Jul 28, 2016

FDP Quarterly Market Summary

So far in 2016 it feels like the bad news has far outweighed the good news. During the first half of the year investors were forced to cope with economic concerns, surprising presidential primary outcomes, volatile commodity prices, terrorist attacks and uncertainty from Central Bank leaders. Unsurprisingly, the result was extremes of sentiment that caused markets to fluctuate significantly.…READ ON

BREXIT – A Political Earthquake Felt Around the World

On June 23, the UK voted by a narrow 52-48% to exit (coined BREXIT for Britain’s exit) the 28-nation economic and political bloc called the European Union (EU). It was a non-binding referendum, which means lawmakers in Britain could ignore the results, but that seems unlikely. In a nutshell, dislike of EU regulation and immigration requirements trumped the economic uncertainty of a BREXIT.…READ ON

U.S. Impact

As the political fallout continues, many at home are asking, “How will this affect U.S. financial markets and the U.S. economy?” No one’s crystal ball is perfect, but let’s take a reasonable stab at it.  It’s hard to see how this alone becomes a Lehman moment that crashes into the credit markets and destroys liquidity. One week following the BREXIT vote, credit markets are functioning well.  Banks in the U.S. are in much better shape today as the latest Fed stress test corroborates, the consumer is healthier than in 2008, and housing is on a firmer ground.…READ ON

A Look Ahead

The UK is in a unique position as a member of the EU, while not being a member of the Euro currency bloc. Likewise, the UK maintains one of the strongest independent central banks in the world, the Bank of England.  The UK’s access to the Bank of England strengthens significantly i ts opportunity to provide internal financial support at this time. However, it also complicates the equation for currencies globally. As a result, much of the volatility we have seen since the vote is driven by significant swings in currency values globally.…READ ON

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How Do Investors Spell Relief?

Investors celebrated an ‘in line with expectations’ CPI that suggested the rate of inflation isn’t accelerating. It’s a small win, but it was enough to send the three major market indexes, the Dow, the Nasdaq, and the S&P 500 to new highs.

An Annual Ritual at the Gas Pump

You’re right if you have this nagging feeling that gas prices rise in the spring. As the graphic illustrates, on average prices rise through Memorial Day, plateau over the summer, and slip in the fall. This year is no exception, as prices echo the seasonal pattern.

Rate Cuts Still on the Table, Timing Less Certain

We often discuss the Federal Reserve and interest rates because both greatly impact investors. For starters, changes in interest rates have a significant impact on stock prices and income earned on savings. Sharply higher rates in 2022 pushed equities into a bear market.

Just Do It

That ubiquitous phrase from one of America’s most extensive athletic footwear and apparel makers seems to have been adopted by most American shoppers. The U.S. Census Bureau reported last week that retail sales jumped 0.7% in March, following a strong 0.9% rise in February.

The Road to Lower Inflation Takes a Detour

The rate of inflation is accelerating. That’s not how we hoped to start this week’s Insights. Take a moment and review Figure 1. The 4-month moving average has broken out of its long-term downward trend (red-dashed lines). On a monthly basis, prices bottomed in June and began to gradually turn higher. The upward trajectory picked up in January.