Our Insight2019-03-03T16:57:01-04:00

Our Insight

& Strategic Views

2018 4th Quarter Commentary

Unlike the first three quarters of the year, market results during the fourth quarter were substantially negative for stocks and positive for bonds. The trade conflict with China and the Federal Reserve’s persistent effort to follow through on “normalizing” monetary policy led to a significant pullback in the stock market and a corresponding rally in high quality bonds. We will expound below, but resolution to one or both issues will be necessary for stock markets … more >

March 7th, 2019|

2018 3rd Quarter Commentary

At first glance, market results during the third quarter pleasantly surprised us but given the strong economic data, the moves appear justified. That said, our 2018 expectations for equity returns have been exceeded and we still have three months to go. Bonds, while slightly negative for the year, have held up well considering the path of the Federal Funds rate. Interest rates have moved higher and appear to continue that trajectory. Of course, concerns persist … more >

March 4th, 2019|

2018 2nd Quarter Commentary

While the first quarter of 2018 reintroduced volatility into the markets, the second quarter seemed to offer a glimpse of stability. Riskier assets in general saw strong returns while the more conservative fixed income markets were flat/slightly negative. The U.S. economic picture remains robust with historically low unemployment and growth projections in the 3% range for the year. These strong dynamics have yielded elevated consumer confidence and support optimistic expectations that the good economic news … more >

March 4th, 2019|

2018 1st Quarter Commentary

For the first few weeks of 2018, equity markets echoed the same trend we saw in 2017: steadily marching higher in the face of both good and bad economic/political news. Beginning in early February, markets began to behave differently with dramatically higher volatility. There have been many reasons discussed by financial pundits for why this change occurred, with the most likely culprits being the Fed’s tightening monetary policy (to contain inflation), Washington trade policy negotiations … more >

March 4th, 2019|

2017 4th Quarter Commentary

As we close the door on 2017, we look back a bit surprised at the magnitude of the rise in global markets. Riskier assets appreciated almost across the board - perhaps no greater example of 2017 “animal spirits” is the headline grabbing emergence of cryptocurrency trading. For stocks, favorable earnings and low interest rates drove valuations higher and led to record highs for most indices. Bond markets struggled to find equilibrium while … more >

March 4th, 2019|

2017 3rd Quarter Commentary

The third quarter was (again) characterized by the lowest stock market volatility in decades, coupled with an increasingly volatile bond market. Corporate earnings in the second quarter increased approximately 10% year-over-year, which reinforced the narrative that the economy continues its slow but improving growth trajectory. As expected, The Federal Reserve has laid out a plan to continue tightening monetary policy with both rate increases and balance sheet “normalization.” The net result is a … more >

March 4th, 2019|

2017 2nd Quarter Commentary

For the second quarter in a row, both stock and bond prices have risen simultaneously. Equity markets are signaling improving economic growth while fixed income markets apparently fear the opposite. The Federal Reserve held a steady course when it raised rates for a second time this year. On a political front, the situation remains fixed as Congress continues to work on a healthcare bill and tax reform. Corporate revenue and earnings growth were positive last … more >

March 4th, 2019|

2017 1st Quarter Commentary

Overview
The first quarter reflected the continued optimism that began last November with stocks showing solid gains and bonds stabilizing. There has been a surprising lack of volatility in stocks, as can be seen with the VIX index (which measures the volatility of the S&P500) trending at all time low levels. This indicates the positive view on stocks, and therefore the economy, that investors now seem to embrace. The Federal Reserve raised rates in March and … more >

March 4th, 2019|

2016 4th Quarter Commentary

Overview
In review, 2016 was quite a year to say the least. We started the year on a down note as global recession fears drove down stock prices. Stock prices turned around in February only to correct in the face of the Brexit vote in June (UK’s vote to leave the European Union). The unexpected result of the U.S. presidential election caused an overnight selloff in stocks but by the following morning stocks were positive and … more >

March 4th, 2019|

2016 3rd Quarter Commentary

Overview

Somewhat counterintuitively, the third quarter was characterized by the lowest volatility we’ve seen in a while.  Following the “Brexit” vote at the end of the second quarter, markets stabilized and continued to march higher. Second quarter earnings (reported during the third quarter) were mainly favorable which reinforced the narrative that the economy continues its slow growth trajectory.  The Federal Reserve met last month and decided to keep interest rates unchanged, citing that “the economy has … more >

October 15th, 2016|

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