Is Low Unemployment Good For the Stock Market?

When the unemployment rate is very low, it is often due to the economy doing very well. In fact, very low unemployment often translates to already high stock prices and for investors buying at that particular stage in the cycle is often detrimental to their portfolio returns. What we know about the stock market is prices are dependent on the business fundamentals, meaning what the business has done since its inception in addition to the future opportunities and future profits. As North American investors ...

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Public Perception Fuels Economic Trends

Economic analysts use a number of metrics to determine the health of financial markets. Depending upon the area investigated, the data includes spending trends, outstanding debt, import/export balance and a host of variables specific to various economic sectors. While each of the measurements furnishes insight into financial health, consumer confidence is one of the most accessible indicators, providing a broad understanding of public perception. The way people feel about money and their financial ...

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The Shift to Late Expansion Sectors

Written by Donald Dony, author of the www.technicalspeculator.com. As a new bull market progresses, there is a normal sequence of economic development. This progression favours certain industry groups at different times. In the late contraction stage of the economy, the financial and consumer discretionaries sectors are favoured. These two groups are usually the leaders. As the economy begins to expand and recover, the technology, services and construction sectors show greater performance. In the ...

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Is the Stock Market in a Bubble?

Written by Ben Carlson Investors seem to carry emotional scars from the dotcom bubble in 2000, and the debt bubble of the 2008 to 2009 Financial Crisis. Both bubbles caused massive losses for investors. Hindsight bias causes us to look at past events and assume they were much more predictable than they actually were at the time.  It’s the “I-knew-it-all-along phenomenon.” Since those crashes are so fresh in our memories, we are now subject to knee jerk reactions. Any time an investment rises ...

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