25-Jan-12 -  Market Monitor: Fed Opens Line of Communication
The Federal Reserve took an historic step today in communicating monetary policy by providing FOMC participants' individual forecasts for the appropriate timing of policy firming. The end result caught the market by surprise as it is now believed economic conditions are likely to warrant an exceptionally low level for the federal funds rate at least through late 2014.

20-Jan-12 -  Market Monitor: Opportunity Knocking
The high equity risk premium reveals the considerable return potential that exists for the S&P 500 if the market can get past its subjective fears. There is apt to be some unsettling developments along the way, but at this point, with the equity risk premium sitting where it was in January 2009, it is arguable that a recession and a credit implosion in Europe are already priced into the market.

In this note, we lay out our reasoning for why we think the market should be able to overcome what we consider to be the three most realistic fears related to the 2012 equity market outlook. At the same time, we highlight a shift in trend dynamics for three major growth drivers that we expect to temper fears about the outlook for the U.S. economy and the U.S. equity market.

13-Dec-11 -  Market Monitor: FOMC Sounds Familiar Message
The policy directive from the December 13 FOMC meeting can best be described as being another dovish statement. It is possible to make such a characterization because that is what we said about the policy directive from the November 2 meeting and, with the exception of a few subtle changes, the two directives read very much the same on the key points.

Even the vote played out in the same fashion. All FOMC members voted for the policy action with the exception of Chicago Fed President Evans, who supported additional policy accommodation at this time (just as he did in November).

30-Nov-11 -  Central Banks Travel Familiar (and Rocky) Road
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank announced a coordinated action to enhance their capacity to provide liquidity support to the global financial system.

The announcement was a surprise and global equity markets soared in its wake.

The experience of recent years has shown, however, that coordinated central bank action is mostly a stopgap for markets undone by an inability to solve fiscal problems. That is, it stops the internal bleeding, but it does not fix what is broken on the outside.

03-Feb-12 -  U.S. Economic Outlook: Growth Prospects, Full Speed Ahead
Pessimism is currently running deep for most economic forecasters. It is no surprise to see most forecasts, including this one, project roughly 2.0% growth over the next couple of years.

Yet, for all of the weakness that is expected to play out through 2013, we see more upside potential than downside risk over the course of the outlook.


Conference Call – Briefing Research Q1 2012 Economic Outlook:  Growth Prospects, Full Speed Ahead

Join us for the Briefing Research quarterly conference call on the economy with our Economist, Jeff Rosen Ph.D., Director of Research, Kimberly DuBord, and Chief Market Analyst, Patrick J. O’Hare, on Wednesday, February 8, at 10:00 a.m. CT (11:00 a.m. ET).  Space is limited, so register now.

03-Feb-12 -  Employment Report: January 2012
There have been numerous discussions among media pundits Friday morning trying to explain that the January employment report is not as strong as it seems. Quite simply, they are wrong.

01-Feb-12 -  Data Detail: ISM (Jan-12), Construction Spending (Dec-11)
Strong gains in new orders and backlogs drove manufacturing activities higher for the fourth consecutive month. The gain in backlogs, specifically, should be enough to keep production moving ahead in the near term.

31-Jan-12 -  Data Detail: Consumer Confidence - January 2012
Given the substantial strengthening in the labor sector over the last few weeks – initial claims fell to a three-year low – and the upward trend in equity prices, one would expect consumer confidence to increase in similar fashion to consumer sentiment. The fact that confidence instead declined could mean consumers do not believe the recent economic gains are long lasting.

30-Jan-12 -  Fixedated: January 23 - 27, 2012
Treasuries shook off the mid-week blues and rallied as the Fed extended its “low Fed funds rate” time frame to at least late-2014, Iran rattled the oil market, and Greece put up some verbal resistance to new bailout proposals.  When times are tough, it is good to be the king – even if your crown is slightly tarnished.

Corporates rallied across the board as more buyers reached for yield away from USTs.  The A-rated index fell to 3.72% – just 3 bps from its all-time low. Munis rebounded and followed USTs to lower yields.

