Perspectives

Markets rose last week with the launch of the second quarter earnings season. Technology stocks led the way with the popular “FAANG” group of companies regaining momentum. Energy stocks also rallied as oil prices continued to recover; West Texas Intermediate crude, the North American benchmark, has gained nearly 10% since hitting a low of $42.53 three weeks ago. Also, this week’s decline in crude oil inventories, which fell by the largest amount since September 2016, supported the price re… View More

Markets were mixed during the holiday-shortened week; the Financials sector outperformed as investors responded to rising bond yields. Energy stocks, though, remained volatile. Crude oil prices declined even as inventories in the U.S. fell to the lowest levels since January; continuing production increases in the U.S. and overseas are reportedly prompting OPEC to consider imposing production caps on previously-exempted Nigeria and Libya. Central banks were in focus as policymakers acknowledge im… View More

This year has been another good year for the S&P, with a year-to-date total return of 9.9% (as of 6/28/17). Investors are asking, “How have I done versus the index?” thinking predominantly of return and not risk. Very few investors are asking, “How am I protected against the next recession.” The memory of 2008, or 2000 to 2002, or 1973 to 1974, etc. is fading. A recent survey conducted by GoBankingRates found 68% of respondents said their portfolio strategy “DOES NOT ACCOUNT FOR TH… View More

Markets were mixed last week as the Financials sector rallied while Technology lagged. On Wednesday, several banks announced dividend increases and share buybacks; the decisions followed the Federal Reserve’s determination that, for the first time in seven years, all of the banks subject to its Comprehensive Capital Analysis and Review (CCAR), the so-called “stress test,” had passed. Higher yields on Treasury bonds further supported the favorable outlook for financial companies. The techno… View More

Stocks were flat-to-higher last week in relatively quiet trading as investors looked ahead to second quarter earnings season. A rebound in technology stocks drove the NASDAQ to outperform while the energy sector underperformed (more on this in our Market Week commentary). The release of the Senate’s draft version of an Obamacare repeal and replacement bill dominated headlines. Early criticism by Senate Republicans suggests that the proposed legislation may not garner sufficient support to pass… View More

The Federal Reserve did what almost everyone expected today, raising the target range for the federal funds rate by 25 basis points to 1.00% - 1.25%. Here are the key takeaways from today's statement from the Fed, its updated forecasts, its plan on reducing the balance sheet, as well as Fed Chief Yellen's press conference. First, although the market consensus is that the Fed isn't going to raise rates again until 2018, the Fed thinks we still have one more hike in 2017, with the odds of two hi… View More

Markets were flat-to-down this week on mixed economic data and ongoing domestic political turmoil. The technology-heavy NASDAQ trailed the broader S&P 500® Index for the second consecutive week; and, small cap stocks underperformed large caps while consumer-oriented and commodity-related sectors also lagged. On Friday, Amazon announced an agreement to acquire Whole Foods; the news triggered sell-offs among traditional grocers such as Kroger, and non-traditional grocers such as Wal-Mart and … View More

Stocks were mostly unchanged last week as political developments, both at home and abroad, preoccupied investors’ attention. Former FBI Director James Comey’s testimony to the Senate Intelligence Committee provided a back story of the events surrounding his dismissal in May. However, investors seemed to collectively shrug at the latest White House drama. In the U.K., Prime Minister Theresa May’s Conservative party unexpectedly lost its parliamentary majority; for the Tories to remain in po… View More

Traditional investment grade bonds will probably not produce the returns most investors need to reach their retirement goals, however, there are other options available. As many who have read our previous commentaries are aware, we’ve found the risk reward tradeoff in preferred stocks attractive. The year-to-date return for the S&P U.S. Preferred Stock Index is 7.02%, with its 10-year average annualized return equal to 4.97%. Most of this return is attributable to the dividends paid by the… View More

Nominal measures are the (global) story today Here’s an update on three of today’s consensus views that we continue to disagree with: 1) “U.S. soft economic data is not matching the hard data.” Missing the point: U.S. real growth is stable, nominal turned up, helping earnings. Nominal also matters for confidence (e.g. Biz Roundtable) & the level is still high. Soft & hard economic data still closer in Europe, increasing the odds of a U.S. economic reconnect. Inventory rebui… View More