Market Review and Outlook 2nd Quarter 2008
The painful unwinding of the Great American Credit Binge is entering its second year. The stock market decline reached bear territory late in the second quarter, with financial services companies under the most pressure. Bond prices declined modestly since March, as yields pressed higher when investors realized that the Federal Reserve could not push short rates lower without further weakening the U.S. Dollar and adding fuel to inflation. This was a replay of last year, where part of the gains of the first quarter was given back in the second quarter.