Senate Finance Mulls Charitable Giving Reform

As the Senate Finance Committee works toward reforming the U.S. tax system, the committee’s majority and minority staff last week issued a paper laying out challenges and goals for members as they review tax rules for exempt organizations and charitable contributions.

The paper, ninth in a series by the committee staff compiling tax reform options, lists several potential goals it says could serve the committee members as guidelines for their review:

The paper counts about 1.5 million tax-exempt organizations with $2.7 trillion in assets and 29 different types of tax-exempt organizations. It describes some specific concerns related to the tax rules associated with these groups.

The charitable deduction, available to only the roughly one-third of taxpayers who itemize, raises concerns about its fairness. The paper says the Finance Committee will question whether giving incentives should be the same for all taxpayers.

The paper looks at how changing the deduction might affect giving. It notes, for example, suggestions that governmental gift matching programs might increase giving, but also arguments that these don’t work well in practice. It says other research suggests that cutting the deduction absent other reforms would reduce giving.

Some tax-exempt organizations are allowed to engage in political activities, a touchy topic on Capitol these days in the wake of the IRS’s targeting certain conservative nonprofits for special scrutiny. The committee paper presents arguments for and against tighter and looser restrictions on political activities.

Related to this is the concern about organizations granted tax-exempt status that do not provide a benefit to the public, particularly underserved populations. The paper notes that some tax-exempt organizations appear to benefit private interests in the same way for-profit entities do.

Another area of concern is commercial activity engaged in by certain tax-exempt organizations. The paper says some think this activity results in unfair competition with for-profit businesses and erosion of the corporate tax base, or that managers may devote too little time to the tax-exempt purpose of the organization.

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Check out What Really Drives Giving? (It’s Not Tax Breaks) on AdvisorOne.

Fed’s Fisher Tempers ‘Taper Tantrum’ Talk

I meant to do that.

That appears to be the attitude of the Fed when contemplating the taper tantrum in the wake of Chairman Ben Bernanke’s awkward comments on June 19 announcing the beginning of the end for the central bank’s quantitative easing.

Richard Fisher, president of the Dallas Federal Reserve, employed his usual folksy metaphors to describe investor behavior immediately following the announcement, claiming it was fully anticipated all along.

Calling investors “feral hogs” and the markets “manic depressive,” Fisher, an outspoken critic of QE and subsequent iterations, said “he doesn’t want to go from Wild Turkey to cold turkey overnight,” an apparent reference to the measured process planned for the unwinding.

The comments, made in an interview Monday with the Financial Times, appear to be part of an effort in the past week to calm markets, which fell significantly in the wake of Bernanke’s comments. Fisher said that although QE will begin to wind down, other forms of Fed stimulus will continue.

It “made sense to socialize the idea that quantitative easing is not a one-way street”, he said, according to FT, and emphasized any such move would be done cautiously.

Fisher, a nonvoting member of the Federal Open Market Committee, said pushback to ending the program would be felt, although he did not mention from whom.

He likened the market reaction to Bernanke’s signal that the bank could begin reducing its monthly bond purchases before the end of this year to the 1992 attack led by investor George Soros on the Bank of England.

“Markets tend to test things,” Fisher told the FT. “We haven’t forgotten what happened to the Bank of England [on Black Wednesday]. I don’t think anyone can break the Fed …But I do believe that big money does organize itself somewhat like feral hogs. If they detect a weakness or a bad scent, they’ll go after it.”

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Check out Taper Tantrum: Markets Recoil, Advisors Scramble on Fed News on AdvisorOne.

Want to Sell Your Practice With No Transaction Fee?

As a recruiter helping advisors with career transitions, Phillip Flakes noticed that a lot of his clients were saying their next move would be their exit from the industry. The savvy entrepreneur didn’t simply move on to more active prospects but realized there was a business opportunity in helping advisors in their final career transition.

The result is Succession Link, a new online marketplace for advisory practice mergers and acquisitions, which went live in May. While there are plenty of such businesses, Flakes’ offering may be a unique value-add coming from a recruiter (his StarPoint Consulting Group has been arranging advisor/broker-dealer marriages for four years now.)

But it may be unique in another way as well. Succession Link charges no transaction fees to advisors selling their practices. Its business model is based on subscription fees to buyers looking for acquisitions on the site.