23-Jan-12 -  Fixedated: January 17 - 20, 2012
Treasuries could not hold on to a mid-week rally as the 10-year UST pushed through the 2.00% level for the first time since January 10.  Hopes grew that Greece would reach a “haircut” deal with private creditors – a hope that has yet to come to fruition.  All bets are off should negotiations fail.

Corporates were mixed last week. Investment-grade bonds sold off with Treasuries while high-yield debt rallied as investors reached out on the risk spectrum.  The muni rally finally fizzled last week following longer-maturity UST yields higher.

17-Jan-12 -  Fixedated: January 9 -13, 2012
Treasuries continued to ride the wave of global unrest (including the long-awaited S&P European downgrades) with the long end of the curve posting substantial gains for the week.  However, it is hard to believe that S&P caught anyone off guard which makes linking the rally to the downgrades fairly suspect.

Corporates rallied as investors continued to seek out more yield.  Muni yields continued to grind lower with the FactSet 10-year AAA Muni hitting yet another low.

09-Jan-12 -  Fixedated: January 3 - 6, 2012
Treasuries ended the week mixed with the long end of the curve taking the most damage.  This week brings the start of earnings season, a bevy of economic data, more tension in the oil market and yet another meeting between French President Sarkozy and German Chancellor Merkel.  For managers that like volatility, this could be your week.

Corporates rallied a bit last week. High-yield debt continues to perform well as the index has fallen 99 bps since Nov. 28, 2011.  Munis continued to rally as the FactSet 10-year AAA Muni Index hit yet another all-time low at 2.23%.

25-Jan-12 -  Trend Watch: Jan. 9 - 20, 2012
With 20% of S&P 500 companies having reported through January 23, 58% have exceeded estimates.  However, the new, blended EPS growth expectation has fallen to 5.9%.  That indicates the trend we have highlighted in prior quarters, that sell-side analysts tend to underestimate the current quarter, may not hold in Q4 2011.  At the same time, though, earnings estimates for 2012 and 2013 have inched higher.

We discuss those points in this week's Trend Watch, along with other views that include how we continue to favor high-yield debt and how a lasting asset allocation shift and larger corporate investment could lead to outperformance in the U.S. equity market and the U.S. economy.

18-Jan-12 -  To Combat Rising Debt, Governments Roll the Dice
The overriding theme in the U.S. gaming market is the quest for tax revenue.  While debt burdens will not go away, the trend of regional gaming expansion may be in its late stages due to rising competition driven by gaming market saturation.

That theme may be exported to Asia.  Developed markets such as Japan are considering a significant expansion in gaming to combat struggling economies, rising debt levels and decreasing tourism.

It is simply too early to predict winners in any of these developing gaming markets.  While publicly-traded operators will battle for the remaining growth markets in the U.S., the industry will shift toward online gaming and further Asian expansion.

11-Jan-12 -  Trend Watch: Dec. 19, 2011 - Jan. 6, 2012
Even though most consensus forecasters are predicting above potential GDP growth in the fourth quarter, the consensus estimates for daily economic data have been extremely pessimistic.  In fact, the pessimism is so strong that the Briefing Research Daily Surprise Index is showing the real economy is outperforming consensus expectations by the largest amount since the index was created in 2000.

We discuss that point in this week's Trend Watch, along with other views including how demand could be the swing factor for crude oil prices in 2012 and how high-yields bonds may have more upside than investment-grade bonds relative to U.S. Treasuries.

05-Jan-12 -  Briefing Research Chart Book: January 2012
The S&P 500 is more attractively priced for long-term price appreciation today than it was when 2011 started. The forward four-quarter earnings yield for the S&P 500 is 8.6% versus 7.7% at the end of 2010. Moreover, the spread between the 10-year Treasury yield stands at 670 bps today versus 470 bps when 2011 began, reinforcing our view that equities offer better long-term relative value over bonds at current prices.

The Briefing Research Chart Book provides a telling snapshot of our fundamentally-based argument, as well as an accompanying picture of key trends for the U.S. economy and the fixed income, commodities, and currency markets.