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ECRI Weekly Leading Index: WLI Down Slightly, But Growth Index Increases
Today's release of the publicly available data from ECRI (Economic Cycle Research Institute) puts its Weekly Leading Index (WLI) at 135.5, down 0.9 from the previous week, which was the highest since December 2007. Year-over-year the four-week moving average of the indicator is now at 2.09%, up from a revised 1.91% the previous week and the twelfth week in positive territory. The company's Weekly Leading Index annualized growth indicator (WLIg) is at 7.1, the highest since early May of 2013.
June Market Outlook Update
by Jim McDonald of Northern Trust,
It appears that, once again, the Federal Reserve’s hopes to raise interest rates are being stymied by the economy. Just last month the Fed’s minutes showed a predisposition to raise rates soon, and Chair Janet Yellen said it would probably raise rates “in coming months” should the data continue to meet expectations.
Last Week’s Highlights on APViewpoint
by Marianne Brunet,
Last week’s top conversations were started by Scott MacKillop, David Blanchett and me, and included comments from new APViewpoint thought leader Stig Nybo. They generated thoughtful discussions on: whether risk tolerance can be measured by questionnaires; how to achieve a more holistic approach to planning; and trends and changes in the global energy market.
Recession Probability Models - June 2016
by Ted Kavadas of RevSD,
There are a variety of economic models that are supposed to predict the probabilities of recession.
While I don’t agree with the methodologies employed or probabilities of impending economic weakness as depicted by the following two models, I think the results of these models should be monitored.
Brexit: Should They Stay or Should They Go?
by Burt White of LPL Financial,
June 23, the day the United Kingdom votes on whether to remain in the European Union, is circled on every calendar on every trading desk globally. The vote will likely be very close, and while the most recent opinion polls show the likelihood of a “leave” vote increasing, though with a margin of error and a sizable undecided vote, the outcome is still unknown.
The Death of the Virtuous Cycle
by Michael Lebowitz,
The elegant virtuous cycle that propelled Western economies to prosperity has been quietly dismantled and replaced with an unproductive imitation. This new, un-virtuous cycle euthanizes discipline and prudence in exchange for the immediate gratification of debt-fueled consumption.
5 Attractive Biotechnology Stocks for Healthy Long-term Returns
by Chuck Carnevale of F.A.S.T. Graphs,
I am a fervent believer that investors are best served by investing towards a specific investment objective that suits their own unique goals, objectives and risk tolerance. In other words, investing is not always trying to get the highest possible total returns. If that were true, no one would have ever invested in bonds, CDs or other fixed income instruments.
Bringing the Human Factor to Index Investing
For decades, Franklin Templeton has been a vocal advocate for active management, believing that the skills and insight that human oversight brings should play a crucial role in the investment process. But the emergence of risk factor investing and the evolution of traditional indexes have opened up fresh opportunities to bring a human touch to evolve what has traditionally been considered the passive space.
Value Unbound: The Implications of a Nascent Value Revival
During the (tech) bubble, all it took to topple tech stocks priced for perfection was a little bit of bad news. Just a little bit of good news may be sufficient today to spark a recovery among value stocks that seem to be pricing in permanent disappointment.
A Slowdown in Job Growth
by Scott Brown of Raymond James,
The economy added nearly 697,000 private-sector jobs in May. That’s before seasonal adjustment (in comparison, we added 996,000 in May 2015). One month does not necessarily make a trend, but figures from March and April were revised lower, reinforcing the view that (seasonally adjusted) job growth has slowed. The question, for the Fed and for investors, is why.
Bear Market Risks: Commodities and the Fed
Last week, we talked about several major warning signs for a bear market: recessions, commodity price spikes, rapid rate increases by the Federal Reserve, and high market valuations. In Friday’s Economic Risk Factor Update, we looked at the probability of a recession in the near future and concluded that it was unlikely.
Today, we’ll consider the next two risk factors: oil price spikes and Fed rate increases.
Pathetic May Jobs Report - New Questions About US Economy
Economists around the world were stunned by last Friday’s unemployment report which showed that a paltry 38,000 new US jobs were created in May, a fraction of the 160,000 new jobs that were expected in the pre-report consensus. It was the fewest number of new jobs in almost six years, reflecting broad hiring cutbacks that raise new concerns about US growth.
