According to the Morningstar Direct U.S. Asset Flow Update published June 15th, US taxable bond funds had a net inflow of $15.4 billion in May. The report indicates that flows for bond funds were mostly negative last year. Beginning in February this year, flows turned positive after the market volatility in January. The report also […] Read the full article…
Over the long run, stock market returns are highly correlated with GDP growth and corporate earnings. For the US S&P 500 stocks, earnings fell from $109.32 per share in 2014 to $92.24 per share in 2015. In this article, we will drill down on historical earnings, projections and discuss the impact this has on equity […] Read the full article…
The US stock market volatility continues. The S&P500 is down roughly 10% for the year before dividends. At the start of 2016 we modified our model portfolios to shift to a more defensive posture. We are currently market neutral on equity weighting relative to our benchmarks. We are overweight in the US and underweighted in […] Read the full article…
Given recent market volatility, I had a number of questions come up in conversations with clients. For this Market Outlook, I decided that a Questions and Answers format might be useful. Why are the Equity Markets Volatile? The S&P500 stock index total return is down 2.9% year to date. I think for a lot of […] Read the full article…
I recently listened to an excellent podcast on Bloomberg’s ‘Masters in Business’ series with economist Ed Hyman (podcast). Ed Hyman is chairman of ISI Evercore and has been voted Wall Street’s top economist by Institutional Investor for 35 consecutive years. Ed was discussing the prospects for the economy. Historically, we have seen economic business cycles […] Read the full article…
Did the Fed Depress the US Economic Recovery? In a recent blog post Dr. Ed Yardeni, a noted economist, opined that the Federal Reserve contributed to depressed economic recovery in the US. He cited three very interesting arguments and I thought it may be of interest to summarize his thoughts here. (source: www.blog.yardeni.com May 26, […] Read the full article…
The Federal Reserve has been signaling that it expects to raise interest rates based on improvements in the economy. The exact timing isn’t clear and the Fed has indicated that they will be data driven. Should you be concerned about how any rate increase will affect your portfolio? In this article, I will examine the historical impacts on the US market based on the first rate hike from the period from 1982 to present. […] Read the full article…
Today the Department of Labor released jobs data for March indicating that the US economy added just 126,000 jobs in March. For 2015, the US has averaged under 200,000 new jobs per month in contrast to the 289,000 monthly average in Q4. The ISM release earlier this week reported a PMI figure of 51.5% for […] Read the full article…
The S&P500 price-to-earnings ratio stands just short of 20. By historical measures we can say that this is well above the mean of 15.5. What we’d really like to know is what kind of future returns can we expect and is the market over-valued. While answering these questions can be difficult, we believe disciplined investing […] Open full pdf article…
There is a good deal of talk about when and how aggressively the Fed will raise interest rates. This has caused many including, Eric Rosengren, President of the Boston regional branch of the US Central Bank, to go on record as saying of the current 2.15% 10 year rate as, “not a rate that is going to be sustainable in a completely normalized economy, which does imply the 10-year rate at some point in the normalization process will not be as low as it currently is.” (source: MarketWatch). Let’s unpack the issue here in a bit more detail. […] Read the full article…