Today's Headlines

By , The New York Times, 03/04/2015

MarketMinder's View: Saving more? Nope. Evidently the real issue is that Wall Street is “bleeding savers dry” through high fees on actively managed mutual funds, putting retirees in jeopardy no matter how much they save. The proposed solution is a uniform fiduciary standard—previewed by the White House last week—which we are told would nudge every broker or investment adviser into selling or recommending index funds. Ipso presto problem solved. Except, we have our doubts. The fiduciary standard doesn’t require advisers to recommend the lowest-cost products. A broker or adviser who believes a higher-cost fund provides the best overall chance of reaching their client’s goals can recommend that fund and remain compliant. Rules don’t determine behavior, costs or returns. A firm’s values, resources, cost structures, philosophy and expertise do that. Heck, a fool held to the fiduciary standard may recommend an incorrect asset allocation, which slews of academic studies show matter much more then fees. Or maybe mix indexes within equities, resulting in subpar returns despite “indexing.” Folks, it ain’t all about the fees. For more, see last Tuesday’s commentary, “The DOL Gets a Homework Assignment.”

By , Bloomberg, 03/04/2015

MarketMinder's View: That the oil industry’s bizarre application of mark-to-market accounting has delayed writedowns of firms’ proven reserves is an interesting factoid. But it is very, very tough to imagine any investors being blindsided when producers finally begin booking losses in a few months. Markets pretty efficiently price in widely known information, and oil’s fall is extremely well-known. Not a surprise. And given how Energy stocks have suffered recently, markets are probably well aware of all this.

By , The Telegraph, 03/04/2015

MarketMinder's View: Basically, Austria’s Carinthia region—an Alpine hamlet—is the new Ireland and Detroit wrapped in one. It holds about €10.2 billion in bonds used to recapitalize failed lender Hypo Alpe Aldria, which lost its state lifeline yesterday, forcing losses on creditors and shareholders. So now it’s on the hook for the bank’s debts (Ireland) and on the verge of bankruptcy (Detroit). While it might be tempting to draw broader conclusions about Austria’s solvency and the eurozone, as this piece tries to do, we think that’s a bridge too far. Ireland didn’t break the eurozone—it was the first bailed out country to heal. The US economy and stocks have yawned over Detroit’s bankruptcy since it went bust in 2013. As this piece notes, Austria’s borrowing costs remain among the world’s lowest. This is a tempest in a teapot.

By , The Wall Street Journal, 03/04/2015

MarketMinder's View: Several pros seem to think the best way to navigate rising interest rates after the Fed hikes is to concentrate in short- and long-term bonds, because long rates probably won’t budge much (less interest rate risk), while short-term bonds (one year or less) can (theoretically) be continually rolled over at higher rates. To each their own, and we happen to agree long rates aren’t likely to jump this year. But it just seems odd to ignore total return at the short end and embrace it at the long end. For folks using bonds as a tool to mitigate expected short-term volatility in a blended portfolio, we’d suggest viewing fixed income more holistically and managing the entire bucket for total return, paying reference to risk and return at all segments of the yield curve and in all major categories.

By , Bloomberg, 03/04/2015

MarketMinder's View: As this piece chronicles, Chinese officials don’t set GDP targets because they want growth for growth’s sake. Rather, they want need employment to rise continually to improve living standards enough to keep the masses happy, ensure social stability and solidify their grip on power. They are also shifting China’s growth engine from manufacturing, where it takes a lot of growth to create jobs, to services, which are very job-intensive. A 7% growth rate creates as many or more jobs in hospitality, health care and the like than a 10% growth rate would have created in factories. The only thing we’d add is that China’s slower growth is a-ok for the world, as their contribution to global GDP rises as growth compounds off a wider base.

By , The Telegraph, 03/04/2015

MarketMinder's View: On the one hand, a two-speed net neutrality system—strict in the US and loose in the EU—merely creates winners and losers among Telecom and Internet companies. On the other, there are some protectionist rumblings accompanying this debate, which is not great. Now, talk is cheap, and it is far from certain either side will respond with actual trade or capital barriers. Most likely, this is all just jawboning. But it is a (very far-fetched, very unlikely) risk.

By , Bloomberg, 03/04/2015

MarketMinder's View: It comes as zero surprise that oil producers aren’t hiring. Between mounting layoffs and the lack of help-wanted ads discussed here, workers in that field have it very tough right now. But the US isn’t the oil industry. Our economy is diverse enough and growth is broad enough that overall economic and jobs growth can continue even as the Energy sector suffers.

