Monthly Commentary

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November 2015
  • Central banks continue to supply extraordinary levels of stimulus, to the delight of stock markets.
  • While earnings growth may decline for a second consecutive quarter, corporate America has been remarkably resilient given the headwinds.
  • While markets are paradoxically paying up for declining earnings, valuations remain reasonable.
  • The recent rally’s sustainability depends on how the private economy can turn exogenous support into earnings growth.
October 2015
  • Equity markets slumped in the third quarter, as the ongoing commodities rout, uncertainty about a slowing China and negative corporate earnings growth had investors on edge.
  • A change of direction in corporate earnings historically has signaled trouble ahead for equity markets.
  • The end of the commodity “supercycle” is being felt in financial markets and in the real economy.
  • The U.S. consumer has been resilient, highlighting that the directions of the economy and the markets can differ.
September 2015
  • There may be a lot of ugliness out there — China, oil prices, currencies — as free markets re-assert control, but such normalization reduces broader risks to the economy and markets.
  • The U.S. economy’s march toward normalization, led by the consumer, has been the bright spot around the world.
  • Without strong earnings growth and the artifice of fed stimulus, markets currently are behaving as normal markets do.
  • Investors should stick to the plan made in calmer times, as it is the best defense from irrational — and often self-defeating — actions.
  • August 2015
    • Developed markets have demonstrated awe-inspiring resilience in the face of emerging market struggles.
    • Emerging market currencies are plunging. U.S. monetary policy is partly to blame but the true culprit is China.
    • U.S. interest rate hikes are likely to be gradual. Investors who exit bonds may miss income opportunities.
    • Energy sector problems cloud the Q2 earnings season. It could be the first quarter of negative growth since Q3 2012.
    • Despite China’s recent selloff, keep in mind that volatility may be rewarded.
    July 2015
      • In the first half of 2015, the long-running bull market continued to overcome a variety of potential stumbling blocks.
      • With ECB stimulus blazing, Europe has been a pleasant surprise this year.
      • While the mechanics of policy normalization can test near-term resolve, investors must remain focused on their long-term goals.
      • If the bull market that arose out of the Great Recession taught us anything it’s that waiting on the sidelines for a precise entry point is pure — and costly — folly.


    June 2015
    • Beginning to normalize the policy rate should actually bolster confidence in the economy and the markets and allow us to once and for all leave the Great Recession behind.
    • M&A activity has been red hot in 2015, suggesting confidence in executive boardrooms.
    • Earnings surprised mightily to the upside in 1Q, but 2Q expectations remain dim.
    • While the math of rising rates discounts financial assets, the growth that prompts the rate hikes should be far more important in sustaining this bull market in the long run.
    May 2015
    • April Fools investors with sharp positive reversals in quarterly profits, crude oil prices and European bond yields.
    • Oil prices bounce off their lows, providing relief to the energy sector while continuing to be a positive catalyst to consumers.
    • California is coming to the realization that “water is the new oil” as farmers and consumers thirst for a solution to the multi-year drought.
    • Perennial laggards Europe and Emerging Markets surge in April demonstrating that patience in diversification matters.
    April 2015
    • Domestic large cap indexes have lagged as oil prices and dollar strength weigh on giant multinationals.
    • The negative impact of normalization has outpaced the expected benefits, a trend likely to be evident in first quarter earnings.
    • Earnings in the energy sector are expected to drop precipitously, and the abandonment of new projects could impede future growth.
    • Tighter U.S. policy combined with rampant easy money globally may be a game changer for asset allocation strategies.
    March 2015
    • February’s rally showed that the market’s most strident bears were overeager in calling the end of this nearly six-year bull run.
    • Fourth quarter earnings outpaced expectations that had been ratcheted down sharply in the face of plunging oil prices.
    • Massive exposure to large-cap equities could make for a crowded trade should investors look to flee a flagging S&P 500.
    • Signs of life in Europe and other non-U.S. markets highlight the importance of broad, global diversification.
    February 2015
    • While there’s been no shortage of risks to roil investors here in the new year, it’s more important to focus on ever-growing corporate earnings and adequate diversification.
    • Any increase in interest rates during 2015 will be the result of domestic economic strength — which is a good thing.
    • The overall net effect of lower oil prices is positive and should help support global economic growth as central banks step up their stimulus efforts.
    • If tech sector earnings are any indication, corporate America should be able to navigate around the challenges of a strong dollar.


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