This morning's release of the September Existing-Home Sales increased from the previous month to a seasonally adjusted annual rate of 5.39 million units. The Investing.com consensus was for 5.30 million. The latest number represents a 0.7% increase from the previous month and a 1.5% decrease year-over-year.
Discussing charitable giving with clients can deepen your client relationships and help you grow your practice. A 2016 survey by U.S. Trust found that nearly all high-net-worth donors (94%) are curious to know more about charitable giving.
Over the long haul the two series offer a compelling study of trends in residential real estate. Here is an overlay of the two series since the 1959 inception of the Starts data and the Permits data, which began being tracked a year later. The monthly data points are preserved as faint dots. The trends are illustrated with 6-month moving averages of data divided by the Census Bureau's mid-month population estimates.
October 19, 1987, is a date that will live in stock market infamy. Known as Black Monday, it marks the largest one-day loss in history, with the Dow down exactly 508 points (22.61 percent).
The modest growth rate is contributing to the length of the current economic expansion, and American households are in the best financial shape in years. Our 3Q17 Quarterly Update report discusses the economic expansion and its impact on equities, fixed income, and more.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for September new residential housing starts. The latest reading of 1.127M was well below the Investing.com forecast of 1.180M and a decrease from the previous month's upwardly revised 1.183M.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for September new residential building permits. The latest reading of 1.215M was a decrease from 1.272M in August and above the Investing.com forecast of 1.245M.
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 68, up 4 from last month's number, came in above the Investing.com forecast of 64.
This Strategic Insight discusses how to bolster tax revenue by increasing potential growth and productivity through tax and spending reform to enhance global competitiveness and increase fairness across taxpayers, thus turn fiscal deficits into surplus. Various guiding principles outlined suggest various proven ways to achieve these objectives.
As many of you know, copper is often seen as an indicator of economic health, historically falling when overall manufacturing and construction is in contraction mode, rising in times of expansion. That appears to be the case today. Currently trading above $3 a pound, “Doctor Copper” is up close to 24 percent year-to-date and far outperforming its five-year average from 2012 to 2016.
Generating consistent returns under uncertain conditions is a challenge. Can multi-asset strategies make the job a little easier? We think so. But a lot depends on how they’re designed.
I’ve recently shared some of my views about rising tensions on the Korean peninsula as well as the political and business landscape in South Korea, which are often intertwined. While there are challenges and uncertainties in South Korea, we haven’t so far let that deter us as investors.
In the first of a three-part series on principles of the low-return imperative, we go under the covers and explain why infrastructure investment may help investors improve the probability of achieving their objectives.
Throughout history banks have been at the epicenter of every financial crisis. That notoriety of failure led to the formation of Central Banks. In the wake of the 2008 financial crisis, global banks have repaired and strengthened their balance sheets, especially in the U.S.
2008 may have generationally scarred investor psychology. As a result, many continue to disavow the current bull market and instead heed warnings of an impending bear market. We argue that fundamentals remain strong and the global equity markets are rife with opportunity.
After last week’s avalanche of economic data, the calendar is back to normal. More important is the onset of earnings season. Recent data have reassured many observers about the health of the U.S. economy. The period of seasonal weakness is ending. Expect people to be asking: Can this earnings season lead to a big year-end rally?
India has implemented measures that combined should generate a surge in economic growth, corporate earnings, and double-digit annualized stock returns over the next decade.
As we transition from Q3 to Q4, the global economy and markets seem much like that third bowl of porridge in the Goldilocks story – everything is just right.
Nearly a decade after the onset of the global financial crisis, real economic growth remains constrained by high levels of household debt, particularly for those in the bottom 80% of the income distribution. The build-up of indebtedness in these households that largely pre-dated the crisis continues to cast a shadow over the real economy.
If we think of expected return as the likeliest long-term “destination” of our investment portfolio, we can then think of risk as the uncertainty in the “journey” to that destination. Advisors serve their clients well by helping them understand the many paths that journey can take, and by establishing a plan of action (or inaction!) for when shortfalls inevitably occur.
The third quarter of 2017 closely resembled the first half of the year – global markets continued to grow steadily, resulting in positive returns for many strategic domestic and global equity investors.
