Today's Headlines

By , CNBC, 10/01/2014

MarketMinder's View: We are typing this at 10:29 AM Pacific Daylight Time on October 1, 2014. This article was posted 23 minutes earlier, according to CNBC. That means it hit the wires exactly 3 hours and 36 minutes into October’s trading. Could this be any more myopic? Yes, yes it could! But … why? Oh! And four of the five preceding first-day-of-October declines (assuming the close is, in fact, lower) were in 2005, 2006, 2009 and 2011. None of these preceded a bear. In fact, that 2011 point would’ve been at about the bottom of a correction! (The S&P 500 Price Index rose 10.8% that month.) Since 1928, the S&P has risen in 58% of Octobers. Seems to us most of its reputed negativity ties to 1929, 1932, 1987 and 2008, which were indeed terrible, but not caused by the calendar.

By , MarketWatch, 10/01/2014

MarketMinder's View: “US manufacturing companies grew at slower but still rapid pace in September, a survey of executives found.”

By , Financial Planning, 10/01/2014

MarketMinder's View: This is a very interesting and quite sensible piece discussing one factor at the heart of 2008’s financial crisis: How to prevent a run on a non-bank financial? Granting them access to the discount window could provide nonbanks liquidity to meet current obligations, and, as noted here, “Panics result from runs on short-term financial liabilities, and in our modern financial system runs no longer just occur on bank deposits.” The Fed was created to serve as lender of last resort to address runs on bank deposits, and it seems to us this time-tested tool could add value for more modern bank funding markets, too. On a semi-related note, here is Matt Klein discussing the difference between insolvency and illiquidity. What we take from this is that the proper strategy for heading off crises is to 1) eliminate procyclical regulation like FAS 157’s fair-value accounting and 2) broadly provide liquidity via the discount window to banks and nonbanks so the question of solvency vs. liquidity never arises, eliminating the risk political decisions are made.

By , Bloomberg, 10/01/2014

MarketMinder's View: This. Is. Noise. Consider: While he announced the cancellation of the region’s independence vote after Spain’s highest court shot it down as unconstitutional, Catalan Regional President Artur Mas claims he will do something. Something completely undefined even in the broadest brushstrokes. Which we can all claim, but we doubt it carries the force of the Spanish constitution. Just sayin', watch what they do, not what they say.

By , The Reformed Broker, 10/01/2014

MarketMinder's View: So the candlestick charting and technical analysis in here regarding the Russell 2000 and S&P 400 Mid Cap Indexes breaking through their 200-day moving averages in a downward direction is really only a reflection of past performance—not predictive of a broader downturn approaching. It’s a nifty looking graph, we guess, but all it speaks to is the narrowing market breadth and the ongoing rotation from small to bigger in 2014, as we alluded to in our 09/25/2014 commentary, “Ken Fisher: ‘Nothing Is Better—Stocks Are Stocks.’ Even Small Caps.” While we aren’t suggesting small- and mid-cap stocks fall from here, it is worth noting there is a historical tendency for them to trail much bigger stocks later in bull markets, as new converts to optimism tend not to seek out micro-cap South Korean biotechnology firms. Rather than another shoe dropping, we’d suggest this is more likely another leg of the bull starting.

By , Bloomberg, 10/01/2014

MarketMinder's View: There is some sense here, mostly in that if the Fed stops talking down the economy, sentiment may improve. However, the whole article seems to be (another!) operating on the premise firms aren't investing in expansion, which disregards the recent growth pickup underpinned by rising (and record-high!) business investment. (Q1 2014's weather-driven dip notwithstanding.) 

By , The Wall Street Journal, 10/01/2014

MarketMinder's View: The fed funds target rate is currently in a bandwidth of 0-0.25%, but effectively the Fed manages this through the use of its new reverse repo facility as the floor. But the floor seems to maybe have a trap door too, in the sense the Fed voluntarily capped daily reverse repos at $300 billion and if demand tops that it could drive rates below the floor (currently 0.05%). That is what happened here, but we don’t really think it’s that significant. For one, the $300 billion limit is totally arbitrary, something that Yellen and Co. basically pulled out of thin air a month or two ago. They could just pull a bigger number out of thin air, if needed.

