Federal Reserve in a bind. Higher interest rates will reduce housing affordability, which is especially troublesome since housing is the primary locomotive of U.S. economic growth.

2013-07-09 Is Now a Good Time to Buy Gold? by Russ Koesterich of iShares Blog

No, says Russ. While Russ still believes that gold should be a part of a diversified portfolio, he explains why he advocates trimming holdings of the precious metal.

2013-07-09 The G8: Sorry, Maybe Next Time by Milton Ezrati of Lord Abbett

While the recent gathering of the Group of 8 industrialized nations addressed worthy topics such as Syria and tax avoidance, it failed to tackle essential economic and fiscal issues.

2013-07-09 Jobs, the Fed, and Long-Term Interest Rates by Scott Brown of Raymond James

The June Employment report showed a labor market that is far from fully recovered, but appears to be well on its way. Federal Reserve policymakers are not going to react to any one report, but the trend in nonfarm payrolls has remained strong. Is that enough to ease up on the gas pedal? Perhaps. However, it should still be some time before the Fed has to hit the brakes.

2013-07-09 Rosebud?! by Jeffrey Saut of Raymond James

Produced in 1941, the movie “Citizen Kane” is heralded as one of the best movies ever made. It was one of the first to depict the American Dream, and materialism, as less than desirable and therefore causes one to contemplate what actually constitutes “a life?” Indeed, as a child the central character, Charles Foster Kane, is living in rural Colorado in a boarding house run by his mother (Mary).

2013-07-08 Widening the Search for Income: Beyond Traditional Bonds by Team of Forward Management

Multisector bond market strategies may provide an opportunity to capitalize on differences in relative value. A more refined and global approach may generate yield with dividend-paying stocks. Emerging market (EM) corporate bonds feature attractive fundamentals and have increased in popularity as an asset class.

2013-07-08 Defaults, Growth, Philly Fed and a Collector's Addition by Gregg Bienstock of Lumesis

The first Friday has come and gone. Initial reports were seemingly positive and then, I think, people read the report or they simply were shaking off the cobwebs from their Independence Day celebration. As always, we await the more detailed State, county and city numbers to avoid revisions to data of up to 30%.

2013-07-08 What Really Matters by Charles Lieberman (Article)

Federal Reserve Chairman Bernanke has made quite clear that the Fed’s decision to reduce its bond buying program is data dependent, so many people now wonder if some recent weaker data, such as the downwardly revised Q1 GDP, may signal that the Fed is likely to continue buying bonds at the $85 billion monthly pace for a while longer. To paraphrase George Orwell, some data is more equal than other data. Monthly employment data top the list, although monthly inflation reports, if they were to show any meaningful rise in inflation, would immediately trump the jobs report.

2013-07-08 Absolute Return Letter: Much Ado about Nothing by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners

A 300 bps rise in bond yields across the term structure would, according to their calculations, do substantial damage to financial institutions’ balance sheets. Holders of U.S. Treasuries alone would lose in excess of $1 trillion on such a move in rates, equal to 8% of U.S. GDP. Other countries would fare even worse. Losses on JGBs would equal 35% of the Japanese GDP, effectively wiping out its banking industry in the process. Holders of U.K. bonds wouldn’t do much better, losing the equivalent of 25% of U.K. GDP.

2013-07-08 Deflationary Boom? by John Hussman of Hussman Funds

Taken together, the financial markets have priced a wide range of assets on the assumption that the U.S. is on the verge of a deflationary boom. Most likely, part of this scenario is wrong.

2013-07-08 Emerging Markets Debt Remains Fundamentally Strong by Claudia Calich, Jack Deino of Invesco Blog

June’s massive bond sell-off, prompted by fears that the Federal Reserve would wind down its bond-buying program, has had a negative trickle-down effect on emerging market debt-dedicated assets, which were hit hard as part of the record $14.45 billion in outflows seen in the overall bond market for the week ending June 12.

2013-07-05 Accessing Myanmar\\\'s Growth by Frank Holmes of U.S. Global Investors

Did you know that in the first half of the last century, Myanmar had twice the GDP per capita of China? What a difference a few decades and government policies make, as China is ten-fold the size of Myanmar today, according to UBS Research. The change in wealth between the two nations is a prime example of how government policies can have a tremendous effect on a country’s growth.

2013-07-05 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The odds of a September tapering have increased but are conditional on labor market conditions continuing to evolve at least as favorably as viewed at the present time. The important caveat is that the Fed’s forward guidance has stressed the importance of improvements in the “outlook” of the labor market and inflation to consider tapering, which implies that economic data between now and the September FOMC meeting will play an important role in the timing of tapering of asset purchases.

2013-07-05 Why Oil Has Proven Resilient by Russ Koesterich of iShares Blog

Crude oil has proven more resilient and less volatile this year (depending on which benchmark you use, it is either up or down in the single digits) than most other commodities. There are three main factors behind this.

2013-07-05 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 130.4, down slightly from last week’s 130.6. The WLI annualized growth indicator (WLIg) fell to 5.3% from 5.8% last week.

2013-07-03 Alternative Energy Brief: EU Solar Tariffs “a big mistake.” by Edward Guinness, Matthew Page of Guinness Atkinson Asset Management

This month we explore the impact of recent EU solar module tariffs.

2013-07-03 Getting Back to “Normal” by Douglas Cote of ING Investment Management

Though markets were whipsawed by the announcement, the Fed’s plan to step aside and allow normalization is a good thing. The primary risk to hedge is now economic growth and the strong equity returns it tends to produce not financial Armageddon. While risks in Europe and China persist, U.S. fundamentals look relatively strong. It’s not too late for investors to move away from defensive positioning and back toward a standard allocation.

2013-07-03 Long Train Running: Why Stocks Are Rebounding by Liz Ann Sonders of Charles Schwab

Why the June swoon occurred and why it might already be over. Fed’s move toward policy normalization may have a lot to do with pricking perceived asset bubbles; not a more hawkish economic stance. Sentiment has improved notably; but technical conditions may need a bit more repair.

2013-07-03 A Roadmap for Rates by Scott Minerd of Guggenheim Partners

Uncertainty over the Federal Reserve’s timeline for tapering quantitative easing has resulted in increased volatility in fixed income markets. While the coming months could see the 10-year Treasury yield climb as high as 3.5 percent, the resulting economic slowdown will keep rates subdued in the medium-term.

2013-07-03 AdvisorShares Weekly Market Review by AdvisorShares Research of AdvisorShares

Markets went higher last week after central bankers around the world reassured investors that they would not kill the economic recovery with higher interest rates. More volatile small and mid-cap stock indices performed even better than the S&P 500.

2013-07-03 Investment Bulletin: Emerging Markets Equity by Team of Bedlam Asset Management

The portfolio performed very well in May, taking the year to date net gain to 15.0%, vs. 3.5% for the index. There were two causes for the good numbers: stock selection i.e. ignoring index weightings - and the avoidance of countries with deteriorating balance of payments and budget deficits, and with high government debt to GDP ratios, such as Hungary, Poland, India, Turkey and South Africa.

2013-07-03 For Abenomics, the Hard Part Is Still to Come by Guy Bruten of AllianceBernstein

Prime Minister Shinzo Abe’s “Abenomics” program, designed to revive Japan’s economy, was a big success in its first five months, easily surpassing low expectations. But it’s drifted off course since it began, and the going is sure to get tougher from here. Still, it’s too early to write off this policy experiment.

2013-07-03 Does China's Central Bank Matter More than The Fed? by Sam Wardwell of Pioneer Investments

I’m pleased to share with you the economic and market brief that I prepare for Pioneer’s investment professionals each week. It’s intended to be short but informative, and I hope you find it useful.

2013-07-03 Failure to Communicate, Part 2 by Scott Brown of Raymond James

The financial markets have begun to reassess Fed Chairman Bernanke’s monetary policy comments. Several Fed officials spoke last week, each echoing Bernanke’s key messages: 1) policy will remain data-dependent, 2) tapering is not tightening, and 3) a rise in the federal funds target rate is a long time off. With an emphasis on data-dependence, the economic figures should get more scrutiny from the markets. Still, there’s a sense that hope plays a major role the Fed’s economic outlook.

2013-07-02 Gundlach’s One-Word Explanation for June’s Decline by Robert Huebscher (Article)

According to Doubleline’s Jeffrey Gundlach, a single word explains the declines global capital markets experienced in June.

2013-07-02 Recent Volatility – Noise, not Signal by Keith C. Goddard, CFA (Article)

This spasm of volatility is a normal side effect when market participants adjust their positions to a new expectation for the future of monetary policy. Even though the policy adjustment being discussed at the Fed is minor – i.e., a gradual tapering of quantitative easing (QE) – the timing of the change was sooner than many investors expected, so trading volume jumped.

2013-07-02 The 2013 Mid-Year Geopolitical Update by Bill O'Grady of Confluence Investment Management

At mid-year, we customarily publish our geopolitical outlook for the second half of the year. This list is not designed to be exhaustive. As is often the case, a myriad of potential problems in the world could become issues in the second half of the year. The lineup listed below details, in our opinion, the issues most likely to have the greatest impact on the world. However, we do recognize the potential for surprises which we will discuss throughout the year in upcoming weekly reports.

2013-07-02 Second Quarter Market Commentary by Mark Oelschlager of Oak Associates

The market posted another positive quarter, with the S&P 500 returning almost 3%. In recent years, Q2 has witnessed a “growth problem,” in which softening economic data prompted investors to sell stocks. But this year that did not happen, as the data actually improved. While new job creation is less than some would like to see, there has been a clear acceleration over the past six months.

2013-07-02 A Mid-Year Ten Predictions Assessment by Bob Doll of Nuveen Asset Management

As we reach the halfway point in the year, we want to track our progress against the predictions made in January. Equities had a strong six-month period, although a correction occurred in May and June, primarily due to a very difficult bond market. Perhaps the “great rotation” started late in the second quarter as investors moved from bonds and bond-like equities, with measured progress for cyclical and growth equities. Anxiety remains over the Fed ending its quantitative easing experiment, and there are also financial issues in China that are cause for concern.

2013-07-02 Do Dividend-Paying Stocks Have Staying Power? by Nanette Abuhoff Jacobson of Hartford Funds

The role of dividend-paying stocks in a diversified portfolio and the environment in which they are likely to outperform the broader equity market are often topics of debate among investors. I believe there are a number of reasons why a strategic allocation to dividend-paying stocks makes sense.

2013-07-02 Investors Gear Up for Earnings Post-Taper by Chris Maxey, Ryan Davis of Fortigent

Following a few weeks of FOMC-induced turmoil, investors are looking forward to getting back to the fundamentals.Second quarter earnings season are set to kick off July 8 with Alcoa, in what will mark an important reporting period for financial markets.Given the now much telegraphed intentions of the Fed, investors are scrutinizing whether the US economy and corporate sector is ready to stand on its own feet.

2013-07-02 Let\'s Barbecue It... by Blaine Rollins of 361 Capital

Equity investors finished June with the first down month in 8 for the S&P500. Bond investors took a Tommy Boy two by four across the face. And yes, it did leave a mark. Two months ago the "Great Rotation" from bonds to equities was nowhere to be seen. Today the panic out of fixed income funds is happening at the highest levels seen since 2008. As we noted last week, inflection points in major rotations are volatile, scary, and unpleasant. This helps to explain the seven 100 basis point moves in the S&P500 in the month of June, which marks the most volatility in 12 months.

2013-07-02 Stay the Course as Mixed Signals Move Markets by Frank Holmes of U.S. Global Investors

Traders stampeded out of gold, emerging markets and bonds this month, setting record monthly outflows in June. Ever since the Federal Reserve hinted in May that signs of a stronger economy could allow for a slowdown of stimulus, markets have protested the news.

2013-07-02 Preparing for the Second Half of 2013 by Russ Koesterich of iShares Blog

It’s halftime halfway through the year. That means Russ is looking back at what he got right and wrong in the first half of the year, and updating his expectations for the remainder of 2013.

2013-07-02 Finding Value In The Materials Sector Is A Material Thing by Chuck Carnevale of F.A.S.T. Graphs

This is the third in a series of articles designed to find value in today’s stock market environment. However, it is the second of 10 articles covering the 10 major general sectors. In my first article, I laid the foundation that represents the two primary underlying ideas supporting the need to publish such a treatise. First and foremost, that it is not a stock market; rather it is a market of stocks. Second, that regardless of the level of the general market, there will always be overvalued, undervalued and fairly valued individual stocks to be found.

2013-07-01 \"This Country is Different\" by John Mauldin of Millennium Wave Advisors

Cyprus is a very small country, some 800,000 people. Among the leadership, everyone knows everyone. There is much to admire, as we will see. But Cyprus has had a gut-wrenching crisis, proportionately more dire than any in other European countries recently; and precedents are being established here for how future problems will be dealt with in the Eurozone and elsewhere.

2013-07-01 Headlines, Patience, Pensions, Tax Collections, Income and Send a Letter! by Gregg Bienstock of Lumesis

Muni Tax Exemption Justification Please: Back in the news. As Congress makes another run at overhauling the tax code, the Senate Finance Committee had a pretty good idea let’s start with a “blank slate” when it comes to deductions, exemptions and credits. The Committee has asked Senators for proposals around deductions and exemptions and to support the same.

2013-07-01 All of the Above by John Hussman of Hussman Funds

Market internals remain broken here. That may change, and it might even change soon. Until it does, we would be inclined to tread carefully, because this may be the highest level investors will see on the S&P 500 for quite some time. Choosing between potential catalysts - credit strains in China, the risk of disappointing earnings, or economic weakness, the incoming data is consistent with one conclusion: all of the above.

2013-07-01 Watching Nominal GDP by Brian Wesbury, Bob Stein of First Trust Advisors

One of the most important foundations of modern macroeconomics is something called the “equation of exchange.” It dates all the way back to John Stuart Mill but, in the past couple of generations, was popularized by free-market icon Milton Friedman.

2013-07-01 On the Radar: An Energy Boost for Stocks? by Milton Ezrati of Lord Abbett

This is the third in a series on longer-term market influences. Each has considered what developments could help or hurt the equity rally after some 1824 months, when, in all likelihood, stocks will fully realize their still attractive existing valuations and feel the last effects of the ongoing flood of liquidity provided by the Federal Reserve. The first number in this series took up monetary policy and the second fiscal reform. This last discussion looks at the prospect of energy abundance, due to fracking, among other sources.

2013-06-28 Labor Force Myth Sends the Wrong Signal on U.S. Growth Prospects by Brandon Odenath of J.P. Morgan Funds

We’ve seen the pundits on TV and read their op edsthe drop in the labor force participation rate is proof that unemployment is falling because many of the unemployed have simply given up the search for work. The inference of course, suggests that the economy is in much worse shape than falling unemployment rates would indicate.

2013-06-28 Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management

For the first five months of the year the global portfolio enjoyed a net gain of 21.0%, 350 basis points better than the index, edging ahead further in May. Recent smoke signals from the Federal Reserve Bank implying - subject to a wide range of get-out clauses that less money might be put into the system, have caused market hysterics. Bond investors have rightly been stampeding out, ending a 32-year old bull market. Its longevity had caused dangerous complacency and overexposure, especially to illiquid and expensive emerging market debt through open-ended vehicles.

2013-06-28 Short-Term Pain, Long-Term Gain by Richard Gao of Matthews Asia

China’s economy has seen plenty of headwinds recentlyweak exports numbers, slower growth in both services and manufacturing and a weak recovery of corporate earnings despite rapid credit growth. China’s equity markets have performed weakly too and have been extremely volatile. But much of the recent volatility has less to do with sagging growth and much more to do with a cash crunch and tight liquidity in China’s banking system. What is going on?

2013-06-28 Does Fed “Tapering” Represent Fed Tightening? by Paul Kasriel of Econtrarian, LLC

It depends. On what? Whether a reduction in the amount by which Federal Reserve purchases of securities increases each month represents a tightening in monetary policy depends on how much loans and securities on the books of private depository institutions (i.e., commercial banks, S&Ls and credit unions) change each month. Whether Fed monetary policy gets more restrictive or more accommodative when Fed the Fed begins to taper the amount of securities its purchases per month depends on what happens to the growth in the SUM of Fed credit and depository institution credit.

2013-06-28 Weekly Economic Commentary by Team of Northern Trust

Small businesses may hold the key to better economic growth. Chinese officials are trying to curb financial excess. There are a number of ways to reach 7% U.S. unemployment.

2013-06-28 Reviewing the Dividend Sell-Off by Jeff Middleswart of Ranger International

Higher yielding stocks outperformed for much of this year, but fell sharply with the pop in interest rates.

2013-06-28 Riding Out Recent Volatility by Michael Hasenstab of Franklin Templeton

Major central bank policy turns are naturally going to cause some market dislocations. Hasenstab says it’s pretty clear the Fed couldn’t continue printing money forever, and while some investors are panicking about what the end of the Fed’s easy money policy will mean, Fed tapering doesn’t equate to Fed tightening.

2013-06-28 China's Near-Term Macro Outlook by Team of Nomura Asset Management

The key message from the recent Shibor volatility is that the Chinese government is now willing to tolerate slower near-term growth while carrying out reform to rebalance the economy for long term sustainable growth. The diminishing demographic dividend as a result of the aging population and One-Child Policy will result in slower potential growth for the economy.

2013-06-28 The New, Old Normal by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

We believe the recent volatility will be relatively short lived and provides an opportunity for investors who need to adjust their portfolios to do sowith long-term goals in mind. The risks associated with fixed income have been illustrated over the past couple of weeks and rising yields have caused equity volatility and a pullback. But we remain optimistic about US equities as well as developed international markets; particularly relative to emerging markets.

2013-06-27 The Global Insider Country Focus: Turkey by Accuvest Global Advisors of AdvisorShares

As the antigovernment protests in Turkey continue, what’s next economically for a country that relies heavily on foreign investors and tourism, especially with summer approaching, the traditional tourist high season? Accuvest Global Advisors, a firm founded on the principle of thinking globally and investing globally, has prepared the following focused country review on Turkey, which analyzes current risks with Turkey and potential next steps in the crisis.

2013-06-27 Policy-Induced Volatility Continues by Scott Minerd of Guggenheim Partners

The recent bond market collapse is reminiscent of the Great Crash of 1994. Further pressure on the economy due to rising interest rates could cause the Fed to revisit its timetable for QE.