Global equities advanced in the third quarter, as steady macroeconomic growth supported solid earnings reports. In the evolving market environment, we believe that individual company performance will make a bigger difference to stock returns.
Co-CIO Francis Gannon on a September Shift for small-caps (and interest rates) and why it could mean good news for cyclical stocks.
With the release of Friday's report on August Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 0.04% month-over-month change in disposable income was trimmed to -0.17% when we adjust for inflation. The year-over-year metrics are 1.98% nominal and 0.55% real. The trend since 2013 has been one of steady growth.
Valid until the market close on October 31, 2017.
The S&P 500 closed September with a monthly gain of 1.93% after a small gain of 0.05% in August. All three S&P 500 MAs are signaling "invested" and all five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), iShares Barclays 7-10 Year Treasury (IEF), and Vanguard REIT Index ETF (VNQ), and PowerShares DB Commodity Index (DBC) — are signaling "invested".
In my conversations with institutional investors I find a surprising lack of optimism about the outlook for equities. The capitalization-weighted Standard & Poor’s 500 was up over 11% year-to-date, excluding dividends, on September 18. Some would argue that only a few stocks are accounting for the rise, but the equal-weighted S&P 500 was up over 8% year-to-date as well.
Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month. At this point, before the close on the last day of the month, all three S&P 500 strategies are signaling "invested" — unchanged from last month's triple "invested" signal. All five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), iShares Barclays 7-10 Year Treasury (IEF), and Vanguard REIT Index ETF (VNQ), and PowerShares DB Commodity Index (DBC) — are signaling "invested", up from last month's quadruple "invested" signal.
In a move that was little noticed outside of the financial world, China announced the creation of an oil futures contract (open to international traders) that will be denominated in Yuan and convertible into gold. This move provides the first official linkage of oil to gold, and more importantly a linkage between the Chinese currency and gold.
Learn from our experts on what may further support small cap outperformance.
In case you missed it, on September 7, APViewpoint hosted one of the best debates ever regarding the fiduciary standard and the DOL rule. It was notable because unlike most of what you’ve been reading, it covered both sides of the topic, and the debaters forced each other to provide deeper rationales for their beliefs. Here are my key insights, particularly those that illustrate the thinking behind the anti-fiduciary mindset.
Today the National Association of Realtors released the August data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales sank in August for the fifth time in six months."
With today's release of the July S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.3% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.0% for the last twenty-nine months. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high.
With the FOMC decision behind us and a moderate data calendar, the financial world will be focused on Washington. Expect people to be asking: Has the time come for tax reform?
This morning's release of the August New Home Sales from the Census Bureau came in at 560K, down 3.4% month-over-month from a revised 580K in July. Seasonally adjusted estimates back to October 2014 were also revised. The Investing.com forecast was for 588K.
Science fiction is real. In October of last year, a self-driving semi in Colorado carried over 2,000 cases of beer from Fort Collins to a distribution center in Colorado Springs — a journey of over 130 miles. While there was a professional driver on board, he monitored the trip from the sleeping berth for most of the journey and never took the controls.
Today I want to continue with the hard-hitting analysis of our public pension problems and say more about personal storm preparation. We all have some very important choices to make.
Oil prices continue to remain low, however, thanks in large part to the ingenuity of Texas fracking companies. As I told Liz, this has served as a multibillion-dollar “peace dividend” that has mostly helped net importing markets, including “Chindia”—China and India combined, where 40 percent of the world’s population lives—Japan and the European Union.
Let's take a long-term view of household net worth from the latest Z.1 release. A quick glance at the complete data series shows a distinct bubble in net worth that peaked in Q4 2007 with a trough in Q1 2009, the same quarter the stock market bottomed. The latest Fed balance sheet shows a total net worth at an all-time high — 74.5% above the 2009 trough. The nominal Q2 net worth is up 1.2% from the previous quarter and 7.3% year-over-year.
The issues that have dominated news cycles in recent weeks should not obscure the robust underlying fundamentals of the US economy, in our view. Though some short-term weather-related disruption is possible, the economy seems to be maintaining its path of moderately strong growth, aided by healthy contributions from consumer spending and business investment.