By , The Wall Street Journal, 03/04/2015

MarketMinder's View: And here is some proof of the prior blurb.

By , The Telegraph, 03/04/2015

MarketMinder's View: Why? Because, according to one study, global debt (public plus private) has jumped 17% since 2007 to $57 trillion—$57 trillion the study suggests global governments and companies will never be able to repay, leaving the economy at risk of perpetual crisis as loans go south. Until they all default, which is apparently inevitable because they’ll supposedly never pay it off. Yet we’ve seen no evidence in history that countries must pay off debt to survive. The UK, for instance, did fine with outstanding debt attributable to the South Sea Bubble, Irish Famine and World War I. Over $1.5 trillion of current US debt ties back to World War II. But this ignores the elephant in the room: With a couple notable exceptions (ahem, Greece), interest rates globally are way lower post-2007 than pre. Most of the $8.3 trillion in new debt is cheaper than the $48.7 trillion that came before it. And a lot of that $48.7 trillion has been rolled over and refinanced at lower rates. That all suggests world debt is probably more affordable today, despite the gross increase. That isn’t what the start of a global crisis looks like—it’s just called leverage. Borrowing to finance growth and earn a net return on the investment is something companies do all the time. It works.

By , The Wall Street Journal, 03/04/2015

MarketMinder's View: No, the 1.1% m/m rise in January eurozone retail sales doesn’t mean Germany stole consumption from Switzerland after the Swiss franc skyrocketed. Perhaps some Swiss folks did cross into France and Germany to get more bang for their buck, but if we’re talking about Main Street sales, this is marginal—think Alpine and Rhineland villages and a couple French Geneva suburbs getting a bit more Swiss foot traffic. Plus, it’s not like Swiss prices suddenly shot up. This is really a false conflict. And it’s entirely speculative, considering Swiss retail sales data aren’t out yet. We’d instead chalk the eurozone’s sales growth up as the latest evidence falling prices aren’t denting demand—a counterpoint to the rampant deflationary spiral dread.

By , Bloomberg, 03/04/2015

MarketMinder's View: A bounce, which is nice, but it’s a bounce after a long stretch of declines tied to Brazil’s oil and mining industries. These still face big headwinds with commodity prices down, so best not to get too excited about Brazil’s near-term economic prospects.

Archive

By , The Wall Street Journal, 03/03/2015

MarketMinder's View: Much of this is sensible—namely, that it makes zero sense to create a special “small cap exchange” free of many listing requirements applicable to larger firms. The notion of having two standards of regulation is bizarre to us, and it’s highlighted as well by the Emerging Growth Company provision of the JOBS Act exempting small firms from SarbOx 404 requirements. Why not just gut SarbOx nearly fully, which would not legalize fraud, but would reduce the costs of listing and compliance?

By , Financial Times, 03/03/2015

MarketMinder's View: We reckon banks and investors alike would enjoy more transparency on how the Fed deems which banks are “globally systemically important,” aka too big to fail, and slapped with higher capital requirements as a result. While the quantitative factors are easy enough to decipher based on the Fed’s releases, the qualitative factors make the entire exercise too opaque—making it difficult for banks on the bubble quantitatively to plan. Financials stocks have done fine with the status quo, so this is more the absence of a potential tailwind than anything else, but still, we have to wonder how loan growth might improve at midsized banks if they knew where they stood.

By , Bloomberg, 03/03/2015

MarketMinder's View: Quantitative easing (QE) hasn’t even begun, and already folks fear tapering! Good grief. The ECB has said they plan to buy roughly €60 billion in long-term assets monthly through September 2016, adding roughly €1 trillion to their balance sheet. They have also said it might be open-ended, depending, and we all know from experience that central bankers are really good at changing their minds as conditions (and their interpretations of them) change. So who knows what will happen, but we think the eurozone will be better off the sooner QE ends. QE flattened yield curves in the US and UK, weighing on lending and growth. It probably has the same anti-stimulus effect in the eurozone, where yield curves are already quite flat. That said, the eurozone has already proven able to grow amid anemic lending and growth in the quantity of money, so QE shouldn’t derail the modest recovery.