“Other competitors do charge transaction fees,” Flakes told ThinkAdvisor in a phone interview. “Others will help the buying advisor find a practice. We will certainly help as well, but we want to start with the selling advisor first.”

The free listing has so far attracted 44 advisors to list their practice since the site’s May launch (41 are listed currently), a majority of which are sole practitioners along with a few two-to-three advisor shops and some larger teams.

“We’re hoping that advisors at least stop in, test the waters, and see what the market will bear," Flakes said.

While Flakes helped to seed the site with practices from among the 60 advisor groups that StarPoint has helped to transition, he sees a broader marketplace beyond these prior relationships in building Succession Link.

“67,000 advisors are 55 and older and … what that says to me there is certainly a huge opportunity,” he says. “And very few have a formal succession plan in place.”

Besides the wasted opportunity of a business going to its grave without giving its still-vital organs a chance for new life, Flakes argues that aging advisors must confront a basic ethical question about what is in their clients’ best interests.

“What if the client were asking the question: Do you have a succession plan? And for advisors who do not, what would your response be?” Flakes asks.

“Financial advisors have to remember there are clients attached to the assets they manage," he says. "If you’re trying to hold on as long as you can and not bring in a junior advisor, you have to question what that says to the client in the end.”

For those advisors who have dipped their feet in succession, some hold out in another way—refusing to sell unless they get the multiple they want on their practice. But that is their prerogative.

Flakes (left) says selling advisors can list their own asking price, state their preferred multiple — say two or three times revenue — or list no asking price whatsoever. Some may stick to their price and others may lose resolve or be attracted to a deal in hand.

“We do get our handful of advisors that say 'if I don’t get the multiple I want on the practice, I’ll just keep working,'” he says.

Asked what current valuations look like, Flakes responds that there are “rules of thumb, which I don’t love” that advisors can get the equivalent to its nonrecurring revenue and two times recurring revenue.

But he insists there are qualitative factors beyond those formulas in valuing a book of business.

“We can do a long-winded valuation, and we also have a short list of companies that specialize in doing valuations” — or the advisor can get his own appraiser,” Flakes says.

He believes the free valuation offered for listing on the platform could probably get within a percentage of a professional valuation, but emphasizes that a third-party appraisal was important for the advisor’s peace of mind.

“We don’t want advisors to think we’re conflicted,” he says.

Aggregating assets of the practices currently on offer on Succession Link (as opposed to a practice-by-practice survey), Flakes asys 62% of assets are commission-based and 38% fee-based.

He says that even a 100% commission-based business — he has one such practice with $35 million in assets currently listed — can represent an attractive acquisition.

“As a buying advisor, that represents a lot of opportunity to move that business toward a fee-based model,” Flakes says. “It will be lower valuation on the practice and a bigger opportunity if the new buying advisor can help restructure.”

The Succession Link co-founder (together with partner Nicholas Gudz) says that broker-dealers typically help a buying advisor finance the transaction, but in a case where the broker-dealer does not provide that service, or for many RIAs lacking that access, help is available.

Succession Link has just announced a strategic alliance with PPCLoan to provide streamlined financing for advisory practice acquisitions.

“We do not provide the financing … but we wanted to go out and find solutions for advisors,” he says.

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Check out Is Your Practice Big Enough? on ThinkAdvisor.

New Hire Roundup: Goldman, Nelson Move Up at NFP; New Vice Chair at FASB

This week in new hires, Michael Goldman became chief operating officer and Carl Nelson head of mergers and acquisitions at NFP; Jay Sommariva went to Fort Pitt Capital Group; James Kroeker was named vice chairman of the FASB; and John Taft of RBC Wealth Management became a LinkedIn Influencer.

Also, Thomas Johnson and Sheri Rhyan joined the Minneapolis office of JHS Capital; Mirae Asset Global Investments welcomed John Whitaker and promoted John Capeci to its sales team; and the MSRB announced new board officers and members for FY 2014.

NFP Names Goldman COO; Nelson Appointed Head of M&A

National Financial Partners Corp. announced Monday that Michael Goldman was appointed chief operating officer effective July 1, and that Carl Nelson, senior vice president of mergers and acquisitions (M&A), has been named head of M&A. As COO, Goldman will report directly to Douglas Hammond, chief executive officer, and will oversee capital deployment initiatives, including strategic acquisitions and management contract buyouts. He will also focus on operational initiatives that advance strategy and enhance the ability to serve clients.

