Markets

Why Coronavirus is Scary for Financial Markets January 31, 2020

Posted by Bryce Coward, CFA in Economy, Markets

As we write, US stocks are down about 1.6% on the day, foreign developed market stocks are down 1.8%, and emerging market stocks are down about 2.4%. This type of corrective action did not really come as a surprise to us. Indeed just two weeks…

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Short Anatomy of a Sell-Off January 31, 2020

Posted by Steven Vannelli, CFA in Markets, Portfolio Management

Sell-offs can start for any number of endogenous or exogenous events. A mentor used to tell me, “There are a million reasons to sell a stock, but one reason to buy.” What he meant was that there are always personal reasons to sell: tuition is…

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What is Driving US Treasury Rates Lower in 2020? January 29, 2020

Posted by Steven Vannelli, CFA in Markets

10-Year US Treasury yields are down about 30bps so far this year, continuing the trend of lower rates that began in the fall of 2018 and confounding investor expectations for rising rates which would validate a turn up in economic activity. The primary driver of…

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New All-time Highs on Declining Breadth is Reason for Caution January 16, 2020

Posted by Bryce Coward, CFA in Markets

There are a number of factors that have us tactically concerned about a period of over-exuberance among equity investors. Those include record low put/call ratios and extreme inflows into equity ETFs. But among the more troubling facts of late is the breakdown in breadth we…

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Incoming Data Continues to Point to Foreign Equity Outperformance December 18, 2019

Posted by Bryce Coward, CFA in Markets

For the last  several months we’ve been talking about the distinct possibility of a period of foreign equity outperformance that investors would be remiss to miss. Indeed, it may be hard to contemplate tilting one’s portfolio in favor of foreign markets after such a great…

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Economic Growth Has Not Hit Bottom Yet November 21, 2019

Posted by Bryce Coward, CFA in Economy, Markets

Even as left tail risks to US and global economic growth seem to have been mitigated over recent weeks (more accommodate financial conditions, rising of some PMI data, worst case trade outcome seemingly a lower probability now), incoming data continue to suggest the nadir of…

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Not So Fast on the Cyclical Chinese Recovery November 14, 2019

Posted by Bryce Coward, CFA in Economy, Markets

This morning investors were unfortunately treated to a rather disappointing package of October Chinese economic data. Three of the most important hard data series were reported: fixed asset investment, industrial production and retail sales. Each was lower than the previous month and missed expectations, suggesting…

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Technology & Materials: Do You Take the Over or the Under? November 08, 2019

Posted by Bryce Coward, CFA in Markets

As each day passes and more evidence of some sort of bottom in economic activity emerges, the chances of market rotation into the more beaten down areas of the global equity market would seem to be rising. In fairness, this is likely not 2012 or…

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EAFE Equities: Can they Ever Work Again? October 25, 2019

Posted by Bryce Coward, CFA in Markets

EAFE stocks, those in the developed Europe and Asia regions, have underperformed US stocks in eight of the last eleven years. That batting average might be decent if you are a professional baseball player, but not so much if you are a professional investor. What’s…

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Not QE? October 18, 2019

Posted by Bryce Coward, CFA in Economy, Markets

Last week the Federal Reserve announced the re-commencement of large scale asset purchases in order to alleviate funding pressures that had been bubbling for several months. Much effort has been made by Fed Chairman Powell and other missionaries to explain why this round of asset…

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