Market Perspectives (April 2014)

by Jim Baird on April 14, 2014

It’s been a bumpy path to start the year for equities. Results were somewhat mixed in March, but domestic equities gained ground during the first quarter.  Intermediate bonds were relatively flat during the month but returns have kept pace with those of U.S. large cap stocks year-to-date.  The backdrop of stronger global growth expected through 2014 should continue to support corporate earnings in the coming quarters; however, a potential reemergence in volatility should not be discounted.

Read the full article>>

Consumer Sentiment Research Notes

by Jim Baird on April 11, 2014

CaptureConsumer Sentiment rises again; reaches highest point since last July

Following a string of solid economic data in the past month, the University of Michigan Consumer Sentiment Index rose more than expected in April to 82.6 after softening modestly in recent months. That result also marked the high point for the index since it reached 85.1 last July.

Consumer sentiment hasn’t moved meaningfully since spiking to 82.5 in December. Nonetheless, the upturn in consumer mood in April suggests that households have noted the recent uptick in economic data and are increasingly optimistic that the mid-winter soft patch is behind us.

While the survey doesn’t focus as directly on labor market conditions as the Conference Board’s Consumer Confidence Index, there’s no question that continued progress on the jobs front has provided a boost to household optimism. Back-to-back positive surprises in nonfarm payrolls in February and March and a sharp recent decline in jobless claims are clear signs of improvement.

In February, household disposable income grew by the most in six months – a potentially promising sign for workers. While not surprising given the persistently high jobless rate, a sustained increase in disposable income growth would be a welcome development for workers and could support stronger consumer spending.

The noteworthy gains in household wealth have also played a substantial role in driving the upward trend in consumer sentiment over the past year. The ongoing recovery in home prices and outstanding stock market returns of the past year have bolstered household balance sheets and have provided households with a bit more breathing room.

Looking at the big picture, it’s apparent that improvement in labor market conditions and the surge in household net worth in the past year have been positive developments. While the economy and capital markets started off the year on a softer note, there is a growing sense that the economy is gathering some momentum anew and the forward outlook is cause for renewed optimism.

Jobless Claims (week of 4.5.14) Research Notes

April 10, 2014

Jobless claims fall to lowest level since May 2007 Initial jobless claims printed at 300,000 for the week ended April 5, falling sharply from a revised 332,000 for the prior week and easily beating economists’ expectations.  That result represents a post-recession low, marking the best weekly result since May 2007. The surprisingly strong result brought [...]

Read the full article →

March’s Employment Situation Research Notes

April 7, 2014

Job creation accelerates; unemployment rate holds steady in March The nation’s jobless rate held steady in March at 6.7%, even as nonfarm payrolls surged, providing further evidence that the economy is finding its footing in the aftermath of the winter doldrums. Nonfarm payrolls rose 192,000 in March, but coupled with upward revisions to the preceding [...]

Read the full article →

Economic Perspectives (March 2014)

April 2, 2014

As the impact of potential distortions from extreme weather conditions fade from economic data, the next few months should provide a better indication of prevailing economic trends.  Forecasts suggest that the first quarter of the year may be an anomaly en route to strong growth in the coming quarters. Read the full article>> 

Read the full article →

March’s Consumer Confidence Research Notes

March 25, 2014

Confidence rises on sharp uptick in expectations Consumer Confidence improved in March, as the labor market provided signs of awakening from its recent doldrums and optimism grew about the outlook for the economy in the coming quarters. The Consumer Confidence Index gained 4.0 from a revised 78.3 in February to reach 82.3.  That surge more [...]

Read the full article →

Plante Moran Engage. – 2014 Issue One

March 21, 2014

What Makes a Successful Investor? It Starts With a Plan. What is the goal of investing? In a general sense, it’s to increase purchasing power by achieving a rate of return that exceeds inflation over time. Believing that wealth can be created in this fashion drives the decision to make a sacrifice today with an [...]

Read the full article →

Jobless Claims (week of 3.15.14) Research Notes

March 20, 2014

Jobless claims rise less than expected Initial jobless claims rose to 320,000 for the week ended March 15, moderately better than the expected 330,000. The four-week moving average declined to 327,000, its lowest point in over three months. Stripping out the week-to-week noise in the data, the number of newly unemployed has been in a [...]

Read the full article →

March Perspectives Podcast

March 20, 2014

A new PMFA Perspectives Podcast is now available via the link below: March PMFA Perspectives Podcast

Read the full article →

Market Perspectives (March 2014)

March 19, 2014

Executive Summary Investors shrugged off some lackluster economic readings, as well as geopolitical tensions in Ukraine, as equities rallied in February. U.S. stocks rebounded from January’s pullback, as several indexes surpassed their recently established all-time highs. Emerging-market stocks also rallied during the month, but trail developed markets and remain in the red year-to-date. Treasury yields [...]

Read the full article →