Goldman, who most recently served as executive vice president of M&A, was named SVP of M&A in 2005 and EVP of NFP in 2008. Previously, he served as SVP and associate general counsel for the company. He began his career as an associate in the M&A department of the law firm Skadden, Arps, Slate, Meagher & Flom LLP.

Nelson joined in 2001. Prior to joining, he guided M&A efforts at Ernst & Young LLP and Pricewaterhouse Coopers LLP.

Fort Pitt Capital Group Welcomes Jay Sommariva

Fort Pitt Capital Group announced Tuesday the addition of Jay Sommariva to direct the firm’s fixed income team. As vice president and senior fixed income portfolio manager, Sommariva will be responsible for analyzing and allocating the company’s fixed income portfolios.

Prior to joining, Sommariva served as vice president and senior portfolio manager at BNY Mellon in Pittsburgh. He also held posts at Northern Trust and Mellon Financial Corporation, totaling 20 years of experience in the industry.

James Kroeker Named Vice Chair of Financial Accounting Standards Board

The board of trustees of the Financial Accounting Foundation (FAF), which oversees the Financial Accounting Standards Board (FASB) and its sister organization, the Governmental Accounting Standards Board (GASB), has announced that James Kroeker, former chief accountant for the SEC, has been appointed a member and vice chairman of the FASB. His term will begin September 1 and conclude on June 30, 2018, when he will be eligible for appointment to an additional term of five years. He fills a vacancy created by the retirement on June 30 of Leslie Seidman, former FASB chairman. The position of vice chairman was created early in the FASB’s history, but was later retired. In response to increasing demands on the time of the FASB chairman, the FAF trustees decided to reinstate the position.

Kroeker was the SEC’s chief accountant from 2009 to 2012, following two years of service as deputy chief accountant. Prior to that, he was a partner in the national office accounting services group of Deloitte & Touche, LLP, based in Wilton, Conn. Between 1999 and 2001, he was a practice fellow at the FASB, leading the project that resulted in a new standard for accounting for stock compensation. Earlier in his career, he worked at Deloitte offices in Wiltona nd Omaha, Neb. Most recently, he was a deputy managing partner in the professional practice group in Deloitte’s office in Washington,D.C.

John Taft Becomes LinkedIn Influencer

RBC Wealth Management-U.S CEO John Taft has premiered as a LinkedIn Influencer on the popular social networking website. Influencers are a group of approximately 250 professionals who regularly share insights with more than 225 million LinkedIn members. As an Influencer, he will be contributing original content on a variety of topics from financial and economic concerns to leadership and stewardship.

Taft established a voice in the industry with the 2012 publication of his book Stewardship: Lessons Learned from the Lost Culture of Wall Street, which looks at the 2008 financial crisis and relays his conviction that service and stewardship can be an answer to minimizing future financial crises and societal problems.

JHS Capital Adds Johnson, Rhyan in Minneapolis Office

JHS Capital Advisors announced that it has appointed Thomas Johnson, a 34-year veteran of the financial services industry, as a vice president of investments, financial advisor, and Sheri Rhyan as a registered client associate, both based in its Minneapolis office.

Johnson works with high-net-worth clients, including families, business owners and retirees, to create personalized strategies for accumulating, protecting and transferring wealth. Prior to joining, he spent six years at RBC Wealth Management, and also worked for Piper Jaffray’s asset management business for 28 years.

Rhyan served as a registered associate at Benjamin F. Edwards & Co. and a compliance specialist at Focus Financial, Inc. prior to joining. She also helped open the first Raymond James & Associates office inMinneapolisin 2006, and spent nine years at Piper Jaffray.

Mirae Asset Global Adds Whitaker, Advances Capeci to Sales Team

Mirae Asset Global Investments (USA) LLC announced Tuesday that John Whitaker has joined the firm's sales team. He has been appointed regional vice president, emerging market specialist, and will cover wholesaling efforts inOhioandMichigan. In addition, John Capeci has been promoted to head of national accounts. Both report to Robert Mulligan, head of sales and distribution.

Whitaker joins from the Bank of New York Mellon Asset Management/Dreyfus, where he served as senior regional consultant, mutual fund sales, based inNew York. Prior to that, he was a financial advisor at UBS PaineWebber, then a business banker at Key Bank, both in Cleveland, Ohio.

