The International Channel

Moving Averages: April Month-End Update

Valid until the market close on May 31, 2017

The S&P 500 closed April with a monthly marginal gain of 0.91% after a fractional loss of 0.04% in March. All three S&P 500 MAs are signaling "invested" and two of the five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI) and Vanguard FTSE All-World ex-US ETF (VEU) — are signaling "invested".

The Message of the Bond Market

At the beginning of the year, most market strategists were in agreement that interest rates were going to rise in 2017. The reasons varied: some saw inflation climbing, pushing yields higher; others worried about bigger budget deficits; a few blamed the Federal Reserve, which was thought to be planning to raise short-term interest rates two or three times and shrink its balance sheet. Whatever the reason, interest rates were expected to head higher, so seeing the 10-year U.S. Treasury yield here at 2.3% is a surprise.

Schwab Market Perspective: Should Sharp Sentiment Shifts Mean a Change in Strategy?

Recent market action has all the markings of a relief rally. The French vote in favor of centrist candidate Macron took "Frexit" off the table for now; a new tax cut proposal by the Trump administration, and the decreasing likelihood of a near-term U.S. government shutdown all appeared to play a part in the sharp rise in stocks and plunge in volatility.

Damn the Deficits, Huge Tax Cuts Ahead!

Donald Trump has made good on one of his most audacious campaign promises by submitting what he describes as the biggest tax cut in U.S. History. For once, at least, this does not appear to be Trumpian braggadocio. It really may be the mother of all tax cuts.

Brighter Outlook for Commodities Suggests a Fresh Look at Investment Benefits and Risks

Though uncertainties remain, we have a broadly positive outlook for commodities in the next year.

Quarterly Letter

In this edition of the Muhlenkamp Memorandum, Ron and Jeff discuss the Small Business Optimism Index chart which is produced by the National Federation of Independent Business (NFIB). It is based on monthly surveys of its members in order to better understand the environment in which small businesses are operating.

Think Like a Business Owner in European Equities

Investors in European stocks are facing multiple sources of risk. Applying the mindset of strategic business owners can help tune out the noise and sharpen investors’ focus on more resilient sources of return potential.

Is the USD Bull Market Over and What That Would Mean for Your Portfolio

Since the beginning of 2017, the US dollar has struggled against nearly every major currency, calling into question the idea that the US dollar is still in a bull market. Indeed, since the dollar made its cyclical high on the first day of 2017 trading,

'French Risk Premium’ Could Persist Until June

Markets cheered the prospect of an Emmanuel Macron presidency, but even if he wins, his reforms may lack parliamentary support. As a result, Franck Dixmier, Global Head of Fixed Income for Allianz Global Investors, says the risk aversion of recent weeks could last until France’s legislative elections in June.

Brexit Heats Up: 4 Things to Watch

Russell Investments’ Senior Investment Strategist, Wouter Sturkenboom reviews the Brexit drivers for the upcoming June 8 snap election as well as four key things for investors to watch as the mechanics of the UK leaving the EU get underway.

A World Turned Inside Out

Slowly but surely, a bruised and battered global economy now appears to be shaking off its deep post-2008 malaise. But this hardly means that the world is returning to normal; on the contrary, the global growth dynamic has undergone an extraordinary transformation during the last nine years.

Peru’s Resilience

Many investors are concerned about the risks to growth and the potential for higher inflation in Peru following two recent shocks.

An Exciting Time for the Energy Sector

Oil is back in the news, with the price of benchmark West Texas Intermediate (WTI) crude roughly doubling from last year’s lows driven by steady demand and coordinated supply cuts by Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers.

Political Risk Update: France and the U.S. Budget

With Emmanuel Macron through to the second round, the French election is (largely) off the table as a systemic risk. Polls show Macron well ahead of Marine Le Pen of the National Front, and the likelihood is that the next French president will be a pro-European centrist rather than an anti-European populist.

Fund Managers’ Current Asset Allocations

Fund managers have become more bullish, but not excessively so. Cash balances at funds remains high, suggesting lingering doubts and fears. Allocations to US equities dropped to their lowest level in 9 years in April: this is when US equities typically start to outperform.