By , NPR, 10/01/2014

MarketMinder's View: Now, to be clear: This is not a statement about Sen. Elizabeth Warren, and always remember that we favor neither party, as both of them do wacky things from time to time. Our aim is solely to analyze proposed legislative or regulatory changes based on facts, not ideology, and assess potential market impact. And based on facts, with due respect, we believe this Senator’s portrayal of 2008 and her resulting recommendations are wide of the mark. We think the overwhelming weight of evidence shows the crisis was not caused by a lack of regulation or regulators not acting strictly enough. While some banks may have gone to excesses, the reality is actual loan losses are very small relative to the trillions FAS 157 (an accounting rule implemented in November 2007) required them to write down unnecessarily. Combine that with the folks over at the Treasury and the Fed getting creative in crisis management, and what you create is a panic based on unpredictable regulator moves. Arbitrary actions contributed to 2008’s panic. So the recommendation regulators act more strictly in a manner inconsistent with the basic framework of the law is a recipe for arbitrary judgments that are by definition extralegal. Governments acting in an arbitrary manner outside the law is not a recipe for a safer financial system and markets.

By , CNBC, 10/01/2014

MarketMinder's View: SPOILER ALERT: The market in question is Japan’s stock market. COLD WATER ALERT: Not to rain on the parade, but the reasons cited herein are either wrongly perceived (weak yen, which is neither a plus nor a minus; Abenomics’* “slow progress”) or baked into existing expectations (pension reform, which so many Japanalysts talk up). In our view, this article basically illustrates the fact that investor sentiment regarding Japan—yes, among pros, too—remains too high. For Japan’s markets to outperform, we believe the Abe administration must make much more headway toward enacting structural reforms. That, and there is still uncertainty surrounding whether or not Abe will go forward with sales tax hike part deux.

*By Abenomics, we presume they mean The Third Arrow structural reforms we are referring to as well. The difference is that “slow progress” is actually more like “no meaningful progress” beyond a long-term, incremental corporate tax reduction and a couple of other window-dressing moves. Nothing on liberalizing trade. No progress on major labor market and agricultural subsidy reforms. Keiretsu reform is also lacking. They haven’t even passed legislation permitting casinos to boost tourism, one of Abe’s first Third Arrow proposals.


By , MarketWatch, 09/30/2014

MarketMinder's View: Well, maybe, because these things are only clear in hindsight. None of the technical analysis here can really tell you whether a correction is forming or not—corrections (quick, sharp drops of -10% to -20% over a few weeks or months) are driven by sentiment, not past performance. Plus, this analysis is overall very confused on whether it’s trying to predict a correction or a bear market—again relying on past performance rather than trying to identify a fundamental cause. We look at potential fundamental risks every day, and we can’t identify any with enough scope or surprise power to cause a bear market tomorrow. With the bull market extremely likely to continue over the foreseeable future, if folks get out of stocks on “the offhand chance [the approaching rainstorm] turns into a hailstorm,” but instead it “turns out yet to be another sprinkle,” missing “some opportunity at the cost of safety” is not a “small price to pay.” Opportunity cost is expensive. For more, see Todd Bliman’s 06/09/2014 column, “The Cost of Trying to Time Corrections.”

By , The Telegraph, 09/30/2014

MarketMinder's View: With the third revision to UK Q2 GDP—bumped up to growth of +0.9% q/q, beating expectations—we finally have the expenditure breakdown. Business investment rose +3.3% q/q (+11% y/y), and real disposable household income jumped. We also got the results of the big recalculation, which adds R&D spending to business investment (and adds some colorful, illegal activities to GDP) all the way back to 1997, and it shows some interesting things. Like businesses invested a heck of a lot more throughout this recovery than statisticians first thought. And the world’s oldest and second-oldest professions are pretty big moneymakers. All interesting. Backward-looking, but interesting. We guess, if nothing else, the UK is on even firmer footing than everyone thought?