2013-06-27 The Tipping Point by Bill Gross of PIMCO

I’ve spun a few yarns in recent years about my days as a naval officer; not, thank goodness, tales told by dead men, but certainly echoes from the depths of Davy Jones’ Locker. A few years ago I wrote about the time that our ship (on my watch) was almost cut in half by an auto-piloted tanker at midnight, but never have I divulged the day that the USS Diachenko came within one degree of heeling over during a typhoon in the South China Sea. “Engage emergency ballast,” the Captain roared at yours truly the one and only chief engineer.

2013-06-27 Mind the (Expectations) Gap: Demographic Trends and GDP by Rob Arnott, Denis Chaves of Research Affiliates

Demographics provided a tailwind to economic growth in the developed world during the past 60 years. Now, as a result of Boomers heading toward retirement and low birth rates of recent decades, demographics may present a headwind to future growth. This issue of Fundamentals, which is excerpted from a forthcoming article in The Journal of Indexes, explores the implications of such changes for economic growth around the world.

2013-06-27 Monetary Exit Strategy: Removing The Doubt by Zach Pandl of Columbia Management

In the press conference following last weeks FOMC meeting, Federal Reserve (the Fed) Chairman Bernanke said that the committee was “puzzled” by the sharp rise in bond yields over the last two months, and that the increase “seems larger than can be explained by a changing view of monetary policy.” We would argue, in contrast, that the recent increase in bond yields has been almost entirely about a changing view of monetary policy.

2013-06-27 Currency Wars: A Case for the U.S. Dollar by Gibson Smith, Chris Diaz of Janus Capital Group

In recent years, the U.S. dollar has tended to lose value when the global economy improves, as investors are more willing to take risks. We believe that pattern has changed and that the U.S. dollar will outperform the Japanese yen, the euro and the British pound over the medium term, even if the global economy continues to improve. In our view, current conditions justify a material deviation in currency exposure compared with certain global fixed income benchmarks, such as the Barclays Global Aggregate Bond Index.

2013-06-27 What We've Got Here is (a) Failure to Communicate by Scott Brown of Raymond James

In his press briefing following the June 19 FOMC meeting, Fed Chairman Bernanke outlined how the evolution of the economic outlook will drive policy decisions in the months ahead. The key messages are that monetary policy will remain data-dependent, that tapering is not tightening, and that higher short-term interest rates are still a long way off.

2013-06-27 AdvisorShares Weekly Market Review by Team of AdvisorShares

Once again, US stock indexes declined last week based on investors’ fears of rising interest rates. While markets were rising at the beginning of the week, on Wednesday, Federal Open Market Committee Chairman Ben Bernanke said that if the economy continued on its current growth path, the Fed would scale back on asset purchases by the end of the year and attempt to end the extraordinary measures by the middle of 2014.

2013-06-27 ING Fixed Income Perspectives June 2013 by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

Fears of Fed tapering are overblown; we expect global funding conditions to remain easy. We continue to favor the U.S. dollar and are bearish on the euro and the yen; we are cautious on EM local currencies, as volatility is likely to persist.Spreads are appealing at current levels, with higher-quality industrials offering the most attractive risk/reward.

2013-06-27 De-Risking Revisited by Nouriel Roubini of Project Syndicate

The prices of a wide range of risky assets have been rising, despite sluggish GDP growth worldwide. This discrepancy portends a new period of asset-price volatility one that could mark the beginning of a broader de-risking cycle for financial markets.

2013-06-27 Turmoil Shouldn't Derail Turkey by Carlos von Hardenberg of Franklin Templeton Investments

In 2012, Turkey’s stock market rose more than 50%, posting one of the strongest performances of any global equity market last year. However, recent news of protests sweeping the nation has started scaring off some investors, at least in the short term. We consider turmoil to often be a natural part of change and development, and these short-term political disturbances likely won’t be the last. I’ve invited my colleague Carlos von Hardenberg, Managing Director, Turkey, based in Istanbul, to share some local insight.

2013-06-27 Is There Life After BRICs for Emerging Market Investors? by Sammy Suzuki of AllianceBernstein

For more than a decade, Brazil, Russia, India and China have dominated the landscape in emerging markets. But as the BRICs-driven commodities boom wanes, investors may need to rethink their approach.

2013-06-26 The QE Lemon Has Been Squeezed Dry by Tad Rivelle of TCW Asset Management

We’ve just witnessed the dress rehearsal for the end of the Fed’s Quantitative Easing (QE). Markets that had learned to stop worrying and love the financial repression have been given reasons to fear the interest rate cycle. For five years we have lived with a central bank that has used, or abused, a zero rate policy and QE to effectuate the Great Risk-On trade to cure the ills of the Great Recession.

2013-06-26 When I Suggested it May Be Time To Go Fishing... by Blaine Rollins of 361 Capital

When I suggested that it may be time to go fishing, I didn’t think that everyone would sell their bonds, notes, and bills to buy a new boat...

2013-06-26 Win Ben's Money by Bill Smead of Smead Capital Management

From 1997 to 2003 a show called,” Win Ben Stein’s Money” ran on the Comedy Central Network. The last five years, investors in the US have been playing a very similar game we are calling, “Win Ben’s Money”. The new game stars Federal Reserve Board Chairman, Ben Bernanke. The object is to win the money the Fed creates via Quantitative Easing (QE) through macroeconomic analysis. In this missive, we will look at how these investors chased Ben’s Money and consider what to do going forward.

2013-06-26 The Fed\'s Dirty Little Secret: QE Does Not Work by Gary Halbert of Halbert Wealth Management

Today I hope to dispel the myth that the Fed’s massive quantitative easing (QE) policy has driven long-term interest rates lower. I will argue that the opposite is true and demonstrate that the yield on the 10-year Treasury note has actually risen during QE-1, QE-2 and QE-3. This flies in the face of most market commentators.

2013-06-26 June 2013 Float Shrink Review by TrimTabs Asset Management of AdvisorShares

Sharing some commentary from our friends at TrimTabs, which summarizes a few changes in the investment landscape that may give you an indication of what to expect following May’s “sell in May and go away” trading adage. TrimTabs research focuses on fund flows and float shrink. They believe the market is heavily influenced by what people and institutions are doing with their dollars. You can read more about the research behind float shrink at AdvisorShares.com.

2013-06-26 Sock Puppet Kabuki; Nikkei Today Parallels Dot-Com Bust by Peter Schiff of Euro Pacific Capital

The Japanese stereotype of excessive courtesy is being confirmed by the actions of prime minster Shinzo Abe who is giving the world a free and timely lesson on the dangers of overly accommodative monetary policy. Whether or not we benefit from the tutorial (Japan will surely not) depends on our ability to understand what is currently happening there.

2013-06-26 Trampled By the Crowd? Logic Briefly Abandoned Creates Opportunity by Scott Colyer of Advisors Asset Management

The past two week slide in asset prices has caused a resurgence of doomsday pundits warning of impending calamity. The negative interpretation of Fed Chairman Bernanke’s comments regarding the U.S.economy’s future upgraded prospects is simply not logical. A careful review of what Bernanke said at his press conference was entirely consistent with what the Fed has said and done in the past.

2013-06-25 The Great Debate on Inequality: Stiglitz versus Krugman by Michael Edesess (Article)

Economics Nobel laureate Joseph Stiglitz is the chief alarmist warning that income and wealth inequality in the U.S. is a very serious threat to the economy. So it comes as a surprise that his fellow Nobelist Paul Krugman – Stiglitz’s intellectual comrade-in-arms – disagrees with him. Their disagreement goes to the heart of today’s economic problem.

2013-06-25 Strategies for the Retirement Red Zone by Joe Tomlinson (Article)

The retirement red zone is the critical years immediately before and after retirement, when financial plans are highly vulnerable to adverse market movements. In many previous articles, I have examined strategies to reduce risk after retirement, but here I will focus on the decade before retirement. I’ll compare strategies that rely on traditional stock-bond portfolios with those using various types of annuity products.

2013-06-25 The Price Your Clients Pay for Using Safe Withdrawal Rates by David B. Loeper (Article)

Safe-withdrawal rates (SWRs) are perhaps the most extensively studied topic in financial planning literature. But applying a single SWR-driven methodology to all clients neglects their unique and individual needs. A better approach is for advisors to assist clients in defining their ideal and acceptable goals and the relative priorities among them. Then they can demonstrate through Monte Carlo simulation the likelihood of the recommended plan becoming over- or under-funded relative to those goals.

2013-06-25 Letters to the Editor by Various (Article)

Adam Apt responds in the latest exchange of letters on the topic of socially responsible investing. A reader responds to Geoff Considine’s article, A Better Alternative to Cap-Weighted Bond Indices, which appeared June 11. A reader responds to Wade Pfau’s article, Retirement Income Designations – Which Should You Choose?, which appeared last week.

2013-06-25 Back to Normal by Brian Wesbury, Bob Stein of First Trust Advisors

Market behavior especially since Fed Chair Ben Bernanke mentioned QE tapering has been relatively dramatic. Not unprecedented, but dramatic. By contrast, the reaction of the punditry has been way over the top.

2013-06-25 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

All markets came under pressure last week (and this morning) over the dual concerns of a slowing global economy coupled with the Federal Reserve’s suggestion that things are improving and thus “tapering” might start by the end of the year.

2013-06-25 Is Fixed Income the New Equity? by Chris Maxey, Ryan Davis of Fortigent

After several decades of positive returns, fixed income investors are being treated to a rude awakening in the last six weeks. Recent comments from Federal Reserve officials suggest a sooner than anticipated exit from quantitative easing, raising the prospect of higher interest rates. Throughout the universe of fixed income assets, investors are questioning the future return potential, leading many to wonder, what now?

2013-06-25 How Not to Invest in Dividend Stocks: Seven Mistakes Investors Commonly Make by David Ruff of Forward Management

While investors may assume that dividend investing is relatively straightforward, they commonly make mistakes that may undercut the potential income and total return of their investments.

2013-06-25 Stay the Course by Douglas Hodge of PIMCO

It is that time of the year again. As school schedules give way to summer vacations, many families will be packing up the SUV to head to one of this nation’s amazing national parks. Years ago, my young family traveled to Yellowstone National Park, home of Yogi Bear and Old Faithful. The requisite float trip down the Snake River was arranged and a good time was had by all a bit of spray but nothing too jarring. Only days later, I returned to the Snake River and had the ride of a lifetime.

2013-06-25 Canadian National Railway Co: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of Canadian National Railway Co (CNI) through the lens of FAST Graphs fundamentals analyzer software tool.Therefore, it is offered as the first step before a more comprehensive research effort.Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-06-25 Rates, Dividends and The Laws of Gravity by Don Taylor of Franklin Templeton Investments

The laws of gravity may dictate that what goes up must come down, but interest rates seem to have their own converse course of action what goes down eventually will go up. Although it seems like interest rates can stay stuck in low gear for years, (decades even, in the case of Japan) eventually they will creep higher, and talk is heating up about the timing and magnitude of such creep in the US. As the portfolio manager of Franklin Rising Dividends Fund, Don Taylor was quick to comment that higher interest rates don’t mean all dividend-paying stocks are doomed.

2013-06-25 Despite More Downside Risk, Stick with Stocks by Russ Koesterich of iShares Blog

Despite stocks’ recent declines and the rocky road ahead, Russ explains why he still prefers equities over bonds.

2013-06-25 Quality Can Deliver in Times of Rising Rates by Chris Marx, Kent Hargis of AllianceBernstein

As talk of an early Fed “tapering” triggered a sell-off in bonds, safe-haven equities have also suffered. Can low-volatility strategies survive rising rates and an unraveling of the safety trade, in which investors rushed headlong into safe assets no matter the cost? We say, yesbut you’ll need an active approach to navigate the near-term pitfalls.

2013-06-24 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

What is the Fed actually saying? The economy is recovering; the labor market is improving; short-term interest rates should remain low until at least 2015; the bond buying program will continue in its current form; any “winding down” (tapering) of purchases will be contingent on steady growth; the policymakers would be prepared to ramp up buying if conditions warrant. What have many investors been hearing/thinking?

2013-06-24 Quick Takes by Charles Lieberman (Article)

One of the issues being hyped these days is over the uncertainty surrounding Fed policy, which quite candidly, I don’t get. Short of laying out precise dates and amounts, the Fed has provided exceptionally detailed guidance that it will ease off the accelerator over the coming months, as long as the unemployment continues trending down. Downside risks have receded, the economy is improving, and extraordinary measures for policy are no longer needed. On the economy’s current trajectory, the Fed suggests it will no longer be engaged in QE by next summer.

2013-06-24 Market Internals Suggest a Shift to Risk-Aversion by John Hussman of Hussman Funds

Our primary attention here is on market internals. If they improve, I expect that we’ll adopt at least a moderately constructive view. Presently, however, my impression is that investors have shifted from risk-seeking to risk-aversion. This shift is not because of a hawkish Fed, but in spite of a dovish one - something more appears to be going on. It’s tempting to wait until a stronger and more specific “catalyst” emerges, but the financial markets have demonstrated repeatedly over time that market losses come first, and the catalyst becomes evident afterward.

2013-06-24 The Case for Rotating into (Select) Cyclical Sectors by Russ Koesterich of iShares Blog

Although defensive sectors are back to outperforming cyclical sectors amid June’s market volatility, Russ still believes there’s a strong case for preferring cyclicals or at least select cyclicals

2013-06-24 Despite Interest Rate Concerns, Muni Volatility May Offer an Entry Point by Jack Tierney of Invesco Blog

As we approach the midway point of 2013, the capital markets have many concerns: the potential end of quantitative easing (QE3), the slow rate of economic growth, the stubbornly high unemployment rate and the sorry state of affairs in both federal and state government finances. I won’t speculate on the eventual outcome of these issues, especially where politics is concerned. But I do think it’s valuable to look past the market’s fear and search for areas where smart investors can take clear-eyed action and benefit in uncertain conditions.

2013-06-24 A Timetable for Ending QE by David Kelly of J.P. Morgan Funds

In a press conference following this week’s FOMC meeting, Fed Chairman Ben Bernanke provided markets with a clearer understanding on how the Fed expects to phase out its current quantitative easing (QE) program. This timetable is justified both by economic progress and by the significant future costs which a too-large Fed balance sheet is likely to entail. Moreover, the timetable, while never previously explicitly outlined, should not have been a surprise to most market observers. Nevertheless, Mr. Bernanke’s words have been met by a sharp selloff across a wide range of financial a

2013-06-24 On the Radar: Let\'s Get Fiscal by Milton Ezrati of Lord Abbett

This is the second in a three-part series on longer-term issues that could either sustain or stall the current equity rally once stock prices fully capture their current, still-attractive values. The first in this series took up the prospective policy change by the Federal Reserve. This discussion considers future fiscal developments.

2013-06-24 How Does the Fed's Recent Action Compare to EM Central Banks? by Paresh Upadhyaya of Pioneer Investments

In an interview on Bloomberg Radio with Tom Keene and Ken Prewitt, I shared my thoughts on the Fed’s recent announcement that it would continue its QE efforts for the time being. If you missed the segment, I’ve summarized that conversation here for you.

2013-06-24 Tidbits, Employment and Quotes to Make You Say... by Gregg Bienstock of Lumesis

The Fed roiled the markets this week announcing the end of QE may be near if A few things to consider: we’ve heard this before, the “if” is a big “if” (see below for some insightful quotes from John Mauldin) and, remember QE was the extraordinary measure taken by the Fed after dropping rates no longer accomplished the Fed’s goals. This month, the Fed noted that the “downside risks to the outlook for the economy and labor market [has] diminished since last fall” while in May they noted that they “continued to see downside risks to the econ

2013-06-24 The Fed Unintentionally Lays an Egg by Bob Doll of Nuveen Asset Management

U.S. equities declined last week as the S&P 500 ended down 2.09%.1 The S&P suffered the first back-to-back one-day declines of more than 1% since last November. Global equities and bonds were also hit hard, with large sell-offs in emerging market assets, commodities and commodity currencies. Concerns about the fallout from dampened Fed policy accommodation are driving the weakness.

2013-06-21 Are Actively Managed Funds About to Gain an Edge by Francis Gannon of The Royce Funds

Although 10-year Treasury rates rose last month, the strong performance of certain cyclical sectors within small-cap looks to us like investors may be showing a bit more confidence in areas favored by many active investment approaches.

2013-06-21 Asia Brief: China's Energy Demand by Edmund Harriss, James Weir of Guinness Atkinson Asset Management

China has the world’s largest unconventional gas reserves, but these so far remain untapped despite its growing demand for energy. China is now trying to follow the example of the US, and the government has set aggressive targets for unconventional gas production. As the demand for transportation fuels grow over the next decade, this gas could be a major contributor to meeting that need.

2013-06-21 Outlook for the Global Bond Market by Nic Pifer of Columbia Management

The global economy continues to expand, but seems stuck on a moderate, below-trend trajectory. Lately, the story seems to be more about a growth rotation across regions than a clear-cut acceleration or deceleration at the global level. Looking to 2014, however, we still expect the global economy to accelerate to a more trend-like pace.

2013-06-21 Fed Tapering Won't Cause a Bond Market Armageddon by Russ Koesterich of iShares Blog

Even if the Fed scales back its pace of bond purchases later this year, Russ explains why investors shouldn’t expect rates to finish the year much higher than where they are today.

2013-06-21 The Fear Factor in US Equities by Grant Bowers of Franklin Templeton Investments

Fear is a powerful motivator. Whether it’s a saber-toothed tiger or investment risks, it’s hard to stay calm when confronted with a perceived threat. Fear of a 2008 2009 downturn repeat, even in spite of strong performance in the US equity market in the first half of the year, has kept many investors sidelined. Grant Bowers believes fear itself could be the biggest issue holding back many investors right now, noting that in his view, short-term volatility aside, the recent US market rally is based on supportive fundamentals which he thinks should have staying power.

2013-06-21 Finding Great Value In The Energy Sector by Chuck Carnevale of F.A.S.T. Graphs

This will be the second in a series of articles designed to find value in today’s stock market environment. However, it will be the first of 10 articles covering the 10 major general sectors. In my first article, I laid the foundation that represents the two primary underlying ideas supporting the need to publish such a treatise. First and foremost, that it is not a stock market; rather it is a market of stocks. Second, that regardless of the level of the general market, there will always be overvalued, undervalued and fairly valued individual stocks to be found.

