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MUNICIPAL SUPPLY SURGE

The sharp increase in new municipal issuance has been driven by issuers refinancing existing debt, making the recent surge far less of a risk to the market. We do not see recent new issuance changing the favorable supply-demand underpinning the municipal bond market.

MARKET’S MARCH MADNESS

The Final Four of the 2015 NCAA College Basketball Tournament is set with Kentucky, Wisconsin, Duke, and Michigan State headed to Indianapolis to determine this year’s college hoops champion. In that spirit, we share our own Final Four for stock market investing:

MARCH EMPLOYMENT REPORT PREVIEW

We continue to expect the broad economy could potentially create between 225,000 and 250,000 net new jobs per month in 2015. Although job growth has improved, wage inflation, an important measure of labor market health, is not yet back to “normal.” A more robust pace of job growth should coincide with an upturn in wage inflation, yet the relationship between the two has been mixed over the past 30 years or so.

Portfolio Compass 3/25/15

A snapshot of LPL Financial Research’s views on equity, equity sectors, fixed income, and alternative asset classes. This biweekly publication illustrates our current views and will change as needed over a 3- to 12-month time horizon.

BREAKING UP IS HARD TO DO

The high-yield energy sector has kept pace with the broader high-yield bond market in 2015 even as oil prices weakened, a notable difference from 2014. Although we don’t believe the high-yield bond market will return to the June 2014 peak, the current yield spread may still represent good value given still strong corporate fundamentals and low defaults.

THE DOLLAR’S RIPPLE EFFECT

Using intermarket analysis is important to reduce the risk of missing vital directional clues within the financial markets. Recently, a strong U.S. dollar has created headwinds for the euro, crude oil, and commodity-sensitive emerging markets.

FORECAST FOR CLEAR SKIES: LEI SHOWS LOW ODDS OF RECESSION

The outcome of last week’s FOMC meeting confirmed our long-held view that the Fed would keep rates “lower for longer.” A report that may have been overlooked by financial market participants last week is the LEI, which is designed to predict the future path of the economy. The LEI suggests the risk of recession in the next 12 months is negligible (4%), but not zero.

Doing Good When Doing Well: Philanthropy and the Affluent Family

In order to choose the most advantageous charitable giving strategy, individuals and families must evaluate a number of factors, such as their need for current income, their desire to control and preserve assets during life and after death, their specific charitable intent, as well as important tax management issues.

PATIENTLY WAITING

The Fed faces a number of obstacles now and may require greater justification to suggest raising interest rates as soon as June. Bond market reaction to recent Fed meetings has been initially bearish but muted overall. Maintaining the word “patient” could have different implications for segments of the bond market.

FOMC PREVIEW: WHEN, HOW OFTEN, AND HOW MUCH

What the FOMC says, if anything, about the rising dollar and its implications, could have ramifications for monetary policy over the next several quarters and beyond. In addition to “when,” market participants may start asking “how much” and “how fast” rates may increase once the Fed begins to raise the rates. We are watching several factors to gauge when the Fed may begin to hike rates, including wages, the output gap, inflation, and inflation expectations.

DOLLAR STRENGTH IS A SYMPTOM, NOT A CAUSE

We do not think the strong U.S. dollar will derail the bull market. The dollar itself is not a key driver of market performance; it is a symptom.

TIPS & RISING INFLATION EXPECTATIONS

Market-implied inflation expectations have increased after reaching a multiyear low in mid-January 2015. Thus far in 2015, the inflation protection provided by Treasury Inflation-Protected Securities (TIPS) has provided a buffer, with TIPS outperforming Treasuries.

BEIGE BOOK SUGGESTS CONTINUED MODEST ECONOMIC GROWTH

The latest Beige Book suggests that the U.S. economy is still growing at a “modest or moderate” pace that is at or above its long-term trend, and that some upward pressure on wages is beginning to emerge. Optimism on Main Street remains high despite the recent barrage of bad news on the economy.

HAPPY BIRTHDAY BULL MARKET

The current bull market celebrates its sixth birthday today (March 9, 2015). Bull markets do not die of old age, they die of excesses, and we do not see evidence of excesses emerging today. Some of our favorite leading indicators suggest the economic expansion and bull market may continue through the end of 2015.

HOT & COLD BONDS

January 2015 was the best month for high-quality bonds since December 2008. In February 2015, high-quality bonds posted their worst monthly performance since June 2013 and the taper tantrum sell-off. High-yield bonds experienced ups and downs thus far in 2015. After a muted January, high-yield bonds returned 2.4% in February, the largest single month gain since October 2013.

A VERY DIFFERENT NASDAQ

The Nasdaq Composite just hit 5000 today as this report was going to press and is nearing its all-time record closing high of 5048. Even with the Nasdaq at 5000, we do not believe stocks have reached bubble territory. The Nasdaq has a much stronger foundation today of valuations, profits, and sentiment.​

REASSESSING INTEREST RATE RISK

We do not expect the weakness witnessed in 2013, but a difficult February 2015 thus far warrants another look at assessing interest rate risk, especially given the likely start of Federal Reserve (Fed) interest rate hikes later this year. Sector allocation, maturity exposure, time horizon, and whether interest income is reinvested or simply spent, all influence potential total returns during a potential bear market for bonds.

HOUSING HEALTH

We continue to expect housing may add to GDP growth in 2015 and for the next several years, as the market normalizes following the severe housing bust of 2005 – 2010. Poor weather in Q1 2015 may again cause housing to be a drag on growth early in 2015.

ARE EXPECTATIONS TOO HIGH?

The market’s continued ascent has caused some to ask if the stock market reflects excessive optimism. The pace of economic surprises as measured by the Citigroup Economic Surprise Index suggests expectations remain reasonable.

PUERTO RICO PUTTERS

Puerto Rico municipal bond price volatility picked up following the strike down of the restructuring law, as the market began to price in the prospect of a broader default. The impact on the broader municipal market is still limited, as has been the case for much of the past 18 months. Default risk for Puerto Rico remains but we still find the broader municipal bond market attractive.