By , EUbusiness, 09/30/2014

MarketMinder's View: Eurozone inflation fears continue as inflation dropped to +0.3% y/y in September (a flash estimate). However, much of the weakness continues to come from falling energy prices—not a mark of actual deflation. Core inflation, excluding energy and food prices, is at +0.8% y/y. As for the ECB angle, we’ll see whether ECB President Mario Draghi gives more details on his upcoming quantitative easing (QE) program on Thursday, but we still believe this is a solution in search of a problem. As we wrote here, QE is deflationary and contractionary.

By , Xinhua, 09/30/2014

MarketMinder's View: Good news: “China will allow direct trading between the yuan and the euro.” That the government is making currency trading cheaper and more accessible (no need for parties to use the US dollar as an intermediary) will likely make the yuan more attractive globally and strengthen investing relations between China and the EU. A win-win!

By , Vox, 09/30/2014

MarketMinder's View: “Burn rates” (the amount of cash a company burns through in a given period) are important, and high burn rates were one sign dot-coms were hugely overvalued at the Tech Bubble’s heights. But those were publicly traded companies. As far as we can tell from the reporting here and the study it cites, the analysis includes only pre-IPO firms. High burn rates among firms reliant on venture capital funding aren’t signs of euphoria—this is just sort of how it goes for fledgling firms taking big risks. What would be a sign of euphoria is if all these firms went public tomorrow at huge premiums.

By , Bloomberg News, 09/30/2014

MarketMinder's View: China spent most of the past four years curbing second and third home purchases in order to contain rapidly rising prices. Meanwhile, cities continued investing in massive home construction projects to boost growth. The result? A supply glut and artificially pinched demand—and weaker prices. So now China is removing those curbs to boost demand. Theoretically, this should support prices and help combat that supply glut, but it isn’t a panacea for China’s property market. 

By , The Wall Street Journal, 09/29/2014

MarketMinder's View: If this bull market is indeed “overdue for a major pullback” 27 months after the most recent correction ended, then why did the 1990s bull have zero corrections between 4/8/1992 and 7/20/1998? Why did the 2002-2007 bull not have its first correction until nearly four years in? And if heightened volatility means a correction is nigh, why didn’t we see corrections after the -2% or greater daily drops earlier this year or in 2013? Volatility doesn’t predict volatility. Volatility doesn’t predict anything. Volatility is past performance, and past performance doesn’t tell you about anything other than the past.

By , CNBC, 09/29/2014

MarketMinder's View: The “why,” according to the Geneva Report, is that China and the other so-called “fragile eight” countries have an apparently catastrophic combination of slowing growth and high public/private debt loads. They say China, in particular, is in nasty shape because each new dollar of credit generates less and less growth, yet officials keep trying to stimulate through new credit. Thing is, this doesn’t make China automatically the epicenter of the next financial crisis. Or even ripe for a crisis. This piece tempts the reader to draw parallels with past Emerging Markets crises, but developing economies have evolved since then. Much of this credit is denominated in local currencies, not foreign (dollars), and most of these nations (except China) have floating currencies. That should help contain the damage in the event that any of these countries really do experience credit bubbles that go poof.  

By , The Wall Street Journal, 09/29/2014

MarketMinder's View: This illustrates why small cap usually underperforms during maturing bull markets: Investors get jittery over what they (rightly or wrongly) see as riskier buys and flock to the perceived quality (and relative earnings stability) of the largest firms. That sentiment shift is evident here. Whether or not small cap keeps falling or creeps back up, it seems highly unlikely to lead for the remainder of this bull market. For more, see our “Ken Fisher: ‘Nothing Is Better—Stocks are Stocks.’ Even Small Caps.”