2013-06-21 A Toast to Change by Hardy Zhu of Matthews Asia

In China, there is a distilled white liquor that is as revered as wine is in France. Known as China’s “national wine,” maotai, or "baijiu" in Chinese, has been celebrated for thousands of years. Having such a high-end branded white spirit on your banquet table is seen as a sort of status symbol or the hallmark of an auspicious occasion, such as a wedding or formal dinner. As recently as last year, some bottles were commanding more than US$300 each, with prices rising partly from the strong demand related to government and business sector events.

2013-06-21 ECRI Recession Watch: Weekly Update by Doug Short of Advisor Perspectives (dshort.com)

Ultimately my opinion remains unchanged: The ECRI’s credibility depends on major downward revisions to the key economic indicators -- especially the July annual revisions to GDP -- that will be sufficient to validate their early recession call. Of course, the July revisions will be quite controversial this year, with some major accounting changes and revisions in annual GDP back to 1929. So if we don’t get the downward revisions to support ECRI, they can always question the accounting changes in the revision process.

2013-06-21 Tapering the Taper Talk by Peter Schiff of Euro Pacific Capital

As usual the Federal Reserve media reaction machine has fallen for a poorly executed head fake. It has been fooled by this move many times in the past and for its efforts it has tackled nothing but air. Yet right on cue, it took the bait once more. Somehow the takeaway from Wednesday’s release of the June Fed statement and the Bernanke press conference is that the Central bank is likely to begin scaling back, or "tapering," it’s $85 billion per month quantitative easing program sometime later this year, and that the program may be completely wound down by the middle of next year.

2013-06-21 Weekly Economic Commentary by Team of Northern Trust

Today, the relative health of banks around the world goes a long way toward explaining differences in economic fortunes. As policy-makers seek ways to improve growth, addressing structural issues in their financial systems may be more effective than monetary or fiscal stimulus.

2013-06-21 Austerity is a Four-Letter French Word by John Mauldin of Millennium Wave Advisors

The France that I see as I look out from the bullet train today is far different from the France I see when I survey the economic data. Going from Marseilles to Paris, the countryside is magnificent. The farms are laid out as if by a landscape artist this is not the hurly-burly no-nonsense look of the Texas landscape. The mountains and forests that we glide through are glorious. It is a weekend of special music all over France, and last night in Marseilles the stages were alive and the crowds out in force.

2013-06-21 End of Quantitative Easing Tapers Asian Returns? Part I by Robert Horrocks of Matthews Asia

Historically Asian markets have done well in periods of a weaker U.S. dollar and faster growth, so lowering peoples’ growth expectations and causing them to bid up the U.S. dollar is about the worst combination for Asian equities historically. And I do not think that Asia’s relation to global markets has changed significantly enough to nullify this past relationship. However, there are reasons to think that the effects on Asia’s equity prices may be a little more muted this time.

2013-06-21 End of Quantitative Easing Tapers Asian Returns? Part II by Teresa Kong of Matthews Asia

While yields have come off their historical lows in the U.S. and Asia, there is substantially more room for rates to continue to rise. In terms of credit spreads, we have seen investment grade and high yield spreads widen. We believe that spreads will have some room to widen given a repricing of risk across the globe.

2013-06-21 Un-Addiction by Jeremy Boynton of Laureate Wealth Management

It appears that the Un-Addiction process has begun. This marks a significant shift for the world of investments. Volatility is on the rise. Interest rates are rising / normalizing. In such a fragile economy, it seems prudent to consider that the risks of economic recession are somewhat higher, even if they are still not the base case. As always, please feel free to contact me with any thoughts or questions.

2013-06-20 Fed Slightly More Optimistic by Brian Wesbury, Bob Stein of First Trust Advisors

The Federal Reserve made only slight changes to the text of its statement, but those it did make signal slightly more optimism. It said labor market conditions show “further improvement,” rather than “some improvement” and sees “diminished” downside risks for the broader economy.

2013-06-20 Municipals: A Glimpse of What's to Come? by Guy Davidson of AllianceBernstein

Federal Reserve Chairman Bernanke reiterated today that a healthier economy would prompt the Fed to end its unprecedented bond-buying program, which has kept yields artificially low. Speculation on this question over the last several weeks has caused a sharp bond sell-off and rising yields. But we don’t see this as the start of a rout for most municipal bonds.

2013-06-19 Every Major Asset Class In The World Is Overpriced by TrimTabs Asset Management of AdvisorShares

We wanted to share a part of a report that TrimTabs sent out over last weekend that received some attention on CNBC on June 10, 2013. Please let us know if you would like to receive a full copy of the report. TrimTabs research focuses on fund flows and float shrink. As you know, they believe the market is heavily influenced by what people and institutions are doing with their dollars. You can read more about the research behind float shrink at AdvisorShares.com.

2013-06-19 Emerging Markets: Reasons for Optimism by Team of Janus Capital Group

Emerging market equities are lagging developed markets this year. However, the underperformance creates an opportunity in our view, and does little to change our long-term outlook for emerging markets, where we believe some of the strongest growth opportunities lie.

2013-06-19 Efficient Pension Investing by Jared Gross of PIMCO

Adapting the Sharpe ratio to pension portfolios can help plan sponsors choose among a multitude of investment options designed to achieve the same goal. In our experience, the most significant efficiency gains have come from shifting from intermediate bonds to long-term bonds and introducing lower-volatility substitutes to equities.

2013-06-19 The Trouble with Tapering by Scott Minerd of Guggenheim Partners

Rising interest rates are beginning to put pressure on the recovery in the housing market, which will affect economic output. This reduces the likelihood that the Fed will taper QE in 2013, and could even lead it to signal a possible expansion or extension of the current policies.

2013-06-19 Changes in our Asset Allocation by Gregory Hahn of Winthrop Capital Management

We believe that valuations in publicly traded securities are stretched, and, although we have seen a move higher in interest rates and stocks have sold off from their high levels, investors are faced with choices that offer generally lower expected returns based on historic measures of return. Today, with the S&P 500 hitting 1650 and the yield on the 10 year US Treasury Note moving abruptly from 1.70% to 2.15%, there are generally two schools of thought on the minds of investors.

2013-06-19 Pride: In the Name of the US Manufacturing/Energy Renaissance by Liz Ann Sonders of Charles Schwab

Manufacturing/energy renaissance in the United States is a long-term theme; not a short-term trade but it’s underway. The list of companies "reshoring" to the United States are powerful and growing. Can the United States become a global exporting powerhouse?

2013-06-19 Managing Equity Risk: Some Rules for the Road by Kurt Feuerman of AllianceBernstein

Under the surface of May’s strong equity returns were major shifts in sector leadership, notably a rotation from defensive to traditional cyclical sectors. Given the market’s tendency to change gears, it helps to be flexible in managing portfolio risk. In fact, it should be a daily exercise.

2013-06-19 3 Reasons to Consider Spanish Stocks by Russ Koesterich of iShares Blog

While Europe is not out of the woods yet, Russ is less concerned about the Spanish market.

2013-06-19 Dialing Down by Scott Brown of Raymond James

The financial markets have gyrated in recent weeks on fears that Federal Reserve policymakers will taper the rate of asset purchases. The rise in long-term interest rates and increased market volatility are hard to justify based on the discussion of possible changes in the Fed asset purchase program alone. No change in monetary policy is expected at this week’s Federal Open Market Committee meeting.

2013-06-19 The Game of Risk by Jeffrey Saut of Raymond James

Ten years ago the COMP was changing hands around 5132. It is now trading at 3423 for a 13-year loss of some 33.3%. Meanwhile, over that same timeframe, the earnings of the S&P 500 are up 83%, nominal GDP is better by some 57.6%, and interest rates are substantially below where they were back then. If you are a college professor such statistics do not “foot” with your teachings because professors tend to believe stock returns are all about earnings and interest rates. I concur, but would add the caveat, “That is if you live long enough.”

2013-06-18 GMO’s Montier on Why to Hold Cash by Robert Huebscher (Article)

Central bank policies have distorted markets to such a degree that investors are devoid of any buy-and-hold asset classes, according to James Montier. But according to Richard Bernstein, the flood of liquidity unleashed through quantitative easing (QE) now offers investors compelling opportunities.

2013-06-18 Promise to Be Irresponsible by Jeremie Banet, Mihir Worah of PIMCO

We believe the recent rise in real rates and fall in inflation expectations could jeopardize the U.S. economic recovery. We also believe these are a direct result of uncertainty about the Federal Reserve’s ultimate goal. Low real yields accompanied by sufficient nominal growth are the necessary prescription for a still ailing economy.

2013-06-18 American Eagle Outfitters Inc: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of American Eagle Outfitters Inc through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-06-18 High Yield Market Overview May 2013 by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch High Yield Master II Constrained Index (the “Index”), was down 0.53% for the month of May, as fears of eventual Fed tapering dominated investor sentiment and put upward pressure on Treasury yields. The end result was the most substantial setback in a year for the high yield market. Despite the fears of rising rates, mildly improving economic conditions, healthy corporate earnings/balance sheets, and reduced tail risks and stagnant global growth/low inflation continue to benefit the high yield market.

2013-06-18 Newsletter June 2013 by Harold Evensky of Evensky & Katz

Do you remember hiding under the sheets listening to radio when your parents thought you were asleep? If so, I have an unbelievable collection of all the old-time radio shows we listened to when we were kids, if you have about six months’ spare time. Find your favorite, click on it, and it lists literally hundreds of episodes you can re-live.

2013-06-18 Unconstrained Bond Funds Fail to Deliver by Chris Maxey, Ryan Davis of Fortigent

There have been an incessant number of articles in the past year addressing a “Great Rotation” by investors the seismic shift in asset allocation predicted to result from a transition to a rising rate environment. Individual investors “spoiled” by a 30-year secular decline in interest rates, it is thought, will run to new alternatives in the face of this structural headwind for a significant chunk of their portfolios.

2013-06-18 The Snowden Affair by Bill O'Grady of Confluence Investment Management

Over the past two weeks, revelations published in The Guardian and the Washington Post reported on a massive data gathering program that the National Security Agency (NSA) has been operating since 2001. The NSA, created during the Truman administration, mostly monitors signal intelligence and is the primary cryptographer for the U.S. government.

2013-06-18 Taking Seniority: Looking to Bank Loans in Uncertain Markets by Elizabeth (Beth) MacLean of PIMCO

Bank loans are senior secured loans to non-investment-grade corporations. They are floating rate instruments, secured by the collateral of that company and senior in the capital structure. Bank loans can be a more defensive way for investors to move into the high yield space, due to the collateral and their senior position. While we have seen yield spreads tightening among loans, on a relative basis we do think loan valuations still look attractive. PIMCO’s investment process helps us seek these attractive opportunities while managing risk.

2013-06-18 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stock prices came under pressure last week over the strength of the Japanese Yen versus the dollar which led to a large decline in stock prices there as well as the misplaced fears domestically that the Federal Reserve Board will pull forward its timetable for “tapering” its quantitative easing policy.

2013-06-18 Fed Zombification by Cliff Draughn of Excelsia Investment Advisors

The enthusiasm of our culture for Zombies is estimated to contribute a tidy $5 billion dollar a year to GDP, and that doesn’t even include the too-big-to-die zombie banks. In my opinion, the acute interest in zombies and horror (and escapism in general) says something about our country’s mental health.

2013-06-17 Recent Volatility in the Foreign Exchange Market and the Strengthening Yen by Team of Nomura Asset Management

There are two issues underlying the increased currency market volatility; depreciation of the Yen may have resulted in worldwide competitive devaluation and concern about early tapering of quantitative easing (QE) in the U.S. appears to have triggered currency depreciation for countries that are running current account deficits.

2013-06-17 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

When Ben Bernanke talksactually he doesn’t even have to talk to move the markets. For the past few weeks, investors have speculated about the next Fed moves and the possibility of a “tapering” of the $85 billion a month bond purchase program, perhaps as early as next week. Markets have been jittery (to put it mildly) as global stocks have fallen (thanks Japan) and international bond rates have been on the rise. Investors began over-analyzing each economic release, each comment by a Fed official, each forecast by a regulatory body or related agency.

2013-06-17 Sector Distortions Can Be Costly in Passive Investing by Joseph Paul, Kevin Simms of AllianceBernstein

Passive investing strategies that emulate an index have become increasingly popular. But passive investing can go awry when sector concentrations leave investors exposed to unintended risks.

2013-06-17 The Price of Distortion by John Hussman of Hussman Funds

Corporate profits have benefited in recent years from enormous fiscal distortions that have bloated margins 70% above their historical norms. Stock prices have benefited in recent years from enormous monetary distortions that have suppressed interest rates and encouraged investors to “reach for yield.” Combining those effects, investors have been encouraged to chase stocks, placing elevated price/earnings multiples on already elevated earnings. Investors who value stocks on the basis of these distortions are likely to discover in hindsight that they have paid a very dear price.

2013-06-17 2013 Midyear Economic Update -- Another False Dawn? by Paul Kasriel of Econtrarian, LLC

We’ve seen this movie before since midyear 2009, haven’t we? The pace of economic activity begins to quicken and it looks as though a full-throated cyclical expansion might finally be at hand, only to have the economy slip back into the doldrums. Nominal private domestic spending on currently-produced goods and services grew in the first quarter at an annualized rate of 5.5% compared to 3.4% in the previous quarter. Consumer spending accelerated, housing sales picked up and business spending on equipment and software continued to grow at a healthy pace.

2013-06-17 Anecdotal Insights into the Housing Market by Charles Lieberman (Article)

The current obsession is over when the Fed will begin to withdraw some of its quantitative easing policy and how this will affect markets. This is adding some volatility back into the markets, even though this change in policy has been expected for a long time. Since Fed policy is likely to change only gradually and will do little to tip the valuation balance between stocks and bonds for quite some time, we see little reason to temper our fundamentally bullish stance towards stocks and bearish view of bonds.

2013-06-17 Tidbits, Stabilization Funds, Rearview Mirrors and Magic 8-Balls by Gregg Bienstock of Lumesis

This week I decided to try something new think of it as the appetizer, dinner and dessert. The appetizer is our section of Tidbits, a look at some headlines and a thought or two around the same. The meal is where we take a deeper dive into a subject or two and dessert is where we round things out what’s new, what’s coming up and the like. If you don’t like the new format, let me know.

2013-06-17 Keynesian Model Blew It Again by Brian Wesbury, Bob Stein of First Trust Advisors

If there’s one economic conclusion we can make from recent data, it’s that the Keynesian model has failed - again.

2013-06-17 Sloppy Markets Continue by Bob Doll of Nuveen Asset Management

Last week the S&P 500 declined 0.97%,1 while many global equity averages fell for the fourth week in a row. Early in the week, discussion of tapering by the Federal Reserve was a big headwind, as discomfort over a slower pace of policy accommodation rippled through global markets. Thursday’s rally was driven by thoughts that tapering fears may be overdone. Markets were also helped by better employment and consumption data.

2013-06-17 Equities: As Companies Reinvest, the Long-Term View Turns Bullish by Ron Sloan of Invesco

This is the third in a three-part series on the economy, earnings and equities. The first two posts examined the US Federal Reserve’s gross domestic product (GDP) goals and how they set the stage for businesses to increase their capital expenditures. This post discusses the US manufacturing resurgence and the outlook for equities.

2013-06-15 Economists Are (Still) Clueless by John Mauldin of Millennium Wave Advisors

The economic forecasts of mainstream economists are quite positive, if not enirely optimistic, reflecting the current data. Should we not take heart from that? Alas, no. This week we look at some of our recent musings on that topic, triggered by a letter from a very serious economist who took umbrage when I wrote disparagingly about economists and forecasting a couple months ago.

2013-06-14 The Evolution of Emerging Market Corporate Bonds for U.S. High-Grade Fixed-Income Investors by Todd Kurisu, Thomas Brennan of William Blair

Emerging market (EM) investment-grade corporate bonds are an important and growing segment of the core fixed-income universe. These bonds have evolved to be more like U.S. investment-grade corporate bonds than high-yield or traditional emerging market debt (EMD) securities. This sector has demonstrated favorable risk, return, and diversification benefits in the context of a broad market fixed-income portfolio. Today’s fixed-income investors must have a framework for evaluating new opportunities subject to prudent risk management

2013-06-14 Going to a Digital Extreme in China by Frank Holmes of U.S. Global Investors

In its shift toward a consumption-driven economy, China has been embracing digital technology at rates that dwarf those of many developed countries. The Chinese have been scooping up smartphones, accessing the internet and consuming goods from online retailers at an incredible pace. We believe the world needs to quickly adapt to China becoming a major player in the digital marketplace, as this trend is in the early stages of exciting growth.

2013-06-14 Looking for Growth? Go Small and Global by Liliana Castillo Dearth, Bruce Aronow of AllianceBernstein

In the hunt for growth in today’s low-growth world, up-and-coming small- and mid-sized companies are a good place to start. But you need to look everywhere, from Indiana to Indonesia.

2013-06-14 Searching For Value And Finding It In Today's Market - Sector By Sector by Chuck Carnevale of F.A.S.T. Graphs

“I think the market is overvalued now,” is a common refrain that I’m hearing from most of the individual investors I have recently been coming in contact with. Consequently, many of these same investors are also currently eschewing investing in common stocks because of that fear. Although I do not agree that the market is currently overvalued, I believe I understand why so many people think it is. Individual investors currently believe the market is overvalued because of two common fallacies that at first blush appear to be logical.

2013-06-14 The Sustainability of Managed Futures Returns by Robert Keck of 6800 Capital

Many investors have begun to question the efficacy of an investment in managed futures given the most recent two years of negative performance for the industry as a whole at a time when U.S. equity prices have been achieving multi‐year highs. The concern is not so much the magnitude of the losses incurred by the managed futures industry during this period; in many cases they are relatively small in comparison to the size of the drawdowns experienced by many other asset classes such as equities, real estate, fixed income, etc., during peak periods of market stress.

