The document summarizes market performance in October 2012 and provides an outlook. The S&P 500 fell 2% while other indexes also declined. Commodity prices decreased as concerns grew about slowing economic growth. Hurricane Sandy impacted the Northeast in late October, causing business disruptions. Looking ahead, the upcoming election and recovery efforts in storm-damaged areas may provide both challenges and opportunities for investors.
Investors have had to contend with many upsetting concerns over the last year, including geopolitical uncertainty, social unrest, natural disasters, monetary tightening, new regulations, and a U.S. government downgrade. The European Sovereign Debt Crisis was underway for over a year when the worrying Nightmares began compounding in March 2011. These Nightmares have undercut confidence and global growth expectations, which impeded equity returns and drove Treasury yields lower. Uncertainty fueled much higher volatility across equity, bond, currency, and commodity markets. Relative valuations across asset classes now provide compelling opportunities for active management, as extreme relative valuations should normalize. U.S. equity valuations are compelling enough, in our opinion, to support a U.S. equity return exceeding 9.5%.
Surprising strength in earnings, consumption, and investment activity has persisted. Earnings growth and high profit margins have benefited from above average productivity, but earnings growth is expected to slow this year to 10%, according to the consensus. The “output gapers” have argued that there is too much slack in employment and manufacturing capacity to push up inflation, yet consumer prices surged 3.9% before easing recently. Normalizing inflation and growth will increase pressure to raise interest rates.
Lear more at http://www.nafcu.org/nifcus
As household debt poses one of the biggest threats to our economy, there can’t be any more important topic in current stressed economic environment. This study digs deep to find out the root causes of excessive debt accumulation.
Ziad Abdelnour, Lebanese American author, trader and financier is President & CEO of Blackhawk Partners, Inc., a “private family office” that backs talented operating executives in growing their companies both organically and through acquisitions and trades physical commodities.
In this issue:
TD Wealth: Developing a roadmap for success
TD Economics: Oil prices remain a wild card for Canada’s outlook
TD Wealth Asset Allocation Committee: Market Outlook
Investors have had to contend with many upsetting concerns over the last year, including geopolitical uncertainty, social unrest, natural disasters, monetary tightening, new regulations, and a U.S. government downgrade. The European Sovereign Debt Crisis was underway for over a year when the worrying Nightmares began compounding in March 2011. These Nightmares have undercut confidence and global growth expectations, which impeded equity returns and drove Treasury yields lower. Uncertainty fueled much higher volatility across equity, bond, currency, and commodity markets. Relative valuations across asset classes now provide compelling opportunities for active management, as extreme relative valuations should normalize. U.S. equity valuations are compelling enough, in our opinion, to support a U.S. equity return exceeding 9.5%.
Surprising strength in earnings, consumption, and investment activity has persisted. Earnings growth and high profit margins have benefited from above average productivity, but earnings growth is expected to slow this year to 10%, according to the consensus. The “output gapers” have argued that there is too much slack in employment and manufacturing capacity to push up inflation, yet consumer prices surged 3.9% before easing recently. Normalizing inflation and growth will increase pressure to raise interest rates.
Lear more at http://www.nafcu.org/nifcus
As household debt poses one of the biggest threats to our economy, there can’t be any more important topic in current stressed economic environment. This study digs deep to find out the root causes of excessive debt accumulation.
Ziad Abdelnour, Lebanese American author, trader and financier is President & CEO of Blackhawk Partners, Inc., a “private family office” that backs talented operating executives in growing their companies both organically and through acquisitions and trades physical commodities.
In this issue:
TD Wealth: Developing a roadmap for success
TD Economics: Oil prices remain a wild card for Canada’s outlook
TD Wealth Asset Allocation Committee: Market Outlook
The economic calendar was thin this week. The Fed’s Beige Book noted that “economic activity continued to stabilize in July and August.” Not exactly a booming assessment of the economy, but better than the previous report. The July trade deficit showed improvement in both imports and exports – further evidence suggesting that the U.S. and global economies have bottomed. Consumer sentiment rose in early September.
The economic data calendar was thin. The Institute for Supply Management’s (ISM) Non-Manufacturing Index rose to 50.9 in September, compared to 48.4 in August – 50 represents the breakeven level; anything greater than 50 indicates expansion. The trade deficit narrowed slightly in August – adjusted for inflation, so it appears that net exports will be a slight drag on gross domestic product (GDP) growth in the third quarter of 2009. Jobless claims fell somewhat, but there’s a fair amount of volatility in the numbers at this time of year.