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By , Bloomberg, 02/28/2014

MarketMinder's View: Q4 GDP growth was revised down to 2.4% annualized, with consumer spending, exports and inventory builds slower than first reported. But there was good news, too: Business investment was revised up, with equipment spending jumping 10.6% and spending on software and intellectual property rising 8%, suggesting earlier fears firms weren’t “investing for the future” were premature.

By , The Washington Post, 02/28/2014

MarketMinder's View: In a refreshing change, the study highlighted here doesn’t argue the Fed’s bond buying propped up asset markets here or abroad. Rather, it says the risks come from money managers assuming en masse that ending quantitative easing (QE) is a negative and stampeding toward the exits. It’s possible—professional and individual investors alike can misinterpret events—but this isn’t any different from a typical sentiment-driven correction, which can happen at any time, for any reason. There is nothing special (or dangerous) about QE in this regard.

By , The Washington Post, 02/28/2014

MarketMinder's View: Setting aside the debate over the benefits of public investing, this is an excellent look at why the Congressional Budget Office’s projections so frequently miss the mark: “No one can predict the future, and it is not the fault of the large staff of economists and nonpartisan brains at the CBO that they cannot know future growth patterns, future costs and the entire fluid set of variables that shape economic life … Variables change—constantly, dynamically and unpredictably.”

By , The Wall Street Journal, 02/28/2014

MarketMinder's View: We agree this bull market should have plenty of room to run, but not because its gains thus far are tame relative to past expansions—the past doesn’t write the future. Rather, stocks look sweet because the economic and political backdrop for capital markets appears brighter than most investors perceive, and stock supply isn’t running away.

By , The Washington Post, 02/28/2014

MarketMinder's View: Setting aside the debate over the benefits of public investing, this is an excellent look at why the Congressional Budget Office’s projections so frequently miss the mark: “No one can predict the future, and it is not the fault of the large staff of economists and nonpartisan brains at the CBO that they cannot know future growth patterns, future costs and the entire fluid set of variables that shape economic life … Variables change—constantly, dynamically and unpredictably.”

By , Associated Press, 02/28/2014

MarketMinder's View: According to our new Fed head, if she and fellow policymakers believe the weather isn’t the main driver of recent so-so economic results, they might, um, taper their tapering of quantitative easing (QE) bond purchases. Here’s hoping they don’t: As we’ve written many times, QE is a drag. It flattens the yield curve spread, making bank lending less profitable and discouraging banks from lending enthusiastically—and starving our capitalist economy of the capital it needs to grow and thrive.

By , Jiji Press, 02/28/2014

MarketMinder's View: So-called “core-core” CPI, which excludes food and energy prices, rose 0.7%—another indication Japan is slowly moving out of deflation—and industrial production rose 4%. However, despite these encouraging signs, we wouldn’t suggest rushing into Japanese stocks. Investors’ expectations still appear too high, and Prime Minister Shinzo Abe so far seems unlikely to execute the significant structural reforms needed for Japan to match folks’ lofty hopes.

By , EUbusiness, 02/28/2014

MarketMinder's View: He’s right. Not because inflation expectations are “firmly anchored”—inflation is a monetary phenomenon, not a psychological one—but because the money supply is still growing. The eurozone would no doubt benefit from more lending and swifter money supply growth, but the current conditions shouldn’t lead to a deflationary spiral a la Japan’s lost decade.

By , The Wall Street Journal, 02/28/2014

MarketMinder's View: Another sign of improvement in the eurozone periphery—bond yields are at pre-crisis levels and still falling, giving nations increasingly more flexibility to address long-running issues in public finances.

By , Associated Press, 02/28/2014

MarketMinder's View: Some claim this might indicate a “softening” market. Maybe! Or maybe it indicates how low supply is. Or how terrible the weather was in much of the country—our guess is fewer folks go house hunting amid snow, ice and freezing rain.

By , Xinhua, 02/28/2014

MarketMinder's View: They did this in 2012, too, but it didn’t work—officials never properly defined legitimate private lending or established a regulatory code. Without those items, anyone who borrowed private funds for a business venture that went bust risked a criminal conviction for illegal fundraising—punishable by death. Needless to say, few businesses took on private loans. This time, however, they appear to have written regulations and established a legal framework, perhaps improving the chances of success.

By , The Wall Street Journal, 02/28/2014

MarketMinder's View: Bankia—formed when seven troubled regional lenders merged in 2010—has been majority-owned by the Spanish government since its 2012 bailout. At the time, it was widely considered one of the world’s most toxic banks. Now, it’s profitable, and investors are lining up for a slice—another milestone for Spain’s continuing recovery.

By , The Wall Street Journal, 02/27/2014

MarketMinder's View: Headline durable goods orders fell in January, but the core reading, which excludes transportation, rose 1.1%. Orders for nondefense capital goods—a gauge of business spending—also picked up. So did order backlogs, indicating factories can’t keep up with strong demand.

By , The Wall Street Journal, 02/27/2014

MarketMinder's View: More evidence of improving loan growth: Bank lending for real estate development, which has struggled a long while, is finally turning up. Credit is becoming more available as yield spreads widen, which should provide economic tailwinds looking forward.

By , The Wall Street Journal, 02/27/2014

MarketMinder's View: It’s not surprising eurozone lending continued to fall after the ECB finished collecting data for its upcoming Asset Quality Review. Data collection might be done, but the review isn’t! Stress tests also loom, with big capital raises (and potentially creditor bail-ins) likely for banks that fail the ECB’s exercise. It all amounts to a big incentive for banks to deleverage and hoard capital, not lend enthusiastically.

By , The Telegraph, 02/27/2014

MarketMinder's View: While the impact of an independent Scotland on the UK economy and Brits’ personal finances is certainly worth considering, at this point, it’s premature to make specific projections like those here. Even if the referendum does pass, it simply permits the Scottish government to begin negotiating an independence agreement with the UK government, and no one knows how they’ll potentially settle any of the items discussed here. For now, this is too long-term and hypothetical to start planning around.

By , Bloomberg, 02/27/2014

MarketMinder's View: While exports slipped in Q4, domestic demand rose—this isn’t an inherently weak reading. As the global economy advances, so should demand for Swiss goods.

By , Reuters, 02/27/2014

MarketMinder's View: Another sign Emerging Markets are broadly healthier than most appreciate: Brazil resumed growing in Q4, narrowly avoiding recession. Looking ahead, the country still faces cyclical and structural headwinds, but it is still contributing to global growth.

By , China Daily, 02/27/2014

MarketMinder's View: The newest development in the Shanghai Free Trade Zone—removing interest rate ceilings for foreign currency accounts holding less than $3 million. Though a small reform, it’s still a beneficial step toward market-based interest rates.

By , Bloomberg, 02/27/2014

MarketMinder's View: While Spain’s Q4 growth was revised down from +0.3% q/q to +0.2% q/q, the drag came from a 3.9% drop in public spending—no shock to anyone, considering Spain is still knee-deep in an austerity program. What really matters: Private sector components (and demand) are improving.

By , Reuters, 02/26/2014

MarketMinder's View: Despite concerns rising mortgage rates, rising home prices and bad weather would derail the housing industry (and potentially the whole economy), new home sales jumped 9.6% in January. Now, that’s only one month, but housing’s recovery has been chugging along for a while. More importantly, housing is just one part of the economy—other areas are strong and can keep excelling even if housing slumps some.

By , Café Hayek, 02/26/2014

MarketMinder's View: Wealth isn’t money alone—or even vast natural resources! Economic well-being, on a country and individual level, requires much more, like the freedom decentralized capital markets provide to (mutually beneficially) exchange goods and services. Venezuela—rich in oil, but also price, supply and other market controls—is a prime example.