2013-06-14 ProVise Bullets by Ray Ferrara of ProVise Management Group

Six years ago, in 2007, the trustees of Social Security projected that Social Security would run out of money, i.e., have a negative balance, in the year 2041. At the end of last month the trustees updated this projection and indicated that the trust fund backing the payment of Social Security would be zero by 2033. A zero trust fund does not mean the payment of Social Security benefits would also go to zero, but would drop to 77% of their originally promised levels through 2087. Is any of this getting Congress’s attention? (Source: Social Security Trustees)

2013-06-14 Japan\'s Crossroads by Jesper Madsen of Matthews Asia

The tone on investing in Japan has changed. In the six months leading up to May 22, the Tokyo Stock Price Index rose 66% in local currency terms, prompting investors to ask themselves the unthinkablewhy have I not allocated more to Japanese equities? During the same time the yen depreciated about 20%, giving Japan’s exporters some much-needed breathing room. However, while the financial markets have given the nod of approval to the economic policies of Prime Minister Shinzo Abe, or “Abenomics,” Japan may possibly be missing a learning opportunity.

2013-06-14 Which Way for Bonds? Mapping a Path Forward by Bill Gross of PIMCO

In 1980, the Federal Reserve, led by Paul Volcker, tightened the quantitative noose to tame double-digit inflation, fueling an unprecedented tailwind for bond prices. Thirty years later we find ourselves at the other extreme, as central banks print money in the trillions of dollars to stimulate economic growth, and inflation is abnormally low. While we are not likely to see a repeat of that type of bull market any time soon, we also do not believe we are at the beginning of a bear market for bonds.

2013-06-14 Global Small Cap Investing: Unconstrained Opportunities by Blake Pontius of William Blair

Equity asset allocations have become more global in recent years as investors have sought to reduce the long standing home country bias in their portfolios. Further propelling this trend has been the growing aversion to traditional asset class structures and indeed, conventional asset class definitions, in the aftermath of the 2008-2009 global fi nancial crisis. Against this backdrop, global equity strategies have continued to garner asset fl ows in Europe and have slowly begun to gain traction in the U.S. after years of tepid demand.

2013-06-14 A Sweet Find on an African Adventure by Frank Holmes of U.S. Global Investors

The heart of Africa has been beating strong in recent years due to elevated commodity prices and resilient domestic demand, despite the global economic slowdown. Among the sub-Saharan African countries, Sierra Leone was the fastest growing country last year, according to the World Bank. Its economy experienced growth that is as rare today as Fancy Red diamonds. GDP increased a whopping 18 percent.

2013-06-14 ECRI Recession Watch: New Update by Doug Short of Advisor Perspectives (dshort.com)

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.3, up slightly from last week’s 131.0 (revised from 130.9). The WLI annualized growth indicator (WLIg) rose to 6.6% from 6.4% last week (revised from 6.3%).... Two weeks ago the company took a new approach to its recession call in its most recent publicly available commentary on the ECRI website: What Wealth Effect? More...

2013-06-13 China\'s Services Revolution by Sherry Zhang of Matthews Asia

Historically, China has focused on infrastructure and heavy industries at the expense of the service sector. Two years ago, service industries in China, such as hospitality, advertising, insurance and tourism, contributed a mere 43% of the country’s GDPwell below that of more developed economies like the U.S. and U.K, which saw nearly 80%. This month Sherry Zhang takes a look at the more balanced growth China will need in order to continue its economic trajectory over the next decade.

2013-06-13 The Instability of Stability by Scott Minerd of Guggenheim Partners

Hyman Minsky’s scholarship holds valuable lessons for the current dynamic in the economy. The Fed, via QE, continues to induce speculative buying in the Treasury market, which is having the effect of destabilizing a number of asset classes.

2013-06-13 Securing a Lasting Economic Recovery by Team of Northern Trust

According to the National Bureau of Economic Research, business expansions have averaged 59 months in the past 11 business cycles. June 2013 marks the fourth birthday of the current U.S. economic recovery, and this one seems very likely to be above average on this score.

2013-06-12 Curtiss-Wright Corp: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

Curtiss-Wright Corp (CW) is an innovative engineering company that provides highly engineered, critical function products, systems and services in the areas of flow control, motion control and surface treatment technologies to the defense, energy and commercial/industrial markets. The legacy company of Glenn Curtiss and the Wright brothers, Curtiss-Wright has a long tradition of design and manufacturing innovation and prides itself on long-standing customer relationships.

2013-06-12 Who Is Your Daddy and What Does He Do? by Cole Smead of Smead Capital Management

In the 1990 movie Kindergarten Cop, Arnold Schwarzenegger portrayed a police officer who goes undercover as John Kimble, a kindergarten teacher in Astoria, OR. Early in the movie, Mr. Kimble tells his class they are going to play a game called “Who is your daddy and what does he do?” After a myriad of answers, one of the children asks him if his ensuing headache is a tumor. Kimble replies “It’s not a tumor.” We at Smead Capital Management believe this was not only one of the more comical moments of Kindergarten Cop, but also a great question to ponder in today&rs

2013-06-12 Weekly Market Commentary by Team of Tuttle Tactical Management

This past week has been volatile. Friday’s jobs number ended up being perfect, not to good, not too bad, causing a big market rally. It has to be noted that the two day rally also came when the market was oversold and was a bounce off of the S&P 500’s 50 day moving average.

2013-06-12 Silver Lining: Fed's “Tapering” Signals Stronger Economy by Eric Takaha of Franklin Templeton Investments

The Federal Reserve’s warning that it planned to scale back purchases of Treasuries sparked a storm on Wall Street, bringing instability to what had been a pleasant May in the US markets. Almost lost in the noise, however, is a silver lining: the Fed thinks the economy may be healthy enough to fly on its own.

2013-06-12 Cyclical Stocks Appeal After Defensive-Led Rally by Vadim Zlotnikov of AllianceBernstein

This year’s equity market rally was initially led by defensive stocks, as macroeconomic concerns persisted despite improved risk appetite. With valuations in these sectors looking stretched and cyclically oriented stocks starting to rebound in May, is a bigger shift starting to unfold?

2013-06-11 Gundlach – Don’t Sell Your Bonds by Robert Huebscher (Article)

Don’t sell your bonds just yet, according to Jeffrey Gundlach. Global economic growth is slowing, he said, and the U.S. will be competing for a larger slice of a shrinking worldwide pie. A weaker economy dims the prospects for higher interest rates. The benchmark 10-year Treasury yield – currently 2.08% – will be 1.70% by the end of the year, according to Gundlach, providing profits for holders of long-term bonds.

2013-06-11 Best Practices for Business Development by Beverly Flaxington (Article)

We recently hired a salesperson to find new opportunities for our advisory firm. It’s not working out very well. My advisors don’t want to work with him because the commission I have proposed would take away from their pocketbook. How should we successfully integrate a salesperson?

2013-06-11 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

The last few weeks have seen volatility emerge as concerns about the Fed’s policy of quantitative easing and the timing of changing it have taken center stage.

2013-06-11 May Flowers Bring Best Equity Market Since 1997 as Bonds Wilt by Douglas Cote of ING Investment Management

The S&P 500 has opened 2013 with its best year-through-May return since 1997. U.S. Treasury prices, in contrast, plunged last month on talks of Fed “tapering”. Don’t expect the reflation in bond yields to continue in the near term, as the Fed continues to struggle in its current war against deflation. Fundamental business activity not quantitative easing is the wellspring of sustained economic growth, creating lasting sales and profits. For investors, the two biggest self-defeating fears continue to be 1) the fear of buying equities and 2) the fear of buying bonds.

2013-06-11 How Asia's Growth Transitions and Policy Experiments Are Shaping the Global Outlook by Ramin Toloui, Tomoya Masanao, Robert Mead of PIMCO

Our view is that Chinese GDP growth will downshift, averaging 6%-7.5% for the next five years as net exports and investment are reaching their limits. In Asia, Japan is perhaps the economy closest to the “T-junction” described in PIMCO’s global secular outlook: The destination of Japan’s journey looks increasingly uncertain, with multiple potential outcomes that could stabilize or destabilize the global economy and markets.

2013-06-11 The Root System by Michael Kayes of Willingdon Wealth Management

Last week my beloved peach tree inexplicably toppled over, destroying what was certain to be a bountiful crop. It was a favorite hobby of mine, to spend hours pruning, thinning, fertilizing, and spraying the height-challenged tree in order to produce a couple bushels of scrumptious peaches in early July. Yet this year I goofed. My plan for growth was flawed in that I failed to diagnose an infestation of peach borer which was weakening the root system. Once the internal strength of the tree was compromised, the tree was doomed.

2013-06-10 China: As Growth Slows, the Need for Reform Grows by John Greenwood of Invesco

The world is closely monitoring the status of China’s economic growth rate. The country’s economy began to rapidly grow in the late 1970s, and it had been growing at about 9% or 10% per year, until the global downturn of 2008 and 2009. During the global financial crisis, the economy slowed abruptly. Since then, it has not been able to get back to that 10% growth rate.

2013-06-10 Emerging Market Opportunities by Patrick OShaughnessy, Ashvin Viswanathan of OShaughnessy Asset Management

Emerging market equities present both unique opportunities and also unique risks. Unlike more mature economies, emerging markets’ economies have the potential for impressive growth rates. But emerging markets also have the potential for damaging socio-economic and political instability. Equity returns in these countries are often impressive, but to earn these returns investors must deal with considerably higher volatility than in the developed equity markets.

2013-06-10 Worry de Jour by Charles Lieberman (Article)

The current obsession is over when the Fed will begin to withdraw some of its quantitative easing policy and how this will affect markets. This is adding some volatility back into the markets, even though this change in policy has been expected for a long time. Since Fed policy is likely to change only gradually and will do little to tip the valuation balance between stocks and bonds for quite some time, we see little reason to temper our fundamentally bullish stance towards stocks and bearish view of bonds.

2013-06-10 2009 vs. 2013 by John Hussman of Hussman Funds

One of the most strongly held beliefs of investors here is the notion that it is inappropriate to “Fight the Fed” reflecting the view that Federal Reserve easing is sufficient to keep stocks not only elevated, but rising. What’s baffling about this is that the last two 50% market declines both the 2001-2002 plunge and the 2008-2009 plunge occurred in environments of aggressive, persistent Federal Reserve easing.

2013-06-10 Growth in “GDP”, A Quick Look at Droughts (Yes, Drought) and Pension Data by Gregg Bienstock of Lumesis

I’m simply not going to take the bait and respond to the Employment Situation report. Regular readers know my thoughts around this monthly report that garners way too much attention (take a look back at the May 6 commentary and others around employment data). This week I focus on how and where State economies are growing, remind you of the availability of some critical data points and pass on some observations and opportunities around Pension data.

2013-06-10 Emerging Markets Mid-Year Pulse Check by Mark Mobius of Franklin Templeton Investments

Global economic growth hasn’t been terribly inspiring so far in the first half of the year, but many investors have nevertheless been inspired to pour more assets into the equity markets, some of which have surged to record highs. As we hit the mid-year point, now seems like a good time to take a pulse check of emerging markets and assess our prognosis.

2013-06-10 DC Solutions: Adding Global Bonds to Target-Date Funds by Alison Martier, Seth Masters of AllianceBernstein

Within US defined contribution (DC) target-date funds (TDFs), whether we’re considering customized TDFs for larger plans or packaged solutions for smaller plans, our research shows that having a bond allocation that is not US-centric can lead to better outcomes and enhance the effectiveness of the glide path.

2013-06-10 What\'s Capping Capital Spending? by Milton Ezrati of Lord Abbett

Now that housing has at last begun to make a contribution to the economic recovery, the pace of capital spending seems to have ebbed. To some extent, the slowed pace of such spending reasonably reflects the economy’s still-more-than-ample production capacity. Reasonable as this seems, the slowdown does come as a disappointing change from the unusually strong growth earlier in the recovery. Now, looking forward, the prospect is for this slowed growth to continue, for a while at least.

2013-06-08 Banzai! Banzai! Banzai! by John Mauldin of Millennium Wave Advisors

In practice it may be harder for Japan to grow and generate inflation than it might be for other major nations. Today we’ll focus on Japanese demographics. While the letter is full of graphs and charts, it does not paint a pretty picture. The forces of deflation will not go gently into that good night.

2013-06-07 Filling in the 2Q13 Picture and Looking Ahead by Scott Brown of Raymond James

We’re now two-thirds of the way through 2Q13. However, the second quarter economic picture is still sketchy. We have some data for April, which is subject to revision. Figures for May will begin arriving this week. Despite the cloudy near-term economic picture, the financial markets are looking ahead to better growth in the second half of the year.

2013-06-07 Never on a Friday by Jeffrey Saut of Raymond James

Over the past 10 years there have been many Hindenburg Omens triggered, but to my knowledge only one of them has actually worked (The Wall Street Journal 8/23/2010 article states the accuracy is only 25%, looking at the period from 1985). Actually, the last Hindenburg signal (December 2012) proved to be an exceptionally good point to buy stocks. I expect this “Omen” will prove to be yet another false signal because the McClellan Oscillator is just about as oversold as it ever gets.

2013-06-07 Why It Pays to Invest in Emerging Market Dividend-Payers by Frank Holmes of U.S. Global Investors

An unexpected change of heart happened in May that you might not have heard about. After years of resisting any path other than its rigorous course, Germany announced it is backing off from pure austerity and is now planning to spend billions of euros to stimulate the economies of Europe.

2013-06-07 Own These World's Leading Brands And Never Fear A Recession Again by Chuck Carnevale of F.A.S.T. Graphs

If you were to take the essence of most people’s beliefs and understanding about investing in common stocks, or the stock market for that matter, and turn it into a movie, I believe it would have to be labeled under the category science fiction. In other words, in my experience, most of what people believe about common stocks or the stock market is predicated more on opinion than on fact. But even more importantly, it is predicated on opinions that are driven by strong emotional responses.

2013-06-07 3 Reasons Not to Turn Away from Emerging Markets by Russ Koesterich of iShares Blog

Is it time to abandon underperforming emerging markets in favor of bets closer to home? Clearly “no,” says Russ and he explains why.

2013-06-07 Strategies for a Runaway Market by Robert Isbitts of Sungarden Investment Research

As stock markets around the world continue their surge, investors should be doing what investors should always be doing AVOIDING COMPLACENCY.

2013-06-07 Why Don't Investors Understand Emerging Markets? by Tassos Stassopoulos of AllianceBernstein

Big is not necessarily beautiful when it comes to forecasting emerging markets. In fact, the kind of big numbers that are often bandied around can actually make it harder for investors to understand what’s really going on. We think there is a better way.

2013-06-07 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The change at the top of the Bank of England comes at a delicate time. The May U.S. employment report will not sway the Fed either way. Eurozone and China PMI reports - interpret with caution.

2013-06-07 As Economy Heats Up, Will Commodities? by Frank Holmes of U.S. Global Investors

Don’t wait for the Fed to officially raise rates, as research shows that investors get the most benefit from materials and energy stocks by getting in now

2013-06-06 But We Want Goldilocks-Like Growth by Blaine Rollins of 361 Capital

While the equity markets would enjoy a bit of the great rotation out of the 20+ year outperformance in bonds and into equities, the move in May has been too much, too quick for even equity investors to stomach. So while the Long Treasury ETF (TLT) fell -6.8% in May, the size of the move even scared investors in REITs (IYR), Junk Bonds (JNK/HYG), and Utilities (XLU).

2013-06-06 The REAL Great Rotation by Richard Bernstein of Richard Bernstein Advisors

The phrase "Great Rotation" has come to mean a sizeable shift in asset allocation from bonds to stocks. We, too, believe that stocks are likely to secularly outperform bonds, but we don’t think that is the "great rotation" about which investors should be concerned.

2013-06-06 The Fed's Dilemma by Scott Minerd of Guggenheim Partners

Market volatility is rising as the Fed continues with its asset purchase program. The economy also appears increasingly vulnerable to a rise in interest rates, which would have an adverse effect on housing in particular.

2013-06-06 The Risk of Government Policies and the Rationing of Retirement by Jason Hsu of Research Affiliates

In late April, a group of leading economists and investment practitioners assembled in La Jolla, California, for Research Affiliates’ 2013 Advisory Panel. Our theme this year touched on two topics that have been front-and-center in recent public debates: the risk of government intervention and the potential rationing of retirement.

2013-06-06 A Longer Time Horizon Can Be an Advantage for Value Investors by Mark Cooper of PIMCO

We believe that given challenging prospects for attractive investment returns, the value premium could become even more important in the years ahead. Even in an uncertain environment like we are currently experiencing, we believe the merit in owning equities for the long term is unchanged: We want to participate as an owner in a growing, profitable business.

2013-06-06 The Wisdom of Crowds by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners

Are markets efficient? This is a debate that has been on-going for decades. In one corner you have the proponents of the Efficient Markets Hypothesis. In their world alpha does not exist, or at the very least it is not sustainable. In the other corner you have the supporters of behavioural finance who see investors as being mostly irrational and suffering from all sorts of behavioural biases which create alpha opportunities galore. Out of this long lasting stand-off a new paradigm is emerging called the Adaptive Markets Hypothesis which aims to reconcile the two.

2013-06-06 More Than a Feeling by Team of AdvisorShares

Tangible signs of fundamental weakness are appearing everywhere, yet financial market participants are simply choosing to ignore these signs. There remains a significant disconnect between the real economy and financial markets. Read this paper by Peritus Asset Management to learn how to navigate the weak fundamental picture in what they believe to be the beginning of a 15-20 year positive technical backdrop, which will put yield generating assets, such as high yield bonds, in the sweet spot.

2013-06-06 Inflation Is Still the Lesser Evil by Kenneth Rogoff of Project Syndicate

The world’s major central banks continue to express concern about inflationary spillover from their recession-fighting efforts. That is a mistake: given the political, social, and economic risks of continued slow growth, policymakers should encourage a sustained burst of moderate inflation.

2013-06-06 June Economic Update by Justin Anderson of Cambridge Advisors

Stocks sold off on the last day of the month but still managed to finish higher in May with the large-cap S&P 500 index up 2.2% and the small-cap Russell 2000 up 4.0%. International stocks finished the month lower with the MSCI EAFE index down -2.9%. Bond prices came under significant pressure as yields rose after Fed Chairman Ben Bernanke hinted that Quantitative Easing may be tapered off sooner than the market expected. The 10-Year US Treasury Yield rose sharply to end the month at 2.16%.

2013-06-05 Certainty, Rates and the Year Ahead by Peritus Asset Management of AdvisorShares

The government tells us not to worry, as the Federal Reserve comes to rescue with QE-Forever. Certainty with fiscal policy doesn’t seem to change the demand equation and cheapened money doesn’t do anything if demand isn’t present. Treasury rates remain at 0% for the foreseeable future making yield hard to find. Read this position paper by Peritus Asset Management scrutinizing how all this has come to pass and what indicators are foretelling the near future effects on the high yield asset class.