History shows, and investment strategists tout, that small cap stocks are the best performing asset class. While small caps outperformed the runner-up, large cap stocks, over the last nearly 100 years, research has shown that the outperformance hasn’t persisted over all multi-year time periods and that the outperformance is concentrated in microcap stocks.
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for July. U.S. house prices were up 0.2 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 6.2% (nonseasonally adjusted). Seasonally adjusted, the index is up 5.20% year-over-year.
What might the German election mean for markets?
After a sustained period of return leadership by U.S. stocks, a number of diversifying assets now appear poised for outperformance.
We have a light calendar for economic data. The week’s focus will be the FOMC policy announcement on Wednesday. Given the resilience of the market rally in the face of various natural and human threats, the punditry will turn to a favored topic. Expect people to be asking: Will the Fed be the catalyst for a market correction?
Value stocks have underperformed most other styles of investing, as well as the broad market, by a wide margin since the beginning of 2015. We see several reasons why, which point to the catalysts for a potential recovery; we do not think Value is past its prime.
The Real Estate Channel
Existing-Home Sales: Fourth Consecutive Decline in August
This morning's release of the September Existing-Home Sales increased from the previous month to a seasonally adjusted annual rate of 5.39 million units. The Investing.com consensus was for 5.30 million. The latest number represents a 0.7% increase from the previous month and a 1.5% decrease year-over-year.
Grow Your Practice through Charitable Giving Conversations
Discussing charitable giving with clients can deepen your client relationships and help you grow your practice. A 2016 survey by U.S. Trust found that nearly all high-net-worth donors (94%) are curious to know more about charitable giving.
Secular Trends in Residential Building Permits and Housing Starts
Over the long haul the two series offer a compelling study of trends in residential real estate. Here is an overlay of the two series since the 1959 inception of the Starts data and the Permits data, which began being tracked a year later. The monthly data points are preserved as faint dots. The trends are illustrated with 6-month moving averages of data divided by the Census Bureau's mid-month population estimates.
Black Monday Remembered
October 19, 1987, is a date that will live in stock market infamy. Known as Black Monday, it marks the largest one-day loss in history, with the Dow down exactly 508 points (22.61 percent).
Quarterly Update: October 2017
The modest growth rate is contributing to the length of the current economic expansion, and American households are in the best financial shape in years. Our 3Q17 Quarterly Update report discusses the economic expansion and its impact on equities, fixed income, and more.
New Residential Housing Starts Down in Again in September
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for September new residential housing starts. The latest reading of 1.127M was well below the Investing.com forecast of 1.180M and a decrease from the previous month's upwardly revised 1.183M.
New Residential Building Permits: Up in September
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for September new residential building permits. The latest reading of 1.215M was a decrease from 1.272M in August and above the Investing.com forecast of 1.245M.
NAHB Housing Market Index: "Builder Confidence Rises Four Points in October"
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 68, up 4 from last month's number, came in above the Investing.com forecast of 64.
What To Expect With Tax Reform
This Strategic Insight discusses how to bolster tax revenue by increasing potential growth and productivity through tax and spending reform to enhance global competitiveness and increase fairness across taxpayers, thus turn fiscal deficits into surplus. Various guiding principles outlined suggest various proven ways to achieve these objectives.
Car Manufacturers Are Electrifying Copper, “The Metal of the Future”
As many of you know, copper is often seen as an indicator of economic health, historically falling when overall manufacturing and construction is in contraction mode, rising in times of expansion. That appears to be the case today. Currently trading above $3 a pound, “Doctor Copper” is up close to 24 percent year-to-date and far outperforming its five-year average from 2012 to 2016.
The Science and Art of Multi-Asset Investing
Generating consistent returns under uncertain conditions is a challenge. Can multi-asset strategies make the job a little easier? We think so. But a lot depends on how they’re designed.
Scoping out South Korea’s Investment Landscape
I’ve recently shared some of my views about rising tensions on the Korean peninsula as well as the political and business landscape in South Korea, which are often intertwined. While there are challenges and uncertainties in South Korea, we haven’t so far let that deter us as investors.
3 Reasons to Consider Infrastructure Investment
In the first of a three-part series on principles of the low-return imperative, we go under the covers and explain why infrastructure investment may help investors improve the probability of achieving their objectives.