By , BBC, 02/26/2014

MarketMinder's View: Given the UK government had to spend a ton to compensate British depositors in branches of failed Icelandic banks in 2008, we can see why regulators would want to strengthen oversight of foreign banks operating in the UK. However, the proposed measure, which would end branch banking and require non-EU banks operating in the UK to operate as subsidiaries, subject to all UK regulatory rules, likely reduces competition, perhaps hurting consumers. It also isn’t guaranteed to make the system safer or limit the risk of taxpayer-funded bailouts—no prophylactic is perfect.

By , The Wall Street Journal, 02/26/2014

MarketMinder's View: The euro doesn’t become any less viable if countries’ trade with eurozone partners shrinks relative to their trade outside the eurozone. Intra-eurozone trade will still be significant, and free and easy cross-border trade within the region will continue giving the supply chain a comparative advantage. As the developing world grows and becomes a bigger trading partner, that just diversifies trade—not a bad thing. Rather, we daresay it would give eurozone nations more flexibility, not less.

By , The Wall Street Journal, 02/26/2014

MarketMinder's View: As shown here, investors likely needn’t worry about the yuan’s recent fall—there doesn’t appear to be any fundamental weakness there. After allowing the yuan to rise for the past few years, the PBOC is purposefully weakening the currency in an apparent attempt to shake out speculators before allowing the currency to trade more freely—a widely known goal and a beneficial step for the developing economy.

By , CNN Money, 02/26/2014

MarketMinder's View: An interesting look at the latest in bank health: Profits rose 10% y/y in 2013 as banks were able to set aside fewer reserves against future loan losses and regulatory costs. Yet lending stayed sluggish. Why? Regulation requiring higher reserves is one reason, as described here. Another, often overlooked, culprit is quantitative easing (QE). QE flattens the yield curve, sapping loan profitability and, with it, banks’ eagerness to lend. As QE purchases taper off, the yield curve should steepen, making credit more available to businesses and individuals.

By , China Daily, 02/26/2014

MarketMinder's View: The rise in offshore corporate debt shouldn’t surprise—officials have raised the quotas for foreign investment and corporate bond issuance in recent years, and they’ve made small regulatory tweaks to encourage higher capital flows. Moreover, foreign debt isn’t in itself a bad thing—especially for a country supposedly dedicated to slowly opening its economy. It gives Chinese firms another option to invest and make money. It could, theoretically, be a risk if currency fluctuations made dollar-denominated debt more difficult to service, but wild currency moves don’t appear likely within the foreseeable future—the government is taking a very gradual approach to currency liberalization.

By , Financial Times, 02/26/2014

MarketMinder's View: The UK released the breakdown of Q4 GDP growth, and the underlying data received mixed reviews. Some lamented weak export growth (0.4% q/q) and others celebrated higher business investment (2.4% q/q) and—confusing to us—slower consumer spending (0.4%), cited as evidence the recovery is becoming more “balanced,” i.e., less dependent on consumers’ wallets. While we rather differ with that view—there isn’t anything inherently unsustainable about a consumer-based economy—the big takeaway is the UK economy continues recovering nicely.

By , Bloomberg, 02/26/2014

MarketMinder's View: Two signs of a continuing UK expansion! One: Home construction is burgeoning as builders struggle to keep pace with demand, which provides a modest economic tailwind. Two: Homebuyers, on average, borrowed £2,000 more in 2013 than 2012, but this higher amount represented a smaller share of average income. Wage growth, it seems, is healthier than many suspect.

By , The Telegraph, 02/25/2014

MarketMinder's View: No. By Black Swan author and the primary proponent of the term Nassim Nicholas Taleb’s definition of “black swan,” a widely scrutinized and discussed political disruption in a nation that has been pulled between Russia and the West for decades cannot be a black swan. Nor is it a material risk for capital markets in the near future. To impact markets in a meaningful way, conflict typically needs to be global—like World War II, which truncated a new bull. Ukraine’s 2004 revolution and the Georgian conflict in 2008—the nearest precedent for the Ukraine endgame described here—had little bearing on global capital markets. The latter occurred during the financial panic-driven bear market, but coincidence isn’t causality.

By , BBC News, 02/25/2014

MarketMinder's View: Italy’s political and economic issues are well-known, and only time will tell whether new Prime Minister Matteo Renzi has the clout to push through structural forms. In the meantime, however, cyclical factors are turning in the country’s favor. Italy’s manufacturing growth is at its fastest level since April 2011 and it just exited recession in Q4 2013—another example of better-than-expected eurozone reality.

By , The Wall Street Journal, 02/25/2014

MarketMinder's View: It seems some technical analysts are waiting for the market to hit a few more new highs before they recommend buying stocks—a rather odd position to take, in our view. One, past performance doesn’t dictate future returns. Two, the longer you wait for “confirmation,” the more upside you potentially miss out on—waiting for arbitrary markers carries significant opportunity costs for long-term investors. Tactical decisions should depend on where markets are likeliest to go over the next 12-18 months, based on fundamental factors.

By , BBC News, 02/25/2014

MarketMinder's View: This isn’t terribly surprising—trying to get 12 different countries with 12 different agendas and interests to agree to a single set of rules is no easy task. That said, delays in long-running trade talks are more an absence of a very long-term positive rather than a market negative. For more, see our 02/25/2014 cover story, “Meanwhile, Outside of Ukraine…

By , Bloomberg, 02/25/2014

MarketMinder's View: Beginning this month, EU financial firms must report all derivatives transactions to a central authority. But, there is a problem: The EU has no standard definition of a derivative, making it difficult to enforce the requirement. Though domestic regulators can continue to use their existing definitions as the European Commission comes to a decision, this illustrates the broader issues the EU will have in moving toward a centralized regulatory system (and shows why it likely takes longer than officials presume).

By , Project Syndicate, 02/25/2014

MarketMinder's View: Two broad misperceptions in this argument: that emerging and developing countries (EMDCs) are a uniform bloc and that US monetary policy is responsible for these nations’ fortunes and ills alike. For one, EMDCs are very diverse in their economic and political systems: Turkey is not Mexico is not South Korea. Suggesting that EMDCs are all equally affected by Fed policy is a fallacy. And two, there is just no evidence the Fed’s quantitative easing (QE) led to surging flows of capital to EMDCs, nor that its current wind-down is causing capital flight. The best course—for the Fed and any central bank—is to refrain from making radical moves based on ghost stories like this.

 

By , BBC News, 02/25/2014

MarketMinder's View: While it’s encouraging to see the European Commission take notice of the eurozone’s recovery, the organization’s forecasts likely don’t mean much for markets looking forward. Like all organizational forecasts, they’re based on backward-looking factors and subject to constant revision as new data come out. For more, see our 02/18/2014 cover story, “Eur(ozone) too Dour.”

By , Quartz, 02/24/2014

MarketMinder's View: Weird as this might sound, this view of Spain’s economy is rather too dour. Spain’s exports held up great even while the country was mired in recession, and the fall in imports touted here was actually a sign of weakening internal demand—a negative. Now, however, consumer spending and business investment are on the rise, combining with export growth to put Spain back in the growth column. Those who think exports are Spain’s sole source of strength should be surprised looking forward.

By , Reuters, 02/24/2014

MarketMinder's View: Markit’s service PMI isn’t the industry standard—that’s the ISM’s Non-Manufacturing gauge, which comes out the first week in March—but the flash reading is a handy early estimate of monthly activity. It showed slower growth in February, which is no surprise considering the extreme winter weather shutting down much of the US at times. Weather aside, however, the economy appears firmly in expansionary mode.

By , The Wall Street Journal, 02/24/2014

MarketMinder's View: This is a testament to what opening long-running monopolies to competition can do. As more of the reforms passed last year take effect—particularly in Energy and Telecom—we wouldn’t be surprised if that trend continues looking ahead. For more, see Elisabeth Dellinger’s 08/15/2013 column, “What to Do About Mexico’s Energy Reforms.”

By , The Telegraph, 02/24/2014

MarketMinder's View: While the take on the new banker bonus cap is spot on—it invites a lack of transparency and is largely a solution in search of a problem—we rather disagree the forthcoming financial transaction tax (FTT) is materially better. For one thing, it isn’t a solution to markets’ “increased propensity to short and violent crashes”—one, markets will always be volatile (and that volatility is normal and a necessary tradeoff for long-term gains), and two, trading activity will likely largely shift from Europe to tax-free areas.

