Waddell & Reed

Market Perspectives

After a strong start to the year, equity markets have experienced a bit of a turn in momentum recently. The question heard most often now is: Has the U.S. economy entered a self-sustaining recovery, which would support an ongoing equity market rise?
High tensions in the Middle East continue to influence not only oil futures, but all aspects of the financial markets. “Iran, Israel and nuclear volatility” takes a look at the issue and explains why the probability of an attack in the near term is low.
Investors who have flocked to the safety of highly-rated bonds may benefit from knowing the lessons of the past.
Markets again face volatility and uncertainty in 2012, and we expect slow global economic growth to continue early in the year. But we think government policies and declines in commodity prices may allow growth to improve in the second half. Ivy Funds Global Economist Derek Hamilton explains.
The Federal Reserve opens 2012 with a new slate of policy voters and a promise to reveal more details about interest rate expectations. “Federal Reserve outlook: Will 2012 be the ‘year of the dove,’” looks at what’s on tap from the central bank.
Despite some pundit forecasts of a collapse, the municipal bond market did not crumble in 2011. “Muni bond market looks to 2012 after predictions of 2011 collapse prove greatly exaggerated,” examines what the pundits got wrong and looks at factors contributing to how the market might fare in 2012
Price movements in global markets have caused some to suggest that stocks are more volatile than at any point in recent decades. While stocks can be volatile, especially in response to major events, historical market data show that prices typically have returned to less volatile patterns over time.
European officials and the world’s monetary authorities are working to contain the expanding debt crisis. “European crisis: Pressure mounts as new leaders emerge,” examines some of the recent events and includes a schedule of key dates through the end of the year.
In the current bond market there is a lot to digest with events unfolding both in the U.S. and abroad as nation’s work to control their debt. What should an investor do?
Corporate profitability is high and balance sheets are strong. Many companies in the U.S. and overseas are using their cash for dividend payments, providing income to investors during this time of low interest rates.

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