2013-06-05 Fed Advisory Council Drops A Bombshell by Gary Halbert of Halbert Wealth Management

Last Friday afternoon, the Fed released the minutes from a May 17 meeting of the Federal Advisory Council (FAC). The Council is a group of 12 influential bankers from across the country who meet periodically and give the Fed Board of Governors input regarding the economy, moneyary policy, etc. The minutes from the latest FAC meeting clearly indicate that the bankers are becoming increasingly uncomfortable with the Fed’s unprecedented “quantitative easing” policy. To my knowledge, no one in the mainstream media has reported on what you will read here today.

2013-06-05 Broader Use of Bail-Ins Could Spur a Revival of Asset-Backed Securities in Europe by Felix Blomenkamp of PIMCO

We believe ABS issuance will likely increase in Europe as eurozone developments and possible future bail-ins potentially result in higher risk premiums and funding costs for European banks. Although regulators are playing catch-up, capital markets are making room for a more credit-intensive product, helping to lead the way for a resurgence in ABS. Due to concerns over the security of bank deposits, investors may look to the ABS sector, which offers collateralized bonds that are free of bail-in risk.

2013-06-05 Driving with the Doors Off, Part II by Doug MacKay, Bill Hoover, Mike Czekaj of Broadleaf Partners

About ten months ago, I wrote about my new bulldozer-yellow Jeep Wrangler, comparing the sensation of Driving with the Doors Off to investing in the New Normal, or as I like to call it, a “slow growth for as far as the eyes can see” environment. While the pavement had always been a mere twelve inches beneath my feet, Driving with The Doors Off made the experience far more real, far more alive, and far more aware of the risks that had always been there. In the New Normal it feels like we are always and everywhere just one small pothole away from the next economic disaster.

2013-06-05 Harleys and Leather Jackets by Jeffrey Bronchick of Cove Street Capital

We are just about done with Proxy Season and with summer in full swing, there is nothing more that we would like to do than kick back and indulge in the 75 pages of shame, greed, ignorance, and political correctness-with only the occasional bright light of shareholder friendly corporate governance-that make up SEC Form 14A, aka the Proxy Statement. I would postulate that this document remains an underrated and under-read part of the investment puzzle as it is the factual record of management’s incentives.

2013-06-04 Woody Brock’s Challenge to Krugman and the Keynesians by Bob Veres (Article)

A polarizing choice confronts policymakers. Either they side with Paul Krugman and the Keynesians, and advocate for aggressive fiscal measures to stimulate America’s economic growth rate, or they align themselves with the so-called austerians, who argue that budget cutbacks are necessary to eliminate deficits. A third option is rarely discussed. Its most outspoken proponent, Horace “Woody” Brock, says that America should continue to borrow, but spend wisely – and develop new policy instruments that would eliminate asset bubbles and stimulate economic activity.

2013-06-04 Vincent Reinhart on Debt and Growth in the U.S. and Japan by Robert Huebscher (Article)

High debt levels translate to slower growth, according to Vincent Reinhart. That conclusion will be disheartening to those who jumped on the errors several University of Massachusetts scholars found last month in Carmen Reinhart (Vincent’s wife) and Ken Rogoff’s research. But Vincent Reinhart is the author, along with his wife and Rogoff, of a study published in 2012 that documented the degree to which high debt-to-GDP levels correlate with slower economic growth in developed countries.

2013-06-04 Exposing False Claims about Socially Responsible Investing A Response to Adler and Kritzman by Adam M. Kanzer (Article)

When the Domini 400 Social Index was launched in 1990, the common wisdom said that if you limited your investable universe by anything other than financial factors, you would limit your returns. The performance of the index has proven that assumption to be false. Nevertheless, the assumption lives on.

2013-06-04 Employment Data, “State of the States” and Interesting Quotes Worth Exploring by Gregg Bienstock of Lumesis

I simply can’t seem to shake the notion that some basic issues continue to exist despite some of the favorable headlines and discussions with some pretty smart people who think the worst is behind us (I do subscribe to the view that it is critical to seek out views contrary to my own to keep me in check). During these discussions or when revisiting their basis, I can’t help but revert back to the data. After all, facts are facts.

2013-06-04 Wounded Heart by Bill Gross of PIMCO

Joseph Schumpeter, the originator of the phrase “creative destruction,” authored a less well-known corollary at some point in the 1930s. “Profit,” he wrote, “is temporary by nature: It will vanish in the subsequent process of competition and adaptation.” And so it has, certainly at the micro level for which his remark was obviously intended. Once proud, seemingly indestructible capitalistic giants have seen their profits fall short of “everlasting” and exhibited a far more ephemeral character.

2013-06-04 Stocks: How Long Will the Bull Run? by Milton Ezrati of Lord Abbett

Conditions appear favorable for the next 12 to 24 months. What could change the market’s prospects in the longer term? Here’s a look.

2013-06-04 Caught Between Slow Growth and the End of Easy Money by Russ Koesterich of iShares Blog

Two contradictory investor concerns are to blame for a recent pickup in market volatility. Russ explains which of the concerns is premature and what that means for investors.

2013-06-04 Finding Healthy Stocks in Europe's Troubled Landscape by Tawhid Ali of AllianceBernstein

European equity markets continue to face severe stress as the continent struggles to contain fallout from the sovereign-debt crisis. Yet this seemingly toxic environment is creating some exceptional investment opportunities in relatively healthy companies that can control their own destinies.

2013-06-04 Equities Hit Pause by Bob Doll of Nuveen Asset Management

Stocks and other risk assets struggled last week, with the S&P 500 declining 1.11%.1 Equities finished lower on Friday, the final trading session of May. The decline trimmed May’s gains and sealed the second consecutive weekly decline for U.S. equities. The S&P increased 2.34% for the month and has gained 4.31% this quarter and 15.37% for the year.1

2013-06-03 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

And the streak continues. (The monthly winning streak that is.) While stocks have drifted lower each of the past two weeks, the Dow has surged for six straight months and the S&P 500 now stands at seven and counting. In fact, much of the week’s losses came in the final hour(s) of trading as investors took profits for the month and positioned their portfolios for the summer. No news from the Fed yet, but the bond debates continue. Housing remains strong on the economic front, but next week’s data will go a long way toward setting the tone for the future.

2013-06-03 Defense and Selective Offense by Mark Kiesel of PIMCO

Given the market’s newfound risk appetite for credit and less attractive valuations, we are taking advantage of global credit market liquidity in an effort to reduce our overall risk posture. In our selective offense approach, we continue to favor U.S. housing and housing-related areas, in addition to select investments in the energy, pipeline, specialty finance, gaming, hospitals, and airline and auto industries, given the more positive fundamental outlook for these sectors.

2013-06-03 US Balance Sheet Repair: More Difficult This Time by John Greenwood of Invesco

In most developed economies, the post-war years since 1945 saw sustained business cycle expansions alternating with shorter recessions. At the end of each expansion, authorities dealt with inflation by raising interest rates and slowing credit growth. When inflation subsided, interest rates were lowered again.

2013-06-03 Treasury Bonds Are No Longer the Conservative Investor's Friend by Jeff Middleswart of Ranger International

For more than three decades, conservative investors have been able to count on Treasury bonds to deliver a consistent income stream, while providing a safe repository for principal. Further, Treasuries have anchored portfolios over their long bull run by limiting the damage when stocks declined.

2013-06-03 Is Volatility Dead? Hardly. by Paresh Upadhyaya, Michael Temple of Pioneer Investments

Certain pundits suggest we have entered a new volatility regime that volatility has been tamed by the massive amount of liquidity injected into worldwide capital markets by very accommodative central banks. We take a different view. While volatility has been declining across many asset classes, it is creeping into several that may have escaped some investors’ attention.

2013-06-03 A Taste of What Tapering Might Mean by Christian Thwaites of Sentinel Investments

A week on from the sparks of the FOMC minutes and we can see how the market handles the subtler parts of Fed communication. Not well. Most of the dove camp talked about adjusting purchases up or down depending on economic conditions (all very reasonable and consistent) but stressed there was really nothing in the data for change. The hawk that counts, Bullard of the St. Louis Fed, even called for continued QE given low inflation. So the “employment is too low, continue” and "inflation is too low, continue” camps agree.

2013-06-03 Does Sector Shift Spell A Continued Rally? by Chris Maxey, Ryan Davis of Fortigent

Unlike most robust equity rallies, however, 2013 performance was initially led by traditionally defensive sectors, such as health care, utilities, and consumer staples. Through the first quarter, those three sectors posted an average return of 14.5%, while traditional cyclicals averaged just 9%. While some speculated this trend was due to investors’ reach for yield amid a frothy fixed income environment, the magnitude of this sector leadership (in an up move) was certainly unusual.

2013-06-03 Getting Better Returns from Dividend Stocks - Look for Growth by Steve Wenstrup of Tillar-Wenstrup

While some investors have begun to return to US Equity (funds) there is still a large amount of money on the sidelines. End of year 2012 data shows investors have trillions in money markets and savings accounts. While there is no guarantee all that money will make its way back into the market the matriculation has begun.

2013-06-03 Is QE Really THAT Important? by Brian Wesbury, Bob Stein of First Trust Advisors

The punditry has decided that anything good happening is actually bad. It is all just a sugar high based on Quantitative Easing and government stimulus and that talk of winding down or tapering QE is negative. So the latest fear is that any good data on growth is actually bad, because it means the Fed will wind down QE. They say “the economy can’t possibly grow on its own without support from the Fed and Ben Bernanke.”

2013-06-03 Qualcomm Inc: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of Qualcomm Inc through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-06-01 After the Gold Rush by Nouriel Roubini of Project Syndicate

The run-up in gold prices in recent years from $800 per ounce in early 2009 to above $1,900 in the fall of 2011 had all the features of a bubble. And now, like all asset-price surges that are divorced from the fundamentals of supply and demand, the gold bubble is deflating.

2013-06-01 Central Bankers Gone Wild by John Mauldin of Millennium Wave Advisors

For the last two weeks we have focused on the problems facing Japan, and such is the importance of Japan to the world economy that this week we will once again turn to the Land of the Rising Sun. I will try to summarize the situation facing the Japanese. This is critical to understand, because they are determined to share their problems with the world, and we will have no choice but to deal with them. Japan is going to affect your economy and your investments, no matter where you live; Japan is that important.

2013-05-31 This Is What Real Bubbles Look Like by Chuck Carnevale of F.A.S.T. Graphs

With the stock market currently doing so well, numerous articles are popping up playing the bubble card. Personally, I don’t believe we are anywhere near bubble levels for equities, at least in the general sense. I do think there are certain stocks that are currently overvalued, but very few that I would describe as dangerously so. To me, the true definition of a bubble is when prices have become so ludicrously high, that the dangers of a catastrophic loss large enough to be considered almost permanent become imminent or at least quite obvious.

2013-05-31 Into the Woods by Tony Crescenzi, Tadashi Kakuchi, Ben Emons of PIMCO

Excess liquidity, falling net issuance and higher correlations among assets complicate the eventual exit that the Federal Reserve and other central banks must make from their extraordinary policies. The Bank of Japan’s ideology has completely changed to “tackling deflation” from “tolerating deflation.” The key focus in the coming months will be how private sectors react. Investors who depend chiefly upon central bank activism may put themselves at risk. They may need to hedge volatility by ensuring their investments are built more on solid fundamentals and reasona

2013-05-31 Japan: Gauging the Stimulus Response by Milton Ezrati of Lord Abbett

The Japanese patient seems to be responding well to Prime Minister Shinzo Abe’s attentions. Equities have rallied strongly. The yen, as the government desires, has retreated from export-crushing highs. The economy has shown signs of a genuine cyclical pickup. The good news has buoyed spirits in Japan. It will likely continue for a while longer, too. But the picture for the country is not yet all joy, because Abe’s policies fail to address the country’s significant, longer-term, fundamental problems.

2013-05-31 The American Consumer is Not Okay by Stephen Roach of Project Syndicate

The spin-doctors are hard at work arguing that falling unemployment, rising home values, and record stock prices mean that the American consumer the major drag on the economy in the post-crisis period is finally back. The facts say otherwise.

2013-05-31 Just One Day Out of Life by Michael Han of Matthews Asia

During my visit to Korea a few weeks ago, a hot debate over an “alternative holiday” system caught my attention. When a holiday falls on a weekend in Korea, it is not generally observed by businesses on the prior or subsequent weekday. However, the government has recently sought to change this despite strong opposition from interest groups and the business sector.

2013-05-31 The Big Four Economic Indicators: Real Personal Income Less Transfer Payments by Doug Short of Advisor Perspectives (dshort.com)

I’ve now updated this commentary to include April Real Personal Income less Transfer Payments. As I’ve discussed before, the adjacent thumbnail shows the major spike in incomes triggered by pulling early 2013 income forward in November and December (bonuses, dividends, etc.) to manage the tax risks of the Fiscal Cliff. At this point we’ve recovered from the post-strategy dip, so the trend going forward will give a more realistic sense of where this indicator is heading.

2013-05-31 The Week in Fiscal and Monetary Policy by Scott Brown of Raymond James

The financial markets were more than a bit confused by the minutes of the April 30 May 1 Federal Open Market Committee meeting. Some Fed officials wanted to begin tapering the rate of asset purchases as early as June. However, that wasn’t a majority opinion. Fed Chairman Bernanke’s testimony to the Joint Economic Committee of Congress was balanced, but strongly suggested that monetary policy is unlikely to be tightened anytime soon. In his testimony, Bernanke also lectured congress on fiscal policy, which has been completely wrong-footed this year.

2013-05-31 Buying Stampede by Jeffrey Saut of Raymond James

Over the long weekend I decided to type the words “buying stampede” into Google to see what popped up. To my surprise there were more than 2,000,000 “hits” on the phrase “buying stampede” and many of them were attributed to me. While that was a pretty humbling experience, it also was surprising because I would have thought more investors would have used that phrase in connection with the many upside rally skeins that have occurred over the past dozen years.

2013-05-31 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

Is central bank communication clarifying or confusing? The European Central Bank should focus its efforts on small business lending. A look beneath the surface of housing proves revealing.

2013-05-31 What\'s the Answer to Unprecedented Policies and Ultralow Rates? by Frank Holmes of U.S. Global Investors

So what’s the answer to unprecedented central bank policies that have been driving stocks higher and ultralow rates? I believe investors need to stick to a strategy that includes dividend-paying stocks that offer the opportunity for both income and growth.

2013-05-31 The Most Important (and Widely Ignored) Economic Number by Russ Koesterich of iShares Blog

While economic numbers like GDP or the monthly non-farm payroll report typically garner the headlines, Russ explains why investors should pay more attention to and may want to alter their assumptions based on -- the Chicago Fed National Activity Index (CFNAI).

2013-05-30 And That\\\'s the Week That Was by Ron Brounes of Brounes & Associates

All good things must come to an end (hopefully just temporarily). After a nice month-long weekly winning streak, stocks gave back some ground as investors over-analyzed Fed comments and worried about future monetary policy. (The stimulus will end at some pointthat’s not necessarily a bad thing.) Japan took the over-analysis the hardest as its market suffered a serious setback, though the rally for the year had been significant and some watchers expected a pullback at some point (just not all in one day).

2013-05-30 UK Secular Outlook - Morphing into the Carney Era by Mike Amey of PIMCO

The UK remains in a “stable disequilibrium”, one that needs to either transform into growing economy with narrowing income differentials or risk a more aggressive policy response. Financial repression, protection of real purchasing power, tail risks of accelerated currency weakness and price sensitivity will likely dominate UK markets over the secular horizon. Investors may consider progressively reducing exposure to assets susceptible to tail risks. Higher quality short-dated income-generating, inflation-hedging and non-sterling assets remain attractive.

2013-05-30 Are We There Yet? by Vitaliy Katsenelson of Investment Management Associates

I started writing my first book, Active Value Investing: Making Money in Range-Bound Markets, in 2005; finished it in 2007; and published the second, an abridged version of the first (The Little Book of Sideways Markets), in 2010. In both books I made the case that there is a very high probability that we are in the midst of a secular sideways market a market that goes up and down, with a lot of cyclical volatility, but ends up going nowhere for a long time.

2013-05-30 Global DC Plans: Similar Destinations, Distinctly Different Paths by Stacy Schaus, William G. S. Allport, Justin Blesy of PIMCO

DC plans in in the U.S., Australia and the U.K. may benefit from better aligning asset allocation defaults to workers’ needed outcome: purchasing power in retirement. Focusing on needed outcomes would suggest a higher allocation to real assets, earlier de-risking and consideration of tail risk hedging.

2013-05-30 Reflation in the Balance by Richard Clarida of PIMCO

Four of the world’s major central banks are now “all in” when it comes to ballooning their balance sheets in correlated, if not coordinated, efforts to achieve escape velocity in their economies. In accounting for the impact of quantitative easing on two key balance sheets, we are able to interpret, monitor and calibrate the programs currently in place. This in turn can help us prepare portfolios if or when sentiments and inflation expectations shift.

2013-05-30 Has the Fat Lady Started to Sing on the Housing Market? by Martin Pring of Pring Turner Capital Group

As decision makers we are continually looking for clues from economic activity in order to adjust portfolios. The beauty of following business cycle sequences is the value from anticipating financial market leadership changes. A major beneficiary of this four year old business recovery has been housing and housing related stocks.

2013-05-30 Morning in a New Europe by Scott Minerd of Guggenheim Partners

The pace of policy reforms is accelerating and economic recovery appears to be on the horizon for the European Union.

2013-05-30 Where the Heck Are We? by Robert Isbitts of Sungarden Investment Research

The current investment market climate reminds me of a scene from the old TV sitcom F-Troop. U.S. soldiers ask their Native American friends, the Hekawi tribe, how they got their name. As Chief Wild Eagle, the Hekawi leader, said back then (paraphasing: ”many moons ago, Tribe travel west, then come big day tribe fall over cliff, that when Hekawi get name. Medicine man say “I think we lost. Where the heck are we?”

2013-05-29 Ball Corp: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

Ball Corp (BLL) is a supplier of high quality packaging for beverage, food and household products customers, and of aerospace and other technologies and services, primarily for the U.S. government.