By , The New York Times, 03/03/2015

MarketMinder's View: This has quite possibly the best graphic we have ever seen. And, quite sensibly, it encourages investors to judge advisers’ and brokers’ actions, not evaluate them based on which regulatory standard they adhere to. A few minor quibbles aside (i.e., it fails to differentiate between investment sales and service, and it doesn’t discuss how an adviser’s values and resources impact their ability to put clients first), this piece can help you separate client-focused investment professionals from those who are looking out for themselves first. For more on why this is necessary, see our 2/4/2015 commentary, “The DOL Gets a Homework Assignment.”

By , The Wall Street Journal, 03/03/2015

MarketMinder's View: Maybe they aren’t—but using valuations and Fed rate hike projections to forecast corrections is a fool’s errand. Volatility is unpredictable, period. And valuations don’t much help predict longer-term performance, either. Some, like P/Es, are sentiment gauges. Others, like enterprise value as a percentage of earnings pre-tax, interest, depreciation and amortization, are just high-falutin’ ways to look at company balance sheets—not terribly meaningful for the market as a whole.

By , The Wall Street Journal, 03/03/2015

MarketMinder's View: That pace? 2.4% annualized, down from 3.2%. GDP growth slowed as falling business investment and exports partly offset a rise in consumer spending. Inventories also piled up, which is open to interpretation, but not good if it means production is outstripping consumption. Only time will tell whether that’s the case, though. Overall, it’s clear Canada’s commodity-heavy economy is feeling the effects of falling oil and materials prices, something investors should keep in mind. It has other industries that can contribute, to be sure, but one should expect some macroeconomic influence from oil prices, too.

By , The New York Times, 03/03/2015

MarketMinder's View: Look, consumers always had three options for whatever money they save at the gas station—spend it elsewhere, save it or pay down debt. And anecdotal evidence and personal experience both suggest Milton Friedman nailed it when he theorized that perceived temporary price changes don’t alter long-term consumption patterns since spending decisions are more a function of disposable income (and folks’ long-term expectations thereof). So it really isn’t surprising that core retail sales (excluding gas stations) aren’t off the charts. Plus, as this piece points out, retail sales omit spending on services, which is a huge share of the US economy. Data released yesterday show real spending on services rose 0.4% m/m in January. Total real consumer spending also rose 0.3%. Besides, our economy is strong and broad enough that it can grow fine whether or not consumers spend their gas savings at the mall.

By , CNBC, 03/03/2015

MarketMinder's View: This is all largely just theater. Greece was always going to have to renegotiate some sort of funding arrangement once the recent bailout extension expires in June, because otherwise, Greek banks would lose ECB financing, essentially forcing Greece out of the euro. Whether it’s an official third bailout, a provisional line of credit with conditions attached or something else, depending on whichever euphemism Greek and EU/ECB/IMF officials decide on, remains to be seen. It also doesn’t much matter, as the endgame—an arrangement that keeps Greece funded and in the eurozone—will (probably) be the same. Just expect a lot of politicking and rumors along the way.  

By , The Wall Street Journal, 03/02/2015

MarketMinder's View: Look, we understand Nasdaq 5000 may grab more eyeballs than Nasdaq 4236, but no price level will tell you where the index is going to go next. Unless you want to impress your friends by spouting off market trivia, myopically looking at big round numbers is a meaningless exercise for long-term investors. And looking at how quickly various indexes pierce and close above round numbers? Arguably even more useless, as it presumes such figures are “resistance” that is hard to get through when, in fact, they are just numbers. For more, see our 2/25/2015 commentary, “Around the World in All-Time Highs.”  

By , Bloomberg, 03/02/2015

MarketMinder's View: Yes, there are problematic pockets in the world, like Venezuela and Russia. But if “misery” = unemployment rate + change in the consumer price index, there is going to be a huge backward skew to the data. Like Spain or Portugal, which are only on this list because of unemployment, a vestige of past weakness. Spain, for example, is growing with falling prices—a sign of growing productivity and economic health. But also, we quibble with the conclusiveness of this list—where, for example, is North Korea?

By , CNBC, 03/02/2015

MarketMinder's View: On one hand, we understand where folks’ frustration with government gridlock comes from—people’s political biases lead them to believe their party is always right and the other side is very wrong, and so they despise it when Congress bickers and can’t get anything done. On the other, few see how positive gridlock is for stocks. A gridlocked government is unlikely to pass contentious, market-harming legislation—reducing uncertainty. With respect to the notion “political pressure and incompetent congressional leadership could bring back all those nightmares” from 2011 and 2012, we’d kindly point out economic growth and bull market continued throughout. And it wasn’t like we got less gridlocked in 2013 or 2014, friends. There is a reason stocks rise after midterm elections and in third years of president’s terms—the reason is gridlock brings inactivity.