ENERGY SECTOR OUTLOOK:WHAT WE ARE WATCHING

We are watching several key factors to assess the potential opportunity in the energy sector. While we expect to try to take advantage of opportunities in this group in short order, we are not convinced that it now presents a great entry point. We continue to recommend the consumer discretionary sector, where suitable, as a way to play low energy prices.

GLOBAL GDP TRACKER

The market continues to expect that global GDP growth will accelerate in 2015 and 2016, aided by lower oil prices and stimulus from two of the three leading central banks in the world. The consensus has been raising its estimate for 2015 growth for developed economies and sharply lowering its estimate for emerging markets.

DECIPHERING NEGATIVE YIELDS

The negative bond yield club is exclusively comprised of European issuers reflecting the ongoing deflationary environment, poor growth expectations, euro currency risks, and negative overnight borrowing rates at selected central banks. Overseas-based bond investors may have several reasons to purchase bonds with negative yields, but, to no surprise, none of those are compelling enough for U.S.-based investors.​

EARNINGS SEASON HIGHLIGHTS AND LOWLIGHTS

look at some of the highlights and lowlights of fourth quarter earnings season. Despite the massive drag from the energy sector and the negative impact of a strong U.S. dollar, fourth quarter 2014 earnings are on track to exceed prior estimates.

EUROPE: THE ROAD TO RECOVERY?

Although it is too soon to gauge the effectiveness of QE in the Eurozone, key readings and data are beginning to show improvement, and consensus expectations are for continued growth in 2015. However, market participants looking for an immediate and sustained response by the Eurozone economy to QE may be disappointed.

WHY OWN BONDS?

A soft start for the U.S. stock market in 2015 once again illustrates the diversification benefit of high-quality bonds even at very low yields. Even in a low-yield environment, bonds provide a cushion as price movements, not yields, are the primary buffer to equity movements. An allocation to core bonds, in addition to more attractively valued high-yield bonds, may make sense for investors.

DON’T FRET ABOUT JANUARY EFFECT

The stock market fell in January, causing some to ask whether the so-called January effect means that stocks will fall this year. Recall less than four weeks ago the “first five days” indicator sent a positive stock market signal for 2015. We always put fundamentals first when forecasting stock market direction—and on that score, we believe stocks still look good.

JANUARY EMPLOYMENT REPORT PREVIEW

The market is expecting the economy to add 235,000 net new jobs in January 2015 and for the unemployment rate to remain at 5.6%. Other measures of the health of the labor market — hiring rates, the quit rate, the unemployment rate, and most importantly, wages — still show that the labor market is not yet back to normal.

ALL ABOUT THE CENTRAL BANK(S)

Recent central bank action has reinforced the “lower for longer” interest rate theme in global bond markets. This week’s Fed meeting may temper marketfriendly central bank trends, but seems unlikely to alter the current environment.

NAVIGATING THE MARKETS 1/26

We are initiating a master limited partnership (MLP) view (neutral/positive) and introducing several new alternative investment categories. ƒƒUpgrading technology and industrials to positive and munis (int.) to neutral/positive.

NO DEFLATING THE U.S. DOLLAR

The latest leg up for the U.S. dollar has been driven by anticipation and arrival of QE by the ECB. The dollar has been strong for a number of reasons, all of them good things. Though not the end all and be all, currency is an important consideration when determining asset allocation.

GAUGING GLOBAL GROWTH

The pace of growth in the global economy is a key driver of global earnings growth, and ultimately, the performance of global equity markets. The IMF raised its estimate for growth in 2015 for developed economies and sharply lowered its estimate for emerging markets.

TAKING A PAGE FROM THE FED

The ECB is widely expected to announce a Fed-style outright government bond purchase program this week. A large and bold plan may arrest the rise in global government bond prices, but anything else may reinforce the record low-yield environment.

BEIGE BOOK - January 2015

The latest Beige Book reflected a picture of the U.S. economy that was largely unaffected by concerns over dropping oil prices, the 2014 holiday shopping season, global growth scares, and a rising U.S. dollar, although the drop in oil prices was noted as a negative in some districts.

EUROPEAN HEAD FAKE?

The much anticipated European Central Bank (ECB) policy meeting this week may include a quantitative easing (QE) program announcement. Although we would view a potentially bold QE program from the ECB as an incremental positive, the ongoing growth and deflation challenges in Europe leave us still with a strong preference for the U.S.

How Much Do You Need to Retire?

Americans used to count on a pension plus Social Security to get them through their “golden years.” But times have changed. Today defined benefit pension plans are becoming much less common, people change jobs more often and most manage their own retirement funds through defined contribution plans.

WHAT IS DRIVING BOND YIELDS?

The fall in 10- and 30-year Treasury yields over the second half of 2014 has been driven primarily by falling inflation expectations, rather than concern over the health of the U.S. economy. The decline in European government yields, unlike U.S. Treasuries, reflects both bleak growth prospects and lower inflation expectations.

DRILLING INTO THE LABOR MARKET

The U.S. economy created another 252,000 net new jobs in December 2014 and 3 million over the course of 2014, with the most net new jobs added since 1999. The labor market still has a long way to go to get back to “normal,” which may keep the Fed on hold for raising rates until late 2015.

THE BRIGHT SIDE OF CHEAP OIL

Earnings season is here and the impact of low oil prices will be the market’s main focus. While we will be closely monitoring the energy sector, we will also be watching the sectors and industries that potentially benefit the most from cheap oil. The consumer discretionary sector and the transports are big potential beneficiaries, supporting our positive views of both groups.

CURVE BALL

For just the second time in the last 30 calendar years, short-term 2-year Treasury yields increased while longer-term 10- and 30-year Treasury yields fell.

A TALE OF TWO EARNINGS SEASONS

The fourth quarter of 2014 will be a tale of two earnings seasons: the best of times and the worst of times.

BACK TO THE FUTURE IN 2015

This week we examine how the U.S. economy in 1985 compares with 2015, focusing on factors such as the pace of the current economic expansion, the political balance in Washington, consumer sentiment, and the role of the Fed’s monetary policy.

