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Sep 12

This Week’s Market Moving Events

The perception of an increased potential for a September rate hike drove market participants to sell just about every asset class, causing major stock indexes to decline by 2 ½%, Oil falling by 3 ½% and bond yields to rise to the upper end of their recent trading range. This emotional (over) reaction to some Fed members indicating that a rate hike might be warranted shouldn’t come as a surprise as every Fed observer has long known that the Fed wants to raise rates and continues to look for data that supports their desire to raise rates. Unfortunately, the ‘data dependent’ Fed is unlikely to find sufficient positive economic figures that supports such a move. And while the absence of strong data doesn’t mean the Fed won’t move, it is a strong indication that at most they will likely raise rates only once before taking another extended break from monetary policy action. As such, investors should expect a further flattening of the yield curve when the Fed moves, an environment that shouldn’t hurt the outlook for equities in the long-term.


This Week’s Market Moving events:

  • Monday: Chinese Economic data (10 PM EST)
  • Tuesday: German Economic data, Small Business Optimism Index
  • Wednesday: Mortgage Applications, Import / Export data
  • Thursday: Retail Sales, PPI, Empire State Manufacturing Survey, Business Inventories, Industrial Production
  • Friday: Consumer Prices and Consumer Sentiment

Jul 25

This Week’s Market Moving Events

Market Recap:

The S&P and other major indexes closed at record highs last week as optimism over corporate earnings help lift share prices. Solid economic news in form of a solid housing starts report and a rise in oil rig counts, indicating strength in the energy sector, provided investors with the reason for the bullish sentiment. U.S. Treasury yields rose slightly for the week, while the USD gained against the Euro and other major currencies.

Looking Ahead:

It will be a busy week for market observers, with plenty of key economic data being released on Tuesday and Friday, including a first look at Q2 GDP, FOMC meeting minutes, and some of the most widely held companies releasing earnings. So far, about ¼ of the S&P constituents have reported quarterly earnings and of these 68% have exceeded expectations. However, this only tell part of the story, as the earnings bar is very low; the season is expected to bring a 3.7% decline in revenues and a 5.5% decline in earnings for the S&P. As such the forward P/E for the S&P 500 is now just above 17X, a historically high figure.

This Week’s Market Moving Events:

  • Monday: Dallas Fed Manufacturing Survey. Gilead Sciences (GILD), Kimberly Clark (KMB) and Texas Instruments (TXN) report earnings
  • Tuesday: Redbook Report, Case Shiller Home Prices, PMI Services, New Home Sales, Consumer Confidence, Richmond Fed Manufacturing Index, Investor Confidence. 3M (MMM), Apple (AAPL), Caterpillar (CAT), Elli Lilly (LLY), Dupont (DD) McDonalds (MCD), Verizon (VZ) report
  • Wednesday: Durable Goods, Pending Home Sales, FOMC Announcement. Altria (MO), Boeing (BA), CocaCola Co (KO), Facebook (FB), Murphy Oil (MUR), Southern Co (SO) report
  • Thursday: International Trade data, Kansas City Fed Manufacturing Index, Amazon (AMZN), Colgate Palmolive (CL), Conoco Phillips (COP), Ford (F), International Paper (IP), Raytheon (RTN) report
  • Friday: Eurozone GDP, CPI and PPI data, U.S. employment cost index, Q2 GDP. Cabot Oil & Gas (COG), Merck (MRK), Xerox (XRX), Public Service Enterprise (PEG) report.

Jul 11

This Week’s Market Moving Events

Market Recap:

After a choppy start to the holiday-shortened week, stocks rallied some 1 ½% on Friday as a strong jobs report boosted hopes that markets would return to a ‘goldilocks’ environment where the economy is growing just enough to help drive earnings growth, but remains tepid enough to keep inflation at bay and the Fed from raising interest rates. Markets are entering a seasonally difficult period, and second quarter earnings season is just getting on its way. Market participants will likely focus on this week’s labor reports as well that Thursday’s Bank of England announcement – the first scheduled news release since the Brexit vote.


Looking Ahead:

Volatility is likely to remain at the forefront, keeping hedging costs high. On the positive side, markets closed on a relatively strong note on Friday, however they failed to set new highs, meaning that they remain in their trading range. Market participants will likely focus on forward looking statements by corporate chieftains during the current earnings season to discern how the second half of the year may play out.


This Week’s Market Moving events:

Monday: U.S. Labor Market Conditions report

Tuesday: Redbook, JOLTS (Job Openings and Labor Statistics Report), Wholesale Trade

Wednesday: Import / Export Prices, Atlanta Fed Business Inflation Outlook survey, Beige Book

Thursday: Bank of England Announcement, PPI, Jobless Claims, Chinese GDP and Retail Sales

Friday: Industrial Production, Retail Sales, Business Inventories, Consumer Sentiment

Jul 05

This Week’s Market Moving Events

Market Recap:

The S&P 500 and other indexes experienced a significant turnaround rally last week, gaining some 3%. And while this is certainly welcomed news, we caution investors from becoming too complacent. Initial fears relating to the British referendum vote to exit the European Union may well have been overblown, but remember “you can’t un-ring a bell,” and the forces that have been set in motion are unlikely to dissipate soon. When taking into account last week’s rally, there are plenty of warning signs coming from the market. The U.S. 10 Year Treasury is yield 1 ½%, German Bunds have a negative yield, Gold continues to rise, and financial shares just ended one of their worst quarters since the (end?) of the financial crisis.