By , The Wall Street Journal, 09/29/2014

MarketMinder's View: According to this, “priced for perfection” means stocks have priced in practically perfect future earnings and economic fundamentals, so any actual results that fall even a bit short of perfect will cause stocks to fall. This is blamed for last week’s market declines, though there is zero evidence to support this general opinion. This also, apparently, makes stocks extra vulnerable to things like a rate hike, geopolitical tensions and slowing Chinese growth. This line of reasoning is incorrect. These things don’t automatically move stocks, and we have a wealth of history to prove it. High P/Es, whether traditional or Shiller, don’t change this conclusion, because we also have a wealth of history to prove high P/Es do not mean stocks are overvalued or primed for a pullback. Also! Economic fundamentals are quite a bit better than this piece supposes.  

By , The Wall Street Journal, 09/29/2014

MarketMinder's View: “Macroprudential regulation” boils down to regulators changing capital requirements and restricting loan issuance to do what they think is correct at the time to deflate a bubble they think is brewing. The US, UK and other central banks have given themselves broad powers to do this, giving them the ability to limit credit for very arbitrary reasons. There is a ton of room for human error and bias to bring unintended consequences here. While we don't see much risk this ends the bull market within the foreseeable future, as the measures that have been announced are small and toothless (particularly the UK’s mortgage lending caps), there is some surprise potential here: “Since there is no scientific means to definitively identify bubbles before they break, the list of specific lending activities that could be construed as ‘potentially systemic’ is only limited by the imagination of financial regulators.”

By , The Korea Times , 09/29/2014

MarketMinder's View: We see this the same way we see all those fears about Baby Boomer retirement upending the US’s fiscal health and economic prospects—unsupported myth and way too long term for markets to care about today. Just as the US Congress has occasionally tweaked the law to put Social Security on a sounder footing, so can Korea tweak its entitlements. What matters for investors now is that none of this comes to a head within the next 30 months—the furthest limits of what markets usually price in. In the foreseeable future, with debt still very low by international standards, Korea’s fiscal situation shouldn’t be a huge risk for Korean or world stocks.

By , The Telegraph, 09/29/2014

MarketMinder's View: This was sort of the missing piece to the UK’s recent assault on the de facto requirement for pensioners to buy an annuity. They’d scrapped the tax incentives to buy an annuity, but the proposed tax treatment of annuity death benefits made things sticky. By dropping the punitive 55% tax on inherited pensions when pensioners over age 75 die and replacing it with marginal income tax rates (and scrapping tax entirely when pensioners under age 75 pass on), Chancellor Osborne will give retirees one less reason to buy an annuity. Assuming, of course, this rumored legislation is actually proposed and passed.

By , The Telegraph, 09/26/2014

MarketMinder's View: Ok, so this is one of many stories we’ve seen tying volatility in some fixed income and currency markets to Mr. Gross’s resignation. On the theory that he liked Asset X, and he will no longer be at Pimco to buy or tout Asset X, therefore Asset X will lose support and fall. Our beef with this is entirely philosophical. The sentiment and market forecast of one fund manager—even one who more or less oversees $2 trillion—is not a market driver over any meaningful stretch of time. Nor are the transactions of one fund manager—even one who more or less oversees $2 trillion. Just not how it works in a world where millions of people trade every day and there are hundreds of trillions of dollars in investable assets globally.

By , Associated Press, 09/26/2014

MarketMinder's View: Surging business investment, exports and consumer spending are all just great, but let’s get one thing clear. Nothing here will “provide momentum for strong growth the rest of the year,” because that isn’t how economies work. The past doesn’t drive the future, and growth doesn’t stay strong just because it was strong. Otherwise every quarter’s GDP would be a self-fulfilling prophesy and the business cycle wouldn’t turn ever. Don’t get us wrong, we think growth continues forward at a healthy clip!! But it’s because leading indicators and bank lending are picking up. Not because Q2 was swell.