Monitoring the Effects of Falling Oil Prices

The impact of falling oil and energy prices on inflation, inflation expectations, the U.S. and global economies, and the global financial system received a great deal of attention at the eighth and final FOMC meeting of 2014. Fed Chair Yellen’s comments during the post-FOMC press conference seemed to have calmed fears regarding the negative effects of oil’s drop on the financial system.

10 Stock Market Questions for 2015

With 2015 almost here, this week we pose and respond to 10 key stock market questions for 2015. Look for more on these and other topics throughout the year.

Tempting TIPS

Lower inflation expectations as a result of falling oil prices have weighed on TIPS prices during the second half of 2014. TIPS underperformance has led to the lowest market-implied inflation expectations of the past four years We do, however, find TIPS an attractive high-quality option and certainly more appealing than Treasuries as a result of recent underperformance.

Potential Outcomes of the Final FOMC Meeting of 2014

Statements following the final FOMC meeting of 2014, particularly on the recent drop in oil prices and its impact on the U.S. economy, could have ramifications for near- and longterm monetary policy. The FOMC will also provide markets with a new set of targets at this meeting...

Will Shoppers Bring Holiday Cheer for Markets?

We expect holiday shoppers, bolstered by lower energy prices, to help support potential stock market gains. Although the severity of the oil price decline has been unsettling, we view the decline as positive for U.S. consumers overall. Retail stocks should deliver some cheer for markets this holiday season, but don’t stuff those stockings with too much of them.

High-Yield Bonds & Oil Prices Revisited

peak of $107 per barrel on June 20, 2014, through Monday, December 8, 2014, we take another look at the impact of lower oil prices on the high-yield bond market. Recent high-yield market weakness has already accounted for a rise in defaults from lower oil prices. Even with weakness from rising defaults, we believe high-yield bonds may outperform their high-quality counterparts in 2015 due to their existing yield advantage.

Favorable Policy Environment for Stocks in 2015

We expect the policy environment in 2015 to be supportive for stocks. The transfer of power to Republicans may have a meaningful impact on broad policy measures. Regardless of the political party in power, the year before the presidential election has historically been a good one for stocks.

Beige Book Suggests That Recent Market Concerns Around Global Growth May Be Overdone

The report suggested that U.S. economic activity has “continued to expand,” and in general, optimism regarding the economic outlook far outweighed pessimism, as it has for the past 18 months or so. For the first time in this business cycle, the latest Beige Book contained more than one mention of employers having difficulty finding low-skilled workers, and retaining and compensating key workers.

2015 Fixed Income Outlook: Handle with Care

With sustained improvement in economic growth, slowly rising inflation, and the approach of the Fed’s first interest rate hike, bond prices are likely to decline in 2015. High-yield bonds and bank loans can help investors manage this challenging bond market.

Can Stocks Deliver the Goods in 2015?

We believe stocks will deliver mid- to highsingle- digit returns in 2015. We expect earnings, and not valuations, to do the heavy lifting in producing potential stock market gains for investors in 2015. Monetary policy is in transit in 2015, when stocks will face a shift from the very loose monetary policy of the Federal Reserve’s (Fed) quantitative easing (QE) program to an environment in which the Fed begins to hike interest rates. Valuations for the S&P 500 remain slightly above long-term ave​

U.S. Economic Growth Picks Up

We believe the U.S. economy will continue its transition from the slow gross domestic product (GDP) growth of 2011 – 2013 to more sustained, broad-based growth. We expect the U.S. economy will expand at a rate of 3% or slightly higher in 2015, which matches the average growth rate over the past 50 years.​

Current Conditions Index 11/19/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Overseas Influences

Demand from overseas investors once again helped the bond market shrug off stronger economic data and weak Treasury auction demand. Favorable yield differentials between Treasuries and key overseas bond yields may provide lingering support for the domestic bond market. The Fed, this week’s release of Fed meeting minutes, and the European economy likely hold the keys to unlocking the low-yield environment.​

Emerging Markets Opportunity Still Emerging

We believe emerging markets (EM) fundamental conditions are set for improvement in 2015, based on our outlooks for economic growth, earnings, and policy. Valuations are compelling and EM may be situated to recapture some of their relative losses from a technical perspective, particularly in Asian markets. However, somewhat mixed fundamental and technical pictures suggest a better opportunity may be forthcoming.

Japan Check-In: Will the Weak Q3 GDP Reading Draw a Policy Response

The much weaker than expected Q3 GDP reading in Japan is a modest threat to overall global growth for 2014 and into 2015. We continue to believe the global economy will continue to expand in 2014, 2015, and beyond. The pace and composition of the policy response from Japan in the coming weeks and months are critical.

High-Yield Bonds & Oil Prices

We find it premature to draw conclusions regarding oil prices and the performance of the broad high-yield bond market. Default rates, the pace of economic growth, and the strength of credit quality metrics among high-yield issuers — not oil prices — will be the primary drivers of high-yield bond market returns.

Current Conditions Index 11/12/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Solid Earnings Season Spelled Out

While the certainty provided by an election outcome has been positive for the stock market over time, our positive stock market outlook is based much more on fundamentals. It does not get more fundamental than earnings, which are on track to grow by 10% year over year for the second straight quarter. Earnings season is not over, but with about 90% of S&P 500 companies having reported results, we are ready to declare it a success.

Consumer Conditions

The drop in gasoline prices over the fall and summer months has been a plus for spending, but other factors have a much bigger impact on the consumer. The better tone to the labor market, the sharp rise in household net worth, and prerecession levels of consumer confidence all act as supports for the consumer. However, stubbornly weak wage and income growth remain as key constraints on spending. Sustained economic growth is the best way to ensure solid employment growth.

Current Conditions Index 11/5/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

High-Yield Divergence

The headwinds of rising high-quality bond yields and increasing new issuance have slowed the advance of high-yield bonds in late October 2014, relative to stock market gains. Nonetheless, we expect high-yield bonds may improve as economic expansion, earnings growth, and low defaults continue to drive our positive outlook. We continue to expect a challenging, lowreturn environment across the bond market, with high-yield bonds a likely bright spot.

