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Rising Interest Rates, Part 2: Exploring the Gap
by Brad McMillan of Commonwealth Financial Network, 12/17/15
In part 1 of this series, I explored what interest rates would look like if they returned to their natural level and determined they would be approximately 5 percent on a nominal basis (assuming 2-percent inflation). As the Federal Reserve (Fed) has determined that 2 percent is the target inflation rate, this approximation of the natural rate seems reasonable. Current interest rates, however, are well below 3 percent, resulting in an obvious gap between where the rate is now and where it should be.

Rising Interest Rates, Part 3: What About Investments?
by Brad McMillan of Commonwealth Financial Network, 12/17/15
As this is the final post in my series on interest rates, it’s time to talk about what everyone is probably thinking: What happens to investments when interest rates rise? This question is especially pertinent given yesterday’s decision by the Federal Reserve on a rate hike.

Rising Interest Rates, Part 1: Return to the Natural Level?
by Brad McMillan of Commonwealth Financial Network, 12/17/15
Although economic growth appears to be slowing, stocks continue to hit new highs. This may lead one to ask, “How does the market retain its strength?” In fact, much of this strength seems to result from the low interest rates provided by the Federal Reserve (Fed). And although it can’t be said exactly when the Fed will raise rates, expectation is currently high that it will happen on December 16.

Monday Update: An Encouraging Week, Overall
by Brad McMillan of Commonwealth Financial Network, 12/15/15
Although I identified consumer confidence as a yellow light in December’s economic risk factor update, last week’s data releases gave a largely encouraging take.

Yuan Becomes Reserve Currency
by Brad McMillan of Commonwealth Financial Network, 12/2/15
This post is a follow-up of sorts to one I wrote a couple of weeks ago, “U.S. Dollar Still Failing to Collapse.” As expected, the International Monetary Fund (IMF) decided to add (as of next October) the Chinese currency to the list of reserve currencies. Also as expected, the world is not ending just yet.

Are We at a Market Peak?
by Brad McMillan of Commonwealth Financial Network, 11/12/15
The question that seems to be occurring to more and more people is, “Are we at a market peak?” It has been a multiyear bull market, stock prices have tripled from the base, profit margins have been at record highs for years, and now interest rates are going up. It’s not a crazy thought.

The 2016 Outlook: 3 Important Issues
by Brad McMillan of Commonwealth Financial Network, 11/11/15
I’m working on my 2016 outlook right now—yes, a couple of months before it actually gets here—and am struggling to focus on what will be most important. Developing an idea about the future requires first identifying the most important issues, then making some decisions about how they are likely to evolve, and finally trying to tie them all together.

The Fed Surprises Again—But with a Treat, Not a Trick
by Brad McMillan of Commonwealth Financial Network, 10/30/15
As I wrote on Monday, no one expected anything of substance from the Federal Reserve. But, once again, the Fed surprised us. The September meeting was a trick, when it chose not to raise rates. But the October meeting looks like it may end up being a treat. I don’t mean in a policy way (rates remained unchanged, as expected). Instead, the Fed has very explicitly ruled out economic risks to the extent that a rate increase for December—which most had written off—is back on the table.

Earnings Vs. Revenue: What to Look for This Earnings Season
by Brad McMillan of Commonwealth Financial Network, 10/22/15
I have talked about valuations quite a bit recently, and, as I have noted, they are certainly important. Valuations, however, are largely subjective and change over time; there is little you can do to manage or react to them.

The Failure of Politics
by Brad McMillan of Commonwealth Financial Network, 10/10/15
Sometimes, I really hate being right. A few weeks ago, I wrote that the Washington, DC, political environment had deteriorated and that the current go-round on the debt ceiling was likely to be even more contentious than the last one, two years ago. Sure enough, with the resignation of Speaker John Boehner—and the withdrawal yesterday of his heir apparent—the House appears ungovernable. Without some type of Republican internal agreement on at least whom to elect as speaker, it’s hard to see any resolution to the debt ceiling debate, which is likely going to hit in the next couple of week

Will She or Won’t She . . . Raise Rates, That Is?
by Brad McMillan of Commonwealth Financial Network, 9/16/15
The big news this week is the Federal Reserve’s rate-setting meeting tomorrow and Thursday. This is one of eight meetings held each year, approximately every six weeks. The remaining ones in 2015 are in October and December. The reason this matters is because, once again, the Fed has to decide whether to start raising rates or not. I have argued before that, economically, it doesn’t really matter that much, but from an investor confidence perspective—and thus for the markets—it does.

With Further Market Declines Likely, Keep the Long Run in Mind
by Brad McMillan of Commonwealth Financial Network, 9/2/15
August was the worst month for U.S. markets in more than three years, so say the headlines. I suspect it was also the worst month in at least that long for many international markets as well. And, as today’s numbers show us, we aren’t done yet. As I write this, U.S. markets are down about 2.5 percent, and European markets closed down around 3 percent.

China and the U.S. Stock Market
by Brad McMillan of Commonwealth Financial Network, 9/1/15
Now that things seem to have calmed down a bit, it’s a good time to discuss why the past week has been so turbulent. The usual explanations—the Chinese currency devaluation and stock market crash—are certainly valid, but there’s more to the story. Let's take a closer look at the connection between the news from China and U.S. stock prices.

As Market Fears Grow, Stay Focused on the Long Term
by Brad McMillan of Commonwealth Financial Network, 8/26/15
One bad day doesn’t make a bear market. Two bad days, however, and the prospect of more to come, may well signal one.

China’s Stock Market Plunges Again (But Not to Worry)
by Brad McMillan of Commonwealth Financial Network, 7/31/15
It turns out that China’s stock market remains a market after all, despite the Chinese government’s best efforts. Prices on the Shanghai Composite Index fell 8.5 percent on Monday and another 1.7 percent Tuesday, stripping away more than half of the gain since the last bottom.

U.S. Stock Market: Should You Be Worried?
by Brad McMillan of Commonwealth Financial Network, 7/6/15
Yesterday wasn’t a good day for the stock market—anywhere. When I wrote yesterday’s post, the U.S. markets were only off by a bit. But the drop later in the day looked like it might be a bad sign; at a little over 2 percent, it was the largest one-day dip in some time.

What Do Rising Interest Rates Mean for the Housing Market?
by Brad McMillan of Commonwealth Financial Network, 6/23/15
Today, I want to revisit a post I wrote just over two years ago. I’ve updated some of the data, but the concerns and the conclusions remain timely. In keeping with one of my recurring themes, this is also an example of how rising interest rates won’t mark the end of the world but, rather, a return to a more normal environment.

Europe in the Next Five Years
by Brad McMillan of Commonwealth Financial Network, 6/19/15
Yesterday, I talked about several major trends that are poised to at least pause (and quite possibly reverse) over the next couple of decades. One major area we didn’t discuss is Europe, which is likely to see more change in the next 5 years than it has in the past 20.

Do Rising Rates Mean Falling Stocks?
by Brad McMillan of Commonwealth Financial Network, 6/11/15
Yesterday, I saw an interesting doom-and-gloom piece on rising rates, which claimed that rate increases typically sink the stock market and that we could potentially expect a crash in the near future.
Results 451–469 of 469 found.