We continue to expect the year to end with gains, however we caution investors from becoming complacent or taking on too much risk.

Looking Ahead: This Week’s Market Moving Events

  • Tuesday: Euro block PMI, U.S. Factory Orders, Consumer Spending
  • Wednesday: International Trade, Job Creation Index, Redbook Report, PMI & ISM Manufacturing data, FOMC Minutes
  • Thursday: ECB Minutes, Jobless Claims. PepsiCo (PEP) reports earnings
  • Friday: June Employment Report

Jun 29

Brexit ease rebound Global equities including U.S. Stocks

Market Recap:

Global equities, including U.S. stocks rebounded on Tuesday as market participants’ fears relating to BREXIT eased. Energy, Financials and Consumer Discretionary shares fared best, as JP Morgan, Travelers and Visa led the Dow Jones Industrial Average nearly 270 points higher. The Euro and the British Pound rebounded slightly against the dollar, while Treasuries sold off slightly with the 10 Year yield closing at 1.46%; oil also gained.


Looking Ahead:

International bourses are helping lift U.S. equity futures in pre-market trading on Wednesday morning, as the initial over-reaction to Briton’s vote to exit the European Union calmed. In spite of the positive market moves yesterday and possibly today, which we certainly welcome, we urge investors to be cautious and not allow short-term volatility or emotions to drive their investment decisions. Quarter-end ‘window dressing’ (a term used to describe end of quarter trading by mutual fund managers to sell some losers and replace them with recent winners to make their portfolios look better) is likely as we approach the Independence Day holiday. Thereafter markets will likely refocus their attention on economic news as well as corporate earnings news. To that end, Nike reported earnings on Tuesday afternoon, beating EPS forecasts but disappointing on the sales and revenue front. Next week’s release of FOMC meeting minutes and Chinese economic data will be critically watched.

Jun 27

The world is changing: The Brexit vote is a small piece of a very complex puzzle

Market Update: Briton’s voted to exit the Eurozone last week, sending shock waves through markets, creating political turmoil and causing enormous amounts of speculation as to what it all means. And while speculation is running rampant, the only thing we know for certain is that the process to exit the Eurozone will take about 2 years, perhaps longer as the process is largely up to the U.K. Parliament.


That’s it, we can’t be sure of anything else. A new referendum is unlikely, in spite of gathering over 3 million signatures requiring Parliament to discuss the matter. How will corporations react, will big banks move out of London as some pundits have suggested? Will this cause a new recession given the already fragile economic outlook for Europe and the rest of the world? Perhaps, but then again that could happen regardless of the Brexit vote. The world is changing, the Brexit vote is just one more, small piece of a very complex puzzle. Looking at the recent events in Europe, Britain, through the lens of a U.S. investor is more reassuring than most have discussed, as the U.S. economy is now un-equivalently more attractive and on more solid footing than virtually all other major economies of the world. Correspondingly, while there will likely be increased short-term market volatility, the fundamentals for most businesses, particularly domestic ones, have not changed materially as a result of Brexit. Given the general unease and nervousness associated with the implications of Brexit, we expect high-quality dividend paying stocks to gain even more favor with investors, as their relative safety and attractive yields offer a bit of a safe haven.


In the long-term, we think that the implications and economic impact of the Brexit vote will likely be less severe than many pundits think. Central Bankers will likely remain dovish, keeping interest rates low for even longer – there is even some speculation that the U.S. Fed’s next move will be to lower rates. And while multi-national corporations will likely have an even more conservative attitude towards cap-ex spending these factors will likely be temporary. For now, all indications are that the global economy will withstand this shock and that intermediate and long-term growth trajectories remain unaltered as a result of Brexit.

May 23

This Week’s Market Moving Events

Market Recap:

In spite of headlines alerting investors that major indexes such as the Dow Jones Industrial Average have declined four weeks in a row, markets are a mere 3 ½% off their all-time highs. More significant than the eye-catching headlines, markets have been acting rationally, punishing companies who haven’t delivered on their earnings and growth promises, while rewarding those that have. Yes, the upcoming June Fed meeting and fears of a potential “Brexit” (Great Britain exiting the Eurozone) are adding to the volatility, and there continue to be some concerns over the broad economic outlook, but overall markets activity has been sensible and calm. The energy sector continues to be amongst the best performers in reaction to rising oil prices, while large-cap pharma stocks are trading on expected consolidation.

Looking ahead:

Investors will be paying close attention to key earning reports this week from companies like Autozone (S: AZO), Toll Brothers (S: TOL) and Tiffanies (TIF) to get a better reading on the health of the U.S. consumer.

