Weekly Market Commentary

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There’s A New Kid in Town: Narrative Economics.

The Markets

Last week, Richard Thaler was awarded the Nobel Prize in economics. His work in behavioral economics and finance recognizes not all economic and financial decisions are made after rational reflection. In Nudge, he wrote:

Slow and Steady

The Markets

It has been 332 days since the Standard & Poor’s 500 (S&P 500) Index experienced a 5 percent drop, reported Barron’s. If there isn’t a selloff on Monday or Tuesday, this will become the longest rally without such a drop.

A Lot Happened During the Third Quarter Of 2017, But Not Much Changed.

The Markets

The bull market in U.S. stocks continued to charge ahead. Traditional measures of valuation continued to suggest the market is overvalued, but some analysts argued it’s different this time. The Economist explained:

Geopolitics, What Is It Good For? Absolutely Nothin’!

The Markets

In January, Robert Kahn of the Council on Foreign Relations wrote in Global Economics Monthly:

“In Theory, There Is No Difference Between Theory And Practice, In Practice There Is.”

The Markets

Yogi Berra was talking about baseball, but the concept also applies to diversification, according to the GMO White Paper, The S&P 500: Just Say No. From the title, you might think the authors – Matt Kadnar and James Montier – don’t like U.S. stocks. They do:

Last week, the aftermath of Hurricane Harvey and potency of Hurricane Irma dominated hearts and minds, but there were some diversions and some welcome news, too.

The Markets

The NFL kicked off its 2017 season with the Chiefs’ win over the Patriots. The men’s U.S. soccer team tied Honduras to stay in the running for a World Cup spot. And, Sloane Stephens made the jump from 957th best on the women’s tennis tour to U.S. Open Champion.

When It Comes to Economic Growth, The Government Doesn’t Measure Twice. It Measures Three Times.

The Markets

Last week, the Bureau of Economic Analysis revised its initial estimate that the gross domestic product (GDP), which is the value of all goods and services produced by a country or region, grew by 2.6 percent during the second quarter of 2017.

Hope Floats

The Markets

Optimism about possible pro-growth economic policies, including tax reform and deregulation, helped U.S. stock indices finish higher last week, reported Barron’s. It wasn’t all smooth sailing, though. Stocks bobbed up and down as investors’ optimism was weighted by concerns about a possible debt-ceiling battle and government shutdown.

Here, There, And Everywhere

The Markets

Markets around the world appear to be benefitting from global economic recovery.

After pointing out the United States’ economy is the heart of the global financial system, Barron’s reported:

North Korea May Be A Little Country, But It Can Churn Up Big Trouble

The Markets

The possibility that verbal hostilities between the United States and North Korea could trigger geopolitical conflict had investors on the run last week. In the United States, the Standard & Poor’s 500 Index fell by 1.4 percent, the Dow Jones Industrial Average lost 1.1 percent, and the NASDAQ Composite finished 1.5 percent lower.

Who’s Been Buying Shares of Company Stock?

The Markets

Since the start of the bull market in 2009, U.S. companies have been buying their own stock. Stock buybacks peaked during the first three quarters of 2016 and have dropped off sharply since then, reports Financial Times citing a report from Goldman Sachs.

There Was Some Good News And Some Bad News Last Week.

The Markets

First, the good news: Thanks to consumer spending and an upturn in federal government spending, the U.S. economy grew faster from April through June this year. Gross domestic product (GDP) grew by 2.6 percent during the period, according to the advance estimate for economic growth.