Monthly Archives: February 2014

Washington Gridlock: Reduced Risk but still an Economic Drag 2/21/14

In recent years, Washington politics have been seen as a major threat to financial markets.  Concerns surrounding the soaring federal debt, fiscal austerity and political confrontations thwarted confidence.  Recently, these fears have diminished and Washington, though still politically gridlocked, is far less of a threat to investors going forward.  Generally speaking, political gridlock can be considered a good thing for investors in the short term as new “game changing” legislation is off the board, which creates a more predictable environment for CEOs and investors.  However, that does not mean political gridlock is benign.  Continue reading

Market Commentary 2/14/14

This week was relatively quiet from an economic data standpoint.  Jobless claims numbers were released yesterday and were higher than expected at 339,000.  The consensus estimates called for a range of 325,000 to 336,000.  Also released yesterday were retail sales data, which showed that retail sales dropped 0.4% in January,  led by auto sales and “in person” stores such as furniture and restaurants.  Investors did not seem to read too much into either economic indicator yesterday, instead attributing these “misses” to adverse weather that plagued most of the country in January.  Continue reading

January Wraps Up First Month of 2014 with U.S. Equity Markets Down 1/31/14

Roughly three fourths of the S&P 500 companies that have reported fourth quarter earnings thus far have beaten estimates.  GDP on an annualized basis grew 3.2 percent in the fourth quarter due to improvements in household spending and exports, suggesting strength of the economy is improving.  But many of these earnings announcements have come with lowered guidance as CEOs work to temper expectations in this environment.  Analysts have gotten comfortable setting expectations that become large hurdles for companies to manage even with continued earnings growth.  Instead of being rewarded for solid numbers, we are seeing stocks punished because the bar has been set too high by analysts.  Continue reading