By , Yomiuri Shimbun, 02/24/2014

MarketMinder's View: If this were to become reality, the 11 nations remaining in the Trans-Pacific Partnership would benefit from freer trade in the very long term, but it would be the latest instance of vested interests blocking Japanese reform—and the latest evidence suggesting investors’ hopes for sweeping Japanese reform are too lofty.

By , BBC News, 02/24/2014

MarketMinder's View: The global economy is already in recovery mode—and it has been for some time. Not all economies will grow in lockstep—some will grow faster than others. But more often than not, those economies spur growth in slower-going economies in the process. Exhibit A: the eurozone. You won’t get this sense from looking at things like “potential growth,” but arbitrary hypotheticals like that don’t matter for stocks.

By , CNBC, 02/24/2014

MarketMinder's View: In our view, this is more evidence of lingering skepticism than anything else. Maybe some parts of the economy are experiencing more than weather-related weakness, but pockets of strength and weakness are nothing new for the US—or any—economy. As for payrolls, those are a late-lagging indicator—February’s jobs report will give more insight into how the economy grew months ago. It won’t tell investors or the Fed anything about what’s to come. For more, see our 02/21/2014 cover story, “Stretched Sentiment.”

By , The Wall Street Journal, 02/21/2014

MarketMinder's View: Here’s a bit of symbolic marker: “The payment means the mortgage-finance giant, together with its smaller rival Freddie Mac, will do what many considered impossible just two years ago: They will have paid more in dividends to the government—around $192.5 billion—than the $187.5 billion they received from the U.S. Treasury for their 2008 bailouts.”

By , The Telegraph, 02/21/2014

MarketMinder's View: Yes, valuations for a narrow selection of tech firms have increased. But this phenomenon isn’t industry wide and as the author notes, “… although technology values are rising rapidly, the $42bn of deals so far this year is still some way off the $79.6bn at the same point in 2000, and rising valuations may just be a reflection of the increased size of the industry.” Facebook isn’t Pets.com and investor sentiment seems far off from the euphoric levels of 2000.

By , CFA Institute, 02/21/2014

MarketMinder's View: While this piece goes into the history, structure and workings of annuities, we find it curious there is no mention whatsoever of the many hidden fees, opaque rules, illiquidity, rigid tax structure and misleading advertising that accompany annuities. Other than that, we completely agree with this take. For more, see our 01/10/2014 cover story, “Guaranteed*.” 

By , The Wall Street Journal, 02/21/2014

MarketMinder's View: Yes, rising oil production in the US is depressing prices to an extent. But this article fails to scale the scope of the “hit.” It references global banking giant Deutsche Bank took a “$5 million”—with an m—unrealized loss. It tallies Pemex’s payments in total at $450 million­—with an m. Folks, Deutsche Bank has Tier 1 capital of $50 billion—with a b. What’s more, the losses haven’t been realized at this point: “The rebound in crude markets in recent weeks may have improved the banks' positions, and they could be in the black by the end of the term of the contract this fall.” In addition, undiscussed is the fact many banks will offset the exposure here via other positions.   

By , Fox Business, 02/21/2014

MarketMinder's View: Want evidence growth begets jobs and not the other way around? Exhibit A: North Dakota. Housing supply can’t keep up with demand, as many flock to the state for the multitude of opportunities thanks to the shale boom.

By , BusinessWeek, 02/21/2014

MarketMinder's View: Will Matteo Renzi, the third Italian PM in the past two years, be more successful at pushing forward much-needed electoral reforms than his predecessors? It’ll be tough, and may take longer than the 100 day timeframe Renzi has given himself, but regardless of how long it takes him, the benefits will be more long-term. But for investors, cyclical factors and low expectations are likely good enough for Italy to surprise to the upside. For more, see our 02/14/2014 cover story, “Politically Italy.”

By , Bloomberg, 02/21/2014

MarketMinder's View: For all the focus on Japan’s energy-driven trade deficit and the impact of its upcoming sales-tax increase, Abenomics may actually be undone by its lack of accomplishments in making structural reforms opening the economy and freeing up labor markets. All the monetary and fiscal stimulus in the world isn’t a cure-all for Japan’s longstanding issues.

By , BBC News, 02/21/2014

MarketMinder's View: Seems to us January’s dip is one step back after several steps forward. January’s -1.5% dip occurs amid a strong growth trend—on a year-over-year basis, retail sales rose +4.3% in January and Q4 2013 sales were up +1.1% q/q. We wouldn’t sweat a one-month dip.  

By , Project Syndicate, 02/21/2014

MarketMinder's View: This argument has been around since the Luddites (and probably longer), but it doesn’t make it any less wrong. Advances in technology create new industries while transforming the nature of labor as well—and it’s expanded opportunities for investors too!

By , Bloomberg, 02/21/2014

MarketMinder's View: This all stems from the belief Emerging Markets (EMs) are affected the worst by the Fed’s tapering—a flawed line of logic. The Fed’s quantitative easing (QE) program did not lead to surging flows into EMs, so it’s unlikely increasing the Fed’s balance sheet more slowly is causing huge outflows. When you consider QE’s deflationary and contractionary tendencies, ending it seems a stimulus for the world’s biggest economy (America’s). A heckuva lot of economic activity could be stimulated in the EMs through faster US growth.  

By , The Washington Post, 02/20/2014

MarketMinder's View: This is an interesting theory and hypothetical argument, but there isn’t a counterfactual—there is no way to prove what might have been if Google were acquired early on or if the many startups snapped up in recent years were still independent. But here’s a counterpoint: The allure of pricey buyouts is a big incentive to innovate—profit motive! Where profit motive exists, innovators will always have an incentive to create the next big, new thing. It doesn’t need to be the founders of Instagram, WhatsApp or Tumblr—it could be anyone with an idea and imagination.

By , The Telegraph, 02/20/2014

MarketMinder's View: Even if the risk of deep deflation in the eurozone were anywhere near the level suggested here (it isn’t), quantitative easing (QE) wouldn’t be the solution. In the US, QE didn’t translate to broad money supply growth—banks didn’t lend at anywhere near the rate needed to boost the supply and velocity of broad money. The same would be true in the eurozone, where QE would flatten the yield curve, compounding the issues already discouraging banks from lending.

By , Main St., 02/20/2014

MarketMinder's View: No. Compensation matters—it’s an incentive—but conflicts of interest arise from values. Rules can’t stop them. Exhibit A: Bernie Madoff. He was paid for advice and portfolio management, not commissions. Besides, investors have choices about what they value and which services they want to pay for—and in a free economy, they should be free to make that choice.

By , The Wall Street Journal, 02/20/2014

MarketMinder's View: A hike in short-term rates is likely quite a ways off, and given how widely it’s already being discussed, when it happens, it won’t catch markets by surprise. Moreover, rate hikes aren’t inherently bad (or good) for stocks. What matters more is whether any monetary policy move is appropriate given the economic environment at hand. For more, see our 04/29/2010 cover story, “A (Non) Moving Target.”

By , The Wall Street Journal, 02/20/2014

MarketMinder's View: We’re bullish, but not because of what this or any other technical indicator suggests—they’re all based on past performance, which simply doesn’t dictate future returns.

By , The Wall Street Journal, 02/20/2014

MarketMinder's View: Any lobbying from developing countries will stem from a misunderstanding of what caused the recent wobbles in some Emerging and Frontier Markets currencies. Fed policy has no fundamental relationship to currency issues in Turkey, Argentina, Russia and South Africa. Nor has Fed bond buying propped up developing countries’ economies and markets. It has flattened their yield curves, however, and ending the program should be a positive there as well as the US.