Capeci was formerly SVP, strategic relationship manager.

MSRB Announces New Officers, Board Members for FY 2014

The Municipal Securities Rulemaking Board (MSRB) has announced new officers and members of its board of directors, who will begin their terms on October 1, 2013. Daniel Heimowitz, managing director at RBC Capital Markets, will serve as chair; Joseph Geraci, managing director and co-head of municipal markets at Citi, will serve as vice chair. Officer terms are for one year.

The new board members represent the public as well as entities regulated by the MSRB. New public representatives are Robert Cochran, co-managing director and chairman of the board at Build America Mutual Assurance Company; Lakshmi Kommi, director of debt management for the city of San Diego, Calif.; Christopher Ryon, managing director at Thornburg Investment Management; and Colleen Woodell, former chief credit officer of global corporate and government ratings for Standard & Poor’s.

Joining as securities firm representatives are James McKinney, senior advisor at William Blair & Company, and Brian Wynne, co-head of public finance and head of the municipal syndicate desk at Morgan Stanley. Nathaniel Singer, managing director at Swap Financial Group, joins as a municipal advisor representative.

Heimowitz was a managing director in Lehman Brother's public finance group. He joined Lehman Brothers after a 19-year career with Moody's Investors Services.

Geraci was formerly co-head of Citi’s municipal financial products group.

Cochran was formerly CEO and chairman of the board of directors at Financial Security Assurance.

Kommi has over 19 years of experience in municipal finance in an issuer capacity, has worked for the city of San Diego since 1994 and has held positions as a supervising economist and deputy director of San Diego’s financing services division.

McKinneyhas worked for William Blair & Company since 1974, and has 42 years of experience in the development and marketing of fixed-income securities.

Ryon was formerly head of Vanguard’s long municipal bond group. He also held positions with the accounting firms Laventhol & Horwath and Ernst & Whinney.

Singer was formerly senior managing director and COO for Bear Stearns & Co. Inc.’s municipal bond department.

Woodell was chief quality officer and team leader for U.S. Public Finance at Standard & Poor’s, and has also worked for First Albany Corporation, Fitch Investors Service and Moody’s Investors Services.

Wynne, with Morgan Stanley for over 24 years, previously served as a municipal underwriter at Alex Brown & Sons. He began his career at Salomon Brothers in syndicate operations and municipal underwriting.

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Check out last week's New Hire Roundup: INTECH Names Leonardi Head of Consultant Relations at ThinkAdvisor.

Best Insurance Stocks For 2014

But nothing has changed and one sided contracts favouring the companies, banks  and other entities  to the detriment of the individual consumer, continue. The regulations are all focused on the sales end, that too in some specific financial service areas Mutual Fund & Insurance being the prime areas, where the companies and their  intermediaries have been put through the wringer. Should customer protection not apply equally in all areas for consumers? Well, it should. But, other areas have been just been left to operate as they have always been. Let us take a few examples.

Banks routinely abuse their trust with their customers.  They are privy to customer information and their balances. They should not be hence allowed to use this privileged information to sell products to customers. Their business is banking and there it should rest. Distribution of products should be by another distinct entity and banks should not be allowed to share privileged information of their customers with this other, sister entity.  Today, we use the specious logic that banks are allowed to distribute products, as they have wide presence and hence can help in reaching these products widely. The question that is not asked here is Is it really good for investors? Is penetration of financial products more important than ensuring consumer is not abused? Are we not supporting abusive businesses, to the detriment of consumers?

Best Insurance Stocks For 2014: Macro Enterprises Inc (MCR.V)

Macro Enterprises Inc., through its subsidiaries, provides pipeline and facility construction, and maintenance services to the oil and gas companies in northeastern British Columbia and northwestern Alberta. It is involved in the construction, alteration, repair, and installation of pipeline and facility pressure piping and structural steel. The company offers facility and compression construction services, which comprise fabrication, piping modifications, station yard underground piping recoat programs, and meter station maintenance for measurement. It also offers pipeline systems services, including inline inspection support, pipe and pipeline valve replacement, installation of reinforcement sleeves, hot taps, surface and sub-surface looping, pigging crews, and valve services, as well as corrosion anomaly repairs, such as excavation, inspection, sandblasting, and re-coating by hand and spray applications. In addition, the company provides water courses, slope instability remediation, surface and sub-surface drainage installation, general right-of-way repair, and second calls handling services; and pressure testing and pigging services. Further, the company is involved in constructing, installing, maintaining, testing, and repairing pipelines and facilities in the oil and gas industry in western Canada. Macro Enterprises Inc. was founded in 1994 and is headquartered in Fort St John, Canada.