S&P Is Not GDP

It is important to recognize that the S&P 500 is not GDP. S&P 500 companies have different drivers for earnings than the components that drive GDP. The backdrop of solid business spending within a slower trajectory of overall GDP growth can be a favorable one for the stock market. Although stocks are at the low end of our target 10–15% S&P 500 return range for 2014, we see further gains between now and year end as likely, with profit growth as a primary driver.

QE Ended, Now What?

The Fed ended its bond purchase program last week and the bar has been set fairly high for restarting more QE. The economy is in far better shape today, compared with the start of QE in 2008 and the end of QE1 and QE2. It is probably too soon to know if QE has “worked,” and the better question may be, can the U.S. economy stand on its own without QE? We believe the BOJ and ECB are likely to do more QE.

Reduce Debt, the Systematic Way

In America today, carrying some debt is unavoidable but how much debt is tool much? Assess your debt and begin reducing it with three easy steps .

Current Conditions Index 10/29/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Breaking Up

The Fed will end outright bond purchases this week, barring any surprises from this week’s Fed meeting. The end of bond purchases should not create much market reaction, as bond investors focus more on global economic growth and expectations for interest rate hikes. The Fed’s breakup will not be a clean one as it maintains a steady influence in the MBS market.

Recovery Reality

The U.S. economy is improving, and in many cases is back to normal, but it remains stubbornly weak in some areas. “Real world” indicators that point to the health of the economy include crane rental rates and customer traffic in restaurants. Economic uncertainty — likely a drag on economic growth in 2011, 2012, and 2013 — has faded as a concern in 2014, consistent with the Fed’s most recent Beige Book.​

Corporate Calm

We remain confident in corporate America’s ability to generate solid earnings growth in the current global economic environment despite the slowdown in Europe (and to a lesser extent, China). A number of U.S. companies have performed relatively well in Europe, with some not yet seeing signs of a slowdown in their business. The business environment overseas appears to be good enough for companies to largely maintain their outlooks for the rest of the year and into 2015.

Current Conditions Index 10/22/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Stay on Guard

Yields may remain low for evidence of any fallout or contagion to the U.S. economy; a stretch of stronger economic data or bolder action by overseas central banks are likely needed catalysts for higher yields. The on-guard mentality in the bond market has pushed back timing for Federal Reserve interest rate hikes.

Oil Hits the Skids

We believe the oil sell-off is overdone and expect the commodity to find a floor in the low $80s. We expect firming global growth to increase the market’s confidence in global oil demand despite weakness in Europe. Energy service stocks are particularly oversold and may be attractive as the services-intensive U.S. energy renaissance continues.

Modest to Moderate Economic Growth Continues

The latest Beige Book reflects a picture of the U.S. economy that has, thus far, been largely unaffected by current geopolitical headlines.Optimism regarding the economic outlook far outweighed pessimism, as it has for the past 18 months or so.

Current Conditions Index 10/15/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Disinflation Infatuation

Inflation expectations have fallen sharply in recent weeks, driven by European disinflation, lower energy prices, and overall growth concerns. The persistence of low inflation expectations may intensify the “lower for longer” theme via lower growth expectations and delays to potential Federal Reserve (Fed) interest rate hikes.

Pullback Perspective

We see the recent increase in volatility as normal within the context of an ongoing bull market. We do not believe the age of the bull market, at more than 5.5 years old, means it should end. We maintain our positive outlook for stocks for the remainder of 2014 and into 2015.

Gauging Global Growth in 2014 & 2015

The pace of growth in the global economy is a key driver of global earnings growth, and ultimately, the performance of global equity markets. Global GDP growth in 2014 remains on track to accelerate versus 2013’s pace, and the consensus is forecasting acceleration in global growth in 2015. Potential growth headwinds in 2015 include...

Current Conditions Index 10/8/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Inflation Happens: Don’t Let It Derail Your Long-Term Plans

A penny saved is a penny earned, right? Not necessarily. Thanks to inflation, over time that penny could be worth less than when it was first dropped into the piggy bank. That’s why if you're investing—especially for major goals years away, such as retirement—you can’t afford to ignore the corrosive effect rising prices can have on the value of your assets.

Slowing Momentum

A challenging bond market environment will likely persist over the remainder of the year and perhaps beyond. Valuations across many bond sectors remain above historical averages and reflect an expensive market. We believe corporate bonds may provide investors with the best defense in what will likely be a continuation of the low-return environment.

Earnings Preview: Welcomed Opportunity to Focus on the Micro

Earnings season is here and may counteract the negative headlines with another dose of positive fundamental news. We expect the third quarter of 2014 could produce another good earnings season, which we believe may positively impact stocks. While there are some headwinds, Europe in particular, the U.S. economic backdrop is supportive and profit margins should remain high, given the few signs of cost pressures.

Blasé on the Budget

The nation’s fiscal situation has improved dramatically in the past five years due to overall economic improvement and a combination of higher tax rates and modest spending increases. However, structural and demographic problems that will drive the deficit over the next several decades remain in place. If policymakers continue to ignore critical warning signs, the near-term improvement in the budget picture is unlikely to last.

Current Conditions Index 10/1/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Grading on a Curve (the Yield Curve, That Is)

The yield curve has a perfect record in signaling recessions over the past 50 years. One of our “Five Forecasters,” the yield curve tells us that a recession and significant market downturn are likely a ways off.

Housing Hiatus?

We continue to expect housing may add to GDP growth in 2014 and for the next several years as the market normalizes following the severe housing bust of 2005 – 2010. Housing affordability and supply, and the supply and demand for home mortgages, will likely determine the pace at which housing increases GDP growth in the years ahead. The inventory of new and existing homes for sale as a percentage of total households has never been lower.

Current Conditions Index 9/24/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

The State of States

A change of seasons should be noted by municipal investors, as a seasonal increase in new issuance may be a catalyst to lower returns after a strong 2014. It is not uncommon for revenues to slow as the economy matures, and we do not view the slowdown in state tax revenues as worrisome for municipal bond investors.

