25-Apr-12 -  Market Monitor: No Real Surprises from the Fed
In essence there were two, key takeaways from the latest FOMC meeting and they did not surprise us at all, because they are consistent with what we have been saying for some time: (1) Monetary policy will remain supportive for the equity market; and (2) The FOMC remains fully prepared to adjust its securities holdings if incoming data warrant such a switch.

13-Apr-12 -  Market Monitor: Beware Seasonal Affective Disorder
Can the equity market rally continue? It can and we believe it will, but we do not think it will be a rally that continues uninterrupted. Several psychological challenges are festering that could lead to some unsettling selling pressure and heightened volatility after the strong start to 2012. Accordingly, our near-term tactical view is more cautious entering the seasonally pernicious May to October period.

Be that as it may, we continue to hold to our long-term view that stocks offer excellent relative value versus bonds.

29-Mar-12 -  Equity Strategy: Earnings Up, Dividend Payout Ratios Down
From our vantage point, we believe there is a risk of complacency in the market over the near term as earning growth slows and investors lock in gains after a tremendous first quarter.

For those concerned that a market correction could occur, high-quality, high-dividend stocks provide a conservative alternative.  We adjusted our proprietary dividend model to screen for companies that have liquid balance sheets and low dividend payout ratios.  These companies have the balance sheets to sustain any correction, and to potentially increase payout ratios.

23-Mar-12 -  Equity Strategy: Earnings Revision Analysis
With the first quarter reporting period only a few weeks away, a slowdown in earnings growth presents a near-term risk for the equity market.

In an effort to reveal potential areas of risk (and opportunity), we performed a data-driven analysis of S&P 500 companies that highlights trends in first quarter price performance and first quarter earnings revisions.

16-May-12 -  Data Detail: Housing Starts, Ind. Production - April 2012
There was a lot of talk that recent increases in housing starts were the result of homebuilders taking advantage of warmer-than-normal temperatures. The data suggest, however, that the weather effects were overblown and that construction levels are clearly rising. Residential construction will be a positive influence on GDP after many years of dragging down overall economic growth.

15-May-12 -  Data Detail: Retail Sales, Inflation - April 2012
Most of the weakness in April retail sales growth was due to pullbacks in spending that came from temporary distortions in spending patterns caused by warmer-than-normal temperatures during the winter (building material and supply dealers fell 1.8% after rising 2.7% in March) and a decline in gasoline prices (gasoline stations spending declined 0.3% after increasing 1.0% in March).

11-May-12 -  GDP Monitor: May 7 - 11, 2012
Fears that consumption growth was poised for a pullback have been alleviated somewhat as the softening in payroll growth looks to be due to volatility. Initial claims returned to their pre-Easter level. This suggests payroll growth in May should exceed the mediocre April gain and result in stronger future income growth.

Please join us for the Briefing Research quarterly conference call on the economy with our Chief Economist, Jeff Rosen Ph.D., Director of Research, Kimberly DuBord, and Chief Market Analyst, Patrick J. O’Hare, on Tuesday, May 15, at 1:00 p.m. CT (2:00 p.m. ET). Space is limited, so register now.

10-May-12 -  Data Detail: Trade Balance - March 2012
The February trade deficit was affected by the Chinese New Year holiday, which fell earlier in the calendar than normal. Shipments that normally came during February were either pulled forward into January or delayed into March. After factoring out the volatility for the holiday, real net export growth was relatively flat for the past several months.

14-May-12 -  Fixedated: May 7 - 11, 2012
The investment world has reached yet another apex of fear.  Greece’s newly adopted “Thanks for the help, but we have got it from here” stance towards further aid, China’s decelerating economy, and J.P. Morgan’s trading gaffe have investors piling into USTs.  Greece's push back against previously negotiated austerity measures is akin to the tail trying to wag the dog.  In this case, the tail is likely to get cut off if it continues to be a problem.