The Coming Housing Boom: Millennials in Exile
Much has been written about the factors original to the American generation of adults currently age 21-39. Many of these factors--student loans, marriage later in life, child bearing later in life, the prior era housing bust and fears that we'd become a renter nation--have dominated investors’ attention. We would like to include one more factor(s) into the mix as we give you an update on the coming boom. Millennials, more than any prior generational group, live in exile. We believe this exile living and hesitancy to put down roots has contributed to the slowness of the coming boom and will contribute to its size and duration.
Working Effectively in a Dysfunctional Organization
When I am selling I keep running into my colleagues as competitors. I’ve complained to my boss, and he says he knows and is “working on it.” I am stunned at how the image of this company is so good, but the internal machinations are abysmal. Is it possible for me to succeed here?
Market Thoughts for June 2016
Brad McMillan, Commonwealth’s CIO, discusses the markets and economy in May. After an early pullback, improving economic news helped fuel a rally in U.S. indices at month-end. While manufacturing remains a concern, improvements in consumer spending and housing have boosted confidence, prompting the Fed to suggest that the economy has normalized. Internationally, political risks continue to be a factor. And any bad news could well rattle the markets. What can we expect tomorrow? Time will tell, but spring seems to have arrived. Follow Brad at blog.commonwealth.com/independent-market-observer.
Is Today's Poor Employment Data Reflecting Wide-Spread Macro Weakness?
by Urban Carmel of The Fat Pitch,
The macro data from the past month continues to mostly point to positive (but sluggish) growth. On balance, the evidence suggests the imminent onset of a recession is unlikely. Consumption rebounded in April: real retail sales grew 1.8% yoy (to a new all-time high) and personal consumption grew 3%. Better still, new home sales made a new 8 year high. However, employment continued to weaken: employment growth had been 2% yoy during most of 2015. In May, that fell to 1.7% growth. As employment and wages drive future consumption, upcoming employment data will remain the key watch out.
Wealth Transfers: The Benefit of Annual Gifts
Many wealthy US investors want to give substantial sums to family during their lifetime, while preserving their flexibility, in case they need the money later. That’s fine: Large annual gifts can go a long way to helping your children get started on their careers,buy homes, or simply live more comfortably. Here are several tax-efficient strategies to consider.
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.
Google’s Lesson on Making Your Team Excel
by Dan Richards,
All successful advisors reach a point where the only way to achieve continued growth is by leveraging the efforts of the team around them. That’s why advisors need to pay attention to new research on the key factor that sets top-performing teams apart, something that Google has built into its team management.
Are You a Return Seeker or a Risk Manager?
Investing, at its most basic level, is a delicate trade-off between return seeking and risk management. For many investors, the factor that dominates their decision making shifts over time with somewhat predictable, and more often than not negative, results.
ECRI Weekly Leading Index: WLI Up 1.0, YoY at 1.29%
Today's release of the publicly available data from ECRI (Economic Cycle Research Institute) puts its Weekly Leading Index (WLI) at 136.1, up 1.0 from the previous week. Year-over-year the indicator is now at 1.29%, up from a revised 1.14% the previous week and the ninth week in positive territory. The company's Weekly Leading Index annualized growth indicator (WLIg) is at 6.1, a slight increase from the previous week.
The Great Bond Sell-Off of 2015: Repeating in 2016?
by Anthony Valeri of LPL Financial,
Although not perfect, the path of yields so far in 2016 bears similarities to 2015. Both 2015 and 2016 witnessed sharp declines in yield to start the year before yields moved higher during the second quarter. However, there are key differences this time around that may work in the bond market's favor.
Factors Continue To Underperform
by Greg Swenson of The Leuthold Group,
For factor investors, recent months have been repetitive and painful. In April, Momentum saw its third consecutive month with a performance spread of -5% (or wider). Low Volatility, a trade that has become extremely crowded, continued to underperform. Investors of late have been piling into the so-called “safe” corners of the market. Whether it happens in an up or down market, typically this type of crowding does not have a happy ending.
