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Asset Management

News or Noise: Global Quantitative Tightening Underway

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If the year were to have ended last Friday, the broad U.S. stock and bond markets would both be down on the year, albeit slightly. Cash, in the form of three-month treasury bills, would be up, outperforming both stocks and bonds for the first time since 1994. Trade tensions, weakening global economic growth, and plunging oil prices are all potential drivers of weakness in risky assets. However, Ned Davis Research (NDR) offered another piece of the puzzle that they believe may be the driving force of this year’s investment difficulty – quantitative tightening.

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News or Noise: Weighing Trade Concern Against a Backdrop of Fiscal Stimulus

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S&P 500 earnings growth has been booming thus far in 2018. In Q1, earnings gained 14.8% year-over-year and are forecast to grow by 20.3% in Q2, as opposed to Q2 2017. Much of the boom in earnings is coming from the December tax cuts, however, the economy continues to expand, even accelerate. Based on their latest data, the Atlanta Fed reports a real-time estimate for Q2 GDP. They call it GDPNow.

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News or Noise: Why have energy prices risen and what does it mean for energy stocks?

By | Asset Management | No Comments

Energy stocks remain one of our highest conviction holdings in the portfolio. This is based on the view broadly held across our research providers that energy related equities are significantly mispriced. Crude Oil prices rose to levels not seen since the first half of 2015 (both West Texas Intermediate (WTI) and Brent blend). Much of the explanation for the most recent move is the growing tension in the Middle East ─ as well as the upcoming meeting of OPEC ─ that is projected to continue with supply restraint ahead of the Aramco IPO targeted in 2018. But, the team at Knowledge Leaders Capital (KLC) posted last week that the more durable and structural explanation for higher prices is that “energy capex has been slashed, oil finds are at generational lows, inventories are improving, and demand keeps ticking higher.”

So, that helps explain the commodity price rise, but why are the stocks yet to fully reflect the move?

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News or Noise: Does Federal Reserve “Normalization” Impact Me?

By | Asset Management | No Comments

This is a tricky topic. In the near term, we believe that Federal Reserve policy shifts are acting as “noise” to investors being overwhelmed by economic and market fundamentals. We believe this return to a more normal market is healthy, given that Fed policy has been a driving force in the economy for the past several years. However, it remains true that we are in unchartered waters. Market volatility could appear at any time, since the Fed is now shrinking their balance sheet and raising interest rates. How quickly and forcefully this shifting policy will impact the economy is unclear.

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News or Noise: Housing season starts strong – is that positive or negative?

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March represents the beginning of the key season for housing. In our opinion, this spring’s selling season is not just important for the housing market, but as a key indicator of the strength of the domestic economy. Over the past few weeks there have been several reports showing continued momentum for both new and existing home sales as well as home values.

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News or Noise Special Edition: What the Markets Think of Regime Change

By | Asset Management, Investments, Webinars | No Comments

In this video, David Fisher, Co-Founder & Chief Investment Officer, and Russ Cearley, Partner & Director of Portfolio Strategy, tackle the 2016 Presidential Election and its potential impact on the markets. Is the market a good predictor of the election outcome? If so, what is the market saying about 2016? What might happen with a Republican win? A Democratic win? David and Russ discuss all of this and more in the video below.

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SignatureFD: 2016 Q4 Election Outlook and Market Review

By | Asset Management, Investments, Webinars | No Comments

In this video, David Fisher, Co-Founder & Chief Investment Officer, and Russ Cearley, Partner & Director of Portfolio Strategy, tackle the 2016 Presidential Election and its potential impact on the markets. Is the market a good predictor of the election outcome? If so, what is the market saying about 2016? What might happen with a Republican win? A Democratic win? David and Russ discuss all of this and more in the video below.

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