Corporates were mixed.  Investment-grade bonds continued to rally, hitting another all-time-low yield (3.53%), while high-yield sold off a bit.  Munis continued to grind lower as investors sought out alternatives to USTs.

07-May-12 -  Fixedated: April 30 - May 4, 2012
Treasuries rallied last week on weak economic data and, of course, European debt fears.  The elections in France and Greece over the weekend did nothing to quell the uncertainties investors face.  When in doubt, take cover – and USTs are the ultimate security blanket.

Corporates saw good strength across the board last week as the investment- grade and high-yield indices moved to lower yields.  Munis gained a bit last week and relative value also improved.

30-Apr-12 -  Fixedated: April 23 - 27, 2012
Another week saw yet another series of disappointing events out of Europe, with Spain leading the way, and lackluster economic data in the U.S. (consumer sentiment and pending home sales notwithstanding).  As such, the safety trade refused to loosen.

Corporates gained across the board last week.  The ML U.S. 7-10-year Corporate “A” Index hit an all-time-low yield (3.61%).  Munis were fairly flat last week as participants took down the limited new-issue calendar with little trouble. The relative value argument for AAA munis remains intact.

23-Apr-12 -  Fixedated: April 16 - 20, 2012
Treasuries traded within a fairly tight range last week as concerns over Europe’s debt issues and political environment had investors seeking shelter.  Add in demand from the Fed’s Operation Twist and yields can continue to be suppressed for quite a while.

Corporates saw small gains last week.  The ML U.S. 7-10-year Corporate “A” Index is just 6 bps from its all-time low yield.  Munis held strong last week.  With UST yields pushing lower, the relative-value argument for AAA munis is strong.

09-May-12 -  Trend Watch: April 16 - May 4, 2012
The Great Recession was driven by a credit contraction, and the U.S. continues to work its way out.  Positive signs keep emerging, including new data over the last two weeks that indicate a rebound in small business lending may finally be here.

Unfortunately, the credit situation continues to deteriorate in Europe.  Standards loosened in the first quarter, but the reemergence of the eurozone debt crisis should lead to another round of tightening.  And demand continues to decline.

We discuss these points in this week's Trend Watch, as well as other views including why we would be cautious about initiating large, new positions in corporate bonds right now, and how a structural dislocation in the labor market could soften potential payroll gains.

18-Apr-12 -  Trend Watch: April 2 - 13, 2012
The yield on Spain’s 10-year bond has climbed from 4.58% on February 1 to as high as 6.02% on April 16.  Over the same time period, the TED spread, which is regarded as a gauge of perceived credit risk in the general economy, has declined nearly 9 bps.  A narrowing TED spread at this fearful juncture seems to imply that there is less fear about contagion risk from Spain hitting the U.S. economy and U.S. banks.

We discuss that point in this week's Trend Watch.  We also break down the Macau gaming market, including an update on our top recommendation in the industry, Las Vegas Sands, and discuss the hybrid vehicle market and its lack of customer loyalty.

04-Apr-12 -  Trend Watch: March 19 - 30, 2012
Friday's Prospective Plantings report from the USDA ratcheted higher the projection for corn plantings in the 2012/13 season, at the expense of both wheat and soybeans.  This record-setting figure would have set a negative tone for corn prices if it were not for Friday's other release, the Grain Stocks report.

We review those reports in this week's Trend Watch, while also discussing ways to invest in water, a vital resource that may begin encountering supply issues, and two new reports that say the euro area may already be out of a recession.

21-Mar-12 -  Trend Watch: Feb. 27 - March 16, 2012
For the first time in quite a while, we do not have a strong preference for either investment-grade or high-yield corporate bonds.  We tend to favor high yield at this point, as it will generally hold up better in an environment where Treasury yields could continue to rise.

We discuss those points in this week's Trend Watch.  We also preview two highly-anticipated grain reports from the USDA and take exception to those pundits who claim quantitative easing is the only reason why the equity market has rallied.