Best Insurance Stocks For 2014: Comfortdelgro Corporation Ltd (C52.SI)

ComfortDelGro Corporation Limited, an investment holding company, operates as a land transport company. It provides public bus and charter bus services; rail services; motor vehicle evaluation and other related services; public taxi services through the rental of taxis to hirers; car rental, care, and leasing services; advertising services; taxi booking management services; vehicle inspection and other related services; vehicle testing and consultancy services; professional inspection and automotive engineering services; inter-city bus services; taxi insurance; coach services; private hire services; crash repair services; and bus station services. The company also operates driving schools; and workshops for repairing, servicing, and the general maintenance of motor vehicles. In addition, it rents buses to hirers and provides related services; operates as a dealer in diesel for motor vehicles; distributes motor vehicles; trades automotive parts; constructs specialized vehic les and assembles bus bodies; and provides and manages taxi booking card facilities. It operates in Singapore, Ireland, the United Kingdom, Australia, China, Vietnam, and Malaysia. As of February 13, 2012, the company�s fleet consisted of 46,329 buses, taxis, and rental vehicles. ComfortDelGro Corporation Limited is headquartered in Singapore.

5 Best Canadian Stocks For 2014: Newport Bancorp Inc.(NFSB)

Newport Bancorp, Inc. operates as the holding company for Newport Federal Savings Bank that provides financial services to individuals and small businesses in Newport and Washington County, Rhode Island, and Stonington, Connecticut. It accepts various deposit products that include including non-interest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts comprising NOW and money market accounts; regular savings accounts; and certificates of deposit. The company?s loan portfolio comprises one-to-four family residential real estate loans; multi-family and commercial real estate loans; home equity loans and lines; construction loans for one-to-four family homes and commercial, multi-family, and other nonresidential purposes; commercial loans; consumer and other loans, including auto loans; and loans secured by passbook savings or certificate accounts. It operates through its main office located in Newport; and five full-service branch offices located in Middletown, Wakefield, Westerly, and Portsmouth, Rhode Island, as well as Stonington, Connecticut. The company was founded in 1888 and is headquartered in Newport, Rhode Island.

FPO Inks Lease Deal - Analyst Blog

First Potomac Realty Trust (FPO) – an industrial real estate investment trust (REIT) – recently penned a lease deal with a professional services firm for 30,036 square feet of space at its Md.-based Class A office property, Redland Corporate Center. With this transaction, the property is now 100% leased.

The Redland Corporate Center, comprising multi-storied office buildings, 520 and 530 Gaither Road, spans 348,469 square feet. The property is positioned in I-270 corridor of Montgomery County and is close to famous landmarks such as Rio Washingtonian Center, Fallsgrove Village Center and King Farm Village Center.

Notably, the asset was acquired by First Potomac in Nov 2010, in a joint venture with Perseus Realty, LLC. This was the largest premium buyout by First Potomac that year.

Redland Corporate Center's prime location and high-class amenities make it an ideal property among First Potomac's assets in the Maryland area. We expect the deal to boost the company's rental revenues and strengthen its tenant base.

First Potomac owns, manages, develops and redevelops office, business parks and industrial properties in the greater Washington D.C. region. As of Mar 31, 2013, the company's portfolio spanned about 14 million square feet. The portfolio consists of 43% office property, 23% industrial property and 34% business parks.

First Potomac is expected to release second-quarter 2013 results on Jul 25. The company has an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of 0.00% and it carries a Zacks Rank #3 (Hold). Thus, we are not so confident about a positive earnings surprise.

Some better performing REITs include DCT Industrial Inc. (DCT), DuPont Fabros Technology, Inc. (DFT) and CubeSmart (CUBE). All these stocks carry a Zacks Rank #2 (Buy).

Apple Found Guilty in E-book Trial - Analyst Blog

Apple (AAPL) found itself at the receiving end of an adverse ruling in the e-book pricing case filed by the U.S. Department of Justice (DOJ). U.S. District Judge Denise Cote ruled that the iPhone maker had conspired with five U.S. publishers to raise e-book prices.