2013-05-29 Is This the End of the World As We Know It? by Massimo Tosato of Schroders Investment Management

After five turbulent years of decline and unrelenting economic doom there are signs that change could be afoot.

2013-05-29 April 2013 Market Commentary by Andrew Clinton of Clinton Investment Management

Interest rates rose modestly during the first quarter as ten year Treasury yields increased by approximately 0.10% or 10 basis points. Seasonal tax-time municipal bond liquidations, together with a heavier primary calendar, weighed heavily on the market causing municipal bond yields to underperform on a relative basis. In our recent market opinion we thoroughly discussed our view that the relative cheapening of municipal bonds presented investors with and attractive entry point as we expect technical conditions to improve as we move into the summer months.

2013-05-29 Filling the Hole We Have Dug by Adam Bowe, Robert Mead of PIMCO

Mining investment contributed more than 60% of the growth in Australia’s GDP in 2012. The expected decline in mining investment will likely leave a significant economic hole in the short term that needs to be filled. PIMCO expects easier monetary policy will be needed to support other sources of domestic growth, such as non-mining business investment, household consumption and housing construction.

2013-05-29 Weekly Market Commentary by Team of Tuttle Tactical Management

Last week we talked about the market being overbought in the short term, so the three day selloff (Wednesday-Friday) was to be expected. The media will blame the Fed but they didn’t tell us anything we didn’t already know. Bottom line, when the market gets extremely overbought traders will use anything and everything as an excuse to take profits. Interestingly, last week was the first streak of three down days this year. The S&P 500 seemed to find some support at 1640.

2013-05-29 Is the Fed in the Home Stretch? by Chris Maxey, Ryan Davis of Fortigent

Global equity markets stammered through a choppy environment last week following increased fears that certain central banks were considering the possibility of pulling stimulus sooner than anticipated. Markets have long been dependent on central banks, but the notion that policymakers could head for the exits leaves investors unsure how to react.

2013-05-29 Outlook on the Japanese Equity Market by Team of Nomura Asset Management

The Nikkei Stock Average closed 128 points higher, or 0.9%, to close the week at 14,612 following the dramatic 7.3% sell-off on Thursday, May 23, 2013. The Tokyo Stock Price Index (TOPIX) also added 6 points, or 0.5%, to 1,194, following a 6.9% sell-off on Thursday, May 23rd.

2013-05-28 Economic Climate Change & the Long-Term View on Yields by Sponsored Content from Loomis Sayles (Article)

Will rates rise? It’s a logical question. US Treasury yields have been in a secular downward trend since the 1980s and almost frozen at historic lows for the last several months. While recent cyclical improvements suggest the US economy is heating up, we do not expect interest rates to start soaring to record highs. The interest rate environment will eventually undergo climate change, but the process will be gradual. There are secular headwinds cooling rates, and we expect them to persist for years to come.

2013-05-28 Is Austerity a Bad Idea? by Michael Edesess (Article)

There are strong arguments for and against both austerity and Keynesianism. However, some recent writings should make us remember to question the terms of the argument itself. While evidence-based economics is important, it can also mislead.

2013-05-28 Europe's Crossroads: The End of the Muddle Through? by Andrew Balls of PIMCO

The eurozone may be nearing a critical junction, owing to its weak growth, weak institutions, debt dynamics and domestic and cross-border political challenges. The German government may take a more active leadership role after its national election, but it is more likely it will continue with piecemeal measures. Considering the current low yield environment and ample central bank liquidity, it is important to focus on absolute yield levels and returns, and consider global alternatives such as emerging market securities and currency exposure.

2013-05-28 Corrections Remain Modest by Charles Lieberman (Article)

Many investors are waiting for the proverbial market correction, so they have an opportunity to get into the market rally. Many investors are holding back because they don’t want to buy at a market top after such a major run. This approach has been a disaster, since the market has given them no such buying windows so far. A correction must eventually occur of course, but quite possibly only from higher levels. Stocks remain the place to be.

2013-05-28 Forward-Looking Broad-Market Investing by Team of AdvisorShares

The following is a research study that provides compelling data on a more efficient way to invest in broad markets. Many people have called the equity market of the last 10 years the “lost decade” due to its lack of net change. Madrona Funds research shows that it would have been possible to have profited by over 200% over the last decade by using their forward looking methodology, which is based on future expected earnings, not past performance.

2013-05-28 Watching Risk-Reward Ratios: Economic Data Still PositiveBut Rate Is Slowing by Rob Stein of Astor Asset Management

Risk-reward ratios are on our radar screen these days as we review the most recent economic data against the backdrop of recent market movement. This is not to say that we are in any way suggesting a top, a bear market, or even that a correction is on the horizon, even taking into account this past week’s movement and volatilityalthough each of these scenarios remains a possibility. At this point, though, we do have some minor concerns about risk-reward in the markets going forward, suggesting that a slight adjustment in beta or equity exposure from current levels is prudent.

2013-05-28 Rock, Paper, Scissors by John Hussman of Hussman Funds

There’s a sort of rock-paper-scissors relationship to financial indicators. Trend following factors typically trump valuations alone, while overvalued, overbought, overbullish syndromes trump trend-following and monetary considerations. Monetary factors tend to be most effective as confirmation of other measures, particularly of trend-following factors, but only in the absence of overvalued, overbought, overbullish syndromes.

2013-05-28 You Now Have All of Our Attention by Blaine Rollins of 361 Capital

Mr. Bernanke’s opening statement was just what the market wanted to hear... "Premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending this economic recovery and causing inflation to fall further".

2013-05-28 Taking Stock by Bob Doll of Nuveen Asset Management

U.S. and global equities were under pressure last week, with all major U.S. indices lower for only the fourth time this year. With discussion of the Fed tapering its stimulus, market uncertainty gained momentum. The S&P 500 was down 1.0% for the week.1 We consider the market pullback technical in nature since the mention of a Fed quantitative easing exit likely created a natural point to take profits after the recent rally.

2013-05-28 Declaration of Not-So-Much Dependence by Brad Evans of Heartland Advisors

There’s been much discussion lately of how alternative energy sources like wind and solar power could lower the U.S.’s dependence on foreign oil. What’s often overlooked, though, is just how much this country is already meeting its energy needs with domestically produced oil and natural gas.

2013-05-25 The Mother of All Painted-In Corners by John Mauldin of Millennium Wave Advisors

Japan has painted itself into the mother all corners. There will be no clean or easy exit. There is going to be massive economic pain as they the Japanese try and find a way out of their problems, and sadly, the pain will not be confined to Japan. This will be the true test of the theories of neo-Keynesianism writ large. Japan is going to print and monetize and spend more than almost any observer can currently imagine. You like what Paul Krugman prescribes? You think he makes sense? You (we all!) are going to be participants in a real-world experiment on how that works out.

2013-05-24 Focus on What You Know and Can Control: Be Aware of Unexpected Risks in Bonds by Warren Pierson of Baird Advisors

While corporate bonds have seen improvement in credit fundamentals, similar improvement has not taken place for municipal bonds. Ongoing challenges in municipal credit could have a meaningful negative effect on municipal bonds. Many callable bonds with longer maturities face significant extension risk with an upward movement in interest rates. Durations currently pegged to shorter call dates could extend as issuers are less likely to call in bonds prior to maturity as interest rates rise. As callable bonds get re-priced to longer maturity dates, the resulting price declines could be profound.

2013-05-24 Recession Watch: ECRIs Weekly Leading Indicator Up Slightly by Doug Short of Advisor Perspectives (dshort.com)

TheWeekly Leading Index(WLI) of the Economic Cycle Research Institute (ECRI) is at 130.6, up slightly from last weeks 130.1 (a downward revision from 130.2). The WLI annualized growth indicator (WLIg) dropped to 6.8% from 7.0% last week.

2013-05-24 Sri Lanka\'s Victory by Teresa Kong of Matthews Asia

Sri Lanka has begun to reap the fruits of peace. By diverting resources that were previously spent on its military toward things like infrastructure, tourism and education, its economy has experienced solid growth. As our small car sat in traffic on the main road leading to the Colombo airport, my driver told me about the newly planned highway scheduled to open later this year. The Colombo-Katunayake Expressway, he said, would reduce my 1.5-hour trip to about 20 minutes. More importantly, I thought, we wouldn’t be driven off the road by rickshaws referred to locally as “tuk-tuks.&#

2013-05-24 4 Ideas for Today's Low Inflation Environment by Russ Koesterich of iShares Blog

There’s certainly no shortage of things to worry about right now related to the US economy. But one thing we’re not too worried about right now: Inflation. Not only is inflation low, but the latest numbers show it’s actually falling. And as I write in my commentary this week, inflation is unlikely to become a problem in the United States for at least another 12 to 18 months. Why? There are a number of headwinds keeping US prices low in the near term.

2013-05-24 The Biggest Loser Wins by Peter Schiff of Euro Pacific

While the world’s economies jockey one another for the lead in the currency devaluation derby, it’s worth considering the value of the prize they are seeking. They believe a weak currency opens the door to trade dominance, by allowing manufacturers to undercut foreign rivals, and to economic growth, by fighting deflation. On the other side of the coin, they believe a strong currency is an economic albatross that leads to stagnation. But the demonstrable effects of currency strength and weakness reveal the emptiness of their theory.

2013-05-24 4 Market Risks Worth Worrying About by Russ Koesterich of iShares Blog

The risk of a US slowdown Not discounted in US valuations. While US valuations currently look reasonable, they’re predicated on a US economy growing at around 2% to 2.5%. The risk of slower growth is not priced into the market. If US economic data continues to disappoint, and we get a growth hiccup in the second or third quarter, then we’re likely to see some US market weakness.

2013-05-24 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust

The two Asian giants have a challenging year ahead. The Fed will be challenged to keep the bond market under control.

2013-05-24 After the Sell Off in Japan: 2 Reasons Not to Panic by Russ Koesterich of iShares Blog

Russ explains why Thursday’s market correction in Japan hasn’t changed his view that investors should consider a market weight to Japanese stocks.

2013-05-24 Remarkable Resilience by Liz Ann Sonders, Brad Sorensen and Michelle Gibley of Charles Schwab

We saw how the prospect of a sooner pullback in purchases in bonds by the Fed rattled the market both in the US and globally, but the picture, to us, has not changed to any great degree. A very gradual pullback, not even going to zero, in quantitative easing due to an improved economic situation doesn’t spell disaster to us. We continue to urge investors to pay attention to both sides of the risk equation when making decisions and to keep the longer-term perspective in mind. Short-term swings are inevitable, but should not be the basis for sound decision making.

2013-05-23 The Labor Force Participation Puzzle by David Kelly of J.P. Morgan Funds

Slow growth and mediocre job creation have been common themes used to describe the U.S. economy in recent years, as both the labor market and broader economy failed to produce the snap-back rebound many expected following the deep recession seen in 2008 & 2009. Despite that lackluster growth, the unemployment rate has now fallen to 7.5% after peaking at 10% in October of 2009, a much faster decline than expected, given average employment growth of less than 125,000 per month.

2013-05-23 QE from 35,000 Feet by Scott Minerd of Guggenheim Partners

Quantitative easing has benefited from global macro events and appears likely to continue for the rest of the year. Markets, though, will continue to anticipate how the current policies will eventually be unwound.

2013-05-23 Investing in Gold: Does It Stack Up? by Team of Knowledge@Wharton

Gold has a timeless allure -- especially if you worry about stock market volatility, inflation, a decay of ordinary currency or the collapse of civilization. Yet not everyone agrees that gold offers the safe haven its promoters describe. How reliable can demand be for a commodity that very few people actually need? What is the proper role for gold in an investment portfolio? Why has its price been falling?

2013-05-23 Europe's Lost Keynesians by Kenneth Rogoff of Project Syndicate

There is no magic Keynesian bullet for the eurozone’s woes, despite what many commentators and much of the public seem to believe. The eurozone’s difficulties stem from European financial and monetary integration having gotten too far ahead of actual political, fiscal, and banking union not exactly a problem that Keynes tried to address.

2013-05-22 If You Didn\'t Buy That Powerball Ticket... by Blaine Rollins of 361 Capital

So onward and upward. What signals should Bulls be on the lookout for? Change in breadth (Up v. Down Volumes, Advancers v. Decliners), Signs of distribution (Sharp down days accompanied by large % increases in trading volumes), Change in leadership away from RISKON sectors (don’t want SmallCaps, Financials, Industrials, Transports or Housing to lag)...

2013-05-22 Cyprus and the Eurozone...Still Stuck in the Middle by Gregory Hahn of Winthrop Capital Management

The debt crisis in the Eurozone turned another chapter as Cyprus finally reached the point of requiring a bailout from the European Union. The wisdom of Gerry Rafferty’s hit song “Stuck in the Middle with You” which was written in 1973, rings true today as we watch the EU and the European Central Bank navigate the mess in Europe. With each attempt at containment, there appears some plot twist, the proposed Cyprus bank bailout is no exception. While the bailout of Cyprus and its banks is not large in size, only 10 billion, relative to the Cyprus economy, it is significant.

2013-05-22 Waiting for the Great Rotation: Why Interest Rates Could Stay Low Even Longer by Nanette Abuhoff Jacobson of Hartford Funds

The number-one question I get from investors is, “When will rates go up?” While this concern has been top of mind for the last few years, investors’ anxiety and sense of risk has intensified amid the threat of the “Great Rotation”the anticipated en masse reallocation out of bonds into equities. But so far, rates have yet to rise, leaving many people to wonder where we stand now and what may happen next. To answer these questions, I’d like to make three points.

2013-05-22 When Will the U.S. Economy Stop Slowing Down and Start Speeding Up? by Marco Pirondini of Pioneer Investments

As earnings data from companies comes trickling in, it all but confirms a slowdown in the second quarter.

2013-05-22 Asia Brief: China's Car Fleet The Largest in the World? by Edmund Harriss, James Weir of Guinness Atkinson Asset Management

Car sales in China have grown rapidly since 2009 and it is on course to outstrip the US in terms of the size of its car fleet by the end of this decade. This presents a major challenge to the Chinese government, which must balance its people’s happiness and political stability with economic development in an environment which has already been compromised. The momentum of demand for new passenger vehicles is likely to make air quality worse and Beijing has introduced emissions and efficiency standards to address the problem.

2013-05-22 Malaysia's Post-Election Investment Outlook by Scott Klimo of Saturna Capital

Earlier this year we identified ASEAN as the most attractive region within the emerging markets universe. That prediction has proved accurate. Market indices (USD returns) year-to-date through April in the Philippines, Thailand, and Indonesia are 23%, 22%, and 16%, respectively. Singapore (which we do not consider an emerging market) gained 6%, while Malaysia rose only 3.9%. So what’s the outlook for Malaysia?

2013-05-22 How to Turn the ECB Straggler into a Central Bank Pacemaker by Myles Bradshaw of PIMCO

In our opinion, the ECB will be most effective if it can design a programme that helps banks deleverage more quickly to stimulate growth in the real economy. To have a meaningful impact on Europe’s broken transmission mechanism, any ECB programme needs to not only lower the cost of credit, but also be regionally tailored or big enough to be effective. Long-term investors should remain focused on the quality of issuers’ balance sheets rather than simply taking more risk because of lower prospective returns.

2013-05-22 A Whiff of Confidence by David Kelly of J.P. Morgan Funds

The single biggest on-going survey of consumer confidence in the United States is conducted by Rasmussen, who survey 500 consumers every night on their views of the U.S. economy and their personal finances. Since October 2007, there has not been a single month in which the index produced by this survey has exceeded 100. However, since the start of May it has averaged well above this level.

2013-05-22 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

Four times a charm. Despite lackluster earnings and economic data that raises some concerns, investors continue to play the game of “how high can we go” and stocks climbed for the fourth straight week With 15k (Dow) and 1600 (S&P) well in the rearview mirror, investors seem to have their targets set on bigger and better things. Some bullish comments by a hedge manager; a solid consumer sentiment reading; a reason for the Fed to hold off on tapering its bond buying stimulusand it’s off to the races for equities (again).

2013-05-22 Where is inflation headed? What will it mean for investors? by Russ Koesterich of BlackRock Investment Management

Slow economic growth and long-term headwinds should keep inflation contained. Low inflation should help support equity markets and high yield bonds, but may be a negative for gold prices. The inflation environment should also help prevent interest rates from rising too fast.

2013-05-22 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Once again stock prices moved higher last week despite mostly poor economic data and a background in Washington DC of multiple scandals. The latter begging the question as to whether substantive policy actions are now off the table for the year.

2013-05-22 Is Japan's Economic Rebound For Real? by Daisuke Nomoto of Columbia Management

The two phrases “Abenomics” and the “BOJ’s Shock and Awe Monetary Easing” are all over the headlines about Japan. Prime Minister Abe unveiled his economic policy late last year calling for a 3% annual nominal gross domestic product (GDP) growth target and an aggressive monetary easing by the BOJ (The Bank of Japan) to achieve 2% inflation. The BOJ unleashed the world’s most intense burst of monetary stimulus last month promising to double the monetary base to 270 trillion yen ($2.7 trillion) by the end of 2014 to defeat deflation.

2013-05-22 Making Investment Grade Is Only the Beginning for Turkey by Frank Holmes of U.S. Global Investors

It’s been a few months since I was in Istanbul and wrote about Turkey’s exciting cultural and economic transformation, and the country is still making headlines. The Emerging Europe Fund’s (EUROX) portfolio manager, Tim Steinle, has been very bullish on Turkey for multiple reasons, including its young growing demographic, its fiscal and monetary policies geared toward growth, and its entrepreneurial mindset and pro-business policies, to name just a few.

2013-05-22 China's IPO Drought: Will it Lift? by Eddie Chow of Franklin Templeton Investments

Following a flood of initial public offerings (IPOs) that lasted several years, China’s local A-share market has been in an IPO drought since late last year. There is some speculation China’s regulatory body, the China Securities Regulatory Commission (CSRC), may allow some IPOs to trickle back into the market this year, but we don’t yet know exactly when or at what volume. I’ve invited my colleague Eddie Chow to share his perspective on why IPO issuance has been halted in China’s local market, and where we see potential opportunities in the current environment.

2013-05-21 Does Your Firm Need a COO? by Beverly Flaxington (Article)

I run a 15-person firm. A consultant come and prepared a growth plan for our future. The number-one recommendation was that I create a role for a chief operating officer and hire this person. But I don’t see how a COO helps a firm that is as small as mine. This seems the solution for a firm of 50 or above, and I can’t afford a high-paid individual repeating what I already do.