By , The Wall Street Journal, 02/20/2014

MarketMinder's View: The foreclosure backlog is down, too, which should help ease some of the strain on mortgage issuance. With cleaner balance sheets, banks should be freer to lend more enthusiastically, providing a small economic tailwind.

By , MarketWatch, 02/20/2014

MarketMinder's View: The US’s Leading Economic Index rose 0.3% in December, continuing its long uptrend. LEI isn’t perfect—no reading is—but not once in 50 years has a US recession occurred during a rising LEI trend.

By , Bloomberg, 02/20/2014

MarketMinder's View: Don’t worry, the headline is largely ironic. Hyperbolic take on recent politics and world events aside, the article discusses the vast potential for global growth and improvement in infant mortality, public health and overall quality of life in every corner of the world. Technology, too: Advances in computing power and efficiency and communication speed will collide in ways we can’t imagine to create new products and services—and opportunities for investors.

By , EUbusiness, 02/20/2014

MarketMinder's View: The eurozone’s composite PMI ticked down from 52.9 to 52.7, indicating a slightly slower expansion than in January. France showed contraction again, but falling French PMIs didn’t translate to falling French GDP in Q4, and France’s Leading Economic Index is still rising. Overall, the region appears poised to continue beating investors’ still-dour expectations.

By , Reuters, 02/20/2014

MarketMinder's View: Another fall in HSBC’s Chinese manufacturing gauge isn’t surprising—it focuses on small, private firms, which are still being squeezed by the government’s crackdown on shadow financing. Plus, most Chinese data for January and February are distorted by the Lunar New Year holiday, during which most firms take a week-long break. This year’s festival stretched across both months.

By , Financial Planning, 02/19/2014

MarketMinder's View: While only one study, we think this illustrates an important investing lesson many overlook when constructing their portfolios (largely because folks tend to focus too much on short-term volatility when determining risk): Over longer periods, stocks’ daily bumps even out—they provide higher returns and less variability than other similarly liquid investing options.

By , Fortune, 02/19/2014

MarketMinder's View: The broader thesis here is on point, and something many investors overlook: Emerging Markets aren’t homogenous, and investors should look at country-specific economic-, political- and sentiment-related factors when deciding where to invest. But this has always been true, for Emerging Markets and every other broad geographic category. It was always a myth that Emerging Markets moved in lockstep.

By , Reuters, 02/19/2014

MarketMinder's View: Even if some firms give the weather a bit too much credit for any potential disappointment in Q1 earnings (and it’s far from given that Q1 will broadly disappoint), markets are pretty good at seeing through these verbal gymnastics. For companies where weather is a legitimate factor, markets also know the snow and ice typically pull some economic activity forward while delaying other commerce—a short-term factor. For more, see our 02/11/2014 commentary, “Weathering the Storm.”

By , The New York Times, 02/19/2014

MarketMinder's View: The upturn in household debt means banks are starting to lend more enthusiastically, which is a positive for growth. That headlines are looking for a negative angle—couching good news as bad—is a sign skepticism remains.

By , EUbusiness, 02/19/2014

MarketMinder's View: Officials plan to agree on new rules for winding down failing banks this spring, before the European Parliament breaks for elections, but this illustrates the obstacles ahead. The EU’s 28 member states, including the eurozone’s 18, and several levels of government need to all agree on new rules—but each governing body has its own interests at heart. Any progress is likely very piecemeal.

By , The Telegraph, 02/19/2014

MarketMinder's View: An interesting development in Scotland’s quest for independence: A year ahead of schedule, the UK government will permit Scotland to issue its own debt and raise its borrowing limit from £500mm to £2.2tn. However, the bonds won’t be backed by the UK, and yields could be much costlier than gilts’. How future issuance actually goes—and what it could mean for Scotland—remains to be seen, but we’d recommend keeping an eye out.

By , Financial Times, 02/19/2014

MarketMinder's View: Under the new rule, foreign banks will have to reorganize their US subsidiaries into separate (and separately capitalized) holding companies and comply with US capital requirements. This move is rather incongruous with the ongoing US/EU free trade talks, which seek to open transatlantic finance and synchronize regulations—and the European Commission is rather flummoxed. If this were to invite a tit-for-tat response, it could upend trade talks and result in a more fragmented global financial system, removing some potential long-term positives.

By , The Wall Street Journal, 02/19/2014

MarketMinder's View: Here’s yet another example of the regulatory headwinds facing European Financials. The rules aren’t yet finished, but already they’re striking much controversy among the banks they’ll regulate, regarding fees, communication and appeals processes. Should the ECB push through rules without giving banks a true opportunity to opine, it creates plenty of room for unintended consequences down the road (much as US regulators’ decision to adopt key Volcker Rule provisions without public comment created unintended consequences here).

By , Bloomberg, 02/18/2014

MarketMinder's View: A common media meme of late holds that earnings are rising only because firms are cutting costs. But as this piece shows, that isn’t the case! Top-line revenues, too, are growing in all 10 sectors. Once again, reality exceeds expectations.

By , BusinessWeek, 02/18/2014

MarketMinder's View: Time will tell whether Renzi will deliver on his proposed structural reforms. Though, for now, cyclical factors—Italy is growing again!—and investors’ low expectations are likely enough to support Italian stocks. For more on this topic, see our 2/14/2014 cover story, “Politically Italy.”

By , Associated Press, 02/18/2014

MarketMinder's View: Monetary policy only goes so far—without reforms to address Japan’s many long-running structural issues, Japan likely won’t become a world economic leader.

By , The Telegraph, 02/18/2014

MarketMinder's View: In the UK, sentiment appears increasingly optimistic as more and more outlets recognize and acknowledge that the country’s economy is in a relative sweet spot—tame inflation coupled with a growing economy. But given how many jitters about rising interest rates this introduces, it seems safe to say euphoria is far off.

By , The Telegraph, 02/18/2014

MarketMinder's View: Just as high oil prices incentivized US oil & gas firms to pursue shale late last decade, Japan’s current energy woes are motivating firms there to pursue unconventional sources. It’s an interesting development and bears watching, though it’s too early to determine how much energy it will provide and whether overall costs will make this venture worthwhile.

By , The Yomiuri Shimbun, 02/18/2014

MarketMinder's View: Now Japan and the US are engaging in side-talks in an effort to overcome difficulties preventing the would-be 11-nation bloc from reaching a broad trade agreement. While both sides’ willingness to negotiate is noteworthy, it seems beef, pork, dairy, rice and wheat protections remain sticking points for Japan. This is one of many issues that could hold up the Trans-Pacific Partnership and why we’d suggest investors not hold their breath for the deal (though, if inked, it would be a long-term positive).

By , AEIdeas, 02/18/2014

MarketMinder's View: “To help put the transformative economic impact of shale oil on the North Dakota (and US) economy into perspective, it’s as if there are now 10,000 ‘small businesses’ (wells) operating in the western part of the state, and each of those ‘small businesses’ is paying millions of dollars in royalty payments to local landowners and farmers, they are paying good salaries and benefits to hundreds of workers, they are generating millions of dollars of profits for the owners of the oil companies, and they are paying millions of dollars in taxes to local and state governments.”

By , The Washington Post, 02/18/2014

MarketMinder's View: Computers and technology do displace workers—but in doing so, they create new jobs elsewhere. As technology advances, innovators use the new technology to create new products and services, and with that comes jobs—just as tax professionals figured out how to use DIY tax software to enhance their services.

By , Reuters, 02/18/2014

MarketMinder's View: In theory, French President François Hollande’s pledges to simplify corporate taxes and keep rates from rising should provide businesses an incentive to invest—an economic tailwind. However, these pledges are backed solely by Hollande’s word—actions ultimately speak louder, and whether the legislature cooperates is another matter.

By , The Wall Street Journal, 02/14/2014

MarketMinder's View: The Chinese government’s penchant for manipulating economic data to suit its political aims is well-documented—even current Premier Li Keqiang once alluded to it. That doesn’t mean official data are wildly out of step with reality, just that it wouldn’t surprise if inflation were in reality a touch higher or growth a mite slower. However, markets are pretty efficient at discounting this, which is what matters for investors.

