Monthly Archives: September 2010

Nine Years after 9/11

Wells Fargo’s Chief Macro Strategist Gary Thayer recently wrote in a September 13, 2010 article entitled “The Week” that, “…we’ve been through a lot since the 9/11 terrorist attacks” including “…two recessions, two wars, a housing boom and bust, a spike in energy prices and the greatest financial crisis since the Great Depression.” While American businesses seem to have managed to handle this pretty well (Ex. after tax corporate profits are at an all time high), Thayer believes that American consumers are not as optimistic and that investor sentiment has taken an understandably big hit since 9/11.Read more

Was it really a Lost Decade?

Many have claimed that the decade of the 2000s was a lost decade for stock investors. When you look at the returns of the S&P 500 index over the decade, it is hard to challenge the validity of this claim. For the period of December 31, 1999 through December 31, 2009, the S&P 500 index had an annualized simple price return of -2.72%. When dividends are factored in, the results do not get much better as annualized total return for the S&P 500 index (with dividends reinvested back into the index) over the same timeframe was -0.95%. This marked the first time since the 1930s that a decade produced a negative simple price return for the S&P 500 index and the only decade that the S&P 500 index ever produced a negative total return since our data sources began tracking the index back in 1926.Read more

Fears of Double-Dip Recession Receding

We, at Hennion & Walsh, believe the U.S. economy will continue to struggle to build any type of sustainable recovery in the face of historically high levels of unemployment, continued fears over potential sovereign defaults and political uncertainties leading into this fall's mid-term elections. Our primary concern centers on job growth. According to the Bureau of Labor Statistics, the current U-3 unemployment rate stands at 9.6%. However, when one considers the wider encompassing U-6 unemployment rate, which counts not only people without work seeking full-time employment (the more familiar U-3 rate), but also counts marginally attached workers and those working part-time for economic reasons, of 16.5%, it begins to become very difficult to imagine a scenario where consumers will start to spend at the levels needed to build a sustainable economic recovery. Despite this, we view a double-dip recession scenario as extreme and unlikely based upon several different economic data points. Read the entire post by clicking on the title.Read more