This Week’s Market Moving Events:

Monday: Autozone (: AZO) and Toll Brothers (S: TOL) report, no major economic data points are being released

Tuesday: EU Inflation data, U.S. PMI Manufacturing, New Home Sales, Richmond Fed Manufacturing Activity Index

Wednesday: Home Prices, International Trade

Thursday: Durable Goods, Jobless Claims, PMI Services, Pending Home Sales

Friday: Q2 GDP revision, Corporate Profits, Janet Yellen speaks

May 11

Stocks rallied more than 1% on Tuesday, after a slew of positive earnings reports

Market recap:

Stocks rallied more than 1% on Tuesday, after a slew of positive earnings reports – including an impressive report from Amazon – lifted investor’s spirits. An absence of negative economic news and Fed speakers helped contribute to the rally as there was little new news for market bears to hang their hats on. A slight rally in Treasuries as well as the US dollar also contributed, as traders viewed this as confirmation that these are likely to remain in their current trading ranges. The JOLTS (Job Openings and Labor Turnover Statistics) report gave little reason for the Fed to become more hawkish as we approach the June FOMC meeting. While there are over 5 ½ million job openings in the United States, the rate of job changes and length of time new jobs go unfilled continue to point to a somewhat weaker than normal jobs market.


Looking Ahead:

U.S. equity futures are pointing to a slightly negative open in early hours, as investors around the globe are taking a pause after yesterday’s rally to search for new reasons to lift share prices. There is little in terms of economic news today, so perhaps markets will experience some calmness before the deluge of earnings and economic data, including Thursday’s Import / Export price report as well as Friday’s retail sales report. Over the weekend, investors will get news on Chinese Industrial Production as well as Retail Sales, both numbers will be heavily dissected to discern the strength of the Chinese economy. Make sure to tune into Money Matters with Gary Goldberg this Saturday at 3:00 PM on The Answer 970 AM, visit for details.

Apr 26

Further Volatility to cause Emotional Overreactions

Market Recap:

Stocks sold off and then rebounded to close the trading day near the flat line on Monday. While oil, which had been a key driver for stock market direction, was sharply down for the day, stocks in general fared better. The ‘new’ correlation seems to be with bonds, which sold off in the early part of the day before rebounding. Earnings season kicked into high gear as some 100 companies reported on Monday alone.


Looking Ahead:

Investors should expect further volatility as earnings and economic news releases are sure to cause emotional overreactions. Tomorrow’s FOMC announcement will likely contain language that indicates that the U.S. economy can sustain 2 or more interest rate hikes, however that the Fed has chosen to hold off due to international concerns. The Fed is in quite a bind, as it absolutely wants to raise rates, but is (rightfully) fearful that such a move will further strengthen the dollar, thereby weakening the Chinese Yuan, which could cause a significant banking crisis in the worlds’ second largest economy. Moreover, given the challenges that Europe and Japan are facing, the negative impact on these economies is also undesirable. As such, we continue to believe that commodity prices will remain somewhat depressed, that the U.S. dollar will remain in its current trading range, and that if the Fed doesn’t raise in June, no hike in 2016 is a significant possibility. From an investors perspective this will mean that interest rates will remain suppressed, making high-quality dividend paying stocks attractive alternatives for those seeking income in a low-yield environment. Don’t miss this week’s Money Matters with Gary Goldberg; for stations and air times, please click here. Visit our website at for more details, including for a free, no-obligation portfolio evaluation.

Apr 25

This Week’s Market Moving Events

Market Recap:

While it may have been an uneventful week for markets, it was an important one. On the heels of a slew of (decent) earnings reports, major stock indexes stabilized and ended within arms-reach of their all-time highs. Speculation that the U.S. Federal Reserve would hold interest rates steady at this week’s meeting became almost unanimous. And while we agree that the Fed is unlikely to raise rates this go around, we believe that the risks are in what Chairwoman Yellen says, not what the committee does. So far, Dr. Yellen has been on the Dovish side, a trend that is sure to end at some point.


Looking Forward:

Index futures as well as major international bourses are down slightly on Monday morning, as investors digest recent political events relating to President Obama’s European tour, the failed Doha accord and threats by Saudi Arabia relating American’s ability to sue foreign governments for damages due to terrorist related damages. More significantly, there are a slew of earnings reports and economic data on tap for the week, not least of which is the long-awaited April Fed meetings scheduled for Tuesday and Wednesday of this week. Markets are likely to remain range bound until the Fed’s press conference on Wednesday afternoon or Thursday’s release of revised Q1 GDP data.


This Week’s Market Moving Events:

Monday: New Home Sales, Dallas Fed Manufacturing Index

Tuesday: Durable Goods Orders, Case Shiller Home Price Index, Richmond Fed Manufacturing Index

Wednesday: International Trade data, FOMC Meeting Minutes and Press Conference

Thursday: GDP, Jobless Claims, Kansas City Manufacturing Index

Friday: Employment Cost Index, Chicago PMI, Consumer Confidence

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