Stock Markets and the Economy
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Your Retirement Finance Week in Review
Inflation has been rising. Should the Federal Reserve be worried about it? The Consumer Price Index (CPI) has been rising steadily since early 2015. It recently settled in above 2%, and the headlines announced that the latest 12-month reading was at the highest level since 2011. Some Fed officials, including Chairman Jerome Powell, have said […]
Tech Stocks Are the Talk of Wall Street
Either technology is taking over the economy, or the market is sending some warning signs about technology stocks. I wrote earlier this year about how technology’s share of the S&P 500 has been climbing the last few years because returns in technology stocks are much higher than the rest of the index’s sectors. Recently, the […]
The Dollar’s Recent Surge Is Unusual
The dollar has been soaring lately, and that has affected both the global markets and economy, as well as reflected recent occurrences. The moves in the dollar in the last few months are unusually large for a major currency. The Bloomberg U.S. Dollar Index increased 4% since mid-April. The dollar had been trending steadily lower […]
The Challenging Phase for Investors Begins: Investment and Economic Review — June 2018
Six months ago in my semiannual investment and economic review, I explained how the United States was in the midst of a transition from a period of very easy monetary policy to a tighter policy. This transition now is over, and we are currently in a period of tight monetary policy and in the late […]
How Markets Respond to Monetary Policy
The Federal Reserve’s been tightening monetary policy since 2015, yet economic growth remains solid. The economy’s resilience after the Fed’s tightening is a mystery to a number of investors and analysts, but it shouldn’t be. It’s a normal part of the economic cycle. The federal funds rate has been increased six times since the Fed […]
Have we Reached Peak Earnings for This Cycle?
Most companies now have reported their first-quarter earnings, and the overall results are outstanding. Almost 70% of companies exceeded the earnings estimates for the quarter, and more than 72% exceeded revenue estimates. The percentage of companies exceeding earnings estimates was the highest since 2006 and among the highest since 1999. A large percentage of companies […]
Dollar Surge Surprises Analysts
The dollar’s been soaring lately and surprising many analysts. After the latest upward surge, the PowerShares DB US Dollar Bullish ETF (UUP) still is down 4.50% over the last 12 months and 0.85% annualized for the last three years. But it’s up 4.86% for the last three months, 3.39% for the last four weeks and […]
Investors Sell off Stocks of Companies with Good Results
Investors are learning that stock prices don’t always follow earnings. Over the long-term, corporate earnings overall tend to grow at about the same rate as gross domestic product (GDP), and stock prices tend to rise at the same rate as earnings. But that’s over the long term, since there can be a lot of divergence […]
