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Fed: Almost Half of US Households Have Under $400 Saved
We begin today by looking at the recently released Federal Reserve study on the economic conditions of 50,000 randomly-selected US households. This annual survey attempts to capture a snapshot of the financial and economic well-being (or not well-being) of US households. Let me warn you upfront that some of the findings are really bad.
On My Radar: 2016 Strategic Investment Conference
Yusko took the stage Thursday morning and told a story about a time in 1999 when he served as the chief investment officer of the University of North Carolina endowment. He presented to his board in December 1999 and showed them the GMO 10-year forward annualized return predictions. GMO had advised investors to expect a negative 1.9% over the coming decade (annualized per year for ten years from 2000 – 2010).
Weighing the Week Ahead: What is the Risk/Reward for Stocks?
This week’s economic calendar is loaded, and packed into a holiday-shortened week. There will also be plenty of FedSpeak, encouraging the favorite game of not just reporting data, but wondering how the Fed will see it.
When it comes time to put it all together, pundits will be asking:
What is the risk/reward tradeoff for stocks?
Economic Reality
Fundamental improvements – intelligent changes in investment incentives, the tax system or infrastructure, for example – can increase the slope of the growth curve and provide substantial net long-term benefits for a society (although not necessarily for every individual member). Short-term fixes simply cannot create wealth out of thin air.
Weighing the Week Ahead: How Should Investors React to the Oil Price Rally?
This week’s economic calendar is pretty light. Market participants will be looking to an early getaway for the long weekend. While there will be plenty of entertaining FedSpeak, I expect a different topic to be at the fore. Pundits will be asking:
Should investors react to the oil price rally?
April Cools
A calmer tone prevailed across markets in April despite major central banks choosing to pause from adding substantial support.
Mixed economic data underscored a tepid fundamental backdrop.
The market rally continued in April, though underlying sentiment may have cooled more than the rally suggested.
Weighing the Week Ahead: Springtime for Housing?
This week’s economic calendar includes some key data on the housing market and few other major reports. The debate about the strength of the U.S. economy continues. The housing market is an important contributor to the economy. As we enter the key season for real estate many will be asking:
Is it Springtime for housing?
On My Radar: Champions of Conviction
“Invest in good companies, don’t use leverage, invest in liquid investments, don’t do private deals and light a candle and pray for a positive outcome.”
-Leon Cooperman, Omega
“Debt drains away vital resources from economic growth. Fighting a debt crisis with more debt is doomed to failure, yet that is not only what global central banks did during the crisis but long after markets stabilized (though the crisis never truly ended, just slowed). This was an epic policy failure that continues today.”
-Michael Lewitt, The Credit Strategist
Global Economic Perspective: May
The road toward the ECB’s target of 2% inflation will likely be long, but we maintain our belief that the central bank is currently pursuing all of the politically feasible policies at its disposal that can encourage a further revival of economic activity and help achieve that goal.
Is the Market Cheap? Three Things You Need to Know About Valuation, but Don't
There is a general consensus that valuation indicators are not very useful for market timing. Despite this, the financial media and the blogosphere feature an avalanche of articles warning that the market is seriously overvalued. Your retirement account might drop 50% at any moment. There are countless worries in the world.
Weighing the Week Ahead: Why the Surprising Strength in Employment?
The economic calendar had most of the big news last week. Earnings season is winding down. It is a time to digest and analyze what we have learned. Many will be asking: Why is employment growth still strong while other indicators show weakness?
Is Sell in May Just a Cliche?
by Burt White of LPL Financial,
“Sell in May and go away” is probably the most widely cited cliché in stock market history. May is upon us, which every year sparks a barrage of Wall Street commentaries, media stories, and investor questions about the popular stock market adage. This week we tackle this widely cited seasonal pattern, but with a couple of twists thrown in to add some new perspective.
Monthly Market Risk Update: May 2016
It’s time for our monthly look at market risk factors. Just as with the economy, there are several key factors that matter for the market, in determining both the risk level and the immediacy of that risk. Although the recent pullback is largely in the rearview mirror, given valuations and recent market behavior, it's still useful to keep an eye on these factors.
