Despite its flaws--which prompted enough miniature selloffs to keep investors on their toes--the global economy has continued to make progress, even in politically troubled areas like Europe, where austerity is being reconsidered. In May's Market Roundup, our capital market strategists John Manley, Dr. Brian Jacobsen, and James Kochan provide their insights into what's been driving the markets and how it may impact your portfolio based on economic and market events.
How can equities be hitting new highs when there are so many problems out there?" is probably the most common question we are asked. We think the answer is pretty simple: It doesn't take perfection to move the markets, only progress. And though it's slow, we do have progress in the global economy. Italy was able to cobble together a coalition government, the U.S. was able to post a 2.5% first-quarter gross domestic product (GDP) growth rate, corporate earnings were able to continue growing, and even the labor market continued to add jobs instead of subtract them. This is all progress. No, it's not perfect, but you can't expect perfection.Continue reading.