10 Mar 2006

Posted at 13:01h in The Friday Brief by
Interest rates are rising across the board.  Just last week we discussed the inverted yield curve and the problem it posed for banks and for those who borrow from banks.  Since our last Brief, the yield on the 10-year note has gone up 10 basis points, or a tenth of a percent, while shorter maturities such as the 2-year note is up only modestly.  The result has been a yield curve that is a bit more accommodative for banks.  Our experts believe the yield curve will not change much from here, remaining relatively flat (short term rates close to long-term rates), therefore challenging for banks, but not disastrous for them or the economy.  If the Fed raises the funds rate to 5% by May as many predict, then the 10-year Treasury bond yield will also likely to rise to 5%.

03 Mar 2006

Posted at 13:13h in The Friday Brief by
After a month and a half since our office flood we are now back to normal.  The wood floor is installed, carpets cleaned and laid, walls and baseboards replaced and painted, art hung on the walls, and furniture returned from various idle locations in our 30-story office building.  ‘Normal,’ whether real or imagined is nice, even if for a short while.  It’s what gives us a chance to catch our breath before the next round of challenge and growth. 

24 Feb 2006

Posted at 13:55h in The Friday Brief by
The year is progressing pretty much as investors anticipated.  Analysts continue to lower their earnings expectations as many corporate managers downplay their guidance for the coming quarters.  Mr. Bernanke of the Fed says he will continue to fight inflation as hard as his predecessor Alan Greenspan, yet he has some changes in mind.  The steady supply of oil continues to be clouded by instability inNigeria,Venezuela,Iraq, and most recently,Saudi Arabia.  But with current supplies high and prospects for slower global economic growth, the price of oil is down 4% for the year so far.  The same is not true, however, for gold, up 7.5% for the year, likely on inflation and global security fears.  But the best leading indicator of all, the stock market, is up.  The Dow Jones, S&P 500 and NASDAQ indices are each up about 3.5% so far this year while our model portfolios are doing better than that.  But, with all the uncertainty, the ride has been bumpy and should continue that way.

17 Feb 2006

Posted at 14:53h in The Friday Brief by
The stock market with all of its intraday gyrations finishes the week up nicely.  Following a decline on Monday, the last three days have culminated in a 1.8% rise in the S&P 500.  In contrast to last week, when good news was bad, investors decided the liked the sound of a roaring economy, especially if Fed Chairman Ben Bernanke doesn’t drown it out with the inflation drum.  On Tuesday, the government reported the strongest monthly gain in retail sales in nearly two years confirming that the economy is as strong as ever.  The Dow industrials rose 136 points, or 1.25% to 11028.