Macro Factors and their Impact on Monetary Policy, the Economy, and Financial Markets
Throughout history banks have been at the epicenter of every financial crisis. That notoriety of failure led to the formation of Central Banks. In the wake of the 2008 financial crisis, global banks have repaired and strengthened their balance sheets, especially in the U.S.
Short-Term Volatility vs. Full-Blown Bear Market
2008 may have generationally scarred investor psychology. As a result, many continue to disavow the current bull market and instead heed warnings of an impending bear market. We argue that fundamentals remain strong and the global equity markets are rife with opportunity.
Weighing the Week Ahead: Can Earnings Season Spark a Big Year-End Rally?
After last week’s avalanche of economic data, the calendar is back to normal. More important is the onset of earnings season. Recent data have reassured many observers about the health of the U.S. economy. The period of seasonal weakness is ending. Expect people to be asking: Can this earnings season lead to a big year-end rally?
As India Crosses the Digital Divide, a New Era of Investment Opportunities Dawns
India has implemented measures that combined should generate a surge in economic growth, corporate earnings, and double-digit annualized stock returns over the next decade.
Goldilocks and the Three Bears
As we transition from Q3 to Q4, the global economy and markets seem much like that third bowl of porridge in the Goldilocks story – everything is just right.
What Income Inequality Means for Economic Growth
Nearly a decade after the onset of the global financial crisis, real economic growth remains constrained by high levels of household debt, particularly for those in the bottom 80% of the income distribution. The build-up of indebtedness in these households that largely pre-dated the crisis continues to cast a shadow over the real economy.
Part 2 Risk: Preparing Clients for an Uncertain Journey
If we think of expected return as the likeliest long-term “destination” of our investment portfolio, we can then think of risk as the uncertainty in the “journey” to that destination. Advisors serve their clients well by helping them understand the many paths that journey can take, and by establishing a plan of action (or inaction!) for when shortfalls inevitably occur.
Glide Path
The third quarter of 2017 closely resembled the first half of the year – global markets continued to grow steadily, resulting in positive returns for many strategic domestic and global equity investors.
Finding Resilient Returns as Global Equities Rally
Global equities advanced in the third quarter, as steady macroeconomic growth supported solid earnings reports. In the evolving market environment, we believe that individual company performance will make a bigger difference to stock returns.
The September Shift to Small-Cap Value + 5 More Observations on 3Q17
Co-CIO Francis Gannon on a September Shift for small-caps (and interest rates) and why it could mean good news for cyclical stocks.
Real Disposable Income Per Capita Gains in August
With the release of Friday's report on August Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 0.04% month-over-month change in disposable income was trimmed to -0.17% when we adjust for inflation. The year-over-year metrics are 1.98% nominal and 0.55% real. The trend since 2013 has been one of steady growth.
Moving Averages: September Month-End Update
Valid until the market close on October 31, 2017.
The S&P 500 closed September with a monthly gain of 1.93% after a small gain of 0.05% in August. All three S&P 500 MAs are signaling "invested" and all five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), iShares Barclays 7-10 Year Treasury (IEF), and Vanguard REIT Index ETF (VNQ), and PowerShares DB Commodity Index (DBC) — are signaling "invested".
Low Volatility Is Here to Stay
In my conversations with institutional investors I find a surprising lack of optimism about the outlook for equities. The capitalization-weighted Standard & Poor’s 500 was up over 11% year-to-date, excluding dividends, on September 18. Some would argue that only a few stocks are accounting for the rise, but the equal-weighted S&P 500 was up over 8% year-to-date as well.
Moving Averages: Month-End Preview
Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month. At this point, before the close on the last day of the month, all three S&P 500 strategies are signaling "invested" — unchanged from last month's triple "invested" signal. All five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), iShares Barclays 7-10 Year Treasury (IEF), and Vanguard REIT Index ETF (VNQ), and PowerShares DB Commodity Index (DBC) — are signaling "invested", up from last month's quadruple "invested" signal.
A New Challenge to the Dollar
In a move that was little noticed outside of the financial world, China announced the creation of an oil futures contract (open to international traders) that will be denominated in Yuan and convertible into gold. This move provides the first official linkage of oil to gold, and more importantly a linkage between the Chinese currency and gold.
