2013 Mid-Year Outlook

| July 16, 2013
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In the second half of 2013, we anticipate the markets will continue on a volatile journey of ups and downs, but we expect performance will eventually converge on a path that likely holds modest gains for stocks, bonds, and commodities.

Rather than a single path emerging, the paths of least resistance for the economy and markets diverged in the first half of 2013. The different markets took all three paths.  To attempt to coin a new phrase: “a market divided against itself cannot stand.” In other words, the divergence in the paths taken by different markets is unlikely to continue in the second half.

As we look to the second half of 2013 and gear up for the trail ahead, we note that a slow-and-steady path for the U.S. economy appears likely. We are preparing for inclement weather, as the economic outlook beyond the United States is cloudier. We are keeping close watch on the Federal Reserve’s eventual evacuation route. 

And while we are preparing for a bond bear attack, we are also preparing for a tough climb ahead for the stock market.Please enjoy the enclosed Mid-Year Outlook 2013: Investors’ Trail Map to the Markets that provides a comprehensive perspective on the markets and the economy — with a focus on the convergence of the paths of least resistance — and the many factors that will influence them in the remainder of the year ahead.

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