Although stock earnings for the first quarter are down, investors reaching for higher yields may be taking a bigger risk than they anticipate. Liz Ann Sonders and her team at Schwab explain why they advocate a neutral position on stocks. While analysts may not be bullish on equities, they are very positive about labor conditions. Jeffrey Gundlach of DoubleLine Capital discusses how the currently low unemployment numbers may affect the overall economy. At this point, forecasts for the second quarter have reason to be optimistic. The chief economist at Invesco, John Greenwood, shares his views on the economic recovery and why he thinks bank credit is a key indicator to watch.

Schwab Prospective: The Soft And Frustrating Middle–  The environment for stocks appears more positive than negative as modest economic growth, low inflation, and a dovish Federal Reserve have tended to be positive for stocks historically. One of the big flies in the ointment, however, is the earnings picture. First quarter earnings are projected by Thompson Reuters to be down about 8% year-over-year—not a great backdrop for stocks.  So what does this all mean for investors?   Liz Ann Sonders and her team at Schwab continue to have a neutral view on stocks, which means investors should remain at their long-term strategic allocation to stocks, being mindful of not stretching for greater yields or faster price appreciation at the cost of greater risk. Read more…

Gundlach’s Market Outlook–  One area that has been bullish for the U.S. economy has been labor conditions. The leading economic indicators from the U.S. Conference Board have been weak, but don’t indicate a recession.  Jeffrey Gundlach, founder and chief investment officer at DoubleLine Capital, discusses the economic outlook . Read more…

Invesco’s Quarterly Economic Outlook For Second Quarter 2016–  The recovery in the US, already nearly seven years old, will not die of old age says John Greenwood, chief economist at Invesco. Unless credit is tightened unexpectedly and the yield curve becomes inverted, business investment and consumer spending will continue to regain momentum. Read more…

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John R. Day, Bill Ennis, Stephanie Davidson and Matt Heller

Disclosure – The articles mentioned in Mid Week with Day & Ennis are for information and educational purposes only. They represent a sample of the numerous articles that the firm reads each week to stay current on financial and economic topics. The articles are linked to websites separate from the Day & Ennis website. The opinions expressed in these articles are the opinions of the author and not Day & Ennis. This is not an offer to buy or sell any security. Day & Ennis is under no obligation to update any of the information in these articles. We cannot attest to the accuracy of the data in the articles.