Weekly Market Commentary 7/27/2015

The Markets There was a spate of bad news last week, and it drove U.S. markets lower. China’s wild ride isn’t over yet. The Purchasing Managers’ Index, a private measure of Chinese manufacturing, came in below expectations at 48.2, according to BloombergBusiness. Results below 50 indicate the sector is contracting. That doesn’t bode well for growth in China, which is the biggest global consumer of metals, grains, and energy, or the rest of the world. Things weren’t rosy in the United States either. Sales of new homes in June came in below expectations, and the median new home price fell

Weekly Market Commentary 7/20/2015

The Markets Investors around the world breathed a sigh of relief last week. It wafted many markets higher. The NASDAQ jumped by more than 4 percent. The Standard & Poor’s 500 Index gained 2.4 percent. France’s national benchmark index rose 4.5 percent, Germany’s was up 3.2 percent, Italy’s increased by 3.6 percent, and China’s Shanghai Composite was up 2.1 percent. So, what happened? Global markets stabilized. First, the Chinese stock market staunched its wounds and recovered some value, which eased investors’ worries. According to Barron’s, by the end of the week, the Shanghai Composite Index was up 13 percent from

Greece Now China

“Nothing in life is to be feared. It is only to be understood.” -Marie Curie Many people have asked me about the recent news out of China. “What’s happening to their stock market?” they want to know. “Will it affect us? Should I be worried?” I offer the above quote as a response. Nothing in life is to be feared, it is only to be understood … and that includes what’s happening in China. We sent a brief overview in our weekly newsletter, so let’s take a few minutes to understand it! The Year of the Bull Turns into the

Weekly Market Commentary 7/13/2015

The Markets It’s a cautionary tale… Many Chinese investors were so optimistic about the prospects for Chinese stock markets they bought on margin, meaning they borrowed money to buy stocks. Borrowing to invest has been so popular that the amount of margin loans doubled in just six months to about $320 billion, according to Barron’s. Experts cited in the article said, “…margin financing in China is equal in size to Indonesia’s entire stock market valuation and as high a portion as it has been in any market at any time…” The problem with buying on margin is repaying the loan

et Commentary 7/6/2015

The Markets It’s been a wild, wild quarter. In early April, stock markets were doing so well (14 of 47 national benchmark indices hit all-time highs) that global market capitalization — the value of stocks trading on exchanges throughout the world — pushed past $70 trillion, according to Bloomberg Business. The publication attributed the climb to stimulus programs. About two-dozen countries’ central banks were either engaged in quantitative easing or had committed to lower interest rates. Rate hike speculation Since the start of the year, analysts have been avidly seeking clues about when the Federal Reserve may begin to tighten

If you’ve been watching TV, been online, or read a newspaper over the past week or so, you’ve probably saw some of the headlines about the Greek debt crisis. It’s possible you don’t quite understand exactly what is going on and how it can affect you. In this post we’ll explain what is happening in Greece and how it can affect us. The Setting Athens, Greece. As of this writing, reports out of this proud, ancient capital are mostly calm right now, but that calmness masks the turmoil that lies beneath. Banks have shut their doors, ATMs are out of

Weekly Market Commentary 6/29/2015

The Markets Not quite as popular as Branjelina and Kimye, ‘Grexit’ (short for Greek Exit) has gained traction as a nickname during the past few months. The British press appropriated a variation, Brexit, when they discovered that the Bank of England was researching the potential risks of renegotiating membership in the European Union, or possibly even leaving the group—but that’s another story. This is about Greece, and it’s a Grexhausting tale. Last week, The Economist explained the state of affairs this way, “…euro-zone finance ministers failed for the third time in four days [on June 25] to find a breakthrough