Small Cap Outperformance
Learn from our experts on what may further support small cap outperformance.
What’s Behind the Anti-Fiduciary Mindset?
In case you missed it, on September 7, APViewpoint hosted one of the best debates ever regarding the fiduciary standard and the DOL rule. It was notable because unlike most of what you’ve been reading, it covered both sides of the topic, and the debaters forced each other to provide deeper rationales for their beliefs. Here are my key insights, particularly those that illustrate the thinking behind the anti-fiduciary mindset.
Pending Home Sales Fall Again in August
Today the National Association of Realtors released the August data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales sank in August for the fifth time in six months."
Home Prices Rose 6.0% Year-over-Year in July
With today's release of the July S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.3% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.0% for the last twenty-nine months. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high.
Weighing the Week Ahead: Time for Tax Reform?
With the FOMC decision behind us and a moderate data calendar, the financial world will be focused on Washington. Expect people to be asking: Has the time come for tax reform?
August New Home Sales Down 3.4% from July
This morning's release of the August New Home Sales from the Census Bureau came in at 560K, down 3.4% month-over-month from a revised 580K in July. Seasonally adjusted estimates back to October 2014 were also revised. The Investing.com forecast was for 588K.
Could Driverless Cars Benefit Your Portfolio down the Road?
Science fiction is real. In October of last year, a self-driving semi in Colorado carried over 2,000 cases of beer from Fort Collins to a distribution center in Colorado Springs — a journey of over 130 miles. While there was a professional driver on board, he monitored the trip from the sleeping berth for most of the journey and never took the controls.
Build Your Economic Storm Shelter Now
Today I want to continue with the hard-hitting analysis of our public pension problems and say more about personal storm preparation. We all have some very important choices to make.
The Biggest Global Tax Break Ever Bubbles Up from Texas Oil Industry
Oil prices continue to remain low, however, thanks in large part to the ingenuity of Texas fracking companies. As I told Liz, this has served as a multibillion-dollar “peace dividend” that has mostly helped net importing markets, including “Chindia”—China and India combined, where 40 percent of the world’s population lives—Japan and the European Union.
Household Net Worth: The "Real" Story
Let's take a long-term view of household net worth from the latest Z.1 release. A quick glance at the complete data series shows a distinct bubble in net worth that peaked in Q4 2007 with a trough in Q1 2009, the same quarter the stock market bottomed. The latest Fed balance sheet shows a total net worth at an all-time high — 74.5% above the 2009 trough. The nominal Q2 net worth is up 1.2% from the previous quarter and 7.3% year-over-year.
Global Economic Perspective: September
The issues that have dominated news cycles in recent weeks should not obscure the robust underlying fundamentals of the US economy, in our view. Though some short-term weather-related disruption is possible, the economy seems to be maintaining its path of moderately strong growth, aided by healthy contributions from consumer spending and business investment.
Myths and Misconceptions
History shows, and investment strategists tout, that small cap stocks are the best performing asset class. While small caps outperformed the runner-up, large cap stocks, over the last nearly 100 years, research has shown that the outperformance hasn’t persisted over all multi-year time periods and that the outperformance is concentrated in microcap stocks.
FHFA House Price Index: Index Up 0.2% in July
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for July. U.S. house prices were up 0.2 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 6.2% (nonseasonally adjusted). Seasonally adjusted, the index is up 5.20% year-over-year.
The German Election and Markets
What might the German election mean for markets?
Are Diversifying Assets Up Next in the Return-Seeking Cycle?
After a sustained period of return leadership by U.S. stocks, a number of diversifying assets now appear poised for outperformance.
Weighing the Week Ahead: Will a More Aggressive Fed Spark the Long-Awaited Correction?
We have a light calendar for economic data. The week’s focus will be the FOMC policy announcement on Wednesday. Given the resilience of the market rally in the face of various natural and human threats, the punditry will turn to a favored topic. Expect people to be asking: Will the Fed be the catalyst for a market correction?
Is Value Investing Past Its Prime?
Value stocks have underperformed most other styles of investing, as well as the broad market, by a wide margin since the beginning of 2015. We see several reasons why, which point to the catalysts for a potential recovery; we do not think Value is past its prime.