The Independent Market Observer

Have a Wonderful Labor Day Weekend!

August 31, 2018

As the days get shorter, the kids head back to school, and everyone turns their attention back to work after the summer, it seems appropriate to take a day to celebrate everyone who works. It seems even more appropriate to have that celebration by taking a day off to go to the beach, camp, or do whatever it is you enjoy—spending some quality time with family and friends.

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Does a Busy Summer in the Economic News Mean a Busy Fall?

August 30, 2018

As we approach the end of summer (I know, not technically), it seems like it never really happened. During most summers, a lack of economic news reduces me to writing about lobster rolls. This summer, however, there was no shortage of things to write about.

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Appearance on CNBC's Squawk Box, August 30, 2018 [Video]

August 30, 2018

Will the economy remain healthy in 2019, especially as the effects of the tax cuts start to fade? I talked about this and more earlier today on CNBC's Squawk Box.

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Iceland: Lessons in Political Economy

August 29, 2018

I just got back from 10 days in Iceland with my family. It was a wonderful trip. We saw and hiked waterfalls, glaciers, and volcano craters. We also went on a whale watch, where we got within yards of humpback whales and saw a very rare whale pod (not normally seen in Icelandic waters). As a family, we had a great time—highly recommend!

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Why Is the Market Hitting New Highs?

August 28, 2018

Maybe I should go away more often. When I left for vacation about two weeks ago, markets were pulling back on worries about Turkey. But after 10 days in Iceland (largely free of the news cycle), I come back to find markets hitting new highs. What is going on?

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Monday Update: Potential Slowdown in Housing

August 27, 2018

Today’s post is from Sam Millette, a fixed income analyst on Commonwealth’s Investment Management and Research team.

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The Effect of Tax Reform on Earnings per Share

August 24, 2018

Today’s post is from Brian McCormick, a manager on Commonwealth’s Investment Management and Research team.

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In Defense of Active Management

August 23, 2018

Today’s post is from Brian Price, Commonwealth’s senior vice president of investment management and research.

Much has been made of the recent proliferation of ETFs and the seemingly endless fee war taking place among the providers of low-cost index funds. As a self-described value guy, I love the fact that advisors have the choice of populating client portfolios with cheap beta through passive vehicles that, for the most part, are very tax efficient. In fact, cost and tax efficiency are the two main reasons why I am a firm believer that ETFs and index mutual funds should absolutely be part of the conversation when constructing portfolios.

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A Closer Look at the Conference Board Leading Economic Index

August 22, 2018

Today’s post is from Andrew Kitchings, a portfolio manager on Commonwealth’s Investment Management and Research team.

When trying to determine the direction of the economy and the market, many turn to the Conference Board Leading Economic Index® (LEI) because it is a composite of multiple indicators covering a broad spectrum of the economy. But the LEI is not overly useful in terms of forecasting future moves in the market. Instead, it can help concisely explain factors that the market is already analyzing and anticipating within the broader economy. Let’s take a closer look.

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Know Your Portfolio: International Small-Caps

August 21, 2018

Today’s post is from Peter Roberto, an investment research associate on Commonwealth’s Investment Management and Research team.

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Monday Update: Concern over Inflation Grows Among Consumers

August 20, 2018

Today’s post is from Sam Millette, a fixed income analyst on Commonwealth’s Investment Management and Research team.

Last week’s major economic releases were focused mainly on housing and consumers. The news was a mixed bag for both. This week will be relatively quiet, with only two major data releases.

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Recent Supreme Court Rulings May Boost Munis

August 17, 2018

My name is Sam Millette, and I’m a fixed income analyst on the Investment Management and Research team here at Commonwealth. I focus on analyzing individual municipal bonds (munis) for our advisors and their clients. As you are likely aware, munis are primarily bonds that have been issued by local municipal governments to finance public investments. Income from these bonds is often exempt from federal and state income tax, which makes them attractive investments for high-net-worth individuals in a high tax bracket.

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Brexit: Deal or No Deal?

August 16, 2018

Today’s post comes from Anu Gaggar of Commonwealth’s Investment Research team. Take it away, Anu! —Brad

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Book Review: The Absent Superpower, by Peter Zeihan

August 15, 2018

I will be away with my family in Iceland for the next 10 days and will be turning over the blog to my colleagues for that time. We have some very interesting pieces lined up, and I expect you will find them both entertaining and useful. But before I go, here is one last post—a book review!

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The Real Lesson from Turkey’s Crisis

August 14, 2018

As Turkey’s crisis rumbles on, investors are on the watch for signs of contagion. Emerging markets in general are getting hit, so contagion remains a possibility. Still, there are reasons to believe the crisis will burn out in Turkey itself.

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Monday Update: Inflation Moderates, But Still Above Fed Targets

August 13, 2018

Last week’s data was all about prices and whether inflation is picking up. It doesn’t seem to be, in any significant way. This week, we'll see a wide range of data, including housing reports and retail sales.

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Quick Takes from the Financial News: Inflation and Turkey

August 10, 2018

To end the week, I have a couple of quick takes on some hot topics from the financial news. Let’s start with inflation.

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Monthly Market Risk Update: August 2018

August 9, 2018

Market risks come in three flavors: recession risk, economic shock risk, and risks within the market itself. So, what do these risks look like for August? Let’s take a closer look at the numbers.

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Economic Signs and Portents

August 8, 2018

I am reasonably convinced that the economy remains solid—although my conviction is softening (see yesterday’s Economic Risk Factor Update)—and that the market is more likely headed higher than lower through the end of the year. But there have been an increasing number of events that, while not really quantifiable, are making me go hmm. So, in the interest of giving some time to anecdotal data and not just the quantifiable stuff, here we go with some economic signs and portents.

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Economic Risk Factor Update: August 2018

August 7, 2018

For the first time in quite a while, we saw disappointing news in the monthly reports for two major data points. First, job growth weakened significantly. Although the prior months were revised upward—more than making up for the shortfall—the question remains as to whether the labor market is getting closer to tapped out. Second, business confidence pulled back significantly. It remains expansionary, but this drop is an unusual move and raises the question of whether the tariffs are finally starting to have an effect.

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Monday Update: Consumers Strong, Business Confidence Weakens

August 6, 2018

Last week was a busy one for economic news, from consumer confidence to the employment report. This week’s data will be all about prices—and whether inflation is picking up.

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Is the July Jobs Report Really as Bad as It Looks?

August 3, 2018

The employment report, probably the single most important economic report there is, came out this morning, and the headline number on job creation was not good at all. In June, the economy added 213,000 jobs, and the expectations for July included another 193,000. Instead, we got only 157,000. You might see a fair amount of angst in the coverage today.

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Market Thoughts for August 2018 [Video]

August 2, 2018

July was a great month for financial markets. In the U.S., the Dow, S&P 500, and Nasdaq were all up, and after a terrible June, both developed and emerging markets bounced back. What fueled this performance? Strong economic data, in particular GDP growth, which came in at 4.1 percent for the second quarter, nearly double what it was in the first. Job growth remains strong, corporations are beating sales and earnings expectations, and even the Fed is more positive on the economy than it has been in some time.  

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A Look Back at the Markets in July and Ahead to August

August 1, 2018

As we begin August, let’s take a look back at the markets in July, plus what to expect in the month ahead.

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