Resilience - August 13, 2018

Resilience – it’s one way to broadly describe market action this year. Sure, we get volatility, but the general direction of the market has been to the upside.

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Why has that been the case? It’s not been a straight line higher. It rarely is. But the fundamentals are playing a big role.

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It’s Still about the Fundamentals - August 8, 2018

The S&P 500 Index2 closed within 0.5% of its January 26th high on August 7.

  • It’s up 10.8% since the February 8th low (MarketWatch).

There is no shortage of gloomy headlines that can distract investors, but favorable fundamentals have supported stocks.

  • The economy is expanding at a robust pace.

  • Driven by economic growth and the cut in the corporate tax rate, profit growth has been exceptionally strong.

  • Interest rates aren’t far from historic lows.

  • Companies are expected to repurchase a record number of shares in 2018 (S&P Dow Jones Indices).

All create tailwinds for shares.

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We are Saving More - August 6, 2018

The second quarter GDP report included revisions in the data going all the way back to 1929. Included in the U.S. BEA’s report is consumer spending and personal income. The income component isn’t a part of GDP, but it was also subject to revisions.

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Entering the Second Half of the Year with Momentum - August 2, 2018

The U.S. economy just recorded its best quarter in nearly four years. Gross Domestic Product (GDP), which is the broadest measure of the value of a country’s economy, grew at an annual pace of 4.1%, according to the U.S. Bureau of Economic Analysis – see Figure 1.

We’ll get two more revisions over the next couple of months, but the early read is encouraging.

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The Fed Gathers and Trump Takes Aim at the Fed - August 1, 2018

The Federal Reserve’s two-day meeting concludes Wednesday.

  • There is virtually no chance of a rate hike.

  • Odds heavily favor a 0.25 percentage point increase in the fed funds rate to 2.00-2.25% at the September meeting (CME Group).

  • The Fed appears to be on track for another rate increase in December.

Will the Fed signal a more aggressive stance?

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