Nov 15 2013

New top in stock market? Stock market at record highs

Are we seeing a new peak in the stock market?  It sure seems that way.  There has been little evidence to justify such a dramatic rise in stocks during 2013.  Speculation is running rampant and retail trading is very low in relation to large bank trading.  It appears that a sizable portion of the buying activity is coming from large investors trying to avoid anything having to do with fixed income.  The Fed is making it very difficult to save in any moderate to safe return investments so the investment community dives head first into the stock market.  Stocks are up a whopping 26 percent in the year.  We should get used to these wild swings in the market even though volatility looks to be very low.  If you have any doubts about where things stand today just take a look at what the stock market has done year-to-date:

top

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Oct 13 2013

Government shutdown impacting American confidence. US Government Shutdown searches.

Americans are definitely interested in the government shutdown.  Beyond the basics of interfering with the economy and inching us closer to a default in mid-October, the government shutdown is front and center in the minds of Americans.  This wasn’t the case the last time we encountered a potential government shutdown.  Although it appeared that we would head down the same road we did not.  This time however, the government has shutdown and is actually causing real repercussions in the economy.  Visit many government websites and you will be greeted by some message indicating the impact of the shutdown.  Ironically Congress is still being paid during this time which is comical.  This is like shutting down a company and expecting the executives to be paid during that time.  It is hard to say how much longer this will go on but already, the impact will be felt for weeks and months to come as the public becomes more aware as to how difficult it is to arrive at any sort of consensus in Congress, even if it means a default.

Take a look at the surge in interest:

The American public is paying very close attention.
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Sep 20 2013

Will rising rates cause more banks to lend to US consumers? Depends on where you look.

One item that may push banks into lending more to regular consumers is the rise in rates.  Rates and constricted margins have made it largely unattractive to lend to American consumers.  Many Americans are in the process of slowly deleveraging and with rates at very low levels, margins may not be enticing enough for banks to make the plunge.  That has been one approach as to what is going on with lower rates in the market.  Yet with the Fed hinting at a taper coming online sooner rather than later, the market has been in a seesaw of ups and downs.  Loan growth has been rather slow over the last few years and there has certainly been a peak in what has been loaned out to consumers.  Yet higher rates may shift more demand into lending as rates become more attractive.

loans and leases YoY
Time will only tell but for now, the Fed is still guiding the markets with their policies.

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