-As hard as it was to believe that the S&P 500 was down more than 10% on the year on 2/11, it was even more unfathomable that by the end of Q1 the S&P 500 would have erased all of those losses and be flat, or even up, on the year at some point before 3/31. Going back and looking at prior years where the S&P 500 saw 10% moves to both the upside and downside in the span of the first quarter, On average, the index has seen a gain of 28.3% (median: +32.0%) for the remainder of the year with positive returns 75% of the time.
-The major averages ended a five-week win streak, with The S&P 500 falling -0.7% over four days that saw some of the lowest trade volume of the year so far; the markets were closed for Good Friday. The stock market's lower note was partly driven by hawkish commentary from St. Louis Fed President and FOMC voting member James Bullard putting a damper on investor sentiment. Mr. Bullard said that a rate hike in April is not off the table. U.S. crude oil futures came well off session lows to settle 0.8 percent lower at $39.46 a barrel. The U.S. dollar index pared gains after touching its highest in more than a week, but turned in its first positive week in four with a rise of more than 1 percent. The euro held near $1.118 and the yen was at 112.81 yen against the greenback. Gold futures for April delivery settled 0.2 percent lower at $1,221.60 an ounce, down 2.61 percent for the week, its worst since Nov. 6th. Treasury yields held higher, with the 2-year yield near 0.88 percent and the 10-year yield around 1.9 percent.
-March 18th Market Weekly Roundup Update: Equity markets continued their advance to extend the current streak to five consecutive weeks of gains. The positive momentum stemmed from this week’s Federal Reserve meeting at which Fed Chair Janet Yellen downgraded expectations for rate hikes this year; the Fed now expects to raise rates twice in 2016, down from December’s estimate of four times. A weaker dollar would also help sustain the recent increase in commodity prices. West Texas Intermediate (WTI) crude, the North American benchmark, closed above $40 per barrel for the first time this year; prices have jumped more than 50% since hitting a low in early February.
-Most Investors don't panic when markets periodically correct: Investors have lost money in the markets this year, but not enough to make them revaluate their portfolios, according to a recent survey of affluent individuals. It would take a 19 percent drop in the equities markets to cause investors to think about changing their holdings and a 22 percent decline to make them sell off their equities, according to a recent Legg Mason Global Investment Survey of 500 affluent U.S. investors.
-March 11th Market Weekly Roundup Update: the Dow rose 1.2 percent, the S&P gained 1.1 percent and the Nasdaq added 0.7 percent, marking the fourth consecutive positive week for the three indexes. The S&P 500 is now down 1.1 percent for the year, staging a sharp recovery from a selloff at the start of the year that was partly driven by a rout in oil. All major indices and sectors rose as investors reacted positively to the European Central Bank (ECB) announcements, improved energy trends, and less volatility in China’s markets. The markets turned enthusiastic about the ECB’s latest stimulus measures. These include interest rate cuts, an expanded pace and scope of its bond buying program, and cheaper, longer-term bank funding.
-March 4th Market Weekly Roundup Update: Markets rose for the third consecutive week as optimism seemed to replace concerns about an economic slowdown, depressed energy and China. In fact energy stocks surged as the PHLX Oil Exploration and Production Index jumped a staggering 35.3% and the economy was blessed with a robust employment report (242,000 non-farm jobs added versus 200,000 forecasted). After major indices dropped approximately -10% to start 2016, they have since risen to recoup most of their year-to-date losses. The S&P 500® Index and Dow Jones Industrial Average have gained 9.3% and 8.6%, respectively, since hitting their lows on February 11th. What is confounding to most investors trying to time markets is they believe an obvious catalyst will emerge to signal the onset of a market rebound but market rallies are typically triggered by an incrementally few minor events that collectively elevate investor sentiment and these are often identified only after the fact.
-Fortunately, the margin spread between government bond yields (treasuries) and corporates has been narrowing over the last couple of weeks, which has driven a rise in corporate bond prices. For instance, the BAML High Yield Index saw spreads drop hugely from a peak of 887 basis points (8.87%) on February 11th, to 768 basis points by the end of February. Another thing to consider is that the bull market was fuelled in part by big corporate stock buybacks, which have been funded by debt. That means that in order to continue, the debt markets must be cooperative for companies to issue debt for stock buybacks. Institutional investor leadership in the equity marked are aware of this mechanism with their allocation decisions toward stocks, which to no surprise, have also been recovering as well.
-For the month of February, the Dow rose +0.3%, the S&P 500 lost -0.4% and the Nasdaq lost -1.2%. The financial sector continued to struggle, ending the month down -12% year to date. For once, the catalyst for the decline was not oil, as a barrel of crude rose +3% for the session. However, concerns over the slowing economy in China contributed to a late selloff. Gold closed February with a gain of more than +10%, the most for any month in four years. U.S. Treasuries prices also showed a second month of gains. The euro hit $1.086, its lowest against the dollar since the start of the month, after consumer prices in Europe fell again.
