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Quarter-End Insights

Our Outlook for the Market

As we roll with the market's historic changes, we still lean bullish.

The market continued to weaken along with the economy in the third quarter. It hasn't been a dramatic decline, on average, but the world has changed. We have been through a historic period in financial markets. The short-run fluctuations have been severe, and the economic and political forces shaping corporate performance have been meaningful and exciting--sometimes, a little too exciting. The overall economy has continued to weaken, with implications for current and near-term results at many of the companies we follow. The evolving regulatory environment holds significant implications for investors as well as taxpayers.

We've been thinking hard about the implications of the changes, particularly in our financial services sector coverage. But the basic theme coming out of our fundamental research hasn't changed that much. Taking our individual calls together, the market has looked cheap all year. We think it still looks cheap.