Don’t Fight the ECB? (Part 2 of 2)

Last week we discussed why buying European stocks now, following the recent stimulus announced by the ECB, is very different from buying U.S. stocks during periods of Fed stimulus in recent years. This week we take a deeper dive into the investment opportunity in Europe and evaluate fundamentals, valuations, and technicals. We recommend that investors “fight the ECB.” We do not believe the additional stimulus is enough for us to recommend European equities over U.S. equities at this time.

Mind the Gap

The key now for the Fed, as it deliberates when to begin to raise rates, is to gauge how quickly the output gap is likely to close. The pace at which the U.S. economy takes up slack is likely to command a great deal of attention from the Fed and market participants in the coming months. We believe the first Fed rate hike is likely to occur in about a year’s time, assuming the economy tracks the FOMC’s forecast.

Current Conditions Index 9/16/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Fed Nerves

Despite recent weakness, bonds continue to discount the pace and magnitude of Fed rate hikes. A few facets of this week’s Fed meeting may reveal whether the recent pullback in bonds continues to stabilize.​

Fall FOMC Watch

We continue to expect the Fed to again cut its bond purchase program and remain on pace to exit QE by year end. However, odds have increased that the Fed could change “something” at this week’s FOMC meeting, including omitting its promise to keep rates low for a “considerable time” or providing the public with an update to its exit strategy. We are continuing to watch...

Federal and State College Financial Aid Programs

The cost of financing a college education can be daunting to many families. The good news is that a family does not have to be in a low-income bracket to qualify for many current aid programs.

Current Conditions Index 9/10/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Growth Signals

The combination of additional cuts to overnight borrowing rates and the announcement of the ABS purchase program was slightly more than expected from the ECB. Bond markets sent growth signals in response to ECB action in the form of higher yields, higher inflation expectations, and a steeper yield curve.​

Back to School With the Three Rs:

We believe the “three Rs” are keys to the outlook for the stock market: revenues (and profits), reinvestment, and the renaissance in manufacturing. We expect stocks to garner support from these three Rs in the form of continued growth in revenues and profits, more corporate reinvestment, and continued steady gains for the U.S. manufacturing sector.

Beige Book: September 2014

Over the past three Beige Books, the BBB has averaged +100, the highest reading over any three consecutive Beige Books since at least 2005. The latest Beige Book indicates to us that the negative headwinds that have held the U.S. economy back over the past seven years may finally be abating. Health care and the ACA have remained a consistent source of concern among Beige Book respondents, although the impact has faded a bit recently. Despite the recent barrage of bad news on...

Current Conditions Index 9/3/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Is It Extreme?

Although the decline in US Treasury yields has been significant in 2014, it is not quite at an extreme when viewed historically. However, the decline in European government bond yields has reached an extreme. Given the influence of European government bond yields on U.S. yields, this week’s ECB meeting may determine the market’s next move.

Central Bankapalooza

The market is not expecting the ECB to begin QE this week, although other forms of policy support are likely. The data continue to suggest that more aggressive monetary policy from the ECB would have only a muted impact on the real economy unless the fractured banking system can be repaired. Policy divergences among the world’s major central banks are likely to intensify in late 2014 and beyond.

Midterms May Mean More Gains for Stocks

The resolution of election uncertainty — and ending the predominantly negative rhetoric surrounding the campaigns — has historically been a positive for the stock market. We continue to see opportunities for further stock market gains over the course of 2014, based upon fundamentals rather than the potential for sweeping legislative change.

Current Conditions Index 8/27/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Bond Yields Around a First Rate Hike

Historically, bond yields have begun to move more forcefully four to six months ahead of a first rate hike from the Fed. We believe the rise in interest rates may begin sooner this cycle due to lower yields and more expensive valuations. We favor capitalizing on year-to-date bond strength and recommend a defensive posture consisting of short to intermediate bonds.

Ready, Set, HIKE!

The first rate hike by the Fed has never been an indication of a market peak. On average, the first rate hike has taken place 37% into the economic cycle (measured peak to peak). The S&P 500 has returned on average, another 58% after the first rate hike (price return) before the market peak for the economic cycle. The initial market reaction to a rate hike is, on average, negative, but the data show it pays to be invested.

Data Dilemma: When Final Isn’t Final

Revisions to GDP don’t often change the overall picture of the health, or lack thereof, of the economy. Despite cutbacks to congressional funding of data collection at the federal level in recent years, the GDP data are a lot more accurate than they used to be. About every five years, the BEA does a “comprehensive revision” to GDP, and at that point, GDP for any specific quarter is just about as final as it will get, as the BEA has 98% of the data it needs to calculate GDP.

Current Conditions Index 8/20/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Geopolitics & Bonds

Geopolitical risks powered bonds to another weekly gain, but historically such gains have been short-lived and given way to other fundamental drivers. Low volume summer trading may keep bond yields pinned near year-to-date lows over the near term.

Crystal Ball?

We believe the LEI is one of the better indicators to foreshadow recession. The latest information from the LEI suggests a positive backdrop for stocks and low risk of recession.

Exporting Good Old American Know-How Part 2

Our fastest growing exports are not always as visible as some of the items we consume and import daily. Most major service export categories have experienced near 10% growth per year for the past 10 years. Good Old American Know-How is our most abundant resource.

Current Conditions Index 8/13/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

European Influence

The strength of European government bonds has supported demand for US Treasuries due to more attractive yield differentials. European influences may continue over the near term, but we expect U.S. bond yields to reconnect to domestic economic data in coming months.

Exporting Good Old American Know-How Part 1

The United States has a trade surplus in the service sector, where we are creating relatively high-paying jobs. Many U.S. service-related jobs require advanced degrees and advanced skills, and help to make possible our booming business in service exports, much of it tied to Good Old American Know-How. Our competitive advantage in the service sector should help to continue to drive employment higher in this sector, especially in areas that require advanced skills.

Turning Down the Noise

Volume has picked up during the recent downturn. No, we are not talking about trading volumes; we are talking about the volume from your TVs with talking heads warning about an impending stock market downturn. If you turn off the TV and focus on what the market is telling you, rather than the talking heads, you can tune out the noise.