2013-05-21 (Yawn)...As Equities Advance Another 2% by Bob Doll of Nuveen Asset Management

U.S. equities advanced again last week, with the S&P 500 increasing 2.1%. Global stocks are reaching new highs in this cycle and the U.S. market is at an all-time high. Bonds were hurt in the move, dragging credit down, while commodities fell slightly on weaker manufacturing data. The unrelenting equity rally and an environment without positive news about earnings and the economy is making many investors uncomfortable.

2013-05-21 Developed Europe: Regional Economic Review 1Q 2013 by Team of Thomas White International

After withdrawing into the background in late 2012, the Euro-zone sovereign debt crisis resurfaced in the first quarter with the Italian elections and Cyprus’ banking crisis. In late February, Italy’s national elections resulted in a fractured mandate, and Italians voted out the incumbent, the main architect of the country’s austerity and reforms agenda.

2013-05-21 Why the Lack of Inflation Is a Problem by Chris Maxey, Ryan Davis of Fortigent

Given the outsized role central banks are playing in today’s financial markets, inflation watching has taken on increased significance.It is widely assumed that continued easy money policies are only possible as long as price increases remain under control.At the same time, for a global economy trying to escape an extended period of weak growth and burdensome debt loads, low inflation is a double-edged sword.

2013-05-21 Capitalism and Democracy by Bill O'Grady of Confluence Investment Management

In the Italian elections, the party that showed the strongest results was the Five Star Movement, led by the comedian Beppe Grillo. Despite this strong showing, the party failed to form a government and refused to participate in any coalitions. This decision not to participate in the political process has been exhibited by other protest groups, such as Occupy Wall Street, the Israeli Tent Movement, and the Spanish “Indignant” movement.

2013-05-21 High Yield Market Overview by Team of Nomura Asset Management

The high yield market, as measured by the Bank of America Merrill Lynch U.S. High Yield Master II Constrained Index, was up 1.86% for the month of April, as the high yield market continued to benefit from stable U.S. economic growth and steady asset reflation driven by the Federal Reserve and global central banks.

2013-05-21 As Energy Demand Outpaces Supply, Asia Looks Overseas to Refuel by Raja Mukherji, Taosha Wang of PIMCO

Many Asian countries are encountering growing energy shortages due to declining indigenous resources and domestic consumption growth. Oil companies in Asia frequently engage in overseas acquisitions. In many cases, these transactions help enlarge reserve base, access technological know-hows and enhance corporate profitability. Strong sovereign support is a key investment thesis in the Asian oil and gas sector. Through our bottom-up analysis, we are finding numerous investment opportunities.

2013-05-21 Are Equity Investors Pushing the Gas Pedal Too Hard? by Norman Boersma of Franklin Templeton Investments

Whatever previous reticence investors may have had about equities last year seems to have evaporated and, with remarkable speed, turned into fear over having missed the equity rally. Some major market averages have accelerated at a pace some say is reckless, so as we head toward the mid-point of the year, Norm Boersma, CFA, chief investment officer of Templeton Global Equity Group, takes a look at reasons investors might continue to push the gas pedalor tap the brakes.

2013-05-21 Putting Cash to Work: 3 Ways to Enter the Market Today by Russ Koesterich of iShares Blog

With global equities up more than 25% since their bottom last June, many investors are wondering: “Is it too late to move cash from the sidelines to stocks?” No, says Russ, and he offers three ideas for where find value today.

2013-05-21 General Electric Looks Like It's Becoming The Shareholder-Friendly Company It Once Was by Chuck Carnevale of F.A.S.T. Graphs

General Electric (GE) was once revered as one of the bluest of all blue-chip companies in the world. During its glory days, GE was respected as an industrial conglomerate that manufactured some of the world’s best jet engines, locomotives, appliances and even the highly regarded General Electric light bulb. However, as best I can determine, the roots of General Electric’s ultimate demise were established in 1930 when the company, responding to the great depression, formed GE Finance in order to help their customers finance GE appliances over time.

2013-05-21 Don't Set Much Store in the Equity Risk Premium by Christian Thwaites of Sentinel Investments

An old measure but a useful one. It should give us some indication of the market after the 23% gain in the S&P since November. The measure is simple enough: the forward price earnings yield less the yield on the GT30. This makes sense because the duration of equities is around 16.5, which is close to the GT30 of 19. By the way, other sources, notably the New York Fed use different approaches, for example Cyclically Adjusted Price Earnings and a shorter duration risk-free rate. But it’s the vectors that matter not the scale.

2013-05-20 Global Real Estate Is Hot Again, but Where Are the Best Opportunities? by Joe Rodriguez of Invesco

In this low interest rate environment, yield-hungry investors have been moving out of bonds, and many are opting for real estate investment opportunities. Combine that with a structural undersupply of institutional quality real estate in many key cities across the globe, and an attractive case for investment starts to emerge. Here’s where we see the most attractive and promising opportunities by region this year.

2013-05-20 Reinvigorating Egypt's Economy by Mohamed El-Erian of Project Syndicate

While blaming the revolution is not a persuasive explanation for Egypt’s current economic woes, its appeal to many Egyptians is understandable. Over the last few months, their economic situation has gone from bad to worse.

2013-05-20 Abenomics for Europe by Scott Minerd of Guggenheim Partners

The devaluation of the Japanese yen may lead EU policymakers to implement measures that will help the economic situation in the single currency zone.

2013-05-20 ProVise Bullets by Ray Ferrara of ProVise Management Group

When the President put forth his proposed budget for the 2014-15 fiscal year which begins October 1st, he went out of his way to offer an olive branch to the Republicans on entitlement programs - especially Social Security and Medicare. The President proposed changing the cost of living adjustments in such a way that, over time, there would be significant savings to the government, but of course, take the money away from the recipients.

2013-05-20 A European Vacation from Austerity? by Milton Ezrati of Lord Abbett

Recession-wracked governments in the eurozone are rethinking fiscal constraints.

2013-05-20 Not in Kansas Anymore by John Hussman of Hussman Funds

Knowing where you are doesn’t mean that you’re leaving, but you should still know where you are.

2013-05-20 Alpha, Beta! by Jeffrey Saut of Raymond James

I had a somewhat lengthy conversation with Rich Bernstein last Friday. I have been on TV with Rich over the years, but have never really had a one-on-one talk with him. Recall that Richard Bernstein was the Chief U.S. Strategist at Merrill Lynch for years before becoming the eponymous captain of Richard Bernstein Advisors (RBA). I was speaking with Rich because I have developed an interest in a few of the funds he manages for various entities. Rich began by stating he is extremely bullish, believing we are in one of the biggest “bull markets” ever.

2013-05-20 Still Bullish by Brian Wesbury, Bob Stein of First Trust Advisors

Like Rip Van Winkle, imagine you went to sleep on October 9, 2007 and didn’t wake up until yesterday. On 10/9/2007, equities were at record highs: 14,165 for the Dow Jones Industrial Average and 1,565 for the S&P 500.

2013-05-18 All Japan, All the Time by John Mauldin of Millennium Wave Advisors

This week we again focus on Japan. Their stock market has been on a tear, and their economy grew 3.5% last quarter. Is Abenomics really the answer to all their problems? Is it just a matter of turning the monetary dial a little higher and voila, there is growth? Why doesn’t everyone try that? And what would happen if they did?

2013-05-17 Making the Most of Equity Allocations by Andrew Pyne, Sabrina Callin of PIMCO

We believe slowing global growth and deleveraging are likely to result in lower long-term returns for equities. Traditional approaches to building equity portfolios may not be enough for investors to meet their return goals. We have found three complementary ways investors can enhance equity return potential: fundamental indexes, index-plus strategies and high active share stock selection approaches.

2013-05-17 Open-Access Economics by Barry Eichengreen of Project Syndicate

The brouhaha over Carmen Reinhart’s and Kenneth Rogoff’s article “Growth in a Time of Debt” has raised troubling questions not only about the efficacy of austerity, but also about the reliability of economic analysis. If a flawed study could appear in a prestigious working-paper series, why should anyone trust economic research?

2013-05-17 A Matter of Perspective by Robert Horrocks of Matthews Asia

A Hong Kong investor once told me that he considered Asia’s capital markets to be like breaking waves; their rhythms often violent, but ultimately, they make a steady progression up the shore. It has often been noted that many Asia investors play these short-term rhythms. But ultimately the tide does come in and there is room for the long-term investor.

2013-05-17 Opportunistic Investing: Making the Most of Your Cash in Today's Market by Chris Engelman of Cedar Hill Associates

With the Standard and Poor’s 500 Index rising more than 20% since last June, some people are reluctant to invest now, fearful that stocks are poised to tumble again. By focusing on their long-term investment objectives rather than short-term market fluctuations, however, investors can plan for a sound financial future. Here, Cedar Hill Managing Director Chris Engelman offers strategies for building a portfolio that helps to limit market risks and increases the likelihood of achieving your long-term goals.

2013-05-17 Weekly Economic Commentary by Team of Northern Trust

Predictions of an American manufacturing renaissance may be premature. Does the Fed have to worry about deflation? The U.S. fiscal deficit is narrowing rapidly.

2013-05-17 Recession Watch: ECRI\'s Weekly Leading Indicator Declines by Doug Short of Advisor Perspectives (dshort.com)

Essentially ECRI is sticking to its call that a recession began in mid-2012, although the company calls it a "mild" recession, which is quite a shift from their original stance 19 months ago: "...if you think this is a bad economy, you haven’t seen anything yet."

2013-05-17 Finding Opportunity Far and Near by Frank Holmes of U.S. Global Investors

Would it surprise you to learn that a vast majority of equity valuation models state that stocks should head much higher over the next five years?

2013-05-16 Searching For a New Investment Paradigm by Philip Lawton of Research Affiliates

Investment management is supposed to be built on brilliant minds’ novel insights and innovative approachesor so our training and traditions have led us to believe. We celebrate our best investors, such as Warren Buffett, Peter Lynch, and Bill Gross, and our best financial theories, such as modern portfolio theory (MPT) and the efficient markets hypothesis (EMH).

2013-05-16 Investors Living in Emerging Markets are a Bullish Bunch! by Mark Mobius of Franklin Templeton Investments

Part of my job involves putting myself out on a limb at times, and I have taken the risk of being subject to contrary (sometimes enthusiastically so) viewpoints. I’ve even been accused of being too optimistic about emerging markets, perhaps partly because my views often represent a stark contrast to dramatic news headlines. So when I took a look at the findings of Franklin Templeton Investments’ 2013 Global Investor Sentiment Survey (GISS),1 I was pleased to discover my longstanding optimism about emerging markets seems to be spreading among investors.

2013-05-16 Hold Your Houses: The Housing Recovery May Take Longer Than You Think To Reach Consumers by Joshua Anderson, Emmanuel S. Sharef, Grover Burthey of PIMCO

New residential construction needs to double from 2012 levels to meet long-run stable demand, and the pace of that increase is critical. Consumer credit growth is hindered by strict lending standards, continued deleveraging and limits to mortgage equity withdrawal. As a result, the balance of mortgage debt is unlikely to meaningfully increase in the next 12-18 months, delaying a return of the virtuous consumer cycle.

2013-05-16 The Dow Hits All-Time Highs, But The Truth Is It Remains Cheaply Valued by Chuck Carnevale of F.A.S.T. Graphs

The Dow Jones industrial average sits above 15,000, an all-time high. But don’t be fooled, this doesn’t mean that stocks are expensive. I understand that it seems logical to assume that

2013-05-16 Where Are the Bears? Evidence vs. Anecdotes in Assessing Market Sentiment Over a Full Market Cycle by JJ Abodeely of Sitka Pacific Capital Management

Imagine the stock market as a national park with just three kinds of animals: bulls, bears, and pigs. The saying “bulls make money, bears make money, pigs get slaughtered” conveys the idea that one can be bullish or bearish and be successful depending on the market environment, whereas greedy pigs are almost always set up for catastrophe.

2013-05-15 And That\\\'s the Week That Was by Ron Brounes of Brounes & Associates

Fiscal Cliff. Sequester. Different names for similar budgetary issues that both basically resulted in games of Congressional “kick the can.” Now in a stroke of luck for non-compromising politicos, the budget deficit is shrinking as higher payroll taxes and paybacks from previously bailed out entities (thanks Fan) have enhanced government revenues since the beginning of the year.

2013-05-15 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Stocks moved higher again last week as the data continues to reflect an economy that continues to trudge along to the consternation of many.

2013-05-15 Is Japan\'s Sun Rising Again? by Kenichi Amaki of Matthews Asia

Japan’s stock market continues to rise while its currency heads in the other direction. Its new leaders, now enjoying high approval ratings, are battling deflation and trying to jump-start its economy with a new determination. This month Kenichi Amaki takes a look at what, if anything, is different this time.

2013-05-15 Yen Weakness: Buffett\'s \"Shot Heard Round the World\'\" by Bill Smead of Smead Capital Management

We returned recently from the Berkshire Hathaway Annual Shareholder Conference. The most exciting and profound comment to us was what Warren Buffett said about the unprecedented actions the last three years by the Federal Reserve Board. Buffett was asked about the risks of the Federal Reserve’s current plan to buy Treasuries to keep interest rates very low.

2013-05-15 Weekly Market Commentary by Team of Tuttle Tactical Management

We have been talking about some troubling divergences in the market for the past couple of weeks. These have worked themselves out--- Small and mid cap stocks are now outperforming the S&P 500 over the past week and month and Treasury Bond yields are coming back up.

2013-05-15 Consumers: The Great Sobriety by Milton Ezrati of Lord Abbett

Americans have cut debt, boosted savings, and held spending in checkall of which should aid the economy.

2013-05-15 Pacific Basin Market Overview by Team of Nomura Asset Management

Pacific Basin equity markets continued to rally in April, led by Japan where the central bank announced that it intends to double the monetary base and inject liquidity into the markets. The MSCI AC Asia Pacific Free Index including Japan gained 4.9% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.6% higher in April. (All performance figures are based on MSCI indices in U.S. dollar terms with dividends included unless otherwise stated.)

2013-05-15 The Great Capitulation by Pamela Rosenau of HighTower Advisors

If you were to browse the virtual bookshelves of Amazon, some of the latest titles do not seem overly optimistic about the future. In Niall Ferguson’s The Great Degeneration, he examines why civil society is in complete “free fall”. Another recent “pick me up” entitled The Great Deformation, by former Reagan budget director David Stockman, discusses the negative impacts of Washington’s political dysfunction to our democracy.

2013-05-14 Is Kyle Bass Wrong About Japan? by Robert Huebscher (Article)

It’s standard practice for short sellers to kick dirt on their targets, and Kyle Bass is doing just that by asserting that Japan’s economy is on the verge of a financial crisis. In a talk on May 3, he said that Japan’s demise is imminent. So far, though, Bass has been wrong – and he has his detractors, who are far less certain of Japan’s destiny.

2013-05-14 David Rosenberg – My Love Affair with Bonds is Over by Robert Huebscher (Article)

The chorus of rate-spike-fearing inflationists has a new member. David Rosenberg, a stalwart advocate of fixed-income investing for the last quarter century, publicly declared on May 3 that his “love affair with the bond market has come to an end.” Prepare for a redux of 1970s stagflation, he said, and he advised investors how to construct portfolios to prepare for that scenario.

2013-05-14 Nouriel Roubini: Four Reasons Investors Should be Worried by Robert Huebscher (Article)

Despite a modest recovery from the nadir of the financial crisis, the global economy still faces tail risks, according to Nouriel Roubini. Roubini’s forecast is not as gloomy as the one that earned the moniker “Doctor Doom,” when he correctly predicted the housing market collapse and the ensuing global recession. But, in a talk May 1, he identified today’s biggest danger points in Europe, the U.S., China and geopolitics which he said threaten to destabilize the global economy.

2013-05-14 Mohamed El-Erian: The Three-Speed Global Economy by Robert Huebscher (Article)

The global economy is operating at three distinct speeds, according to Mohamed El-Erian, and investors need to understand the implications of the divergent paths that key countries are following. Japan and most European countries are going backward, he said, and could continue in that direction for decades. The U.S. is “healing,” but not quickly enough to get to “escape velocity.” Certain emerging markets, meanwhile, are adapting technology and innovation and are growing rapidly.

2013-05-14 Letter to the Editor by Various (Article)

A reader responds to Robert Huebscher’s article, Niall Ferguson: Four Reasons Why the U.S. is Failing, which appeared last week.

2013-05-14 Guide to Working with Monetary Napalm by Scott Colyer of Advisors Asset Management

Napalm is a highly incendiary form of jellied fuel. It was used extensively in the Vietnam War to quickly ignite massive fires over large areas of land. In the world of financial incendiaries, the Fed’s overwhelming monetary stimulus has ignited asset prices in the United States with the force and effectiveness of napalm. Is the fire short lived? Are the gains in asset prices temporary or can they be believed? Are the housing and stock markets on fire just because of the Fed’s quantitative easing (QE) or could there be a much more fundamental reason?

2013-05-14 It\'s Not That Bad Out There by Brian Wesbury, Bob Stein of First Trust Advisors

Certain things, like the sun rising, or the tides shifting, can be counted on. It’s also true that when government shrinks as a share of GDP, things start to pick up.

2013-05-14 Cyclical and Emerging Market Strength May Be Pointing to Better Growth by Bob Doll of Nuveen Asset Management

Last week U.S. equities advanced as the S&P 500 increased by 1.3%. We have been amazed bythe market’s ability to continue to rally in an environment in which sales growth has been anemic and earnings gains have been largely based on companies’ abilities to manage margins and utilize financial engineering.

2013-05-14 Who is Henry Singleton? by Jeffrey Saut of Raymond James

The year was 1974 and Teledyne (TDY/$77.56/Outperform), on a split-adjusted basis, was trading at about $0.05 per share. By 1986 it was changing hands around $75 per share. Unfortunately, back in 1974 I didn’t have enough money to buy more than 10 shares, having lived through the devastating bear market of 1973 1974 where the D-J Industrial Average (INDU/15118.49) lost 47% of its value.