By , Associated Press, 03/02/2015

MarketMinder's View: That double dose of positive news: February inflation fell less than it did in January (-0.3% y/y vs. January’s -0.6% y/y) and January unemployment fell to 11.2%, its lowest level in almost three years. In our view, the reaction to this news illustrates the dour sentiment toward the region. Lower energy prices have been the primary deflationary pressure, as core inflation was steady at 0.6% y/y and service-sector inflation accelerated to 1.1% y/y—and the hope the ECB’s quantitative easing program will help boost inflation seems misguided. Unemployment is a late-lagging indicator, so this is less positive news than, we don’t know, the seven straight quarters of positive GDP growth and overall rising leading economic gauges.

By , Xinhua, 03/02/2015

MarketMinder's View: China’s growth rate has been gradually slowing for years—this isn’t breaking news. And it is at least partly intended! The government has long since signaled its desire for a slower growth rate in exchange for more sustainable, market-driven, less credit-and-infrastructure boom reliant. And because the country is growing off a larger base, China’s contributions to global GDP are larger now than they were ten years ago, when China was expanding at a double digit clip. For more, see our 1/21/2015 commentary, “China’s Great Miss?”    

By , Reuters, 03/02/2015

MarketMinder's View: India’s central bank will now aim for an inflation target of 4%, give or take two percentage points—a positive, as inflation targeting has helped countries that have historically struggled with stagflation and hyperinflation (like Brazil). That there was no mention of a Monetary Policy Committee, which would indicate greater institutional independence for the central bank, is a disappointment, but this is still a positive move for India and speaks well of Prime Minister Narendra Modi’s ability to follow through on achievable structural reforms benefiting India economically in the long-term.        

By , Real Clear Markets, 02/27/2015

MarketMinder's View: Here is an excellent discussion of markets’ ability to discount widely known information, with special attention paid to pundits’ common practice of forecasting bear markets or crises based on factors most of the world is well aware of today. “Crashes are once again the result of new information entering the marketplace, not what you, me, and the pundits already know.” We’d suggest keeping the points raised here in mind next time a spooky headline catches your eye.

By , The Wall Street Journal, 02/27/2015

MarketMinder's View: The thesis here? Three years of low volatility in oil prices, decried by oil traders then, have given way to a sudden “new normal” of high volatility (decried by oil traders now), as evidenced by eight months’ worth of swingy prices. But here is the thing: Volatility has no normal. Volatility is volatile and unpredictable, and trading anything short-term is not easier or harder based on the degree of volatility (hence how traders seem to hate it both ways). Oh, and this is odd too: “Analysts and traders have thus found themselves grappling with newly important but unfamiliar data, such as how many U.S. drilling rigs are operating, or the financial health of U.S. shale companies.” Well, the Baker Hughes Rig Count is more than 70 years old, most oil analysts look at it in some measure (as they would many gauges of future supply) and it’s odd to emphasize that now—due to technological advance, the rig count alone is arguably less predictive of short-run production changes than it has been in the past. That is why Baker Hughes’ tally is down about -30% since October, yet US production has risen. Here is a picture of that.

By , The Washington Post, 02/27/2015

MarketMinder's View: So there isn’t a lot of direct market impact in this piece, which is much more sociological than anything. We provide it for this reason: There are many misplaced long-term fears and hyperbolic warnings suggesting the aging baby boomer generation is an economic or market risk. There are lots of reasons these are wrong, like the fact demographic shifts are too slow and widely known to affect markets materially. But also, what if, as the interviewee suggests, retirement comes later due to medical advances and a more services-dominated economy? What if it just isn’t the same retirement the preceding generation had? (By the way, before you go buy book after book on demographic market risks, please read this.)

By , CNBC, 02/27/2015

MarketMinder's View: So this basically argues February’s 5%+ gains across many indexes is a prelude to more gains next month because that happened in 9 of the 10 such occurrences since 2009, an example of how not to use history in investing. Past returns do not predict. But also this acts somehow surprised at the recent frequency of positivity—suggesting markets should revert to the mean and fall after a big up month. Yet markets do not mean revert—in a bull market, indexes rise more often than they fall, which is kind of how it works. Finally, the author states that 5% months are rare, but 10 occurrences since this bull began would put the frequency at 13%, which doesn’t seem that rare to us. Besides, it’s all myopic. Look, we’re bullish too, just not for because of anything that has already finished happening.

