Size seems to matter in some aspects of life, and it certainly does in the financial markets. Super-size August movements in global stocks are but one sign that something may be amiss in the global economy itself – China notwithstanding. There’s the timing and the eventual “size” of the Fed’s “tightening” cycle that I have long advocated but which now seems to be destined to be labeled “too little, too late.”
Retailers felt the benefit of further loosening of consumers’ purse strings in May as 11 of 13 major categories registered advancing sales. Only healthcare and personal care spending experienced a setback following two consecutive monthly advances, while spending on goods in the miscellaneous category was unchanged.
With only a few stragglers still left to report, the Q1 earnings season is essentially over, and despite initial fears of an outright decline in earnings, the companies in the S&P 500 managed to squeak out a small gain in income.
Last July, when Federal Reserve Chair Janet Yellen spurred a sell-off in healthcare stocks by saying that valuations in shares of biotech companies looked "stretched," portfolio manager Graham Tanaka saw an opportunity.
Following a weak first quarter dogged by a west coast port strike and a severe winter, the economy appears to be improving. On the one hand the latest report offered a substantial negative revision to March payrolls, on the other it was the only month this year to deliver a sub-200,000 payroll reading