The Dirty Little Secret of Passive Investing
by Michael Aked of Research Affiliates,
Passive investments have a dirty little secret: Their gross returns are materially depressed by implicit implementation costs. You don’t see these costs in performance attributions, unbundled management fees, or even standard trading cost analyses.
Does Active Management Add Value in Emerging Markets?
by Larry Swedroe,
I continue my series on the ability of actively managed funds to add value for their investors with an in-depth look at the asset class that is the “poster child” for an inefficient market – emerging markets. Can active managers outperform a passive index, given the supposed abundance of mispriced emerging-market stocks?
Last Week’s Highlights on APViewpoint
by Marianne Brunet,
Last week’s top conversations were started by APViewpoint member John Walton and thought leader Michael Edesess, and included comments by thought leaders Wade Pfau, Dirk Cotton and Joe Tomlinson. They generated thoughtful discussions on decumulation planning strategies and whether quantitative strategies are vulnerable to the overfitting of data.
The Ugly Truth About Buy and Hold
by Don Schreiber, Jr of WBI Investments,
Over the past 35-40 years, the industry and media have told investors to invest passively, or to buy and hold. We believe this approach is flawed and hurting rather than helping people invest successfully. The passive, buy and hold concept was developed in response to the damage inflicted on investors and the mutual fund industry in the 1970s.
Hedge Funds, Expensive Beta, Low-Cost Alpha – Replication is Better
by Maneesh Shanbhag,
Hedge fund returns, like most strategies, are a combination of market risk (beta) and manager specific risk (alpha). Depending on an investor’s goals with a hedge fund investment, high risk-adjusted return or diversification, replicating the hedge fund in order to avoid the detrimental effects of high fees is better than a direct investment.
Gender Equality: Good for Business
by Team of LPL Financial,
Many of us were excited to learn that civil rights activist Harriet Tubman will soon be featured on the $20 bill. Unfortunately, for women who work jobs where men earn $20 per hour, they will only be receiving one Hamilton, one Lincoln, and one Washington for their hours of work.
Investors Are Focusing On Earnings And Sales Estimates
by Eric Bush of GaveKal Capital,
About one month ago, we noted how investors were favoring high P/E stocks. Over the past month, focus has shifted to changes in earnings and sales estimates. Over the past month, the three factors (out of 30) that have had the highest correlation to the returns of GKCI DM Index are 1-month change in EPS estimates, 3-month change in EPS estimates, and 1-month change in sales estimates.
The Entrepreneurs’ Wealth Transfer
It takes great effort to build a fortune—and great effort to pass it on to your kids (or others) without the taxman taking a big bite. This case study shows our analysis of four potential wealth transfer strategies that a 40-year-old pair of entrepreneurs considered after selling their business for $34 million—and how they chose among them.
ECRI Weekly Leading Index: WLI Down Slighty, YoY at 0.77%
Today's release of the publicly available data from ECRI (Economic Cycle Research Institute) puts its Weekly Leading Index (WLI) at 134.5, down 0.5 from the previous week. Year-over-year the indicator is now at 0.77%, down from 0.98% the previous week and the eighth week in positive territory. The company's Weekly Leading Index annualized growth indicator (WLIg) is at 5.3, a decrease of 0.3 from the previous week.
Retail Sales Figures
by Scott Brown of Raymond James,
Economic data reports are subject to measurement error, statistical noise, and seasonal adjustment difficulties. They should always be taken with a grain of salt. However, that’s not to say that the figures are useless. Rather, they are subject to interpretation. What then do we make of the situation when the hard data conflicts with the anecdotal information?
Here's Why the Gold and Silver Futures Market Is Like a Rigged Casino...
A respectable number of Americans hold investments in gold and silver in one form or another. Some hold physical bullion, while others opt for indirect ownership via ETFs or other instruments. A very small minority speculate via the futures markets. But we frequently report on the futures markets – why exactly is that?
Americans Working Beyond Age 65 Hits New Record
A new report from the US Labor Department last week found that more Americans are working past the age of 65 than ever before. Part of the reason is that Americans are living longer and more people want to work beyond age 65. But the main reason is that most Americans have not saved nearly enough for retirement, and many have no choice but to keep working.
Results 4,651–4,700
of 6,535 found.