Enhancing Charitable Gifts With Life Insurance

If you are a regular donor to charity, life insurance could help you to make a much larger gift to your cause of choice.1 Instead of making periodic cash contributions to a charity, you could use the same amount to pay the premium on a life insurance policy to benefit the charity. Upon your death, the charity would receive the full face value of your policy—which would likely amount to considerably more than you could afford to donate during your lifetime.

Current Conditions Index 8/6/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Stock Market Valuations Suggest That This Bull Market Still Has Teeth

Losing under 3% in a week seems a minor concern given historical market ups and downs; nevertheless, investors may begin to wonder if stock market valuations are signaling a decline. Since the end of the last significant sell-off for stocks, the market has been in a pretty consistent upward trend. Valuation is a poor market-timing indicator; while valuation should always be considered, it is a blunt tool that should be taken into broader context.

Reconnected?

With the release of the GDP figures for the second quarter of 2014 (along with revisions to the data back to 1999), the disconnect appears to be fading. The data released so far for the third quarter suggest that the underlying economy had decent momentum as the third quarter began. The data continue to suggest that the U.S. economy is poised to post growth in the second half of 2014 above the long-term run rate of the economy.

Current Conditions Index 7/30/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Calling the Feds Bluff

Futures continue to indicate the bond market believes the Fed does not have an ace up its sleeve and that ultimately they will not raise rates as high as they project. A host of top-tier economic data may influence bonds more this week given the absence of new forecasts and a press conference following this week’s Fed meeting.

Second Quarter Earnings Season Update

Amid the barrage of nearly constant economic and market data, nothing is more important to assess the health of corporate America than the quarterly check-in that we affectionately call earnings season. As earnings season approaches its halfway mark, it’s a good time to take a look at what we’ve learned so far.

Midsummer Madness

Only nine times in over 14 years have the FOMC meeting, GDP report, ISM report, and the employment report — all often marketmoving events — occurred in the same week. Historically, these weeks have exhibited 20% more volatility than an average week over this time span, as measured by the S&P 500 Index. This week is unlikely to be just another boring midsummer week for financial market participants.​

Current Conditions Index 7/23/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Modest-to-Moderate Economic Growth Continues 7/21/14

The latest edition of the Fed’s Beige Book indicates that the negative headwinds that have held the U.S. economy back over the past seven years may be declining. The rebound in our Beige Book Barometer over the past several months is consistent with the Fed’s view that the drop in economic activity was mostly weather related. Despite the recent barrage of bad news, optimism on Main Street remains high...​

Is Congress Contemplating QE4?

If a tax holiday is enacted and the repatriated funds by multinational corporations are used to buy back shares or retire debt, it could potentially act as a very potent market stimulus equivalent to the height of the Fed’s QE3.

Municipal Mid-Year Outlook

We do not expect the municipal bond market to repeat first half strength over the second half of 2014. A gradual rise in yields to compensate for better growth, a modest rise in inflation, and the start of Fed rate hikes in roughly one year’s time will likely pressure bond prices slightly lower through year end. We continue to believe the taxable bond market is likely the main catalyst to the next move in municipal bond prices.

Counting Down the Months

A common worry among investors is that the stock market may fall as the Fed gets closer to hiking rates. In fact, the S&P 500 has posted a gain in the 12 months ahead of the first rate hikes over the past 35 years.

Gauging Global Growth in 2014 and 2015

Global GDP growth in 2014 remains on track to accelerate versus 2013’s pace, excluding the impact of the weather. The pace of growth in the global economy is a key driver of global earnings growth, and ultimately, the performance of global equity markets. In our view, markets may already be looking ahead to the second half of 2014, and especially the third quarter, to gauge the true underlying pace of global growth.

Portfolio Compass 7/9/14

A snapshot of LPL Financial Research’s views on equity & alternative asset classes, the equity sectors, and fixed income.

Current Conditions Index 7/9/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Managing Health Care Costs: Tips for Small Businesses

Employer-sponsored health insurance is considered by business owners and employees alike to be one of the most important benefits available in the workplace today. Yet skyrocketing costs are making it more difficult for small businesses to attract and retain skilled workers with the promise of health insurance

Earnings Season: A Show About Nothing

Much like the television comedy Seinfeld, which celebrated its 25th anniversary this past Saturday, July 5, 2014, the second quarter earnings season is likely to be “a show about nothing.”

Disconnect?

We continue to expect that U.S. economic growth may rebound to a 3% pace for all of 2014. The June 2014 jobs report was undeniably strong on all fronts, standing in sharp contrast to the weak performance of the economy in the first quarter of 2014. The last time the economy created at least 200,000 jobs per month for five consecutive months was in late 1999 through early 2000, when the U.S. economy was growing between 4.5% and 5.0%.

Current Conditions Index 7/2/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

A Challenging Second Half Looms

After broad based strength over the first half of 2014, we expect yields may rise in the second half of 2014 as global growth strengthens and inflation picks up from recent lows. Higher valuations have increased the challenges facing investors.

Investor’s Almanac Field Notes

Similar to a farming almanac, our Investor’s Almanac is a publication containing a guide to patterns, tendencies, and seasonal observations important to growing. The goal of farming is not merely to grow crops, but to sustain living things — investing shares the same goal.

LPL Financial Research's Mid-Year Outlook 2014

At this year’s halfway point, we offer the LPL Financial Research Mid-Year Outlook2014: Investor’s Almanac Field Notes containing key observations and updates to our outlook for 2014.

Understanding Your Retirement Income Replacement Ratio

Although the term retirement income replacement ratio sounds formidable, it’s actually a simple, understandable concept that doesn’t require any fancy math. The ratio helps you zero in on your retirement savings goal and periodically measure your progress as you move toward your target. Will you need 60%, 75%, 90% or even 100% of the income you have in your last year of work to maintain a desirable standard of living after you retire?

World Cup and World CPI Are Heating Up, Risking Mistakes by Key Players

Just as the World Cup has been heating up, increasing the risk of player mistakes, the world consumer price index (CPI) has also been heating up, complicating the task for policymakers at the world’s central banks and increasing the risk of mistakes that could have market implications.

