Our Perspective on Recent Volatility
In a few short weeks, the financial markets in the US have experienced their fastest decline in history as CoViD-19 was officially elevated to a “pandemic” as it spread out of China, infecting populations around the world while triggering tremendous levels of panic selling in the financial markets. While data from earlier this quarter suggested […]
Earnings vs Politics
Following a near bear market to close out 2018, the S&P 500 posted its best year since 2013. Although the market traded at compelling valuations and a similar setup to prior pauses in global growth, anxiety set the cadence most of the year, keeping cash on the sidelines and the markets primed for a strong […]
Muddy Waters Ahead
The third quarter began with a continuation of market strength as trade war tensions seemed to deescalate following the June meeting between the U.S. and China. Corporate earnings came in higher than expected with 77% of S&P 500 companies beating estimates, above the five-year average, and the market enjoyed a brief reprieve from the volatility […]
A Spoonful of Fear Keeps the Bull Market Healthy
Heading into the 2nd quarter’s earnings season, corporate profitability proved better than anticipated, and markets continued to climb higher on renewed optimism. The sanguinity quickly soured at the start of May, following an abrupt halt in US-China trade talks and a surprise ban on trading with one of China’s largest telecom conglomerates, Huawei Technologies. After a […]
A Pause in an Upward Trend
Stocks continued to rebound following the volatile end to 2018, cautiously climbing a wall of worry as equities adjusted to better than feared forward guidance while anxiety over a looming recession subsided. The market has almost fully recovered to its prior highs, with a decisive move likely to play out over the upcoming earnings season. […]
Outlook is Constructive
When it comes to the stock market, December proved to be anything but merry. It was the worst on record since the Great Depression. In our view, the investing environment was one that felt like death by a thousand cuts. While no one cut on its own was fatal, the compounding effect turned serious. An […]
A Needed Correction
Since the Great Recession, investors have gotten used to very low interest rates and extremely accommodative monetary policy. This remained true even as signs of economic recovery and expansion began to take hold. That environment appears to be changing, and bond yields have now spiked to the point where they have caused an equity market […]
Markets vs Trade Tensions
Rising trade tensions, new tariffs and protectionist threats are threatening the upside potential of both stock prices and bond yields. Were it not for these risks, we think equity markets would likely have moved higher this year and government bonds would be under more pressure. Even more than the actual negative economic impact, the uncertainty […]
International Events vs Earnings
Investor attention remains focused on trade issues. Tensions eased somewhat last week, as Chinese officials indicated they may be open to negotiating resolutions. It is possible that the Chinese government may make some concessions that would allow President Trump to claim a political win that wouldn’t disrupt global trade. Should tensions ease further, we think […]
A Cautious Continuation in 2018
The year began with a sense of political turmoil coming from Washington. The news included President Trump’s latest confrontation with North Korea, a feud between the president and his former strategist Steve Bannon, worries about more restrictive trade measures and struggles to secure a bipartisan deal in the Senate over immigration reform. Last year saw […]
