Research & Market Insights Market Insights

05.06 2010

Initial Thoughts on Market Plunge

Today equity markets tumbled the most in a year on concerns that the European debt crisis will spread, threatening the global economic recovery.  At one point, the Dow Jones Industrial Average was down nearly 1,000 points before recovering to close down 348 points, or 3.2%.  News reports suggest that a trading error in S&P futures…

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05.04 2010

Washington Conference: Much Hinges on November’s Election

Last week I spent two days in Washington, D.C. at world-renowned economist Art Laffer’s 50th Washington Conference. During this conference we were briefed by an array of congressmen, senators, former regulators and the current Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen. Topics ranged from expectations for the November election, to our nation’s debt, to NATO…

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04.30 2010

Cyclical Bounce Continues

The preliminary estimate of U.S. Gross Domestic Product in the first quarter of 2010 is 3.2%, close to the consensus forecast of 3.3%. This marks a significant deceleration from last quarter’s growth of 5.6%, yet indicates the recovery continues, albeit at a pace more sluggish than past recoveries.  Inventory rebuilding again was a significant component,…

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03.26 2010

Wild Week For Financial Markets

Investors encountered an interesting week across financial markets as both the U.S. dollar and S&P 500 reached new 2010 highs, stocks later reversed on elevated volume, and Treasuries were bloodied in the wake of tepid auction demand. Economic news was mixed: durable goods orders showed continued strength in the economy, while existing and new home…

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03.07 2010

Employment Continues To Improve

The Bureau of Labor Statistics released February employment figures on Friday which showed continued, yet far from robust, improvement. Payrolls dropped by 36,000 in February, nearly half the consensus expectation for losses. In another positive sign, prior month losses were reduced, indicating that the massive layoffs of a year ago have abated. In addition, the…

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02.12 2010

How Will the Greek Debt Crisis Be Resolved?

Markets this week were volatile as investors weighed the news coming out of Europe concerning the potential bailout of Greece. On Thursday, European leaders pledged unprecedented support to Greece, yet they failed to provide any details of how the bailout would work. Of course, Greece is not alone among European countries with too much debt,…

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02.06 2010

Investors Take Flight From Risk

Despite generally good news on the economy and corporate earnings, global equity markets are in the midst of the steepest correction since the recovery rally began last March. The week’s peak to trough decline for the S&P 500 was over 5%, and the index is now down over 7% from the January 19th high. A…

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01.20 2010

Election Results – Another Positive for the US Dollar

In the wake of yesterday’s stunning election in Massachusetts, why did the equity markets endure the steepest losses of 2010? After all, markets rallied on Election Day in anticipation of the Republican victory. CNBC’s Jim Cramer used much of his show to urge viewers to “Buy, Buy, Buy!”, based on his belief that gridlock will…

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01.10 2010

Stocks Start New Year Strong, Jobs Not So Much

The calendar may indicate that a new year has begun, but one week into 2010, global equity markets continue to act like it is still 2009. The S&P 500 closed higher each day this week to post a 2.7% gain and close at the highest level since October 2008. On Friday, stocks reversed earlier losses…

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12.22 2009

Has the U.S. Dollar Bottomed?

Did the U.S. dollar bottom on Thanksgiving? Since then, the greenback is up nearly 5% in response to sovereign credit fears, beginning with Dubai and then spreading to Greece. We have been arguing that the “short dollar, long everything else” trade is among the most crowded we’ve ever seen, and that the near term threat…

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