By , The Wall Street Journal, 09/26/2014

MarketMinder's View: Oh boy. The thesis here, best as we can tell, is this: Stocks drive consumer sentiment, which drives consumer spending, which drives growth, but the Fed is about to hike rates, so returns will sag, confidence will flag and the economy will stag(nate). What a drag. That probably sounds scary, so here is some good news: None of this is true. Stocks have some influence over consumer sentiment, but so do things like recent economic numbers, scary (or happy) things they see in the news, the weather, what folks had for breakfast and their general mood. This is why—as this piece even points out, contradicting its own thesis—consumer confidence fell for much of this bull market’s first two years. Consumers who tell confidence surveys they’re sad very often go out and buy things, which is why consumer spending—and economic growth—often move differently than confidence gauges. And Fed rate hikes, as you can see here, are not bad for stocks inherently.

By , The Telegraph, 09/26/2014

MarketMinder's View: Does anyone else have a mental image of Vladimir Putin running around the KaDeWe department store in Berlin, hiding behind displays, then jumping out and shouting “Boo!” at shoppers? Anyone? Anyone? Errr … we didn’t either. Anyway, we’ve no doubt Putin’s sanctions and saber rattling are spooking folks in Europe. Because it’s scary when a self-important fascist madman gets involved in a war on your continent. But, that doesn’t mean the conflict in Ukraine is an economic risk. This survey could actually be an indication expectations are too low, setting up a positive surprise down the road.

By , MarketWatch, 09/26/2014

MarketMinder's View: Ladies and gentlemen, here is your wall of worry … in pictures! Wheee! None of these seven things—which include ISIS, Vladimir Putin, political unrest, Ebola, border disputes and US midterm elections—are bull market killers. Some, like midterms, are positives dressed up as negatives. Could any or all of these trigger some emotional volatility? Could that volatility be big enough to qualify as a word that starts with “c” and rhymes with “korrection”? Sure! Those—quick drops of 10% to 20% over a few weeks or months—can start at any time, for any reason or no reason. But corrections are normal in bull markets. Corrections don’t end bull markets. Bear markets end bull markets, and again, the items here that are negative aren’t nearly big enough to whack a few trillion dollars off global trade, GDP and markets. And if you are still feeling skeptical, here are seven more pictures

By , Calafia Beach Pundit, 09/26/2014

MarketMinder's View: Just an interesting look at how misguided policies can destroy once-vibrant economies. Argentina was once one of the western world’s economic jewels. Now it’s bleeding cash, suffering over 30% inflation by many estimates, and watching private businesses leave in droves. It’s also a little lesson in what it really means to print money en masse—unlike US quantitative easing, which is often called “printing money” but in reality is the central bank creating electronic reserve credits, swapping these for bonds on the secondary market, and then relying on banks to lend off these new reserves (they aren’t). “For years, Argentina’s central bank has expanded its balance sheet in classic ‘money printing fashion,’ by lending significant sums of money, mostly in the form of newly printed currency, to the government, in exchange for a flimsy promise that it will be repaid. Argentina is literally a proving ground for the theory that when too much money (actual peso currency) chases a limited amount of goods, the result is inflation.”

By , Project Syndicate, 09/26/2014

MarketMinder's View: So there is a lot of ideology here, which means there are lots of unsupported general statements and strong opinions stated as facts. Those are your signs this thesis is probably not grounded in reality or supportable by tangible evidence and, therefore, not the sort of thing you should base an investment outlook on. We sort of agree, actually, that the eurozone’s recent economic turnaround wasn’t prompted by austerity policies—cycles just turn. But the structural benefits of privatizing unproductive state-run assets, allowing businesses to streamline, putting more economic activity in the hands of private businesses and citizens and—more recently—cutting taxes are vast. They largely haven’t been realized yet, as these measures typically impact the real economy at a substantial lag, but the UK in the 1990s and Korea in the 2000s—to name just two—show just how much of a boost they can bring.

