The drivers of short-term market moves can be vastly different from those which underpin the cycles of longer-term market direction. This month we examine a variety of these factors.
Below please find a link to our monthly market perspective piece for May. This month we explore the reality behind market anomalies such as “sell in May and go away.”
Below please find a link to our monthly market perspective piece for May. This month we explore the reality behind market anomalies such as “sell in May and go away.”
Following an impressive bounce back from February lows, the durability of the current bull market remains suspect. The benefits of the recent rally appear limited to the large cap, defensive sectors of the market. In prior market cycles, this has portended that the latter stages of a bull market are fast approaching and as such, caution is warranted.
Monthly Market Perspective - January 2017Mark Biegel
Below please find a link to our monthly market perspective piece for January. This month, with the transition in Washington upon us, we reflect on what impact prior presidential cycles had on markets, and assess how this one may turn out.
Below please find a link to our monthly market perspective piece for June. This month we dive deeper into equity market year-to-date returns and discuss the narrow leadership that has re-emerged, primarily from several large technology companies.
Below please find a link to our monthly market perspective piece for December. This month we explore a variety of factors potentially driving markets and evaluate the risks and rewards lying beneath the surface.
Below please find a link to our monthly market perspective piece for August. Due to the recent rebound in quarterly corporate earnings, this month we explore the importance of this fundamental underpinning to the equity markets.
A review of Q4 2015 corporate earnings reveals a significant slowdown in revenue and earnings growth. While these developments have been affected by the sharp decline in commodity prices,they may reveal early signs of recessionary conditions.
The portfolio’s pro-cyclical bias was beneficial as we continued to see a shift in favor of cyclical stocks over defensive sectors. Over the past few years, we have seen a significant expansion in the universe of companies with the ability and willingness to pay a dividend. Given the speed with which stocks have advanced and the introduction of increased interest-rate volatility, I would describe my outlook for equities as cautious for the short term.
Global equities hit another record high in December as global economic data remained robust, economic growth prospects kept being upgraded and financial conditions stayed accommodative.
Following an impressive bounce back from February lows, the durability of the current bull market remains suspect. The benefits of the recent rally appear limited to the large cap, defensive sectors of the market. In prior market cycles, this has portended that the latter stages of a bull market are fast approaching and as such, caution is warranted.
Monthly Market Perspective - January 2017Mark Biegel
Below please find a link to our monthly market perspective piece for January. This month, with the transition in Washington upon us, we reflect on what impact prior presidential cycles had on markets, and assess how this one may turn out.
Below please find a link to our monthly market perspective piece for June. This month we dive deeper into equity market year-to-date returns and discuss the narrow leadership that has re-emerged, primarily from several large technology companies.
Below please find a link to our monthly market perspective piece for December. This month we explore a variety of factors potentially driving markets and evaluate the risks and rewards lying beneath the surface.
Below please find a link to our monthly market perspective piece for August. Due to the recent rebound in quarterly corporate earnings, this month we explore the importance of this fundamental underpinning to the equity markets.
A review of Q4 2015 corporate earnings reveals a significant slowdown in revenue and earnings growth. While these developments have been affected by the sharp decline in commodity prices,they may reveal early signs of recessionary conditions.
The portfolio’s pro-cyclical bias was beneficial as we continued to see a shift in favor of cyclical stocks over defensive sectors. Over the past few years, we have seen a significant expansion in the universe of companies with the ability and willingness to pay a dividend. Given the speed with which stocks have advanced and the introduction of increased interest-rate volatility, I would describe my outlook for equities as cautious for the short term.
Global equities hit another record high in December as global economic data remained robust, economic growth prospects kept being upgraded and financial conditions stayed accommodative.
10 Key principals of using evidence investing to improve your odds of success in reaching your goals. This includes embracing the market and using diversification.
The Cogent Advisor, and independent wealth manager in Chicago helping successful professionals simplify their complex financial lives and reach their goals. 312-382-8388. www.thecogentadvisor.com.
LBS - Asset Allocation Model – February UpdateMark MacIsaac
Robust and synchronized upswing in global economic growth, still accelerating earnings growth, global consensus earnings projections continuing to improve and accommodative financial conditions all remained supportive of equities in January.
LBS Asset Allocation August Update - July 28, 2017Mark MacIsaac
Global economic data continue to point to robust and synchronized economic growth with the release of stronger-than-expected ISM surveys, German IFO business climate survey and Chinese Q2 real GDP growth data.
New highs in the equity markets prompt the questions, "Is it a good time to invest?" and "What is a good strategy?" Read on to see what Cornerstone Wealth Management's Chief Investment Officer Alan Skrainka, CFA, has to say.
As the debate about future economic growth continues, we provide selected excerpts from Q4 earnings transcripts. Quotes from CEO's of companies across multiple industries. Excluding energy and manufacturing, most CEO's indicated a positive growth outlook for their respective companies and industries.
Attached please find our monthly market perspectives piece for September. In light of the recent market volatility, we outline alternative investments, in particular market neutral investments. Currently, our preference is to use market neutral strategies for portfolio defense. In today’s market conditions, particularly in fixed income, traditional asset allocation strategies comprised solely of stocks and bonds may be challenged to provide an adequate balance of investment risk and return.
This month we attempt to look past the recent “headlines” affecting international markets and analyze the facts. As you will note, despite the volatility, we believe international investing still makes sense for long term investors.
