The Independent Market Observer

Coronavirus Update: April 30, 2021 [Video]

April 30, 2021

Today, I'd like to provide an update on the coronavirus, including the economic and market implications. We’ve had good news on the medical front, as the fourth wave of the virus doesn’t seem to be gaining traction. Case counts and positive test rates are back to the lows we saw as the third wave subsided, and hospitalizations and death rates have improved. One potential problem is that vaccination rates have slowed, which we will need to keep an eye on.

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Don’t Sell in May and Go Away

April 29, 2021

As we approach the summer months, there are a lot of reasons for investors to be worried: inflation, taxes, the deficit, and on and on. I am hearing quite a bit about reasons not to be cheerful, some of which we’ve talked about in other posts. But because of where we are in the calendar, there is one more making the rounds—the old market chestnut “sell in May and go away”—that I want to talk about today. The short response to this adage, for readers in a hurry, is “don’t.”

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Will the Fed Do Anything About Interest Rates?

April 28, 2021

I have had a number of questions recently about inflation and what that means for the Fed and interest rates. The general assumption seems to be that inflation is about to rise sharply and that the Fed will be forced to raise rates to control it, with the usual panoply of devastating side effects. The taper tantrum gets mentioned frequently, as when rates rose sharply and derailed stock markets after the Fed suggested it would tighten policy.

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Vaccinations Are Working—But We’re Not There Yet

April 27, 2021

I spent last week down in the Florida Keys on vacation with my family. It was great. The weather was terrific, we went snorkeling and kayaking, and the place we stayed was very nice. Truly relaxing.

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Monday Update: Initial Jobless Claims Set New Pandemic-Era Low

April 26, 2021

Last week was relatively quiet on the economic update front, with only three major data releases. The weekly initial jobless claims and new home sales reports served as highlights. This week will be busier, with reports on first-quarter GDP growth, durable goods orders, and personal income and spending.

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With Interest Rates Up, Should Investors Search for Yield?

April 23, 2021

The 10-year Treasury yield has been climbing steadily since hitting a low of 0.5 percent in August 2020. This week, as of April 20, it was close to 1.56 percent. But the rise in rates hasn’t been equal across the broad spectrum of fixed income instruments. If you’re an investor who hasn’t made any changes to your fixed income portfolio since last August, it’s likely your exposures have changed. As a result, your investments may not be delivering the benefits you’re looking for. To assess the situation, take a look under the hood at your fixed income portfolio. But first you need to understand what current interest rates are telling us—and how inflation is involved.

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The Winners and Losers of the American Jobs Plan

April 22, 2021

Infrastructure is the backbone of any healthy economy, and America’s is in desperate need of refurbishment and investment. Indeed, President Biden campaigned on a promise to revitalize our aging infrastructure and to invest heavily in clean energy. Biden recently took the first step in that direction by introducing the $2.3 trillion American Jobs Plan. Let’s talk about this plan’s winners and losers, as well as what it could mean for your investment portfolio.

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What’s Trending in Target-Date Funds?

April 21, 2021

Today's post is from Michael Geraci, supervisor, retirement consulting investment services.

Last year was a challenging one for the financial markets, resulting in volatility for most investment products. In fact, the coronavirus pandemic presented the biggest test for most asset allocation products since the 2008 financial crisis. 401(k) investments were no exception, specifically target-date funds.

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Monday Update: Retail Sales Soar as Economic Recovery Accelerates

April 19, 2021

Last week saw the release of a number of important economic updates, with most reports pointing toward a continued acceleration in the pace of the economic recovery. Highlights included a surge in March’s retail sales and housing starts, as well as a new low for the number of weekly initial jobless claims. This week will be relatively quiet, with a focus on March’s home sales reports.

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Coronavirus Update: April 16, 2021 [Video]

April 16, 2021

Today, I'd like to provide an update on the coronavirus, including the economic and market implications. On the medical front, we’ve seen modest deterioration over the past two weeks. Case counts and positive test rates have risen steadily, while hospitalizations and death rates have stabilized or increased by less than case growth. But with vaccinations continuing at an accelerating pace—the trend is now at more than 3.3 million per day—the race between vaccinations and the virus continues.