By , The Wall Street Journal, 02/14/2014

MarketMinder's View: This makes the push to adjust the Volcker Rule’s treatment of collateralized loan obligations (CLOs) officially bipartisan—an interesting development. It seems politicians are aware of the rule’s unintended consequences, though whether regulators grant an allowance similar to that given community banks for trust-preferred securities last month remains to be seen. If they don’t, the impact on banking should be minimal—30 US banks hold roughly $70 billion in CLOs, which represents a fraction of the over $14 trillion banking system.

By , The Wall Street Journal, 02/14/2014

MarketMinder's View: We agree: “If this week has taught investors anything, it’s the rapid pace at which sentiment can change and markets can bounce back.” Focusing on the short term often throws investors off their tracks—markets are just volatile, especially over short periods. Keeping a longer view will help investors stick to their long-term goals and objectives.

By , Reuters, 02/14/2014

MarketMinder's View: This isn’t the first and probably won’t be the last economic data release impacted by dismal weather—the snow and ice continued in February, too. But as this piece points out, evidence suggests the weakness will prove temporary—nothing has fundamentally changed. Once weather allows factories to come back online, they should be humming as usual.

By , The Telegraph, 02/14/2014

MarketMinder's View: While storms and floods have impacted UK’s economy by limiting the number of folks leaving their houses, in some ways disastrous weather can boost demand for certain products, helping offset some of the weather’s negative economic impact.

By , Associated Press, 02/14/2014

MarketMinder's View: The sky-high number of flight cancellations has caught many an eyeball in recent days, but as this shows, it’s neither surprising nor terribly negative for the industry. Just an interesting example of how reality is often far more benign than headlines would suggest.

By , EUbusiness, 02/14/2014

MarketMinder's View: The eurozone’s recovery continued with 0.3% q/q growth in Q4, beating expectations, with the expansion pretty broad based. France avoided recession at 0.3%, Italy returned to growth for the first time since 2011, and Greece’s contraction slowed further. Looking ahead, recovery likely remains uneven, but the stronger areas should continue pulling the weaker nations along.

By , The Wall Street Journal, 02/13/2014

MarketMinder's View: Hey! A year without debt-ceiling theatrics! Huzzah! Lest ye forget for the next time, though, the debt ceiling is a political invention—risk of actual default is infinitesimally small. For more, see Todd Bliman’s column, “Detonate Your Debt-Ceiling Fears.”

By , The Wall Street Journal, 02/13/2014

MarketMinder's View: If you’re waiting for a sign that the recent negative volatility is over, you’re likely going to be waiting forever—and will miss out on that nice positive volatility that typically follows. Long term, growth-oriented investors needn’t worry about waiting for a signal or trying to pick the precisely optimal time to re-enter the market. There isn’t anyone we are aware of who has a documented track record of repeatedly navigating short-term wiggles.

By , The Wall Street Journal, 02/13/2014

MarketMinder's View: While the first lesson in here (“keep your head on a swivel” looking for risks) is debatable—constantly seeking out risks could cause you too much flipping in and out of markets, the remaining are worthwhile. One nugget: “You don’t get bonus points in investing for arriving at your destination ahead of time. The only thing that matters is getting there in one piece.”

By , The Wall Street Journal, 02/13/2014

MarketMinder's View: While the first lesson in here (“keep your head on a swivel” looking for risks) is debatable—constantly seeking out risks could cause you too much flipping in and out of markets, the remaining are worthwhile. One nugget: “You don’t get bonus points in investing for arriving at your destination ahead of time. The only thing that matters is getting there in one piece.”

By , Reuters, 02/13/2014

MarketMinder's View: While it’s true inclement weather can impact some business activity in the short-term, other types of businesses can benefit from it—bad weather isn’t a big negative for everyone. More importantly, winter weather isn’t likely to have a lasting detrimental impact on the economy, especially when the seasons begin to change. It simply pulls some activity forward and pushes others back. For more, see our 02/11/2014 cover story, “Weathering the Storm.”

By , Bloomberg, 02/13/2014

MarketMinder's View: As recent developments have shown, central bankers’ forward guidance is not materially different from jawboning. It’s talk. Hot air. Not action. And not actionable for investors. However simple, all such forecasts are subject to change. For more, see Elisabeth Dellinger’s column, “Forward Misguidance.”

By , MarketWatch, 02/13/2014

MarketMinder's View: Crises typically do come from the places investors don’t expect them to—surprises—and in that regard, we agree fears over the Emerging Markets are likely overdone. But replacing an overdone fear with misperceived ones is equally fallacious. All of the alleged risks are either well-known (Australia’s reliance on mining) or misperceived (the UK has an “unbalanced” recovery or Germany only looks strong because the eurozone periphery is weak, despite the fact that much of the periphery is growing). 

By , BBC News, 02/13/2014

MarketMinder's View: This saga illustrates the impact of India’s poor infrastructure—which foreign capital could help improve through investment in better roads and storage facilities. However, India’s long-standing history of protectionism has created several barriers to foreign investment, leaving a great deal of potential food (like all those onions) to go to waste. For more, see Mary Holdener’s column, “Let Them In(dia)!

By , CNN Money, 02/12/2014

MarketMinder's View: At about $17.2 trillion, exactly where total US debt sits, but not for long—the House and Senate have both voted to suspend the limit until March 2015. Apparently our politicians didn’t feel like using their favorite campaign wedge issue this time around. The break from debt-ceiling politicking will no doubt be enjoyable, but for markets, it doesn’t mean much.  

By , Bloomberg, 02/12/2014

MarketMinder's View: It’s odd to see worries over low inflation in our healthy economy—just a couple decades ago, low inflation plus modest economic growth was highly coveted as a “Goldilocks scenario”—not too fast, not too slow. But if the Fed wants higher prices, they can just end quantitative easing outright, encouraging banks to lend more, boosting money supply (and economic!) growth.

By , Reuters, 02/12/2014

MarketMinder's View: Suspicions about the validity of Chinese data aren’t unwarranted—they’ve been manipulated before, and the Lunar New Year holiday regularly wreaks havoc with January and February data. But even if exports and imports didn’t really grow above 10% y/y, they likely didn’t crater—other January data released thus far indicate continued, though slower, growth.

By , Bloomberg, 02/12/2014

MarketMinder's View: Quantitative easing (QE) wouldn’t stave off low inflation or deflation in the eurozone—but it could worsen them, as shown in the US and UK (and Japan). QE saps money supply growth, a necessary factor for rising inflation. Plus, arguments like this overlook the fact European banks aren’t lending because they’re continually deleveraging to meet ongoing regulations and stress tests—not because they’re making a fortune parking funds at the ECB (which would likely increase, actually, if QE happened).

By , EUbusiness, 02/12/2014

MarketMinder's View: December’s 0.7% fall is not terribly surprising. The eurozone’s recovery was never set to go in a straight line. Some countries will improve faster than others—just like different areas of the economy and months will improve unevenly. To us, longer-term trends are more important, and these suggest tepid growth likely continues.

By , Financial Times, 02/12/2014

MarketMinder's View: When banks ultimately release certain data likely isn’t a market mover, but this is another example of the ongoing confusion surfacing as banks try to interpret and adopt the complicated rule. We’ll keep readers apprised as more unintended consequences and confusion from the rule’s passage come up.

By , Quartz, 02/12/2014

MarketMinder's View: Leaving aside the ad hominem swipe at Mr. Paul, the main lesson this article ignores is correlation is not causation. True, the low long-term interest rates resulting from quantitative easing (QE) have made refinancing more attractive to home owners, but as this piece notes, there are many other factors at work, too, like government programs. At the same, QE discourages banks from lending, making them less eager to refinance loans. Which, incidentally, isn’t as significant an economic driver as this piece argues.  

