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The Great Rotation: A Flight to Equities in 2013

(Reuters) – One of the big investment shifts of our day may be at hand – regardless of how global markets actually perform this year. What’s already known as the “The Great Rotation” – a tilting of pension and insurance funds’ strategic, long-term asset preference back toward equity from extreme positioning in bonds – has…

Markets’ New-Year Euphoria Looks Overdone

The new-year euphoria in financial markets looks overdone. The S&P 500 is up 5 percent, investors are throwing record sums into equities and Treasuries are flirting with 2 percent yields. But fiscal cliff diving can still hurt the economy and at least one incentive to put money to work may wear off.

There are reasons for optimism. Two-thirds of the S&P 500 companies that have reported quarterly earnings have beaten profit estimates, according to Thomson Reuters I/B/E/S. That, and Congress’s decision to make many Bush-era tax cuts permanent, has helped embolden retail investors, who poured a record $55 billion into equity mutual and exchanged-traded funds this month.

The last time such inflows reached an all-time high, though, was in February 2000 after the economy had grown at a 7 percent clip. That’s hardly the case today. BNP Paribas reckons the economy grew just 1.3 percent in the fourth quarter and will expand a mere 1.0 percent in the first three months of this year.…s_overdone.html

Conservative Think Tank: The middle class has never had it so good

Mark Twain once said that there are three types of lies: “Lies, damn lies and statistics.” On Tuesday, economists Mark Perry and Donald Boudreaux offered an interesting illustration of Twain’s oft-quoted line when they refuted the argument, expressed by many top economists and analysts, that the middle class is in decline. Calling the claim a…