By , The Wall Street Journal, 09/26/2014

MarketMinder's View: If you use surveys like those described here, it is indeed quite difficult to get a sense of how much volatility an investor can truly withstand emotionally. No quibbles there. But this piece assumes risk tolerance should be the basis of every investor’s strategy—and completely ignores the issue of goals. Trying to pick a strategy without first identifying your goals—the primary purpose for your money over your investment time horizon—is like aiming without a target. You’ll probably miss. Risk is important, but it comes after figuring out what long-term return you need to reach your goals over time—and the discussion should center on the tradeoffs between long-term growth and short-term volatility and what you’re comfortable with on both of those fronts.

By , The Wall Street Journal, 09/26/2014

MarketMinder's View: Oh boy oh boy. This is all based on the assumption that a strong dollar hurts the economy because it makes exports more expensive and “undermines competitiveness.” But a strong dollar also makes imports cheaper, which drives down our manufacturers’ input costs and makes them—wait for it—more competitive! Now, this isn’t to say a strong dollar is best. Or that a weak dollar is worst. Or that a strong dollar is bad and a weak dollar is good. Just that currency moves have plusses and minuses, and over time, they tend to offset. The stronger dollar isn’t an economic headwind. It’s just a thing.

By , The Guardian, 09/26/2014

MarketMinder's View: To the argument that the eurozone can’t grow and thrive without “large-scale debt forgiveness,” we offer a tale. Once upon a time, there was a big country whose debt-to-GDP ratio passed 100% after they borrowed to fund an unprecedented war effort. This debt was never forgiven, never paid off and sits on the Treasury’s balance sheet today, along with another $15 trillion or so in IOUs. Yet the economy grew amazingly, and nearly 70 years later, this country sits atop the world in terms of economic size and clout and fiscal stability. All this country—the US!—needed was a competitive economic foundation. Many of the most troubled eurozone countries have spent the past few years making themselves more competitive, too. Let this bear fruit over time, and we have a strong hunch they can grow their way out of high debt. Just like America did.

By , Financial Planning, 09/26/2014

MarketMinder's View: Why are we asking this question? Why are we assuming “low” inflation is a market driver? Why are we ignoring all the many, many, many factors that actually impacted stock, bond, real estate, commodity and all other markets over the last 15 years? Why are we looking at 15 years only? Why are we assuming a “12-asset portfolio” is superior simply because it beat large-cap US stocks over these 15 years? What about individual investors’ unique goals, objectives, financial situations and time horizons? What if some or all of those 12 assets don’t match their needs? What then? This is one of those studies that is probably super interesting for academics but has no use in the real world. Please do yourself a favor and do not consider any part of this study to be actionable investment advice. Including the statement that cash is like a seat belt so investors should always have a good-sized cushion just in case—opportunity cost is a risk, too.

By , Calafia Beach Pundit Blog, 09/25/2014

MarketMinder's View: This fascinating piece highlights some lesser-known, industry-specific economic measures that add more evidence to the following claim: The US expansion is on sound, if underappreciated, footing. No, we won’t get a recession if there is a slight dip in a gauge measuring Architectural Billings. But these tangible gauges can help one better see and relate to the broad economy.   

By , The Washington Post, 09/25/2014

MarketMinder's View: Hey look! Another Chinese Hard Landing fear article! You know, not that we are counting, but it seems to us there is about one of these articles written for every individual living in China. This version posits a bunch of reasons why China may be in trouble. Its central banker may be ousted. Shadow banks inflated a debt bubble. And a housing bubble. And China may be turning Japanese or American(?). Marry these reasons with some recent weaker economic data and voila, The Hard Landing. But China, contrary to the theory here, has still shown solid growth this year with no signs of a major letdown—including in its Leading Economic Index, which has surged in recent months. Perhaps there is a message about the direction of reform in central banker swap, but that’s all speculation. In our view, it’s more likely the path the government has traveled already—setting expectations for slower growth and slowly pursuing more reforms—continues. For more, see our 09/18/2014 commentary, “The Li Keqiang Put.”    