By , Financial Post, 02/11/2014

MarketMinder's View: Past performance doesn’t guarantee future returns! Research shows hot funds rarely stay that way. Their mandated styles (e.g., small or large cap) fall out of favor, their managers leave, their luck runs out—you name it. Investors picking funds based on recent past returns alone, without doing any due diligence into how those returns were generated and whether those factors are still in place, likely end up disappointed.

By , The Independent, 02/11/2014

MarketMinder's View: There isn’t any evidence “engineered currency devaluations” have even broadly taken place, let alone prompt allegedly victimized countries to erect retaliatory trade barriers. Quantitative easing didn’t weaken the dollar, shattering this thesis. The one country that did devalue—Japan—didn’t inspire neighboring Taiwan and Korea to devalue their own currencies or block trade. On balance, global trade is rising and getting freer.

By , CFA Institute, 02/11/2014

MarketMinder's View: From Ponzi to SAC Capital, it’s true there is a long history of wrongdoing on the part of certain actors in Financial Services. We’d suggest, however, that the issues go much further than this: Wall Street’s sales tactics are often underpinned by questionable values. From tactics like pitching clients a cherry-picked basket of high performing investments to selling high fee and high commission products like annuities and non-traded REITs, it is critical for investors to understand their advisor’s values—and how these values benefit clients generally.

By , CFA Institute, 02/11/2014

MarketMinder's View: This is a fairly interesting list of features one may expect when stocks are in a bubble, but we’ll add one: At extreme points in the market (whether bear market low or bull market top), it’s commonplace to find investors justifying irrationally extrapolating recent trends forward based on the notion the world has fundamentally changed—“it’s different this time,” the mantra goes. Today, you don’t hear many pundits arguing we’re in a new era of permanent bullishness now, a sign euphoria hasn’t arrived yet.

By , The Baseline Scenario, 02/11/2014

MarketMinder's View: It wasn’t Collateralized Loan Obligations (CLOs) that “torpedoed” US banks during the financial crisis—it was the misapplication of mark-to-market accounting to these securities, which banks intended to hold to maturity. If a bank never sells an asset, its market value doesn’t matter—the bank redeems the security at face value at maturity and collects the income along the way. That isn’t a distortion. It’s how the market is supposed to function, and that’s why regulators are considering adjusting the portion of Dodd-Frank that would interfere. For more, see Todd Bliman’s related column, “Strolling Down Maiden Lane.”

By , The Grumpy Economist, 02/11/2014

MarketMinder's View: The Phillips Curve, for those not familiar, claims to show unemployment drives inflation—the logic being lower unemployment means more competition for workers, which pushes up wages, which pushes up demand, which pushes up prices. Not true! Inflation is always and everywhere a monetary phenomenon of too much money chasing too few goods. Were it otherwise, Venezuela and Argentina, with their contracting economies and high unemployment, wouldn’t have some of the world’s highest inflation rates.

By , Minyanville, 02/11/2014

MarketMinder's View: Friendly advice: Whenever anyone tells you a chart of an index or stock’s past performance tells you what that index or stock will do in the future, just smile politely and walk away. The past isn’t predictive! Take the analysis here, which claims current volatility looks like May 2013, and stocks quickly retraced their brief decline then, so they should do the same today. Maybe they will! Or maybe they fall further, and we see a full-blown correction of 10% or more. Short-term volatility is impossible to predict. Long-term investors should keep a longer perspective and focus on fundamentals—not charts that encourage them to look backward and think short-term.

By , The Sydney Morning Herald, 02/11/2014

MarketMinder's View: This is the Aussie version of the widespread fears recent earnings growth comes solely from cost-cutting, and slowing demand will put the brakes on profits and investment looking forward. Yet there isn’t much (if any) evidence demand is slowing! Air freight traffic is rising. So are intermodal rail shipments in the US. It all points to a higher volume of goods moving around the world, which wouldn’t happen if people and businesses were spending less.

By , Andina, 02/11/2014

MarketMinder's View: This story is a nice counterbalance to the pervasive negativity surrounding Emerging Markets lately and a solid reminder for investors to avoid thinking of Emerging Markets as a broad category. Peru, Chile, Colombia and Mexico took the sensible step of inking an agreement that will remove tariffs on 92% of goods traded between the four Latin American nations, and Costa Rica has signed a letter stating its intent to join as well. This sensible step is a positive for markets and the economies impacted.

By , International Business Times, 02/11/2014

MarketMinder's View: “The British Retail Consortium (BRC) said total retail sales increased by 5.4% on year in January, compared to a 3.0% increase in January 2013, and a 1.8% increase in December.” While we wouldn’t necessarily attribute it all to the housing recovery, accelerating and better-than-expected retail sales add to other expansionary data from the UK in recent quarters.

By , Cato @ Liberty, 02/11/2014

MarketMinder's View: This does an excellent job explaining what fast-track trade negotiation authority actually is—and that’s critical to understanding the ongoing debate in Congress. “It is true that under the terms of fast track, Congress agrees to a timely, up-or-down vote without amendments. But that happens only after the Congress has conveyed its negotiating objectives and parameters to the president. Under the recently introduced legislation to restore fast track, Congress is demanding that 147 negotiating objectives be met before allowing fast track consideration of any trade deals that come before it.”

By , The Wall Street Journal, 02/10/2014

MarketMinder's View: This highlights some of the many issues with the official unemployment rate—and why investors shouldn’t rely on it as the be-all, end-all measure of economic health.

By , Associated Press, 02/10/2014

MarketMinder's View: Setting aside our usual quibbles with the folly of long-term forecasting and the faulty assumption unemployment is a forward-looking indicator, the thesis here has a major philosophical flaw: It asserts things are different this time because the US has an “aging population” coming out of a financial crisis. There is simply no evidence retiring baby boomers are an economic negative—demographics aren’t the economic force they’re often made out to be. Moreover, this recovery hasn’t been slow because slow recoveries are the norm after a crisis. Government cuts have weighed on headline growth, and Fed policy has dampened the money supply.

By , The Wall Street Journal, 02/10/2014

MarketMinder's View: This captures the ongoing tug of war between skepticism and optimism. Folks believe stocks can do ok, and they acknowledge ongoing economic growth, yet fears (largely unwarranted, in our view) persist. As sentiment improves, growing optimism can be a powerful force for stocks—and it can run some time before euphoria takes hold. For more, see our 2/7/2014 cover story, “A Skeptical Pull.”

By , The Guardian, 02/10/2014

MarketMinder's View: It’s true the Fed didn’t cause Emerging Markets currency woes, and we agree a broad contagion is unlikely. But not because we think the risk is confined to countries with high current account deficits—current account deficits weren’t the issue in Korea, Indonesia and Thailand in 1997/1998. The issue then was fixed exchange rates and a high level of dollar-denominated government and corporate debt. Defending, then discarding currency pegs ultimately made that debt impossible to service. This isn’t what’s going on in Turkey and Argentina today—their issues are self-made and political. For the latest on Emerging Markets, see our 1/30/2014 cover story, “This Week in Monetary Policy.”

By , AEIdeas, 02/10/2014

MarketMinder's View: Did you know that if California were a country, it’d have the world’s ninth-largest economy? Or that Texas produces nearly as much as Australia? Or that the 4.4% of the world’s people who live in the US produced 22.3% of its GDP in 2012? This piece is full of fun facts to remind us “how much wealth and prosperity is being created all the time in the world’s largest economic engine.”

By , The Wall Street Journal, 02/10/2014

MarketMinder's View: While personal comfort with short-term volatility is an important factor to consider when choosing an asset allocation, time horizon, long-term goals, objectives, cash flow needs and overall financial situation are also key. Investing is about probabilities and trade-offs. If you need long-term growth in order to reach your goals, you need to accept the probability of short-term volatility along the way. Focusing on comfort with volatility alone ignores this and could lead to an asset allocation out of sync with your long-term goals.

