U.S. Growth Benign As Global Risks Weigh
The U.S. growth story continues to improve, albeit gradually.
In recent years, U.S. growth has approximated 2%. During that period, tight fiscal policy (i.e., the government’s progress in reducing its deficit by cutting spending and increasing its revenue) detracted more than 1% from that growth. That impact now seems to be waning. Further, capital investment may be gaining strength. Forecasters, us among them, feel that growth could now gravitate toward 3%, which robust job growth and other indicators seem to confirm.Download PDF
Stock Prices Rise Further, But Fourth Quarter Starts Roughly
Reading this in the fourth quarter may trigger a raised eyebrow, the result of early October volatility, but stocks did quite well this year, through September. More importantly to long-term investors, on a more relevant three-year timeframe, large U.S. stocks returned 86% in the period (S&P 500 total return).Download PDF
Fixed Income Portfolios
Uncertainty Leads Most Bond Markets Higher
Fixed income has outperformed the equity market so far this year. At the time of this writing, all fixed-income categories are in positive territory and some sectors, including longer-term U.S. treasuries and corporate bonds and emerging-market bonds gained anywhere between 6.5% to 9.5%. We believe that a flight-to-safety effect is playing a major role. One of our associates put it well: “…Europe slowing, Russian aggression and resulting sanctions, China slowing and social unrest. These weaknesses plus other BRIC weakness, ISIS and Ebola…it’s just too much uncertainty at one time.”Download PDF