From the August 2006 issue of Investment Advisor • Subscribe!

Behind the Numbers, with Stuart Schweitzer

"Global equity markets failed to build on a strong finish to the first half [of the year] amid concerns of rising labor costs, corporate profits and record oil prices," noted JP Morgan Asset Management's Global Markets Strategist in an economic and market rundown report written with colleague Ehiwario O. Efeyeni and released in mid-July. "Trying to anticipate the final rate hike by the Fed has become the market's favorite pastime over the last several months. This fixation has recently caused markets to react positively to signs of slowing growth on the grounds that it weakens the case for further tightening. We believe that the economy is finally starting to slow, but the evidence is not yet conclusive....It will be difficult, amid rising core inflation, for the Fed to stop tightening until there is clear evidence of a broader economic slowing than is yet apparent. While we do not at this stage envision a bear market, we do expect the market to stay volatile through the summer."--Robert F. Keane
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