201607.12
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The Hope Trade Returns Though Severely Stunted As It Should Be

All it takes are the words “record high” and all economic or financial sins are forgiven and forgotten. The financial media cannot contain themselves whenever they get the chance to use the term, adding qualifications like “soar” and “sharply” to make sure everyone gets the message. Context need not apply because stocks are supposed to…

201606.27
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Sector Snapshot: Defensive Sectors Take The Lead

Even before the Brexit vote, momentum was shifting to defensive sectors. The rally in weak dollar sectors – other than the gold/silver mining industry – was looking very overbought and tired anyway, so Brexit was a good excuse to take some profits. Whether the dollar can retain the strength it has gained on this historic…

201606.13
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Global Asset Allocation Update

The risk budgets are unchanged again this month. For the moderate risk investor, the allocation between risk assets and bonds remains at 40/60. I struggled more with this decision than any in recent memory but in the end there just isn’t sufficient evidence to make a change. Raising or lowering the allocation to risk assets…

201606.10
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Bi-Weekly Economic Review

Economic Reports Scorecard Concern about recession is growing again as formerly strong portions of the economy turn down. The last two weeks brought reports of new weakness in the labor market, continued slowing in construction and renewed weakness in manufacturing. Auto sales were also weak based on the reports from individual manufacturers. The state of…

201606.05
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What Now, Ms. Yellen?

Well, that was ugly. The lousy employment report released this past Friday threw the markets and probably the FOMC for a loop. Stocks didn’t really do anything – yet – but other markets more than made up for that minor oversight. The dollar was down 1.5% on the week, all of that after 8:30 Friday…

201606.03
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Chart Of The Week: Stocks More Expensive Than 2000

This week’s chart comes to us from Ned Davis Research via this article on MarketWatch: What that bottom pane shows is that the median price to sales ratio for the S&P 500 is about 2.2. That is higher than in 2000, which was about as obvious a bubble as one is likely to ever see….

201605.24
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Sector Snapshot: Dollar Rally Could Impact Leaders

The short term leadership is shifting as the dollar comes off its lows. Energy and materials had been leading the market during the recent period of dollar weakness. As the dollar found its footing over the last month, defensive sectors took the lead.  Whether this short term shift continues will likely depend on whether the…

201605.13
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Bi-Weekly Economic Review

Economic Reports Scorecard The tone of the economic reports improved over the last two weeks with quite a few releases coming in better than expected. From a scorecard viewpoint, we had 6 reports better than expected versus 8 worse than expected for the reports where a consensus can be tracked and interpreted. (Note: sometimes it…