October 25, 2016

A Quiet Week Ends With Indexes Up

A quiet week ends with indexes up, but right now, the general market sentiment seems unsure about where it stands and where to go from here. Why did the markets have a sluggish week? Experts last week described the markets as lazy and docile, and we have to agree. If these five days of trading are a movie, it would probably put a lot of people to sleep. On paper, last week seemed to provide plenty of opportunities for market excitement – from major companies’ earnings releases to the European Central Bank’s latest policy announcement. In reality, however, much of what we saw and heard led to little change and few strong reactions. But why? We’d point to a few key occurrences: Earnings reports were mostly good, but few were outstanding. The European Central Bank held interest rates where they are. The presidential election continues to hold the markets in limbo. While […]
September 20, 2016
April Jobs Report Shows Slower Pace of Growth

After Summer Slumber, Volatility is Back

WEEKLY UPDATE – SEPTEMBER 19, 2016 This article is about Volatility is Back. After Summer Slumber, Volatility is Back, Volatility picked up last week due to pressures from lower oil prices and speculation about the timing of the Federal Reserve’s next rate hike. This summer has been historically calm for markets, leading markets to trade without big intraday gains or losses.[1] However, Friday broke that streak, possibly ushering in a period of greater volatility as uncertainty looms. For the week, the S&P 500 gained 0.53%, the Dow grew 0.21%, the NASDAQ added 2.31%, but the MSCI EAFE dropped 2.49%.[2] After Summer Slumber, Volatility is Back The market is facing a dilemma based on mixed information and an uncertain political landscape. On the one hand, economic data is neither weak nor strong enough to make the choice to raise interest rates easy for policymakers. On the other hand, the unpredictable nature of […]
August 1, 2016

Stocks Close Mixed on GDP Disappointment

Stocks Close Mixed on GDP Disappointment WEEKLY UPDATE – August 1, 2016 Stocks broke their four-week winning streak, closing mixed after the release of a surprisingly low estimate of second-quarter economic growth. For the week, the S&P 500 lost 0.07%, the Dow fell 0.75%, the NASDAQ grew 1.22%, and the MSCI EAFE added 2.36%.[1] The preliminary estimate of Q2 Gross Domestic Product (GDP) growth showed that the economy grew a paltry 1.2% last quarter versus the 2.6% growth expected.[2] Investors were understandably disappointed as they had hoped for a resurgence after a slow first quarter. Professional economists were also surprised. The New York Fed had forecasted GDP growth of 2.1% and the Atlanta Fed had predicted 2.3% growth.[3] Why the surprise? Digging deeper into the data, we find that the disappointment came from an unexpected fall in business inventories. On the positive side, the drop may boost future economic growth as businesses […]
July 6, 2016

Stocks End Q2 With a Bang – Financially Simple

Stocks End Q2 With a Bang QUARTERLY UPDATE – JULY 5, 2016 After the previous week’s post-Brexit selloff, stocks closed out last week with one of the best performances of 2016 as investors bought the dip. In the first half of the year, the S&P 500 was up 2.69%, the Dow was up 2.90%, the NASDAQ was down 3.29%, and the MSCI EAFE was down 6.28%. All these numbers are as of the quarter’s end on June 30.[1] What lesson can we draw from recent market gyrations? Markets respond unpredictably to shocks, and periods of strong performance often follow close on the heels of frightening sell-offs. While the media loves to predict gloom and doom at every opportunity, smart investors know to stay calm, look at underlying fundamentals, and stay away from emotional decisions. While we can hope for smooth sailing in the weeks ahead, we should expect continued volatility. […]
May 23, 2016

Fed Changes Tune On Interest Rates

WEEKLY UPDATE – MAY 23, 2016 “Fed Changes Tune On Interest Rates”, Stocks closed out a bumpy week mixed, ending a three-week stretch of losses for the S&P 500 and NASDAQ. The Dow, however, extended losses for a fourth straight week for the first time since 2014.[1] For the week, the S&P 500 gained 0.28%, the Dow lost 0.20%, the NASDAQ gained 1.10%, and the MSCI EAFE added 0.16%.[2] Fed Changes Tune On Interest Rates Market reactions to the release of the April Federal Reserve Open Market Committee meeting minutes drove much of last week’s volatility. The official minutes showed that the Fed is moving away from its cautious stance and is open to raising interest rates as soon as June if data points to a solid second quarter.[3] The unexpected hawkishness surprised many investors who weren’t expecting a hike until later this year. However, some professional economists predicted a June hike. […]