The Bank of Japan Leaves Monetary Policy Unchanged
by Sean Connery of Invesco,
The Bank of Japan (BoJ) announced at its April 28 policy meeting that it would keep monetary policy unchanged. Invesco Fixed Income has been inclined to think that the BoJ would wait. It was only in January that it eased policy last, and we had anticipated that it would want to fully assess the impact of those actions before easing further. Furthermore, the recent increase in oil prices and weakening in the yen may have bought the central bank some additional thinking time. However, recent polls indicated that many non-Japanese investors had expected easing.
On My Radar: He Ain’t Heavy, He’s My Brother
He sure feels like he’s heavy. From The Wall Street Journal this morning, “U.S. Growth Starts Year in Familiar Rut.” “A sharp pullback in business investment and weak global demand dragged down an already-lackluster U.S. economy in the opening months of 2016, the latest setback in a bumpy expansion entering its seventh year.” That marked the economy’s worst performance in two years.
Altitude Adjustment: Investing During a Period of Lower Returns and Higher Volatility
It can be difficult to adjust to the end of a good run. For years following the financial crisis of 2008, investors benefited from a rally in financial markets facilitated in part by expansionary policies of the Federal Reserve and other central banks around the globe.
Silver Wheaton: The Ultimate Streaming Service
As the only pure silver mining company, Silver Wheaton couldn’t have been founded during a more opportune time. The commodities boom was still young. I remember that when the idea was shared with me, what I found most attractive was that it had virtually no competition. Franco-Nevada, which had been acquired by Newmont in 2001, wouldn’t be spun off for three more years. It was a no-brainer to put capital in this new endeavor.
The Impeachment Proceedings of Dilma Rousseff
Brazil’s lower house recently voted to impeach President Dilma Rousseff. The process now moves to the Senate, which is expected to vote in the next few weeks. For almost a year, Rousseff’s opposition has been trying to impeach her for allegedly manipulating the government budget in 2014. A Senate majority vote to impeach could remove her from power, installing her vice president, Michel Temer, as president. This week we look at the circumstances that have led to the Brazilian presidential impeachment proceedings, Brazil’s recent political history and its economic development.
Equity Investment Outlook April 2016
During the first quarter, global markets experienced exceptional volatility. Markets began their nose dive on the first day of trading this year as investors worried about deflationary trends, turmoil in credit markets and the possibility of a global recession. Then, in mid-February, a rebound in oil markets and new data suggesting stronger than expected U.S. growth caused sentiment to reverse and markets to recover. We believe that similar ambivalence and mood swings will persist for some time. Odds seem to favor an extended period of sub-par economic growth both in the U.S. and around the world.
On My Radar: Glut – The U.S. Economy… in the Age of Oversupply
Today, my plan was to highlight two of my favorite analysts, Dr. Lacy Hunt and Dr. Gary Shilling. But that plan has changed and importantly, I believe, what I share this week can give us a better understanding of the structural issues we face. And how they might be fixed. Listening to Bloomberg’s Tom Keene early this week, I stood quiet as he interviewed Daniel Alpert.
Wait Until You Get a Pitch Right Where You Want It!
by Jeffrey Saut of Raymond James,
One of the most successful investors in history received the only A+ from Professor Benjamin Graham (of Graham and Dodd “Security Analysis” fame) at Columbia: the chairman and chief executive officer at Berkshire Hathaway, Inc., which traded as low as $38 per share in the early 1970s and now trades around $219,000 per share. If you haven’t guessed who by now, it’s Warren Buffett. How does he do it?
Can Stocks (finally) Set a New Record?
We have been taking profits on stocks that hit targets and replacing with new selections. There are many candidates, and we go shopping on dips. We classify stocks three ways: (1) Aggressive upside, but plenty of risk. You need to buy a basket, not a single stock; (2) Great companies with great prospects, currently undervalued, but with potential catalysts. (3) Stodgy, conservative names without a lot of upside. Great candidates for enhancing dividend yield by selling near-term calls. Thinking about opportunities in this way is a good method for the individual investor.
9 Fairly Valued Mid-Cap Consumer Discretionary Dividend Growth Stocks: Part 2B
by Chuck Carnevale of F.A.S.T. Graphs,
Mid-cap stocks are often overlooked by investors and not widely covered on Wall Street or many financial websites and blogs. However, I consider it a mistake because there are many mid-size companies that are attractive long-term investment opportunities.
The Great American Economic Growth Myth
Since the end of the financial crisis, economists, analysts, and the Federal Reserve have continued to predict a return to higher levels of economic growth. As I showed in my discussion of the Fed’s forecasts, these predictions have continued to fall short of reality.