In the civil antitrust lawsuit, the DOJ had charged Apple and five publishers for conspiring and manipulating e-book prices to make an average $2.0 to $3.0 extra on each book for a three-day period in early 2010. This resulted in consumers paying millions of dollars more for the e-books.

The accused publishers included Hachette Book Group, News Corp.'s (NWS) HarperCollins, Holtzbrinck Publishers, Pearson's Penguin Group and CBS Corp's (CBS) Simon & Schuster Inc. Though all the publishers have already settled with the DOJ, only Apple stood for the trial.

Apple entered the e-book market with the launch of its iBookstore app in 2010 and initiated an 'agency model' for pricing the e-books. Per the agency pricing model, publishers could set the retail prices of e-books and the retailer would earn 30% of the e-book price as commission. This assured a guaranteed income for the retailer and also enabled the publisher to raise e-book prices to more than 50% of the list price, which is what competitor Amazon (AMZN) was offering.

Amazon had a wholesale price model, under which the retailer paid the publisher half the listed price of the books, while it retained the option to charge any amount for the e-book. Amazon used to charge a maximum of $9.99 for e-books, making losses on the sales to promote its reader.

Many online retailers shifted to the new agency model. After some brief resistance, Amazon eventually gave in to the demand of publishers. This led to the e-book prices equaling the physical ones at times. Apple continues to deny any wrong doing in the case and stated that it would appeal.

The current ruling is likely to have a domino effect as it will open up other private lawsuits agai! nst Apple for alleged price-fixing. Separately, the company is facing lawsuits on possible damages to customers for charging higher e-book prices brought by 33 state attorney generals.

This judgment is a major blow to Apple as it may not only result in possible penalty payments but it also tarnishes Apple's image. Besides this unfavorable ruling, Apple continues to face a number of other legal headwinds, including pending patent infringement lawsuits against Samsung in different countries.

Recently, Apple had lost to Samsung at the U.S. International Trade Commission. Moreover, Apple withdrew its lawsuit against Amazon for using the "app store" word.

We, however, believe that since the e-book segment does not form a major part of Apple's business, it will not be a major overhang on the stock in the near term.

Currently, Apple has a Zacks Rank #3 (Hold).

Retail Sales Disappoint - Ahead of Wall Street

Monday, July 15, 2013

The stock market today has to contend with not-so-bad data out of China, but decidedly bad Retail Sales numbers on the home front. Investors will be looking for the market to build on last week's record close as the Q2 earnings season gets into high gear and Bernanke provides further clarification on the 'Taper' issue in testimony before Congress later this week.

On the earnings front, Citigroup's (C) better than expected report this morning following strong reports from J.P. Morgan (JPM) and Wells Fargo (WFC) on Friday sets us up the stage for a slew of banking sector earnings this week. Q2 earnings growth is resting solely on the banking sector and the group appers on track to come through on the promise.

China's in-line second quarter GDP growth rate of 7.5% provides further confirmation of a decelerating trend in the world's second largest economy, but it should ease some of the worst fears that suspected an even weaker showing. The country's new leadership team hasn't shown any nervousness about the slowdown as they move the economy away from investment-led growth and more geared towards domestic consumption.

To that end, today's data offers some promising signs as retail sales accelerated in June from the prior month's growth pace. But any shift in the economy's orientation will likely be a long-drawn and multi-year process as the the apparent retail sales momentum of 13.3% in June vs. 12.9% in May is mostly due to inflation. Importantly, consumption as a share of GDP fell in the first half of 2013 from 2012's level

China's retail sales data may or may not be showing momentum, but there are no questions about the weak tone of the June U.S. Retail Sales data from this morning. The Retail Sales disappointment runs counter to the positive momentum in the labor market and broader measures of consumer confidence. This will likely prompt further downward revisions to Q2 GDP estimates, which was steadily coming down in rece! nt weeks to begin with.

But the Q2 GDP weakness is not unexpected as consensus estimates all along expected the growth pace to bottom in the second quarter and accelerate back from Q3 onwards. The 'Taper' narrative reflects this growth outlook as well and we will find a bit more on how the Fed views the economy from Bernanke's Congressional testimony later this week.

Sheraz Mian
Director of Research



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