Portfolio Compass 6/25/14

A snapshot of LPL Financial Research’s views on equity & alternative asset classes, the equity sectors, and fixed income.

Current Conditions Index 6/25/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Behind the Curve?

Despite the Fed labeling the recent inflation increase as “noise,” longer-term bond yields rose, inflation expectations increased, and the yield curve steepened — all signs of the bond market pricing in inflation risks. As the low inflation pillar of year-to-date bond strength fades, it may be one more reason to be cautious in the bond market.

USA $17.1 Trillion | GER $3.8 Trillion

The U.S. economy is poised to outperform Germany in the years ahead thanks to better demographics, better productivity, and a more focused central bank. Today the U.S. economy is in far better shape than the German economy. Advantage U.S.A.

Current Conditions Index 6/18/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Bond Market Perspectives

We believe bank loans could be one of the more attractive fixed income asset classes based on our economic and market outlook for the second half of 2014 and believe recent negative headlines are misplaced. A still low interest rate environment, a growing economy, and strong demand for floating rate debt have all fueled growth in the bank loan market.

Emerging Opportunity

Emerging market stocks have now pulled ahead of the performance of the S&P 500 Index for 2014, which may finally mark the beginning of the turn for EM relative performance.

FOMC: Need to Know

We continue to expect the Fed to trim QE by $10 billion per month this year and to remain on pace to exit QE by the end of 2014. Our view remains that the current center of gravity at the FOMC will likely err on the side of keeping rates lower for longer. Markets should expect that the Fed will be content with keeping its fed funds rate target near zero until key labor market indicators make significant progress toward “normal.”

Current Conditions Index 6/11/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Portfolio Compass 6/11/14

A snapshot of LPL Financial Research’s views on equity & alternative asset classes, the equity sectors, and fixed income.

Central Bank World Cup

Strong economic data has weighed on bonds to start June but favorable yield differentials between Treasuries and European government bonds have helped limit the domestic bond weakness. Divergent central bank policies may still mean bonds yield to growth.

Who Are the Buyers and Sellers?

At the heart of it, all markets come down to buyers and sellers. Taking a look at who is buying and who is selling can tell us something about the durability of the market’s performance and what may lie ahead.

Modest-to-Moderate Economic Growth Continues

The latest edition of the Fed’s Beige Book indicates that the negative headwinds that have held the U.S. economy back over the past five years may be declining. The rebound in our Beige Book Barometer is consistent with the Fed’s view that the contraction in economic activity was mostly weather related. We continue to expect...

Current Conditions Index 6/4/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Irrepressible Bonds

Investor positioning and changed Federal Reserve expectations had a particularly beneficial impact on robust bond market performance in May. Unbalanced investor positioning may have run its course, and investor expectations about the Fed may be as good as it gets.

No Debate: Stock and Bond Markets Agree

No debate here: Over the past five years, modest declines in bond yields in the range of 0 – 50 basis points occurred along with modest gains of 0 – 10% for stocks.

Better Gauges of Global Growth Ahead

As markets brace for this week, we continue to expect that the U.S. and global economies may accelerate in 2014 relative to 2013’s growth rate. We continue to expect that the FOMC will taper QE by $10 billion per meeting, exit the program by the end of 2014, and begin to raise interest rates in late 2015. Our view remains that...

Portfolio Compass 5/28/14

A snapshot of LPL Financial Research’s views on equity & alternative asset classes, the equity sectors, and fixed income.

Current Conditions Index 5/28/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Oil, Oil Everywhere

Why — if the United States is producing more oil and consuming less than it was a decade ago — is the price of oil going up, and what does it mean for investors?

Capital Spending Check-up

We do not think the economic weakness in Q1 is the start of another recession, and, indeed, we continue to expect real GDP will expand 3.0% in all of 2014. We believe the conditions are in place for a pickup in business spending, and we expect the pace of business capital spending to accelerate over the next several years.

Municipals Bloom Amid Drought

Limited new issuance and Treasury market strength have powered municipal bonds to their best start since 2009. In conjunction with lower yields and higher valuations, near-term caution may be warranted as the first signs of selling pressure emerge and a challenging seasonal period looms. Absent a new bout of economic weakness, we see additional municipal price gains as limited.

Snapback

We do not think the first quarter GDP report will be a harbinger of a recession in the near future. We continue to believe the U.S. economy will accelerate in 2014 (relative to 2013), and that GDP will increase 3.0% for the year. The LEI indicates that the risk of recession in the next 12 months is negligible at 4%, but not zero.

Japan Going Godzilla

If Godzilla-sized quantitative easing aligns with a fading impact from recent tax hikes, increasing political support for corporate tax cuts, and a push by government pension funds into stocks, it may mean a blockbuster summer for Japanese stocks.

Investing Through Life’s Stages

Read this simple guide on how to get started in investing and how to reassess your investment strategies through multiple life changes.

Portfolio Compass 5/14/14

A snapshot of LPL Financial Research’s views on equity & alternative asset classes, the equity sectors, and fixed income.

Current Conditions Index 5/14/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Slim Pickings

Bond market strength in 2014 has led to more expensive valuations across the bond market, not just in Treasuries. Narrow yield spreads by themselves do not imply a pending market correction and spreads can stay narrow for a long time. However, after a strong start to 2014, lower yields in combination with narrower yield spreads illustrate the lack of opportunity in the bond market.

The Best Indicator May Be a Long Way From Signaling the Start of a Bear Market

The volatility we call “market storms” is likely to continue to be a characteristic of markets this year, caused by well-known factors, such as: geopolitical conflict in Russian border countries, slower economic growth in China, or a weak start to the year for the U.S. economy, among others, but also lesser-known factors like the Oklahoma earthquakes, solar flares disrupting communications, and the Ebola outbreak...

Dollar on the Verge?

While the dollar may gain ground in the coming months and quarters as the economy accelerates, we continue to believe the dollar will slowly depreciate over time — continuing the trend that has been in place since the early 1970s. The weaker dollar has, at the margin, made our exports more attractive, pushed up the costs of goods we import, and, most importantly...

