Inflation dropped quite dramatically. That is generally supportive of economic growth, provided it doesn’t trigger fears of deflation. Further, I can’t tell if my fair market value estimate was flawed last week, or whether some impressive earnings were reported, but the value (range) calculation jumped higher. That means the market looks less overvalued and (a little) less risky.

Besides that good news, the stock performance was certainly not generalized, with some individual stocks (I’m looking at BB, among others) having a dismal week. Still, stocks in general continue to outpace bonds. Looking at specific asset classes, US small caps (IWM) maintain their advantage, despite a slightly negative week. European stocks (XIN) are a close second.


Market Outlook February 25, 2013

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