Monthly Commentary

Main content

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.
December 2014
  • Heading into 2015, the global economy is on a sustainable growth trajectory despite rampant volatility from plummeting oil, deflation in Europe and growth concerns in China.
  • We’ve built our 2015 forecast employing a multi-faceted framework called TRED that includes four inputs:
    • Tectonic Shifts in Energy, Global Trade, Technology, Frontier Markets and Water are broader, unifying trends driving true change.
    • Rates — inflation rates, central bank policy rates, discount rates, exchange rates — provide a window into the overall economic health of country, region and global economies.
    • Earnings deliver an unbiased view of the strength or weakness of a cross-section of global and domestic companies.
    • Diversification enables investors to pursue a thoughtful, considered investment philosophy focused on prudent investment discipline.
  • Building wealth is predicated on taking risk, not avoiding it. A reliable and an adaptive approach to assessing that risk on an ongoing basis is essential to developing resilience in the face of potentially volatile markets.

November 2014
  • After weeks of struggles, market strength returned quickly in mid-October.
  • The expansion of the BOJ’s quantitative easing program surprised markets and may provide inspiration to central banks in Europe and China.
  • As corporate America surges to all-time high EPS, domestic macro conditions continue to improve.
  • While Republicans took control of Congress with the midterm elections, policy impact may be minimal.

October 2014

  • While the success of the Fed’s aggressive QE program surprised the markets and the central bank…
  • …Europe hasn’t gotten the memo, continuing to dither over the scope of its asset-purchase program as recession and deflation loom.
  • Markets across the globe — with the exception of long Treasuries and domestic large cap stocks — were hard hit in the third quarter.
  • Though volatility has risen, it remains modest; investors should take this opportunity to broaden their portfolios at more attractive levels.

September 2014
  • A hawk in dove’s clothing, Yellen will likely be ahead of the curve when it comes to hiking rates.

  • Winding down quantitative easing and zero interest rates will bring greater market volatility.

  • Driven by strength in manufacturing and a revitalized consumer, corporate America is thriving.

  • The euro zone is an economic basket case, forcing Draghi to reach for another “bazooka” solution, to the likely benefit of risk assets.

  • Broad, globally diversified portfolios can help protect investors against the volatility that policy normalization may bring.

August 2014
  • The U.S. economy is recovering strongly, which will compel the U.S. Federal Reserve (Fed) to withdraw its support.

  • Winding down quantitative easing and zero interest rates will bring greater market volatility.

  • In our view, investors should embrace risk assets within an effectively diversified portfolio on positive economic growth and corporate earnings.

  • Markets ultimately will be free of Fed influence, a positive for sustainable economic growth.

July 2014
  • Markets have looked past the early-2014 economic cold spell as fundamentals heat up and systemic risks wane.

  • European Central Bank bolsters monetary stimulus as the Fed and Bank of England continue tightening.

  • Cold War redux in Ukraine and Middle East instability inspire yawns.

  • Given seven consecutive quarters of S&P 500 earnings growth, we affirm our 2014 forecasts for EPS and price level.


Footer content