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Monthly Market Risk Update: April 2021

April 15, 2021

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Market Risk Update. Thanks for the assist, Sam!!

Equity markets continued to rally in March, although a rise in long-term interest rates during the month led to some volatility, especially for growth and technology companies. The S&P 500 gained 4.38 percent, while the Dow Jones Industrial Average rose by 6.78 percent. The Nasdaq Composite's heavy technology weighting dragged down its performance, resulting in a gain of only 0.48 percent during the month. Despite the volatility, both the Dow and the S&P 500 ended the month close to all-time highs, and the Nasdaq has since bounced back. Markets remain in rally mode, although the risks are still significant.

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Economic Risk Factor Update: April 2021

April 14, 2021

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam!

The economic recovery continued to pick up steam in March, driven by public health improvements and the federal stimulus checks that reached bank accounts during the month. All of the major indicators we track in this piece showed improvement, with rising service sector and consumer confidence coinciding with faster job growth and a continued normalization of interest rates.

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Finding Opportunity in Growth and Value

April 13, 2021

Today's post is from Jim McAllister, director, equity research.

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Monday Update: Service Sector Confidence Surges to Record High

April 12, 2021

Last week saw a number of important economic updates, with a focus on March’s service sector confidence and producer inflation reports. Service sector confidence served as a highlight during the week, with the better-than-expected March report bringing the index to its highest level on record. This will be another busy week for updates, with a focus on March’s consumer inflation and retail sales reports and a look into consumer and home builder sentiment in April.

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Medical and Economic News Continues to Demonstrate Improvements

April 9, 2021

Two weeks ago, after several weeks of significant improvement, the medical news started to worsen as case growth and positive test rates ticked back up. Whether this situation might signal the start of another wave of infection growth was an open question. The good news is that the answer looks to be no. Case growth, while slightly above recent lows, has stayed steady despite the continued reopening of the economy and the increasing spread of more contagious variants of COVID-19. While the battle against the pandemic continues, vaccinations are also continuing. They should end up choking the virus off before it gets to a significant fourth wave. The medical risks are still real, but they are lower than they were two weeks ago, and they’re dropping every week.

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The Importance of Investing in Financial Literacy

April 8, 2021

“The number one problem in today’s generation and economy is the lack of financial literacy.” Alan Greenspan

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Looking Back at the Markets in Q1 and Ahead to Q2 2021

April 7, 2021

The first quarter looks to be the turning point, both for the pandemic here in the U.S. and for the economic damage it has caused. While risks still remain, especially in the short term, the significant progress we made in the first two months of the year started coming to fruition in March, signaling that we are through the worst of it.

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Monday Update (on Tuesday): Labor Market Recovery Picks Up Steam

April 6, 2021

Last week saw a number of important economic updates, with results largely coming in above economist estimates. Highlights included better-than-expected results for March’s consumer and business confidence surveys and a much-better-than-expected March jobs report. This will be another busy week for updates, with a focus on international trade, the minutes from the most recent Fed meeting, and a look at producer inflation in March.

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Market Thoughts for April 2021 [Video]

April 5, 2021

In March, we saw a strong end to a healthy first quarter for stock markets. Both the Dow and S&P 500 here in the U.S. showed gains, while developed markets abroad showed lower but still positive returns. We also had good news on the economic front. Hiring rebounded, layoffs dropped, and consumer confidence rose to post-pandemic highs.

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Coronavirus Update: April 1, 2021 [Video]

April 1, 2021

Today, I'd like to provide an update on the coronavirus, including the economic and market implications. After several weeks of improvement on the medical front, we’re starting to see modest deterioration as the country reopens. Case counts and positive test rates are back to early March levels, while hospitalizations and death rates have stabilized. While the short-term risks are real, we do have a better outlook for the next two to three months. At that point, between vaccinations and existing exposure, we should be at or close to herd immunity.

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