Whether or not the Fed will start tapering the pace of its asset purchases seems to be the big question hanging over the market. This week stocks moved modestly higher as the negative implications of a disappointing employment report were outweighed by heightened expectations of economic recovery. On the plus side, key manufacturing and services […]
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The Growing Wage Gap
In June, median annual household income rose to $52,100 from its recent inflation-adjusted trough of $50,700 in August 2011. Despite this improvement, it is still $2,400 lower – a 4.4% drop – than in June 2009, when the last recession ended. This has important implications for investors, given that consumer spending represents about 70% of […]
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The Importance of Management
On Friday morning, Microsoft announced that long-time CEO Steve Ballmer would retire within the next 12 months. The shares surged following the announcement—rising more than $20 billion in total market value at the market’s open. The positive reaction indicates investors believe the prospect of a change in leadership at Microsoft will help unlock value. When […]
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Fed Watch: Jobs Report Sends Mixed Signals
Friday’s jobs report indicated the unemployment rate dropped from7.6% to 7.4%, beating expectations of a 7.5% rate. Surprisingly, the labor participation rate – or the proportion of the population either actively employed or looking for a job – fell during that same period. Further contradicting this decline in the unemployment rate was the Labor Department’s […]
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Recognizing the Value of Intangible Assets
When second-quarter GDP figures are released on July 31, the U.S. Bureau of Economic Analysis will be rewriting economic history. For the first time, research and development costs will be categorized on the government’s books as an investment. Since the government began recording GDP in 1929, R&D has been treated as an expense. In addition, […]