By , Reuters, 02/10/2014

MarketMinder's View: The German Constitutional Court’s statement that the ECB’s Outright Monetary Transactions (OMT) program is “probably illegal” likely doesn’t mean much for the euro or the program. Germany’s court has no jurisdiction over the ECB, and the European Court of Justice, to which Germany referred the case, likely rules in the ECB’s favor. While the ECB has yet to use OMT, it perhaps helps shore up confidence among those who believe an unused policy was the only reason the eurozone periphery’s sovereign debt yields are back to pre-crisis levels.

By , The Wall Street Journal, 02/07/2014

MarketMinder's View: There wasn’t much (if anything) worrisome about January’s jobs report. Payroll gains might have lagged forecasts, but they were good enough to bring total private sector job growth to 7.3 million since unemployment peaked. The labor force grew, too, and the number of marginally attached workers fell. Overall, it’s just another small step forward in a longer-term trend of improving job markets—a lagging confirmation of continued economic growth.

By , The Wall Street Journal, 02/07/2014

MarketMinder's View: While there are a number of misperceptions here, particularly quantitative easing propping up global growth and the perilous state of Emerging Markets, what this article more broadly shows is the general state of skepticism about overall global health. Reality is much better than many investors believe, suggesting this bull has more room to run. For more, see Elisabeth Dellinger’s column, “Q(E) the Contagion? I Think Not.”

By , The Washington Post, 02/07/2014

MarketMinder's View: By “default,” they mean prioritizing payments, which isn’t default. After the “extraordinary measure” to keep paying the bills run out—whether that’s in March, as forecast here, earlier or later—the Treasury can, will and must use cash on hand and incoming tax revenue to pay bond interest first and foremost, drastically lowering the likelihood of actual default considering our $2.7 trillion in annual tax revenues last year dwarfed the $224.7 billion in interest payments. Assuming it gets that far, that is—politicians talk a big game, but they’ve raised the ceiling 108 times and will do it again, though perhaps not before extraordinary measures run out. For more, see Todd Bliman’s column, “Detonate Your Debt-Ceiling Fears.”

By , The Telegraph, 02/07/2014

MarketMinder's View: So did imports! Some bemoan this for its impact on the trade deficit, which detracts from GDP, but rising imports are a sign of growing domestic demand. Overall, the December trade report is another indication of how healthy the UK economy is.

By , CNBC, 02/07/2014

MarketMinder's View: It does, and President Dilma Rousseff is trying to court them. At the same time, however, her administration’s actions are something of a deterrent—protectionism, occasional price controls and heavy intervention in energy and finance typically discourage investment.

By , Telegraph, 02/07/2014

MarketMinder's View: While Germany’s constitutional court has indicated ECB bond buying could violate EU law and the ECB’s charter, they kicked the issue to EU courts—and EU courts are very unlikely to rule against the policy. Much of this hubbub likely comes down to politicking—Germany’s Constitutional Court has no jurisdiction over the ECB. For more on this topic, see our 06/11/2013 cover story, “Germany Takes the OMT to Court.”

By , The Wall Street Journal, 02/06/2014

MarketMinder's View: While polls are not the most useful gauge of sentiment, this one struck us as a concise illustration of how fickle sentiment can be—according to this poll, about 60% of Americans say that the US is still in recession, while about 63% from the same survey say their personal financial situation is “strong or somewhat strong.” Surveys capture how people feel at one point in time and don’t indicate how they’ll act in the future.

By , AEIdeas, 02/06/2014

MarketMinder's View: Here’s a far better way to look at trade than fixating on deficits: “Total US international trade (Exports + Imports) topped $5 trillion in 2013 for the first time ever and reached a new all-time record high of $5.016 trillion (see chart above), as annual US exports of $2.27 trillion set a new record and annual imports of $2.743 trillion fell just slightly below the 2012 record level of $2.745 trillion, according to today’s BEA report.”

By , The Wall Street Journal, 02/06/2014

MarketMinder's View: In our view, debt ceiling brinkmanship hurts only one group of Americans—politicians. All the hemming and hawing have little effect on the economy, markets or most people’s day-to-day lives. Would a US default be bad and have both domestic and global repercussions? Certainly. But it is incredibly unlikely the debt ceiling would actually bring a default, increase or no. This is hot political rhetoric investors should largely see as noise.

By , BusinessWeek, 02/06/2014

MarketMinder's View: Is recent market volatility part of a larger correction? Maybe, maybe not—we’ll only know in hindsight. But as uncomfortable as negative volatility may be, investors need to remember three key principles: markets rise much more often than they fall; volatility is the price tag for stocks high rate of long-term growth; and no one can navigate all short-term blips.  For more on recent volatility, see our 02/04/2014 cover story, “Volatility and Manufacturing.”

By , MarketWatch, 02/06/2014

MarketMinder's View: The real news here is imports rose and exports slightly fell. Combining them into a trade “deficit” is and has always been misleading. Now, some economists are predicting that this higher trade deficit will mean Q4 GDP will be revised lower to less than 3% growth. And maybe so, but that says more about GDP’s mathematical treatment of imports as a minus and exports as a plus. However, rising imports are most often a sign of healthy domestic consumption—not a negative. Also, all this data are backward-looking—stocks look forward.

By , Bloomberg, 02/06/2014

MarketMinder's View: With all the deflationary fears surrounding the eurozone, some have proposed a form of quantitative easing (QE) to boost inflation. But remember, inflation is always and everywhere a monetary phenomenon—if there isn’t enough money chasing goods and services, prices fall. In the US, the Fed’s QE program has proven disinflationary—banks aren’t incentivized to lend by the low profits resulting from the Fed’s bond buying reducing yield spreads. The result? Record low velocity of money. We believe the eurozone would see similar effects if the ECB experimented with a QE-style program—the opposite of what it wants.

By , New York Times, 02/06/2014

MarketMinder's View: “Many investors shrugged off the downgrade, saying they had anticipated it months ago, while others said the possibility of a default remained remote.” Another example of ratings agencies coming late to the party: The spread between Puerto Rico’s 30-year general obligation bond and a benchmark of highly rated municipal bonds was unchanged after S&P issued its downgrade.

By , ABC News, 02/06/2014

MarketMinder's View: We don’t agree that the wealth effect or the “Great Rotation” are likely to be key contributors to the bull—both are greatly overwrought. That said, this piece does correctly highlight healthy corporate profits and misperceptions about the taper as reasons to be bullish for 2014.

By , Financial Times, 02/06/2014

MarketMinder's View: The thesis for this “greater clarity” seems to be the following: The Fed’s QE caused money to flood Emerging Markets countries that are dependent on foreign capital to fund their economies because of a trade deficit (current account deficit). Yet no such tsunami of capital flowed—so tapering shouldn’t actually pose a real risk. Moreover, current account deficits don’t make for fragile economies. After all, the US has run one for the majority of the last three decades. Given this, we see little need for more “coordination.” For more, see our 01/30/2014 cover story, “This Week in Monetary Policy.”

By , Reuters, 02/06/2014

MarketMinder's View: While it’s only a proposal, removing 96% of import tariffs on trade between Europe and the US would be a welcome step in the transatlantic trade deal. While we wouldn’t expect a deal any time soon—if ever—if one comes to pass it would benefit both regions.

By , NBC News, 02/05/2014

MarketMinder's View: Even if some economic activity is deterred by snow storms, drought, heat, rain or any other natural occurrences, others—like online shopping, oil and gas use and winter-themed retail—might get a boost, helping offset some of the impact. Plus, winter is cold—always has been. Markets know that and likely won’t be derailed, even if they’re volatile now—they know a quarter or two of weather-related earnings disappointment, if it even comes to that, isn’t a sign of fundamental weakness.

By , Bloomberg, 02/05/2014

MarketMinder's View: Some blamed the weather—which likely had some impact—but most seemed unconcerned about the smaller rise, citing instead a strong longer-term trend. Euphoria is hardly near, but the lack of skepticism surrounding private unemployment suggests green shoots of optimism are starting to show.

