On the Road Again

I will be leaving tomorrow morning to speak at the FPA NorCal conference in San Francisco. I understand the conference is sold out again this year and once again about 500 of the top financial planning professionals on the West Coast will attend. I will be speaking about tactical asset allocation as the financial planning…

Watching for Signs of European Banking Risk

The PIIGS (Portugal, Italy, Ireland, Greece, and Spain) simply can’t get out of the news lately, and the problems on the periphery of the Euro-Zone continue to create uncertainty and legitimate risk for financial markets. Debt downgrades by ratings agencies as well as the threat of restructuring, reprofiling, or just plain old default continues to…

Divergences Among LEIs

We regularly follow several different types of leading economic indicators (LEIs), often times looking for divergences with the stock market – in either direction. What we’re witnessing today, ironically, is a divergence among LEIs, which makes interpretation more difficult than when they’re moving in a more uniform fashion.

Data Confirms Soft Patch, Market Shrugs

Economic data published today brought more evidence that a soft patch in the economy has arrived. Today brought the sixth straight week of initial unemployment claims above 400,000, the Conference Board’s Leading Economic Index fell more than expected with a -0.3% decline in April, existing home sales were subpar again, and the Philadelphia Fed manufacturing survey came in much less…

Another Little Sign

Is a bigger market sell-off coming? We are currently debating this question in our investment team meetings, and the answer is not entirely clear at the moment. However, there are technical signs that are starting to emerge which are unsettling to the bulls on the team. We have written before on the deterioration in the…

Sequencing

Lately I’ve been reading a lot about sequencing. The term is used in reference to how the Federal Reserve might go about communicating and then changing current monetary policy. The sequencing might go something like this: 1) The Fed ends quantitative easing as scheduled by the end of June but announces that it will continue…

The Strange Case of Two Unloved Secular Stories

I find it interesting that Pinnacle is currently underinvested in two long-term or secular themes. One is the China growth story and by extension, our investment in emerging market ETFs and funds. The second is the commodity bull market story. Notably both themes are related to the other in obvious ways since China is the…

Soft Patch Upon Us

A number of indicators have led us to believe that the economy is probably slowing at the moment. For example, regional manufacturing surveys have been trending down recently, unemployment insurance claims may have broken their previous downtrend, the Economic Cycle Research Institute recently issued a warning based on their Long Leading Index, defensive equity sectors…

Employment Gains Continue

With recent economic data turning decidedly mixed, raising concerns about the possibility of another economic slowdown similar to the one experienced last spring and summer, it was encouraging to see the monthly employment report released this morning surpass expectations.