The Independent Market Observer

11/4/13 – Change in the Weather: Colder Outside, Hotter in the Stock Market

November 4, 2013

I took down a tree over the weekend, using a handsaw, branch cutters, and a ladder. I had to do it piecemeal, one branch at a time, as it was right next to my house. That’s a lot of work, and I was sweating hard by the time I got down to the main trunk and had dragged the rest of the tree to the back yard. Yesterday, when I was cutting down the remains for disposal, the weather was a lot colder. A sweater, a fleece, and gloves weren’t keeping me warm. It was a big shift from one day to the next—but hey, I live in New England.

The change in the market weather hasn’t been nearly as quick, but it has been even more pronounced. Taking a look at the market over the past couple of months, it’s clear that the narrative has changed, which probably portends continued strong performance.

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12/21/12 - Outlook 2013: The Economy Returns to Normalcy - The Fiscal Cliff (Part 4)

December 21, 2012

All of the preceding analysis is based on the assumption that the fiscal cliff is averted and that a deal, which phases in any tax increases and spending cuts over time, rather than imposing them all on January 1, is cut.

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12/20/12 - Outlook 2013: The Economy Returns to Normalcy - 2013 Financial Markets Outlook (Part 3)

December 20, 2012

Fixed income

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12/19/12 - Outlook 2013: The Economy Returns to Normalcy - The Real Economy in 2013 (Part 2)

December 19, 2012

To try to estimate where the real economy will be in 2013, we must first consider where growth might come from. Consumer spending is approximately 70 percent of the economy, so this will be the first area we consider.

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12/18/12 - Outlook 2013: The Economy Returns to Normalcy - Where We Are Now (Part 1)

December 18, 2012

At the end of 2012, the U.S. economy finds itself, almost, at the beginning of a sustainable recovery. Consumer spending has recovered to levels above previous highs and is on par with recoveries from previous recessions. Retail sales are also doing well. The housing market has turned, with most markets reporting price increases year-on-year, and the number of houses for sale in most markets is below historical averages, suggesting that price appreciation will continue.

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