“decision making – the thought process of selecting a logical choice from the available options.”
Please read on,
Just in case you know someone that makes investment related decisions by throwing a dart, I’m here to remind you that we don’t. Great thought goes into each recommendation after analysis of a vast amount of data. Here are a few of the things we are focused on now:
BAA Spreads – The yield on corporate bonds above the rate on comparable maturity Treasury debt is a market-based estimate of the amount of fear in the bond market. BAA-rated bonds are the lowest quality bonds still considered investment-grade, rather than high-yield. Therefore, they best reflect the stresses across the quality spectrum. A rise in BAA spreads is interpreted as a negative.
Business Lending – A good gauge of business’ willingness to borrow to fund growth, the Federal Reserve tabulates demand for commercial and industrial loans at U.S. commercial banks. More borrowing reflects increasing optimism by business leaders in the strength of demand. A rise in loan growth is interpreted as a positive.
Shipping Traffic – A measure of trade, the Association of American Railroads tracks the number of carloads of cargo that moves by rail in the United States each week. A growing economy has more cargo. A rise in railroad traffic is interpreted as a positive.
VIX Index – The VIX is a measure of volatility implied in the prices of options contracts for the S&P 500. It is a market-based estimate of future volatility. While this is not necessarily predictive, it does measure the current degree of fear present in the stock market. A rise in the VIX is interpreted as a negative.
Retail Sales – The International Council of Shopping Centers tabulates data on major retailers’ sales compared to the same week a year earlier. This measures the current pace of consumer spending. Consumer spending makes up two-thirds of gross domestic product (GDP). Rising retail sales is interpreted as a positive.
Until next week,
Susan R. Linkous
The opinions expressed above are just that, opinions. Always seek advice before investing. All of the performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The market value of corporate bonds will fluctuate and, if sold prior to maturity, yield may differ. Moody’s BAA rating: obligations are judged to be medium-grade and subject to moderate credit risk and certain speculative characteristics.
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