INVESTMENT ADVISORY SERVICES: FEATURED MARKET DATA
Stocks and Treasuries Diverge
Stock and bond markets are expressing divergent views of the future. Typically, stock prices and bond yields rise together. Bond yields began to decline in the 4th quarter of 2018 and stocks declined as expected. However, stocks recovered in late December while bond yields have continued to fall.
by Laura Fox
INVESTMENT ADVISORY SERVICES: FEATURED MARKET DATA
Personal Income & Spending Surprise to Upside
The recent Personal Income and Spending report showed that consumers, who represent over half of the U.S. economy, exceeded forecasts for income and spending in April. This healthy increase followed strong spending in March, which was the best monthly increase since 2009.
by Laura Fox
INVESTMENT ADVISORY SERVICES: FEATURED MARKET DATA
GDP May Fall From Strong Q1
Rising exports, lower imports and higher inventory offset weaker growth in consumer spending and business investments. Final sales to domestic purchasers rose only 1.3% for the quarter. This measure of domestic demand fell for the third consecutive quarter. Despite some underlying weakness, the GDP report exceeded much lower expectations from earlier this year.
by Laura Fox
INVESTMENT ADVISORY SERVICES: FEATURED MARKET DATA
Growth Concerns Invert Yield Curve
On March 22, amid signs of weaker global growth, 10-year US Treasuries closed at a lower yield compared to 3-month Treasury Bills for the first time since 2007. This inversion of the Treasury curve continued the next four trading days. An inverted yield curve means investors think short-term rates will fall.
by Laura Fox
INVESTMENT ADVISORY SERVICES: FEATURED MARKET DATA
Manufacturing Still Matters
Growth declined at U.S. manufacturing firms in February. The ISM manufacturing index fell to 54.2 in February, a two-year low and below market expectations of 55.8. Four of the five primary components: orders, employment, production and deliveries, all declined.
by Laura Fox
INVESTMENT ADVISORY SERVICES: FEATURED MARKET DATA
Strong Consumer Spending Reflects Confidence
Consumer spending rose strongly in November, led by durable goods such as trucks and appliances. Consumer outlays are on pace for the best quarter of growth in four years. Growth in spending has been trending above income in 2018. This has resulted in the personal savings rate falling to 6.0%, the lowest monthly rate since March 2013.
by Laura Fox
INVESTMENT ADVISORY SERVICES: FEATURED MARKET DATA
Credit Market Concerns
The low interest rate environment has encouraged stock buy-backs and debt issuance resulting in higher leverage ratios. As the credit cycle turns, this increased leverage could trigger concerns regarding credit quality trends. Widening corporate bonds spreads have signaled real or perceived risk by the market.
by Laura Fox
INVESTMENT ADVISORY SERVICES: FEATURED MARKET DATA
U.S. Economy Still Chugging Along
U.S. GDP growth remains solid with a reported 3.5% annualized growth rate during Q318 following a strong Q218 pace of 4.2%. Consumer spending and higher inventory levels contributed a substantial boost while lower net exports detracted from growth. Tax cuts continue to stimulate economic activity although we expect the impact to fade in upcoming quarters.
by Laura Fox
INVESTMENT ADVISORY SERVICES: FEATURED MARKET DATA
Rising Costs Impacting Home Sales
Rising home prices and higher mortgage rates appear to be impacting home sales nationally. According to a national home price index, home prices have increased by over 6.3% in the past year. Meanwhile, the US 30-year fixed mortgage rate has increased from about 4.0% a year ago to over 4.6% in August 2018.
by Laura Fox
INVESTMENT ADVISORY SERVICES: FEATURED MARKET DATA
U.S. Deficits Fueling Increased Debt Issuance
Additional tax revenue from rising GDP in 2018 has failed to offset tax cuts and higher spending, resulting in wider deficits. To finance the growing deficits, the Treasury is boosting sales of Treasury bills, notes and bonds. Many analysts and investors forecast that these developments will lead to higher borrowing costs for the U.S. government.
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