S&P 500 earnings in the first quarter were significantly impacted by negative performance in the energy sector. In our Market Perspective we examine Q1 earnings excluding energy and observe reasonably healthy results.
This month we analyze first quarter earnings and dig into the impact of oil prices. As we have suggested, markets ultimately trade on earnings, and this quarter the picture has been clouded by the rapid decline in the energy sector.
Our May Market Perspective identifies and discusses the potential weaknesses in several traditional "safe" sectors within the equity markets-healthcare and utilities.
We examine the impact of foreign exchange fluctuations. More specifically, we explore the dynamics of the strength of the US dollar vs. currencies around the world and the impact this has had on asset values. There are a variety of reasons for the recent dollar strength, which we examine in more detail in the slides that follow.
Following several years of relatively benign capital market volatility, it appears wider swings may finally be upon us. January produced multiple moves up and down in excess of 3%. Market Perspectives explores the meaning behind the volatility and how we may seek to take advantage of it.
As we look ahead to 2015, we review some of the themes we highlighted in 2014. While some of our strategies played out well last year, some are still developing. We expect our valuation discipline will continue to serve as a valuable guide in the new year and beyond.
Recently commodity prices have fallen to multi-year lows. Read our December Market Perspective to learn how these dramatic price movements may impact consumers, industries and companies.
Biegel Waller Investment Advisory Market Perspective David Berger
While the U.S. asset purchase program came to an end last month, we expect easy money policies around the globe to continue well into the future. We anticipate global leaders will remain focused on fighting deflationary forces with sufficient liquidity, which should help global asset prices.
Domestic small cap equities are trading at significantly elevated valuation levels. This month we highlight some of the key data points relating to this overvaluation.
Our April "Slides of the Month" discuss the recent run up in prices of dividend paying stocks. We identify favorable values in cyclically oriented stocks which are better positioned to benefit from additional economic growth.
Biegel Waller Investment Advisory March 2014 CommentaryDavid Berger
In our March 2014 commentary we highlight the importance of corporate earnings to the strength of the economy and the equity markets. The value of revenue growth is discussed as profit margins have already been enhanced by cost cutting and lower capital spending.
MUTUAL FUNDS (ICICI Prudential Mutual Fund) BY JAMES RODRIGUESWilliamRodrigues148
Mutual funds are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. They are managed by professional portfolio managers or investment companies who make investment decisions on behalf of the fund's investors.
1. Market Perspective – June 2016
Experience Insight Impact
biegelwaller.com
Overview: The factors which drive markets can be quite dissimilar over the short and long-term.
Ultimately, we look for growth, the cost of capital, and valuations as long-term drivers. In the
shorter-term however, sentiment can dominate the investor psyche. This month we attempt to
gauge the status of these various factors.
2. Trailing One Year Performance: Volatile But Flat
2
Experience Insight Impact
As we discussed
last month, the
market has been
engaged in a
wrestling match
between the bears
and bulls for the
past few years,
and accordingly,
has been range
bound. As of the
beginning of June,
markets are at the
top end of the
range.
3. Margin Erosion
3
Experience Insight Impact
The above chart demonstrates that although margins have been
falling (orange bars), the S&P 500 (white line) has largely ignored this
factor for now.
Margin erosion has been a contributing factor for falling earnings
for the past year. The left 4 quarters of earnings declines are
represented on the bottom left of the above chart. The current
quarter is represented by the middle horizontal line and future
growth is to the right. Expectations are lofty and such growth
would appear necessary for markets to continue advancing.
Corporate Operating Margins % vs. S&P 500 Index S&P 500 Profit Growth (Actuals through 1Q16 and Consensus
Projections through 1Q17)
4. Interest Rates and Low Cost Capital
4
Experience Insight Impact
Interest rates remain near historical lows thanks to a poor May jobs report, and the prospect of the Fed once again delaying the next rate hikes.
This allows companies an ongoing refinance opportunity, and the chance to continue to repurchase stock using very low cost debt.
6. Investors Are Currently Expressing Enthusiasm For Markets
6
Experience Insight Impact
• This index from CNN Money incorporates various demand indicators (including stock momentum, relative
strength, breadth, options volumes, stock volatility, and junk bond demand) to judge market sentiment.
• Current conditions suggest investor enthusiasm is at elevated levels (as indicated by the “extreme greed”
reading) and corrective action could occur.
7. Conclusion: In the short-term, investors have looked beyond the current fact pattern of valuations
and growth in sending markets towards the top end of the recent range. This enthusiastic buying
(“greed”) historically suggests a contrarian signal for future market performance. For markets to
continue to advance, growth will need to re-emerge as a force. This probably means margins will
need to stabilize and begin to turn upwards. In the meantime, investors await new data as we
continue to watch Central Bank policy around the globe. As always, our goal is to create portfolios
which balance the current risks with a longer-term perspective in order to meet the goals and
objectives of our clients.
Experience Insight Impact
Market Perspective – June 2016
7
8. Experience Insight Impact
Disclaimer
8
Opinions expressed in this commentary may change as conditions warrant and is for informational
purposes only. Information contained herein is not intended to be personal investment advice for
any specific person for any particular purpose. We utilize information sources that we believe to
be reliable but cannot guarantee the accuracy of those sources. Past performance is no guarantee
of future performance; investing involves risk and may result in loss of capital. Consider seeking
advice from a professional before implementing any investing strategy.