-October 28th, 2016 Weekly Market Roundup. Stock indexes were mixed on the week as the Dow Jones Industrial Average increased marginally, while the S&P 500 fell as the upcoming U.S. elections weighed on sentiment despite generally better-than-expected corporate earnings and economic data/ The initial estimate of third quarter GDP (2.9%), the strongest pace in two years, exceeded both the 2.5% forecast and the second quarter’s somewhat anemic 1.4% growth rate. Of the 293 companies in the S&P 500® Index that have reported results, 73% have exceeded analysts’ earnings per share estimates and 57% have exceeded analysts’ sales estimates. For the quarter, overall corporate sales are now expected to grow 2.7% while earnings are expected to grow 1.6%.
-October 21st, 2016 Weekly Market Roundup. The S&P 500 rose +0.4% this week while the Dow Jones Industrial Average finished little changed after declining -0.1%; the Nasdaq Composite gained +0.8%. Sixty-eight of the 82 companies in the S&P 500 reporting earnings posted better than expected profits for the quarter. However, portfolio managers are hoarding cash at levels not seen since 2001, indicating that in the event professionally managed money have higher conviction, then there remains substantial sideline cash to move the markets on upward. Clearly, investors are sitting on cash for news from the Federal Reserve and the U.S. presidential election. Also, for the first time in three years, trading volume in October is on track to fall below average daily volume for the year. Federal Funds futures, used by traders to indicate the odds of a central-bank policy change, suggest a 70% chance of a December Fed rate hike.
-October 14th, 2016 Weekly Market Roundup. In the U.S., the S&P 500 Index lost about 1.0% for the week, its second consecutive one-week decline. European equities, meanwhile, eked out a 0.1% gain (in local currency terms), after falling to a two-month low on October 13. U.S. equity markets were largely calm with the exception of Tuesday, when the Dow dropped 200 points. For the sixth quarter in a row, compntanies in the S&P 500 are expected to post lower profits than they did a year ago, according to FactSet.
-With correlations between mainstream asset classes increasing this year, more diversity is required. Stocks, bonds, oil, and gold are all set for simultaneous gains this year for the first time since 2010. What is concerning is if these upward correlations would be matched with equal declines among this group should the market correct downward. This is one of many reasons why our client portfolios require greater asset diversity. For example, alternative assets are a portfolio diversifier because they don’t have a high correlation with stocks or bonds and fit somewhere between the two in terms of risk profile. Another consideration is to evaluate the increased portfolio contribution of alternative assets when traditional assets like stocks and bonds are trading at lofty valuations.
-October 7th, 2016. Markets declined modestly for the week despite stronger than expected vehicle sales and manufacturing data. Third quarter earnings season begins next week with Alcoa, CSX, Delta Air Lines, and JPMorgan Chase scheduled to report. For companies in the S&P 500® Index, analysts estimate a 2.1% earnings decline, the sixth consecutive decrease.
-Since the presidential election can still throw a curve a ball and with both the stock and bond market valuations trading at above average levels, we strongly believe that investors should stay diversified across a variety of asset classes. Indeed, Mr. Market can also be disrupted by the Fed, which is contemplating a rate hike, while the impact of Brexit still looms (Deutsche Bank is just one of the many concerns).
-The S&P 500 index has gained an average of nearly 4% during the fourth quarter since 1945. Even more comforting, the S&P 500 has increased in price more than 70% of the time. Source: CBSNews.com
-It is unusual that the past two months, August and September, produced identical returns in the S&P 500 of -0.12% decline with both months reflecting a lack of investment conviction. For example, the month of August contained many low volume and low volatility sessions, while September was generally a much more volatile month with big intra-day swings in the middle of the month that ultimately made no advancement in returns.
-Since 1933, during the month prior to the election, the S&P 500 Index gained an average of 1.7% when the incumbent party won an election. When the opposition party won, stocks declined by 4.4%.
-October 21st, 2016 Weekly Market Roundup. The S&P 500 rose +0.4% this week while the Dow Jones Industrial Average finished little changed after declining -0.1%; the Nasdaq Composite gained +0.8%. Sixty-eight of the 82 companies in the S&P 500 reporting earnings posted better than expected profits for the quarter. However, portfolio managers are hoarding cash at levels not seen since 2001, indicating that in the event professionally managed money have higher conviction, then there remains substantial sideline cash to move the markets on upward. Clearly, investors are sitting on cash for news from the Federal Reserve and the U.S. presidential election. Also, for the first time in three years, trading volume in October is on track to fall below average daily volume for the year. Federal Funds futures, used by traders to indicate the odds of a central-bank policy change, suggest a 70% chance of a December Fed rate hike.
-October 14th, 2016 Weekly Market Roundup. In the U.S., the S&P 500 Index lost about 1.0% for the week, its second consecutive one-week decline. European equities, meanwhile, eked out a 0.1% gain (in local currency terms), after falling to a two-month low on October 13. U.S. equity markets were largely calm with the exception of Tuesday, when the Dow dropped 200 points. For the sixth quarter in a row, compntanies in the S&P 500 are expected to post lower profits than they did a year ago, according to FactSet.
-With correlations between mainstream asset classes increasing this year, more diversity is required. Stocks, bonds, oil, and gold are all set for simultaneous gains this year for the first time since 2010. What is concerning is if these upward correlations would be matched with equal declines among this group should the market correct downward. This is one of many reasons why our client portfolios require greater asset diversity. For example, alternative assets are a portfolio diversifier because they don’t have a high correlation with stocks or bonds and fit somewhere between the two in terms of risk profile. Another consideration is to evaluate the increased portfolio contribution of alternative assets when traditional assets like stocks and bonds are trading at lofty valuations.
-October 7th, 2016. Markets declined modestly for the week despite stronger than expected vehicle sales and manufacturing data. Third quarter earnings season begins next week with Alcoa, CSX, Delta Air Lines, and JPMorgan Chase scheduled to report. For companies in the S&P 500® Index, analysts estimate a 2.1% earnings decline, the sixth consecutive decrease.
-Since the presidential election can still throw a curve a ball and with both the stock and bond market valuations trading at above average levels, we strongly believe that investors should stay diversified across a variety of asset classes. Indeed, Mr. Market can also be disrupted by the Fed, which is contemplating a rate hike, while the impact of Brexit still looms (Deutsche Bank is just one of the many concerns).
-The S&P 500 index has gained an average of nearly 4% during the fourth quarter since 1945. Even more comforting, the S&P 500 has increased in price more than 70% of the time. Source: CBSNews.com
-It is unusual that the past two months, August and September, produced identical returns in the S&P 500 of -0.12% decline with both months reflecting a lack of investment conviction. For example, the month of August contained many low volume and low volatility sessions, while September was generally a much more volatile month with big intra-day swings in the middle of the month that ultimately made no advancement in returns.
-Since 1933, during the month prior to the election, the S&P 500 Index gained an average of 1.7% when the incumbent party won an election. When the opposition party won, stocks declined by 4.4%.