By , The Economist, 02/05/2014

MarketMinder's View: Let’s be clear: The Fed’s quantitative easing (QE) has nothing to do with some emerging markets’ recent problems. There is no evidence QE inspired mass cross-border capital flows—so there is no logic behind the assumption its (slow) end will reverse them. India’s—and Argentina’s, Ukraine’s, Turkey’s and Russia’s—currency and economy are weak because of its own unique issues.

By , The Telegraph, 02/05/2014

MarketMinder's View: The UK’s services sector PMI (about 75% of the economy) growth hit a seven-month low, though that factoid is more a sign of how strong the gauge has been lately—the read was a still-high 58.3. But the most interesting development came in the underlying data: Order backlogs rose considerably as firms struggled to keep up with demand, and many firms reported capacity strains. This augurs well for future hiring and business investment.

By , BBC, 02/05/2014

MarketMinder's View: Slower retail sales aren’t great, but they aren’t necessarily horrible, either: Data are volatile, and in an uneven recovery like the eurozone’s, some will lag. The real misperception here is arguing slower retail sales increase the risk of deflation. Deflation is a monetary phenomenon—with M3 money supply growing, it’s an unlikely endgame.

By , Bloomberg, 02/05/2014

MarketMinder's View: US services accelerated to 54 (well within expansionary territory) as business activity and forward-looking new orders grew—another sign the US expansion carries on strongly.

By , Bloomberg, 02/05/2014

MarketMinder's View: Whether or not the Nikkei continues falling, it seems Japan’s sentiment-driven rally in early 2013 may finally be catching up with the reality Prime Minister Shinzo Abe isn’t fulfilling his promise of structural economic reform. Monetary policy can only go so far. Without wresting the economy from political vested interests, Japan likely can’t shake off decades of economic stagnation and lead the global economy.

By , Financial Times, 02/05/2014

MarketMinder's View: Italy might consider its rich cultural history as “the basis of its economic strength,” but that doesn’t change the fact a struggling private sector and bloated public sector have weighed heavily on public finances. That said, considering markets have long known credit ratings are simply backward-looking, politically influenced opinions, it seems a stretch to argue the threat of downgrades alone spooked investors out of Italian sovereign debt, driving up borrowing costs—the threat of bailouts and a eurozone breakup likely played a far greater role, and that threat would have been there with or without the raters.

By , The Wall Street Journal, 02/04/2014

MarketMinder's View: Another sign of housing’s recovery: Thanks to rising home prices, homeowners have more equity, allowing them to fund renovations that were out of reach in recent years. This provides a small but overlooked economic tailwind.

By , The New York Times, 02/04/2014

MarketMinder's View: Robots, computers and other machines have fostered amazing productivity gains over time, helping us do more with less. But humans will always be a vital cog of our economic engine—robots won’t make human capital redundant. As this piece shows, humans have many traits machines can’t grasp: “It is precisely the emotive traits that are rewarded: the voracious lust for understanding, the enthusiasm for work, the ability to grasp the gist, the empathetic sensitivity to what will attract attention and linger in the mind.”

By , The Wall Street Journal, 02/04/2014

MarketMinder's View: This underscores what we’ve said for a while: Loan demand is healthy (even with rates up since last May!), but loan supply is weak. In our view, the culprit is quantitative easing (QE) bond buying, which reduced long-term interest rates and the spread between short and long rates—banks’ gross lending profit margin. As the Fed continues winding down QE, the spread should widen, encouraging banks to loosen standards and lend more enthusiastically.

By , Associated Press, 02/04/2014

MarketMinder's View: This doesn’t appear to be a sign of weakening business investment. As this piece highlights, many firms pulled big-ticket orders into November to take advantage of an expiring tax break. That likely bumped up November’s results and pulled down December’s—but it shouldn’t have much (if any) bearing on future investment or manufacturing results.

By , The Wall Street Journal, 02/04/2014

MarketMinder's View: People might focus on Friday’s jobs numbers, but markets are forward-looking. Jobs are a late-lagging indicator. Payroll gains in January are a function of growth in previous months—markets already know how the economy did then. What matters more is how firms do looking forward. Gauges like the high and rising Leading Economic Index suggest growth likely continues.

By , Bloomberg, 02/04/2014

MarketMinder's View: More evidence suggesting the UK economy is chugging along—the UK Construction PMI jumped to 64.6 in January from 62.1 in December, with residential construction activity growing at the fastest pace since November 2003. As in the US, a recovering UK housing market is providing an underappreciated economic tailwind.

By , The Wall Street Journal, 02/04/2014

MarketMinder's View: Whether it’s the “U-Shaped,” “Bucket” or “Benefit” strategy, these blanket formulas likely don’t conform to the specific needs and objectives of all investors. Investors should consider their long-term goals, time horizon, cash flow needs and overall situation when determining their asset allocation—and always remember the time value of money, which the “U-Shaped” approach ignores.

By , CNBC, 02/04/2014

MarketMinder's View: Like most CBO forecasts, this assumes causality where it doesn’t necessarily exist, extrapolates trends years into the future, assumes policies are set in stone, and doesn’t consider the many other changes and unknown variables that could arise. The next 12-18 months is a better timeframe for investors to consider, and in our view, there is nothing about the Affordable Care Act that hasn’t been discussed ad infinitum—markets have long been aware of all forecasts about its impact, both good and bad. The Act is extremely unlikely to swing markets either way.

By , The Wall Street Journal, 02/03/2014

MarketMinder's View: Let this put to rest any remaining doubt over whether a reduction in US quantitative easing is responsible for the Argentinian peso’s decline—it isn’t. Argentina’s troubles are self-inflicted, the result of inflationary monetary policy, price controls, trade restrictions and economic policies that deter investment. All have put capital in short supply, which is bad news for a country relying on imported raw materials and intermediate goods.

By , Reuters, 02/03/2014

MarketMinder's View: In this case, “reeling” means new business decelerated, but still grew. The same goes for the broader manufacturing PMI, which remained in expansion though at a slower rate. Only time will tell whether this is a blip or the start of a dip—the ISM survey often varies from month to month, just like all short-term data, and adverse weather conditions likely played a big role here.

By , The New York Times, 02/03/2014

MarketMinder's View: While it’s easy to get lost in the political debates over state budget surpluses, to us, the bigger takeaway here is state finances are improving as rising incomes boost tax revenues—a trend that should continue along with the economic expansion. For more, see our 12/5/2013 cover story, “The Faults of Municipal Default Fears.”

By , The Washington Post, 02/03/2014

MarketMinder's View: The debt ceiling returns Friday, and our Treasury Secretary is trying once again to goad Congress into action. If lawmakers dither, rhetoric likely gets more urgent and colorful, which might prompt some jitters. But even if Congress delays for a while, the US has the resources and flexibility needed to continue making interest payments (and, per the Supreme Court, a legal requirement to). Ultimately, however, Congress almost certainly raises the debt ceiling again (whether before, on or after February 7)—just as they’ve done 108 times before.

By , Reuters, 02/03/2014

MarketMinder's View: It’s true some pockets of weakness exist, but that’s true of any global expansion—not all countries will grow at the same pace or even all grow. Furthermore, some headline numbers don’t tell the whole story. For example, China’s government has been destroying blast furnaces to slow manufacturing production in an effort to tackle a steel supply glut. Overall, however, global manufacturing is on the rise.

By , The Wall Street Journal, 02/03/2014

MarketMinder's View: Whether or not banks ultimately go on a shopping spree, it’s significant that they’re even thinking about it—it’s further confirmation the crisis mentality of the past few years has largely faded, which speaks to how far the eurozone has come (something many investors don’t yet appreciate).

By , CNBC, 02/03/2014

MarketMinder's View: In the near term, volatility could very well continue—and jitters over these and other recent developments might play a role. But the fundamental chain of events theorized here seems unlikely, in our view. Extrapolating China’s deliberate credit and manufacturing slowdowns into a full Emerging Markets crash ignores the health of most Emerging Markets—including China, which is in better shape than this suggests. For more, see our 1/27/2014 cover story, “Keep Calm as Stocks Carry On.”