Current Conditions Index 5/7/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

The New Conundrum

Several factors, led by short covering, pushed bond prices higher in the face of stronger economic data last week. Like the Greenspan conundrum of 2005, we expect an improving economy and the eventual onset of Fed rate hikes to gradually push bond yields higher.

Global Earnings Picture Reveals Dramatic Regional Differences

Earnings forecasts are being cut sharply overseas, raising the questions of how much of a value international developed market stocks are and whether they can outperform the U.S. market in 2014.

Central Bank Pulse

Key emerging market central banks have raised rates within the past year in an effort to combat inflation, the threat of inflation, or current account imbalances. Most developed market central banks are on hold or easing. The divergence among global central bank policies creates both risks and opportunities for global investors, and especially active managers who invest globally.

Portfolio Compass 4/30/14

A snapshot of LPL Financial Research’s views on equity & alternative asset classes, the equity sectors, and fixed income.

Current Conditions Index 4/30/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

One Year Later

The broad bond market has almost fully recouped the damage done from the 2013 selloff with some sectors having fully recovered. We do not expect a repeat of 2013, but the rebound in bond prices, higher valuations, and lower yields have created new challenges that may lead to lower returns.

Run for the Roses

The animal spirits of business leaders and investors may be re-emerging, resulting in more investment that may herald better growth.

Mid-Spring Surprise

Only eight times in over 14 years have the FOMC meeting, GDP report, ISM report, and the employment report — all often market-moving events — occurred in the same week. Historically, these weeks have exhibited 20% more volatility than an average week over this time span, as measured by the S&P 500 Index. This week is unlikely to be just another boring mid-spring week for financial market participants.​

Current Conditions Index 4/23/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

The Big Bang Theory: Inflating the Stock Market

It does not take a Ph.D. to see that we may be witnessing a big bang in inflation, but the early stages of accelerating inflation have been historically good for the economy and stock market.

Beige Book: Window on Main Street

Weather was again a key theme in the Beige Book with 103 mentions, down from 119 in March. However, the mentions in April were in a much less negative context than in March. The Affordable Care Act continues to be a key concern for Main Street.

Kids & Money: Nurturing Your Child’s Financial Growth

Most kids learn the basics of money and making change in elementary school, but probably won’t learn how to manage money unless they choose finance as a career path. That means it is up to all of us to see that our children reach adulthood prepared to face life’s fiscal challenges.

Portfolio Compass 4/16/14

A snapshot of LPL Financial Research’s views on equity & alternative asset classes, the equity sectors, and fixed income.

Current Conditions Index 4/16/14

Read real-time insight into the trends that shape LPL Financial Research’s recommended actions to manage portfolios, it has proven to be a useful investment decision-making tool.

Mixed Messages

The market-friendly overtures from the Fed may help keep bond yields in the current low range, but much of the good news from the Fed is already priced into the bond market. Investors may be more willing to downplay Fed news and refocus on economic data, which will ultimately drive the Fed’s decisions. Breaking out of the yield range now will likely depend on improving economic data over the next several weeks.

The Weakest Earnings Cycle in 55 Years

This has been the weakest earnings cycle in 55 years. Earnings growth needs to improve to support valuations and drive the stock market higher. Fortunately, growth may be set to improve in the coming quarters.​

Gauging Global Growth in 2014 & 2015

The stabilization in growth forecasts for both 2014 and 2015 is a sign that perhaps the market is more confident now that the global economy is in the middle innings of an expansion. While the forecasts for GDP growth for 2014 and 2015 have generally moved higher for developed economies over the past 18 months, growth estimates for emerging market economies have generally moved lower.

The Future According to the Bond Market

At any given time, current bond market pricing may provide a view of future economic growth, interest rates, inflation, and when the Federal Reserve (Fed) may raise interest rates, how fast, and by how much. The low level of longer-term bond yields, a flatter yield curve, and subdued inflation expectations all could signal a sluggish economic environment. Bond market indicators do not always come to fruition and taking a contrarian view from future indications may provide opportunities.

Current Conditions Index 4/9/14

The CCI is a weekly measure of the conditions that underpin our outlook for the markets and economy. It provides real-time insight into the trends that shape our recommended actions to manage portfolios and has proven to be a useful investment decision-making tool.

Jobs Looking for People Redux

The JOLTS data continue to tell a familiar story: the labor market is healing, but it still has a long way to go to get back to normal. Looking around the country at open jobs by industry, firm size, and pay, it seems like a good time to be a business and professional services worker in the South looking for work in a small-to-medium sized (50 to 249 employee) business.

Surprise: Cyclicals May Soon Come Back

The very tight relationship between economic surprises and the performance of cyclicals suggests cyclicals may soon make a comeback relative to more defensive sectors.

Current Conditions Index 4/2/14

The CCI is a weekly measure of the conditions that underpin our outlook for the markets and economy. It provides real-time insight into the trends that shape our recommended actions to manage portfolios and has proven to be a useful investment decision-making tool.

Portfolio Compass 4/2/14

A snapshot of LPL Financial Research’s views on equity & alternative asset classes, the equity sectors, and fixed income.

No Fooling, Good Quarter for Bonds

Bond prices rose across the board following a difficult 2013 and yields fell, with the 10-year Treasury yield closing the first quarter 0.3% lower. At a 1.8% quarterly return for the Barclays Aggregate Bond Index, the pace of bond performance is unsustainable, and we continue to suggest a defensive posture against rising interest rates in the bond market with an emphasis on more economically sensitive sectors.

Keeping Up With Your IRA: Tax Season Tips

If you’re one of the millions of Americans who owns either a traditional individual retirement account (IRA) or a Roth IRA, then the approach of tax season should serve as a reminder to review your retirement savings strategies and make any changes that will enhance your prospects for long-term financial security. It’s also a good time to open an IRA if you don’t already have one.

Maintain a Good Credit Rating

For better or for worse, the American way of financial life relies on debt as a way of solidifying a desired lifestyle. Therefore, it is important to establish a good credit history if you intend on making more substantial, debt-financed purchases in the future.

 
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