Jul 162016
 

Market Conditions

Up, up, and away! The bull is clearly back. Equities were up for the third week in a row, reaching a series of fresh record highs. The swift post-Brexit rebound has been driven by falling treasury yields (making bonds more expensive compared to stocks), better than expected economic data, and higher expectations for company earnings growth. The U.S. jobs report showed the strongest monthly hiring since last October, monthly retail sales rose sharply with three-month growth now the strongest in more than a year. Rate hike expectations did edge up a little, but concerns about a rate hike taking place before the end of 2016 are almost non-existent. The fed funds futures market estimates the likelihood of a hike in July at 2.4% while the implied probability of a hike in December sits at 47.8%.

The S&P 500 opened Monday at 2131.72 and closed on Friday at 2161.74, up 30.02 or 1.41% for the week.

Chart_071616_SPX

Continue reading »

Jul 022016
 

Market Analysis

Equities recorded their strongest weekly gains of the year following last week’s Brexit debacle. Markets were spurred higher by a vow to further ease monetary policy by the Bank of England during the summer. In the wake of those comments, markets have priced in an 85% chance of a rate cut in England by August. This all puts further pressure on central banks in the United States to keep interest rates low indefinitely. It appears that the zero-percent interest rate policy (ZIRP) is now the “new normal”. The S&P opened Monday at 2031.45 and closed on Friday at 2102.95, up 71.5 points, or 3.52%.

Chart_070216_SPX

Continue reading »