Weighing the Week Ahead: Time to Sell the News?
The economic calendar is moderate. Fed Heads are mostly on the bench. The Doho oil conference (combining OPEC and non-OPEC producers) will be the first major news for the week ahead. Markets have already anticipated the outcome, just as they have the trend of first- quarter earnings. It is a classic test of the theme:
Is it time to sell the news?
What Condition My Condition Is In
by John Mauldin of Mauldin Economics,
In this week’s letter we will take a quick look at the condition of a slowing global economy (the IMF just downgraded its own forecast this last week). Then we’ll grapple with a Plan B scenario, because I have a confession of sorts: I am not entirely optimistic that Congress and the new president can get their act together, so I offer a proposal from former Oklahoma Senator Tom Coburn as to what we, the people, can do to actually change the country’s direction without having to depend on a Congress that may prove dysfunctional. Again.
If You’re Not Following this Energy Trend, You’re Being Left in the Dust
This week our office was visited by my friend, investor and author Gianni Kovacevic, who is at the halfway point of a cross-country book tour to promote the latest edition of “My Electrician Drives a Porsche?” As part of the tour, he’s driving a Tesla Model S from Boston to Palo Alto, California—Tesla’s hometown—to demonstrate the potential of green energy and spread his message that “the future is now.”
The Times Are a--Changin'
Dovish comments and actions by central banks, including the Federal Reserve, helped sustain the market’s rally.
Fundamentals still indicated tepid growth even as global risk appetite built further through the course of the month.
March highlighted that shifts in political trends could feature prominently in the remainder of the year.
Mid-Cap Dividend Growth Stocks by Sector: Part 2A Regional Banks
by Chuck Carnevale of F.A.S.T. Graphs,
In part 1 of this series on fairly valued mid-cap investment opportunities I primarily focused on non-dividend paying growth oriented mid-caps. In part 2 of this series I turned my focus to finding fairly valued dividend paying mid-caps. However, as I was evaluating dividend paying mid-caps in the S&P 400 mid-cap index, it became clear to me that the differences between dividend paying mid-caps were more important than the similarities. Therefore, I have grouped the dividend paying mid-caps I found into 3 separate offerings focusing on sectors. In this, part 2A, I will be exclusively covering fairly valued mid-sized regional banks.
State of the States
by Anthony Valeri of LPL Financial,
With the deadline approaching, taxes are front and center in the minds of investors. No one likes paying taxes, but they are of utmost importance to the financial well-being of state and local governments. Higher tax revenue has been a key driver of improving (in most cases) state and local government credit quality metrics by firming the financial standing of municipal government debt issuers. However, growth in state and local government tax revenue may be poised to slow, lessening the positive impact behind municipal credit quality.
Alpha or Assets? — Factor Alpha vs. Smart Beta
More and more investors are buying “factor”-based strategies, which invest using measures like valuation and low volatility. However, the most popular strategies are applying factors the wrong way. We believe that strategies should be built for alpha, not scale—but the asset management industry has gone in the opposite direction.
Hoisington Quarterly Review and Outlook – 1Q2016
The prospects for the Treasury bond market remain bright for patient investors who operate with a multi-year investment horizon. As we have written many times, numerous factors can cause intermittent increases in yields, but the domestic and global economic environments remain too weak for yields to remain elevated.
On My Radar: A Powerful and Reliable Determinant of Long-Term Investment Return
In my view, the bet today comes down to this: you believe the Fed can hold the market up (aka “the Fed Put”), you believe politicians can accomplish structural reform and you believe that the same holds true in Europe, China and Japan. Essentially, “whatever it takes” wins. Alternatively, you believe that extremely high equity market valuations matter, excessive debt is problematic and that it is ultimately impossible for central bankers, try as they might, to repeal economic business cycles.
What Tools Does the Fed Have Left? Part 3: Helicopter Money
by Ben Bernanke of Brookings Institute,
“Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated." (Milton Friedman, “The Optimum Quantity of Money,” 1969)
Weighing the Week Ahead: Will Earnings Spark a Big Move in Stocks?
The economic calendar is moderate. Fed Heads are out in force. More significant is the start of “earnings season.” There is always speculation about earnings, but this time is special. I expect a focus on the question:
Will earnings spark a break in the trading range for stocks?
Results 2,451–2,500
of 3,702 found.
