Perspectives

Earnings are expected to come in well ahead of last year's numbers, despite a couple of notable misses this week (GS, IBM). Weak growth in 1Q16 provides an easy comp and improved nominal growth provides an additional boost for companies to report high single digit to low double digit Y/Y growth rates. S&P 500 earnings are expected to rise 10.8% Y/Y.   It is worth noting the double anniversary effect of Energy sector earnings weakness, which will mitigate the lift to earnings. S&P profi… View More

With the United States and many global markets closed for Good Friday, stocks ended the short trading week lower. Trading volumes were low for much of the week, as investors may be concerned with rising tensions overseas in Syria and North Korea, and the continuation of strained diplomatic relations with Russia. Of the indexes listed here, only the Dow's losses were under 1.0%. On the other hand, the Russell 2000 and Nasdaq suffered the largest dips, falling 1.42% and 1.24% respectively. The pri… View More

Markets last week varied from unchanged (for the Dow Jones Industrial Average) to modest, or more significant, declines for the S&P 500® Index, the NASDAQ and the Russell 2000® Index, respectively. The mixed results followed the midweek release of the Federal Reserve’s March meeting minutes. Discussions among Fed officials on the gradual unwinding of bond holdings, a process known as “balance sheet normalization,” unsettled investors.  Most members of the monetary policy committee a… View More

Markets rose this week on the prospects for tax reform and rising oil prices. Small cap stocks, which have lagged year-to-date, led the gains; the outperformance of these more aggressive stocks suggests that investor confidence is regaining momentum. Meanwhile, the S&P 500® Index, which is dominated by large companies, ended the quarter with its best performance since the fourth quarter of 2015. Apparently, market sentiment has quickly moved past last week’s failed effort at health care r… View More

The markets declined last week as the focus on health care reform weighed on investor sentiment.  Many had viewed the administration’s early efforts on the American Health Care Act, the replacement for Obama’s Affordable Care Act, as potentially delaying pro-growth initiatives, most importantly tax reform and an infrastructure package.  The White House’s push for a Friday vote in the House of Representatives set the stage for a transition to other, more popular, items on the President�… View More

Stocks rose this week following the Federal Reserve announcement on Wednesday to increase interest rates for a second time in three months.  Fed Chair Janet Yellen, in communicating the rate decision, noted: “We have confidence in the robustness of the economy and its resilience to shocks”; and, “Many more people feel optimistic about their prospects in the labor market.”  The favorable assessment buoyed investor sentiment, especially for shares of small and mid-sized companies which o… View More

Declining oil prices weighed on the markets this week; West Texas Intermediate crude, the North American benchmark, fell 9% to drop below $50 per barrel for the first time this year.  Record U.S. inventory levels, partly due to scheduled refinery maintenance, but also a result of increased production, contributed to the pullback.  At an industry conference this week in Houston, Saudi officials, who would prefer an oil price increase to $60 per barrel or higher, told several U.S. producers not … View More

Markets were mixed last week; gains for the Dow Jones Industrial Average and S&P 500® Index continued while the technology-heavy NASDAQ and Russell 2000® Index of small company stocks lagged.  As investors gravitated towards conservative areas of the market, electric utilities were the strongest performers followed by consumer staples companies, such as food and beverages.  The euphoria that is normally at major market tops is largely absent despite the fact that major market indices are… View More