Market Commentary
Taking Stock of Europe
Concerns out of Europe sent U.S. stocks in a decline Thursday reminiscent of declines during the 2008-2009 global financial crisis. The correction experienced is not necessarily a surprise, but what is surprising is the reason: Greece – specifically Greece’s questionable ability to service its debt and the implications a default might have on Greece’s neighbors in Spain, Portugal, Italy and Ireland.
Friday, May 21st, 2010
Deciphering the ‘Flash Crash’
Yesterday the market experienced what is now being referred to as the ‘flash crash.’ Investigations into what exactly caused this momentary plunge of stock prices are already underway. However, while the sources of the intraday volatility may be unique, the resulting lessons for investors are not.
Friday, May 7th, 2010
The Federal Budget and Stock Market Returns
Estimates from the bi-partisan Congressional Budget Office indicate the federal budget deficit will rise to $1.5 trillion in 2010 before falling to $1.3 trillion in 2011, representing 10.3% and 8.9% of estimated Gross Domestic Product (GDP), respectively. This raises a key question for investors: What impact might massive government spending have on stock market returns? Stated a different way, are stock market returns systematically linked to the federal government’s budget?