By , BBC News, 09/25/2014

MarketMinder's View: Not to be outdone by his American counterpart, BoE governor Mark Carney is warning that, “financial markets may be mispricing risks” based on the notion investors are complacently piling into riskier assets in search for yield in the current low interest rate environment. But this “hunt for yield” meme is a bit overwrought in our view. Yes, rates on high-yield bonds are down, but there is still a relatively normal spread between their rates and high-quality sovereign yields, which is a better measure of whether investors are demanding to be compensated for taking risk than rates alone. In our view, the reason markets aren’t reacting with more volatility to the suggestion the BoE may raise rates at some vague future point is because they realize 1) initial rate hikes don’t really threaten the bull market materially and 2) forward guidance is really just cheap talk.     

By , The Telegraph, 09/25/2014

MarketMinder's View: In one way, there are similarities: Both the outbreak of WWI and the 2008 Financial Crisis were caused by big, negative shocks. But it wasn’t a surprise that banks were globally interconnected, and the cause wasn’t Lehman’s failure. Stocks were down more than 20% before Lehman. Rather, the surprise was the unnoticed impact of an accounting policy change—FAS 157—which caused those failures in the first place. It deepened into a panic after Lehman because the Fed surprisingly outsourced its crisis management to the haphazardly run US Treasury. Listen, history has a lot of value for those who study financial markets—it’s a laboratory providing a range of probable scenarios of how current events may turn out. For example, we can use past data to show that terrorist attacks don’t derail bull markets. Or we could use history to show conflicts only truly matter for stocks when they go global—like WWI’s impact back in 1914.

By , Reuters, 09/25/2014

MarketMinder's View: But the ECB has already been trying various stimulus measures, to no avail. Exhibit 1: The first round of the ECB’s ballyhooed Targeted Long-Term Refinancing Operation took place last week, and fewer banks than forecasted took advantage of cheap funding for small-business lending. Monetary stimulus isn’t a great solution for the real problem, which this article pays short shrift to: “Eurozone banks, particularly in the crisis-stricken countries, have tightened up on lending as they adapt to tougher capital requirements and undergo health checks …” And if they fail those health checks, many speculate a bank could be wound down, which is regulatorese for “put out of businesses.” The issues are regulatory more than they are monetary, and no amount of central bank generated acronyms is all that likely to counter them.

By , Associated Press, 09/25/2014

MarketMinder's View: Here is an instructive lesson about how one monthly data point from one economic gauge never tells the whole story. Durable goods fell -18.2% m/m in August because of a big drop in commercial aircraft demand. Sounds bad! But this is coming off a scorching July, when durable goods rose +22.6% m/m led by … wait for it … commercial aircraft! Investors: Never fixate on any one data point, particularly in a series as noisy as durable goods can be.


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Global Market Update

Market Wrap-Up, Tues Sept 30 2014

Below is a market summary (as of market close Tuesday, 09/30/2014):

  • Global Equities: MSCI World (-0.2%)
  • US Equities: S&P 500 (-0.3%)
  • UK Equities: MSCI UK (-0.6%)
  • Best Country: Sweden (+1.5%)
  • Worst Country: Hong Kong (-1.1%)
  • Best Sector: Utilities (+0.3%)
  • Worst Sector: Energy (-0.7%)
  • Bond Yields: 10-year US Treasurys rose .02 to 2.50%

Editors' Note: Tracking Stock and Bond Indexes


Source: Factset. Unless otherwise specified, all country returns are based on the MSCI index in US dollars for the country or region and include net dividends. Sector returns are the MSCI World constituent sectors in USD including net dividends.