-The major averages ended a five-week win streak, with The S&P 500 falling -0.7% over four days that saw some of the lowest trade volume of the year so far; the markets were closed for Good Friday. The stock market's lower note was partly driven by hawkish commentary from St. Louis Fed President and FOMC voting member James Bullard putting a damper on investor sentiment. Mr. Bullard said that a rate hike in April is not off the table. U.S. crude oil futures came well off session lows to settle 0.8 percent lower at $39.46 a barrel. The U.S. dollar index pared gains after touching its highest in more than a week, but turned in its first positive week in four with a rise of more than 1 percent. The euro held near $1.118 and the yen was at 112.81 yen against the greenback. Gold futures for April delivery settled 0.2 percent lower at $1,221.60 an ounce, down 2.61 percent for the week, its worst since Nov. 6th. Treasury yields held higher, with the 2-year yield near 0.88 percent and the 10-year yield around 1.9 percent.
-March 18th Market Weekly Roundup Update: Equity markets continued their advance to extend the current streak to five consecutive weeks of gains. The positive momentum stemmed from this week’s Federal Reserve meeting at which Fed Chair Janet Yellen downgraded expectations for rate hikes this year; the Fed now expects to raise rates twice in 2016, down from December’s estimate of four times. A weaker dollar would also help sustain the recent increase in commodity prices. West Texas Intermediate (WTI) crude, the North American benchmark, closed above $40 per barrel for the first time this year; prices have jumped more than 50% since hitting a low in early February.
-Most Investors don't panic when markets periodically correct: Investors have lost money in the markets this year, but not enough to make them revaluate their portfolios, according to a recent survey of affluent individuals. It would take a 19 percent drop in the equities markets to cause investors to think about changing their holdings and a 22 percent decline to make them sell off their equities, according to a recent Legg Mason Global Investment Survey of 500 affluent U.S. investors.
-March 11th Market Weekly Roundup Update: the Dow rose 1.2 percent, the S&P gained 1.1 percent and the Nasdaq added 0.7 percent, marking the fourth consecutive positive week for the three indexes. The S&P 500 is now down 1.1 percent for the year, staging a sharp recovery from a selloff at the start of the year that was partly driven by a rout in oil. All major indices and sectors rose as investors reacted positively to the European Central Bank (ECB) announcements, improved energy trends, and less volatility in China’s markets. The markets turned enthusiastic about the ECB’s latest stimulus measures. These include interest rate cuts, an expanded pace and scope of its bond buying program, and cheaper, longer-term bank funding.
-March 4th Market Weekly Roundup Update: Markets rose for the third consecutive week as optimism seemed to replace concerns about an economic slowdown, depressed energy and China. In fact energy stocks surged as the PHLX Oil Exploration and Production Index jumped a staggering 35.3% and the economy was blessed with a robust employment report (242,000 non-farm jobs added versus 200,000 forecasted). After major indices dropped approximately -10% to start 2016, they have since risen to recoup most of their year-to-date losses. The S&P 500® Index and Dow Jones Industrial Average have gained 9.3% and 8.6%, respectively, since hitting their lows on February 11th. What is confounding to most investors trying to time markets is they believe an obvious catalyst will emerge to signal the onset of a market rebound but market rallies are typically triggered by an incrementally few minor events that collectively elevate investor sentiment and these are often identified only after the fact.
-Fortunately, the margin spread between government bond yields (treasuries) and corporates has been narrowing over the last couple of weeks, which has driven a rise in corporate bond prices. For instance, the BAML High Yield Index saw spreads drop hugely from a peak of 887 basis points (8.87%) on February 11th, to 768 basis points by the end of February. Another thing to consider is that the bull market was fuelled in part by big corporate stock buybacks, which have been funded by debt. That means that in order to continue, the debt markets must be cooperative for companies to issue debt for stock buybacks. Institutional investor leadership in the equity marked are aware of this mechanism with their allocation decisions toward stocks, which to no surprise, have also been recovering as well.
-For the month of February, the Dow rose +0.3%, the S&P 500 lost -0.4% and the Nasdaq lost -1.2%. The financial sector continued to struggle, ending the month down -12% year to date. For once, the catalyst for the decline was not oil, as a barrel of crude rose +3% for the session. However, concerns over the slowing economy in China contributed to a late selloff. Gold closed February with a gain of more than +10%, the most for any month in four years. U.S. Treasuries prices also showed a second month of gains. The euro hit $1.086, its lowest against the dollar since the start of the month, after consumer prices in Europe fell again.