The persistently low rate of inflation is feeding a debate on the Federal Reserve’s monetary policy. The latest inflation reading (specifically, the PCE Core rate) fell to an annual rate of only 1.6% despite overall strength in the economy. White House officials and some economists argue that the Fed should support continued economic expansion by lowering interest rates; indeed, in the lead up to the Fed’s meeting on Wednesday, many investors anticipated a rate cut. However, in announc… View More
Less than two months ago, conventional wisdom thought the US economy was in real trouble. The consensus expected real GDP would barely grow, if at all, in the first quarter of 2019. Many were in a tizzy about the "second derivative," of growth, obsessing that near zero growth in Q1 would mean three straight quarters of deceleration in real GDP, which if extrapolated meant a recession could be lurking. Oops! The US economy accelerated in the first quarter, with real GDP up at a 3.2% annual rate … View More
U.S. stocks were mixed last week, with the S&P 500 Index largely unchanged. Behind the headline numbers, however, there was some movement within and between sectors. Health care stocks sold off sharply last week, with managed care stocks hit particularly hard by regulatory concerns. The CEO of United Healthcare came out strongly against the “Medicare for all” plans being discussed by Democratic presidential candidates, which called the issue into focus. In contrast, both technology and f… View More
On Friday, the much anticipated earnings season began with JP Morgan reporting earnings 5% above expectations; positive commentary by management on the strong demand for credit by consumers and businesses helped propel the Financials sector higher. The Nasdaq led all indices for the week (0.57%) followed by the S&P 500® (0.51%) and the Russell 2000® Index (0.14%); the Dow Jones Industrial Average fell 0.05%. The S&P 500® reached an important milestone on Friday when the Index cro… View More
China’s release of strong economic data last Sunday set the stage for across-the-board market gains in an otherwise quiet week leading into next week’s start of earnings season. The Russell 2000® Index (2.78%) led the major indices followed by the Nasdaq (2.71%), S&P 500® Index (2.06%) and the Dow Jones Industrial Average (1.91%). Last Monday’s momentum extended through the week with upbeat comments from U.S. and Chinese officials on the progress of trade negotiations; a meeting… View More