By , Bloomberg, 02/27/2015

MarketMinder's View: This is an interesting historical view of GDP and its origins, but it actually misses many more meaningful and practical critiques of the series: It presumes all government spending is good for growth (consider that in light of the austerity debate in Europe) and imports detract from growth, when they are actually a sign of healthy domestic demand. But as a confirmation of the economy’s recent trajectory, it’s still a useful gauge. PS: The title is a false either/or, which the article corrects without saying so in the first paragraph. GDP is the flow of economic activity occurring during a certain period. It is neither wealth (which would be the cumulative value of economic activity) or well-being, which is undefinable, fuzzy and emotional.

By , The Wall Street Journal, 02/27/2015

MarketMinder's View: This is not a perfect article, by any stretch, particularly due to what we believe is incomplete due diligence advice at the end. But it is darn good and a very useful reminder that not all industry recognition and awards are equal—most include opaque criteria and many go so far as to be pay-to-play. Awards alone aren’t reliable proof of manager competency. For more, see Lance Lehman’s 6/6/2014 column, “Five Due Diligence Must Dos” and Todd Bliman’s 12/4/2013 column, “Incentives, Interests and Investors.”

By , The Wall Street Journal, 02/27/2015

MarketMinder's View: We are darned ambivalent on this one, for sure. It nonsensically points out the point gain could have been the largest in history. It sensibly guts that, pointing out that this is off a bigger base so the percentage is tiny and wouldn’t be the biggest in history. Then, stocks fell below point-record mark today, making the whole article a nonstory. Shucks.

By , The Wall Street Journal, 02/26/2015

MarketMinder's View: Don’t make another trade until you read this, create a sign of these nine mistakes, print it, laminate it and tape it to your computer screen. All are timeless, costly pitfalls. The more you know them, and the more you develop the introspection to spot them in yourself, the better investor you will be.

By , The Guardian, 02/26/2015

MarketMinder's View: We will spare you heavy analysis of the coffee metaphors here, mostly because we don’t understand them (mostly because we don’t get metaphors in general). The actual thesis here is the same old unsustainable/unbalanced expansion fears we’ve seen in Britain for a while—too much borrowing and spending, not enough business investment, industrial production or exports. The evidence seems to be Q4’s falling business investment and industrial production. Thing is, both are tied to North Sea oil, which pulled back bigtime as prices fell in Q4—widely expected. Manufacturing, which more directly reflects UK industry, rose. So did investment in IT equipment, non-transportation machinery and intellectual property products (including R&D). We don’t know what that means in coffee terms, but in non-metaphorical real-life economic terms, it all suggests the UK is on firmer footing than many believe.

By , The New York Times, 02/26/2015

MarketMinder's View: The fish in question was a catch of undersize grouper a commercial fisherman tossed back into the sea after being busted by the Florida Fish and Wildlife Conservation Commission for breaking minimum size rules. The agents cited him and told him to surrender the fish to the port authorities, but tried to pull a fast one, dumping the small fish and replacing them with new, compliant fish, hoping to avoid the fine. Anyway, turns out that amounted to destroying “tangible” evidence in a financial fraud case, because he was tried and convicted under Sarbanes-Oxley. He appealed, and it went all the way to the Supreme Court, which overturned his conviction Wednesday. Now, this all probably seems fairly obvious, like duh, how silly to prosecute a grizzled, tattooed fisherman with a Fu Manchu moustache under a law aimed at white collar, Enron-style crime. But what’s really significant here are some things the Justices wrote in their opinion of Sarbox. The justices seem to believe “tangible” refers to actual physical evidence of falsified claims. The majority opinion asked: “Fish one may fry, but may one falsify, or make a false entry in the sea dwelling creatures?” One justice added that as tangible objects go, “a fish does not spring to mind—nor does an antelope, a colonial farmhouse, a hydrofoil or an oil derrick.” So that would seem to limit the law’s applications—something even the dissenting justices would welcome. The dissenting opinion called Sarbox “too broad and undifferentiated, with too-high maximum penalties, which give prosecutors too much leverage and sentencers too much discretion.” Sarbox is still alive, because the Court can’t rewrite legislation, but it does suggest Sarbox’s many shortcomings are attracting attention.