2013-05-14 The Budget Deficit by Scott Brown of Raymond James

The Monthly Treasury Statement showed a large budget surplus for April. Some of that may prove to be temporary. Income was pulled forward into 2012 ahead of expected tax increases in 2013 and that was reflected in higher tax payments in April. Some of it is payback from the bailouts of a few years ago (for example, earnings from Fannie Mae and Freddie Mac). However, much of the improvement reflects a rebound from a severe recession. Tax revenues are recovering and recession-related expenses are trending lower.

2013-05-14 New Normal ... Morphing by Mohamed El-Erian of PIMCO

The New Normal has morphed to include consequential elements of a "stable disequilibrium." In the midst of notable multi-speed dynamics, the global economy as a whole is muddling along a road that will give way over the next three to five years to one of two stark alternatives: either sustainable global growth, institutional and political renewal in the West and safe deleveraging; or growth shortfalls that cause financial instability, fuel greater social tensions, accentuate political dysfunctions and complicate debt traps.

2013-05-13 Skills, Education, and Employment by John Mauldin of Millennium Wave Advisors

It is graduation time, and this morning finds me swimming in a sea of fresh young faces as a young friend graduates, along with a thousand classmates. But to what? I concluded my final formal education efforts in late 1974, in the midst of a stagflationary recession, so it was not the best of times to be looking for work. It turned out that I had a far different future ahead of me than I envisioned then. But I would trade places with any of those kids who graduated today, as my vision of the next 40 years is actually very optimistic.

2013-05-13 Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management

Equity markets remained strong and the portfolio continued to outperform well, with a monthly gain of 3.2% vs 0.6% for the index. After two decades of policy torpor, Japan’s government has rapidly adopted a trio of policies to kick start the economy: monetary and fiscal stimulus, plus a weak yen. This is shock and awe’ relative to GDP, being far greater than any experiment in any developed country since the Second World War.

2013-05-13 An Idea Around Disclosure and Something to Consider on Pension Reform by Gregg Bienstock of Lumesis

A fair amount was written this week regarding the SEC Cease and Desist Order against the City of Harrisburg (“Order”) and, while certainly not privy to all that was said, we want to take a slightly different perspective. Before getting there, a very brief summation of the Legal Discussion from the Order and the SEC’s Report of Investigation (“Report”).

2013-05-13 Closing Arguments: Nothing Further, Your Honor by John Hussman of Hussman Funds

Nothing further, your honor. I am resting my case.

2013-05-13 Tenuous Times? by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab

US stocks continue to make new highs, yet commodities have struggled and Treasury yields remain low, albeit up from recent near-record lows. Although not the standard playbook, we remain optimistic but acknowledge an equity pullback can occur at any time. Manufacturing data has been soft, the employment picture is mixed, and housing continues to improve. The European Central Bank (ECB) has joined the easing arty, illustrating the continued disappointments coming out of the eurozone.

2013-05-13 The Cash Conundrum by Ric Dillon of Diamond Hill Investments

In an effort to keep interest rates low, the Federal Reserve, along with other global central banks, is flooding the financial markets with liquidity. This additional liquidity is pushing prices for most financial and real assets higher. At some point, the Fed’s policy of easing will end and in some ways will be reversed. Purchases of government-backed securities may end this year (QE3); however, the Fed has signaled that the near zero interest rate policy for Fed Funds is likely to continue into 2015.

2013-05-13 Americas: Regional Economic Review 1Q 2013 by Team of Thomas White International

Weaker global demand and prices for energy and commodities, as well as softer than expected domestic consumption have restricted the growth outlook for most economies in the Americas region during the first three months of the year. Fewer monthly job additions in the U.S. have dented consumer confidence, and growth for the current year is now forecast to be moderately lower than earlier expectations.

2013-05-13 Uncomfortable With the Debate of Our Times by Michael Kayes of Willingdon Wealth Management

A relatively weak first quarter earnings season is winding down, while major stock market indices are reaching all-time highs. This doesn’t quite add up, does it? Overall, corporate profits advanced at an anemic 2.5% in the first quarter, well below the long-term average of 7%. Worse over, revenues were actually flat in the first quarter, below expectations in most cases. On top of that, most companies that have reported earnings have also lowered estimates for the remainder of the year.

2013-05-11 Three Reasons to Buy Gold Equities Today by Frank Holmes of U.S. Global Investors

A strong stomach and a tremendous amount of patience are required for gold stock investors these days, as miners have been exhibiting their typical volatility pattern. That’s why I often say to anticipate before you participate, because gold stocks are historically twice as volatile as U.S. stocks. As of March 31, 2013, using 10-year data, the NYSE Arca Gold BUGS Index (HUI) had a rolling one-year standard deviation of nearly 35 percent. The S&P 500’s was just under 15 percent.

2013-05-10 A Tale of Two Markets: Equity Bulls and Bond Bears by Douglas Cote of ING Investment Management

Surging equity markets absent an accompanying rate rally is a red flag, as Treasury yields remain well below “normal”. While investors’ renewed enthusiasm for equities is warranted, they must be careful to avoid the “folly of gaming diversification”. Corporate earnings have impressed, though revenue has struggled due in part to a moribund Europe. Divergent markets mean investors should stay broadly diversified in equities and real bonds not near-cash and ever alert to the fundamentals.

2013-05-10 DICK's Sporting Goods Inc: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of DICK’s Sporting Goods Inc through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-05-10 2013 US Financial Markets: Part 2 - The TINA Hypothesis by Clyde Kendzierski of Financial Solutions Group

Contrary to the “Bernanke Illusion” (money market funds are a zero return investment), history indicates that money market funds are likely to provide investors with returns approximating inflation over the next decade. As I pointed out in our last letter, the markets are pricing in inflation levels significantly higher than the prospective total returns of 10 year TBonds. The small additional return achieved by corporate bonds or US stocks (at current prices) is unlikely to compensate a buy and hold investor with sufficient gains to justify the interim risks.

2013-05-10 Recession Watch: ECRI\'s Weekly Leading Indicator Continues to Show Improvement by Doug Short of Advisor Perspectives (dshort.com)

Essentially ECRI is sticking to its call that a recession began in mid-2012, although the company calls it a "mild" recession, which is quite a shift from their original stance 19 months ago: "...if you think this is a bad economy, you haven’t seen anything yet."

2013-05-10 Symptoms Don\'t Lie by Peter Schiff of Euro Pacific Capital

A good doctor will not simply make a diagnosis based on measurements. The symptoms and complaints expressed by the patient are at least as important in making a determination as the data provided by diagnostic tools. When the data says one thing and the symptoms continuously say another, it makes sense to question the reliability of the instruments. This would be particularly true if the instruments are furnished by a party with a stake in a favorable diagnosis, say an insurance company on the hook for treatment costs. The same holds true for the U.S. economy.

2013-05-10 The U.S. Economy Stands to Gain from Actions of Central Banks by Team of Northern Trust

Recent central bank meetings have resulted in a reiteration of accommodative monetary policy from the Federal Reserve and new initiatives from its counterparts overseas.

2013-05-10 Earnings: Why Capex Will Be the New Driver of Business Growth by Ron Sloan of Invesco

This is the second in a three-part series on the economy, earnings and equities. The first post examined the US Federal Reserve’s gross domestic product (GDP) goals. Here, we discuss how those GDP goals set the stage for businesses to increase their capital expenditures.

2013-05-10 Countries Should Be Careful Not to Overstimulate Their Housing Markets by Team of Northern Trust

Countries should be careful not to overstimulate their housing markets. Credit extension is improving, but remains modest.

2013-05-10 3 Reasons to Explore the Frontier by Russ Koesterich of iShares Blog

Though frontier markets have outperformed developed and emerging markets so far this year, it’s not too late to explore the frontier. Russ offers three reasons to consider having a small strategic allocation to “pre-emerging” world equities.

2013-05-09 China's Building, but Will They Come? Ghost Cities by Mark Mobius of Franklin Templeton Investments

Some of you may have heard or read about the current state of the real estate market in China, often covered in a sensationalistic way, with talk of “ghost cities” and “bubbles” ready to burst and so forth. These types of reports can cause quite a jolt in the market, which is what we saw happen, probably not coincidentally, after a popular US television newsmagazine aired a somewhat negative report in March. But as I’ve said many times before, there’s often more to a story; important parts can end up on the cutting room floor.

2013-05-09 Equity Market Distortions Create Big Payback Potential by Joseph Paul, Kevin Simms of AllianceBernstein

Even after this year’s equities rally, market imbalances created by the financial crisis in 2008 have not disappeared. When these distortions unwind, we expect deep value stocks to rapidly recover.

2013-05-09 BlackRock Inc: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of BlackRock Inc through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-05-09 Make Way for the MIPS by Scott Minerd of Guggenheim Partners

Emerging markets still provide excellent opportunities for outperformance in equities, with Malaysia, Indonesia, the Philippines and Singapore being among the best positioned for the decade ahead.

2013-05-09 The Effect of Negative Interest Rates in Europe by Zach Pandl of Columbia Management

In his press conference last week, European Central Bank (ECB) President Mario Draghi signaled that policymakers may be more open to a cut in the central bank’s deposit rate. Although Mr. Draghi acknowledged this move could have negative side effects, he added “we will be able to deal with the negative consequences we will look at this with an open mind.” Several major central banks considered negative deposit facility rates during and after the financial crisis, but so far, all have determined that the idea did not pass the cost/benefit test.

2013-05-09 Why Reinhart & Rogoff Still Matter by Russ Koesterich of iShares Blog

Despite Reinhart and Rogoff’s methodology mistakes, their widely cited paper’s basic conclusion still holds. Russ K warns that both policy makers and investors ignore it at their own peril.

2013-05-08 Europe (and Italy's Rivals) Appear on Road to Recovery by Par Rostom of Franklin Templeton Investments

When Europe’s debt disease spread to Cyprus, accompanied by bank runs and public unrest, some doubted the European Central Bank’s (ECB) ability to contain the contagion. And, even more recently, Slovenia turned up sick, warning of escalating debt problems and faltering banks. But with the setbacks have come some surprising steps forward, too, including progress in Italy, which recently formed a new coalition government.

2013-05-08 Germany Under Pressure To Create Money by John Browne of Euro Pacific Capital

Currently, central banks around the world are walking in lock step down a dangerous path of money creation. Led by the Federal Reserve and the Bank of Japan, economic policy is driven by the idea that printed money can be the true basis of growth. The result is an unprecedented global orgy of currency creation. The only holdout to this open ended commitment has been the hard money bias of the German-dominated European Central Bank. However, growing political pressure from around the world, and growing dissatisfaction among domestic voters have shaken, and perhaps cracked, the German resolve.

2013-05-08 Are Recent Market Highs Merely Rhymes, or Something More? by Joe Kringdon of Pioneer Investments

As someone smarter than me once observed, history never repeats itself, but it does rhyme. Oftentimes those rhymes, like my family’s dinner bills, are simply head fakes’ curious coincidences with no residual meaning. Other times, however, they do carry meaningful implications. Consider, for example, what’s going on in the markets right now.

2013-05-08 Deflation Is OverPlease Come Out by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management

A blooper reel of 20th century history would likely include a feature on Japanese soldier Hiro Onoda. Posted to a small island in the Philippines during the waning days of World War II, when Onoda’s mission proved unsuccessful he was ultimately forced to flee into the woods, where he survived on a steady diet of coconuts and bananasfor almost 30 years after the end of the war.

2013-05-08 Are Investors Breathing a Sigh of Relief? by Bob Doll of Nuveen Asset Management

Last week U.S. equities delivered another gain as the S&P 500 increased by 2.0%.1 On Friday, the U.S. jobs report offered relief from fears of an accelerating weakness caused by prior softness during this time in each of the last three years. However, the full set of economic data for the week supports our view of a slower second quarter in a post-sequestration environment.

2013-05-08 US Economy Should be \"Good Enough\" for Stocks by Russ Koesterich of BlackRock Investment Management

The April employment report confirms that the US is on a slow-but-positive course of economic growth. This environment should be conducive to further gains in equity prices. Europe, in contrast, continues to struggle and investors should approach that region with caution.

2013-05-08 Monthly Letter to Our Clients and Friends by Kendall Anderson of Anderson Griggs

It has been years since we have seen new highs on the Dow Jones Industrial Average and the S&P 500. Although the wait can be traumatizing, it’s nice to get proof that market prices ultimately recognize growth of business value.

2013-05-08 6.7 Million “Missing Workers” Where Did They Go? by Gary Halbert of Halbert Wealth Management

Today we will touch several bases. We begin with last Friday’s unemployment report which was hailed by the mainstream media, but had a lot of bad news to go with the good. From there we look at the estimated 6.7 million “missing workers” in this economy and ponder if they’re permanently gone from the employment rolls.

2013-05-08 Absolute Return Letter: In the Long Run We Are All in Trouble by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners

In the long run we are all dead, said Keynes. Maybe so, but we could be in trouble long before then. Investors appear preoccupied with central bank policy. We argue that investors are quite right in keeping their eye on the ball but, to us, it looks as if they are focusing on the wrong ball. The real worries for the long term are demographics and negative real interest rates and the effect these factors may have on equity returns.

2013-05-07 Niall Ferguson: Four Reasons Why the U.S. is Failing by Robert Huebscher (Article)

Niall Ferguson is the champion of anti-Keynesian economists. Last week, he explained why America’s pursuit of Keynesian policies is leading to disastrous consequences.

2013-05-07 Breakaway Brokers: What the Data Really Say by Bob Veres (Article)

For the past 15 years, and especially since 2008, few assumptions have been accepted as widely or confidently in the financial services world as the idea that brokers are leaving the wirehouse environment in increasing numbers – and taking their clients with them. Underlying that assumption is another: that the trend is accelerating, and will continue to do so until the brokerage industry’s retail footprint has been severely diminished. The more extreme projections see the entire brokerage asset gatherer/sales model following Lehman, E. F. Hutton and Bear Stearns into extinction.

2013-05-07 How to Construct a Low-Cost Conservative Portfolio by Geoff Considine (Article)

One of the greatest challenges for investors today is constructing low-risk portfolios that provide the best returns using low-cost funds or ETFs. Doing so requires advisors to define risk as the potential for retirees to fail to achieve their financial goals, instead of as volatility, as it is traditionally measured. I will show how to construct a low-cost portfolio that minimizes this definition of risk while generating a reasonable real return.

2013-05-07 Mutual Fund Companies Need to Prepare for a Changing Environment Fund Industry Turbulence Ahead by Paul Franchi (Article)

The mutual fund industry grew explosively from the 1980s on a rare tonic of a low-inflation credit expansion powered indirectly by international trade flows. That run reached a peak in 2008 when the application of quantitative easing (QE) served to prevent industry collapse with a softer form of transition, which continues today but must end when inflation returns.

2013-05-07 On Trees and Forests by Guy Cumbie (Article)

A reader responds to Robert Huebscher’s article, The New Challenges to Reinhart and Rogoff, which appeared last week.

2013-05-07 Meredith Whitney – State-issued GO Muni Bonds are Safe by Ben Huebscher (Article)

Meredith Whitney has softened her tone regarding muni bonds. The analyst who famously predicted disaster for the entire market on national TV now she says that new governors have been elected and states have begun reforming. There will be problems in four key states, but she is not predicting a disaster. In fact, she said investors will be safe in general obligation bonds.

2013-05-07 And That\'s the Week That Was by Ron Brounes of Brounes & Associates

The trend is your friend (and the current trend is a “friend with benefits” for investors). After a record-setting first quarter for stocks, analysts were skeptical that the “party” would continue. And yet, the Dow Jones enjoyed a fifth straight month of gains in April, while the S&P 500 and Nasdaq one-upped the Blue Chips with six month winning streaks.

2013-05-07 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn

Financial markets got the news they wanted last week as Europe cut interest rates, while here at home the Federal Reserve hinted they might do even more when it comes to money printing. To top it off, Friday’s employment report showed improvement from March although the details caused most to discount the excitement.

2013-05-07 Deere & Co: Fundamental Stock Research Analysis by Team of F.A.S.T. Graphs

This article will reveal the business prospects of Deere & Co through the lens of FAST Graphs fundamentals analyzer software tool. Therefore, it is offered as the first step before a more comprehensive research effort. Our objective is to provide companies that have excellent historical records and appear reasonably priced based on past, present and future data and expectations.

2013-05-07 Central Banks Steal the Spotlight Once Again by Chris Maxey, Brian Payne of Fortigent

Central banks around the world continue to provide increased stimulus to their respective economies. Increased conviction over pro-stimulus policies comes in light of recent flaws found in the Reinhart, Rogoff January 2010 paper, which suggested that government debt of more than 90% of GDP is detrimental to economic growth. The latest week brought another round of news in the world of central banking, although it seems the number of options left on the table is running short. What central bankers hope for now is that economies will finally enter recovery mode.

2013-05-07 Why Did Gold Prices Fall So Sharply? by Paresh Upadhyaya of Pioneer Investments

April’s sharp decline in gold got people’s attention. Plunging from $1,561 to $1,347/oz on April 12 and 15, it was a staggering decline of 13.7% the biggest 2-day drop since 1983. Is anything significant going on behind the scenes? We believe this price action is not a new phenomenon for gold, but a continuation of a much bigger trend that has been in place since the third quarter of 2011.

2013-05-07 Attractive Dividends? Earnings Growth? A Way to Get Both by Team of Lord Abbett

International equities provide broader opportunities for combining appealing divided yields and earnings growth.

2013-05-07 Global Bonds: A Flexible Solution for an Uncertain Market by Olivia Albrecht, Michael Story of PIMCO

The recent rallies in both safe-haven and risk assets have left many investors in a quandary. We believe alpha, or above-market return, will have to play a greater role for investors seeking to meet return targets. In our view, the current environment affords many opportunities for generating alpha.

2013-05-07 Investing for Income and Capital Appreciation by Giorgio Caputo, Rob Hordon, Ed Meigs, Sean Slein of First Eagle Investment Management

A Q&A with First Eagle Investment Management’s senior members and their market views and strategic insights.

2013-05-07 Quarterly Letter by Team of Grey Owl Capital Management

In his April 2013 commentary, PIMCO’s Bill Gross wrote, “PIMCO’s epoch1, Berkshire Hathaway’s epoch, Peter Lynch’s epoch, all occurred or have occurred within an epoch of credit expansion What if an epoch changes? What if perpetual credit expansion and its fertilization of asset prices and returns are substantially altered? What if a future epoch favors lower than index carry or continual bouts of 2008 Lehmanesque volatility ?”

2013-05-06