Marketing Commentary- Q2 2005
What’s Been Happening? Alan Greenspan describes the flattening yield curve as a conundrum, and he is about as close to the issue as can be. The surprise for Greenspan and Co. is that as they have raised short-term interest rates nine times in recent years, longer-term rates have fallen. Ten-year treasuries now yield about 4%, whereas overnight loan rates to banks are 3.25%. That very small difference between short and long-term rates historically indicates a slowing economy, yet profits are improving, home prices keep rising and you hardly hear about unemployment rates any more. Winners this...
Read MoreMarketing Commentary- Q1 2005
What’s Been Happening? Like last year, 2005 has begun with a losing quarter for the major stock indices. Smaller company stock funds fell more than Large Company Stocks, reversing the trend of the past few years. The dollar has begun to recover, especially versus the Yen. International Stocks managed to overcome this currency headwind in the past three months to deliver positive gains, but the margins of recent out performance appear to be shrinking. Real Estate funds (REITS) and commodities funds fell sharply in the first quarter. The perception might be that the easy money has been made in...
Read MoreMarketing Commentary- Q4 2004
What’s Been Happening? The dollar continued to fall relative to the Yen and the Euro, adding a tailwind to the returns from International funds. Meanwhile, easing oil prices put domestic financial markets more at ease and the US Stock Market earned 90% of its 2004 return in the past ninety days. Three months ago, markets fretted over the presidential election. As expected, stocks rose after the election uncertainty ended. Despite a backdrop of war, terrorist threats and an uncommon human disaster in Asia, financial markets had a normal year. Broad expectations for higher long-term interest...
Read MoreMarketing Commentary- Q3 2004
What’s Been Happening? Bonds were surprisingly strong in the past three months. As the Fed raised short-term interest rates, the market bid up longer-term bonds and mortgage rates fell. Lower long-term interest rates would be expected to presage a slower growth economy. Then again, this could just be a show of respect for oil prices that have swiftly marched above $50 per barrel. Trends to be Aware of Stocks have moved mostly sideways in the US in 2004, but have fared much better in non US Developed Markets and Emerging Markets. It is counterintuitive that stocks would rise in the...
Read MoreMarketing Commentary- Q2 2004
What’s Been Happening? While we collectively hold our breath, pondering developments in politics and terrorist tactics, financial markets have taken a breather. The U.S. Stock Market advanced modestly for the quarter, at least that’s what a positive return of 1.71% feels like after the volatility of recent years. Bonds and Real Estate securities lost ground as the spectre of rising interest rates provided their first real headwind in recent memory. Emerging Market stocks, as a broad category, fell hardest in the recent quarter but remain well ahead of levels of two years ago. Trends to be...
Read MoreMarketing Commentary- Q1 2004
What’s Been Happening? The recovery in the US stock market continues, although the pace has slowed. Earnings have been stronger than expected, and prices follow profits. Real Estate funds continued to outperform other asset classes, but as of March 31, REIT prices exceed underlying property values by over 30%, so the REIT correction of early April is no great surprise. Small Company stocks have dramatically outperformed Large Company stocks in recent periods. Historically, small company stocks lead recoveries, while Large Company stocks complete them. International funds have awakened from a...
Read More