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  • Record Equity Market Highs Amidst Low Inflation

    It appears that the concept of being a rational investor may have taken a back seat during the week, at least partially.  The large capitalization Standard & Poor’s (S&P) 500 index closed at a record high amidst weak consumer and producer inflation data, a contraction in retail sales figures, and a marginal drop in consumer and small business sentiment data.  It’s not to say that the market should have experienced a precipitous downside following such uneven economic data points but it bares significance to note that the risk on rally appeared independent of fundamental economic well-being.  Such a trend has been evident for nearly three years now following the multiple expansion of the large cap equity market alongside a cycle of neutral earnings growth.  Since mid-2015, the S&P 500 has averaged an earnings per share growth of less than 1% while ...

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  • Labor Market Strength

    The highly anticipated June labor market report was released last week and the results were fairly upbeat.  The economy added 222,000 private jobs and was followed by a positive 47,000 revision for May.  We were excited to see the upbeat total figures given that May’s report was not particularly strong.  The unemployment rate was announced at 4.4%, up from the previous 4.3%, but it was warranted by the higher labor force participation rate.  As more individuals enter the workforce, the unemployment rate will adjust accordingly.  This is not a negative occurrence over short time frames and may even signal a stronger labor market.  The wage growth aspect of the report did not indicate strong upside but rather continued to post a neutral trend hovering at 2.5%.  Although such a figure continues to remain near the highs of the previous seven years, ...

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  • June 2017 Recap

    The dominant news for the month centered on the Federal Reserve’s decision to raise interest rates by 0.25%, an action that was widely anticipated. Contrary to conventional wisdom, Treasury bond yields remained largely unaffected and even managed to drop following the announcement. Comments from Janet Yellen indicated the Fed remains convinced that broad economic growth remains intact and that near-term growth has been attributed to the economy as a whole rather than concentrated in small pockets.

     

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