Monthly Commentary

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December 2012
  • Though equity markets have been calm, the real economy tells a different story.
  • If our leaders in Washington aren’t able to arrive at a compromise, January 1 will mark the beginning of the country’s first “scheduled recession”, though third quarter corporate earnings suggest a global slowdown is evident.
  • Don’t be surprised to see a Christmas rally should Congress kick the fiscal can down the road and the Fed extend Operation Twist.
November 2012
  • Third quarter earnings growth for S&P 500 companies is at risk of being negative for the first time in three years.
  • Though some risk assets softened in October, all are solidly positive year to date.
  • Monetary stimulus has stabilized markets, aided housing and the consumer, but alone it is inadequate; pro-growth taxation, spending and regulatory policy is necessary.
  • While the presidential election is important, Congress will ultimately control spending and tax legislation.
October 2012

Tectonic shifts in energy — led by new technologies to tap into natural gas stores deep under the surface of the earth — are expected to lead the United States to energy independence by 2020. Many investors have failed to recognize fully the profound impact the energy revolution — along with other tectonic shifts — is having on market fundamentals and asset prices. This report focuses on the impact energy has had on the private economy this year and our expectations for its long-term influence.

October 2012

Over the past year, markets defied a steady diet of financial Armageddon news to deliver healthy returns, but today risks such as softness in U.S. manufacturing, counterbalanced by aggressive monetary stimulus, compete for attention as investors attempt to distinguish between prudent risk con¬trol and outright risk avoidance.

September 2012

Global risks make headlines, but fundamentals and tectonic shifts such as global trade are the pillars of economic growth that support market resilience and — so far — a tireless bull market.

August 2012

How many asset classes are negative for the year through July? Would it surprise you to learn that all ten of the leading asset classes were positive for the year? The equity market is having its best start since 2003 and its second best since 1998-with fixed income having one of its best years ever.

This performance in the face of widespread negative perceptions demonstrates the importance of the market signals ING Chief Market Strategist Doug Coté has been stressing all along. In this month's ING Global Perspectives commentary, Market Climbs the Wall of Worry to Watch July Fireworks , he takes a closer look at "the risk gap," the inordinate fear of any risky asset class that can cause sidelined investors to miss out on the returns generated by the ABCDs of fundamentals:

  • Advancing Corporate Profits - Q2 earnings growth has once again confounded Wall Street, up for the 12th consecutive quarter.
  • Broadening Manufacturing - Two monthly dips after 34 straight months of expansion is a signal we're watching closely for future trends.
  • Consumer Strength Underestimated - Personal income rose in July, the savings rate increased to 4.4%, and housing prices increased for the second consecutive month.
  • Developing Economies are Driving Global Growth - In 2001 less than half the global economic growth came from "developing countries" like China; today it's nearly 80%.
July 2012

Although the second quarter ended in the red, June showed that being in the equity markets matters and that a broad, globally diversified portfolio can build wealth with relatively safe returns.

In this month’s ING Global Perspectives commentary, ING Chief Market Strategist Doug Cote discusses the “Risk Gap” which is what investors don’t own leading to upside risk – forfeiting exceptional returns when mired in “safe” assets. As always, investors should continue to focus on the ABCDs of fundamentals:

  • Advancing Corporate Profits - Profits for Q1 2012 increased 6% over Q1 2011.
  • Broadening Manufacturing - The U.S. ISM manufacturing index slipped to 49.7% in June, the first slip into contraction territory in 35 months.
  • Consumer Strength Underestimated - Consumers took a slight breather as a 2.2% decrease in gasoline purchases pulled May retail sales down.
  • Developing Economies are Driving Global Growth - The 2012 A.T. Kearney Global Retail Development Index ranks four Latin American counties in the top 10 for global retail expansion opportunities.

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June 2012

In this month’s commentary, ING Chief Market Strategist Doug Coté stresses the key factors investors should know to ride out this temporary market volatility.

  • For the third straight year, a Euro-crisis hit markets in May, causing uncertainty and doubt to overshadow fundamentals
  • What’s needed today is a disciplined plan that protects portfolios from losses but does not overreact and send investors prematurely to the exits
  • Earnings growth, a dependable fundamental signal for both buying and selling, remains positive — the U.S. is slowly but surely moving forward
  • Ample rewards await those who maintain a diversified global portfolio and stay focused on long-term goals

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May 2012

The bears grew hopeful early in the month, as global markets were spooked by events in the euro zone: Spain briefly brought back fears of bailout Armageddon, the Dutch government collapsed, and PMI numbers for the region came in weaker than expected. April Fools! The bull market remains intact and offers compelling value for those looking to build wealth.

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April 2012

We just wrapped up the best first quarter since 1998, volatility has dropped to almost boring levels, fundamentals are relentlessly marching forward and global risks appear to have returned to a more normal state.

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