By , The Wall Street Journal, 02/26/2015

MarketMinder's View: The theory here is that deflation is always and everywhere bad—even if, like the slightly negative headline US Consumer Price Index reading, it’s driven entirely by volatile energy prices—because central banks may have to stimulate growth in the future by creating negative real interest rates (rates minus inflation), and that’s hard to do when prices are overall falling. However, there are three problems with this: The past, the present and the future. History shows there are long stretches of deflation while the economy booms—like in the Industrial Revolution. Also, currently, interest rates are negative in many parts of Europe (not that we are recommending this policy today, which is unnecessary and probably a minor headwind). Commodity prices are always and everywhere volatile, which is why most central banks don’t weight them heavily in weighing potential moves. The impact of the drop may prove to be a one-hit wonder, if oil prices merely stabilize. But overall, no, we don’t suggest “cheering” falling prices, in the sense that in this case they really just create winners and losers. P.S., lowflation plus growth had another name in the 1990s: The Goldilocks Economy.

By , Financial Times, 02/26/2015

MarketMinder's View: And that supposedly new focus has dug up what some believe is a quandary as potentially unsolvable as Fermat’s last theorem: The eurozone’s cyclically adjusted P/E ratio (CAPE) is below the US’s, but the eurozone’s normal trailing P/E is higher than the US’s—so how the heck do you tell which one is undervalued? We will save you the trouble of pulling your hair out, because this is a false either/or. CAPE is nothing more than an oddly calculated, bizarrely inflation-adjusted, backward-looking Frankenstein’s Monster of a thing. It predicts neither near-term or long-term returns. Normal P/Es are somewhat more useful, but only because they can measure sentiment—but you can’t always assume lower P/Es in one nation vs. another mean sentiment is lower, too. Actually, qualitative evidence (headlines, media tone, Tweets, conversations with humans) suggest sentiment is more optimistic in the US than Europe. Valuations are more useful when trying to weigh sentiment in one place relative to history—like the fact valuations today are nowhere near the euphoric Tech Bubble peak. Look, it isn’t about whether the eurozone is under- or over-valued vs. the US—you don’t have to choose one or the other! What matters is that reality in both places is better than most perceive, creating fine investment opportunities in each.

By , MarketWatch, 02/26/2015

MarketMinder's View: Tell us if you have heard this before. The theory here is Greece faces essentially four options: The ECB/IMF/EU troika moderates, Greece defaults and stays in the eurozone, Greece defaults and leaves or Greece submits to austerity. Which have been the options basically since 2010. It all comes to the thunderingly obvious conclusion that, “The EU’s lack of flexibility, self-discipline, and humility makes a rapid resolution for Greece difficult, at best.” We mean, this whole thing has been dragging on for years. Expecting a quick fix now is naïve.

By , Financial Times, 02/26/2015

MarketMinder's View: This is all mostly hypothesizing, but it is an interesting look at potential reasons why banks are happily buying negative-yielding bonds. For one, most intermediate-term yields aren’t as negative as the ECB’s -0.2% charge on excess reserves, making them the lesser of two evils. Two, banks might also believe they can flip them to the ECB for a profit once quantitative easing begins.

By , CNBC, 02/26/2015

MarketMinder's View: Most of this is just one guy’s opinion, which he is certainly entitled to. We feel compelled however, to note a few … umm … lapses? in the assessment of economic conditions. So here are a few questions: How is it possible “the downturn in U.S. profits is accelerating” when US earnings are overall positive in the most recent quarter? The answer is in the chart included—the growth rate is slowing. But as the same chart shows, that isn’t very uncommon in a bull market. Also, on a similar note, it’s true that an earnings drop is “associated with a recession,” but they are not a reliable predictor of one. Neither is the Citigroup Economic Surprise Index a measure of recession, which is an absolute condition (broadly negative economic output). That gauge measures selected economic data versus some analysts’ expectations. Ultimately, actual forward-looking gauges like The Conference Board’s US Leading Economic Index (LEI) are rising. No recession has begun while LEI has risen in the index’s 55-year history.

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Global Market Update

Market Wrap-Up, Tuesday Mar 3 2015

Below is a market summary as of market close Tuesday, 3/3/2015:

  • Global Equities: MSCI World (-0.4%)
  • US Equities: S&P 500 (-0.5%)
  • UK Equities: MSCI UK (-0.7%)
  • Best Country: Hong Kong, (+0.7%)
  • Worst Country: Ireland (-2.3%)
  • Best Sector: Energy (+0.2%)
  • Worst Sector: Materials (-0.8%)
  • Bond Yields: 10-year US Treasury yields rose 0.04 percentage point to 2.12%.

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.