The 2nd quarter of 2017 continued the streak of new highs in equity markets. While this bull market has already lasted longer than most; investors still seem to be overly cautious, expecting a pullback at any moment. However, this nervousness is likely the reason the pullback has not happened. The longer the nervousness continues, the longer the market can run. Aiding the uptrend continues to be improving corporate earnings, low unemployment, low interest rates, low inflation, and a much improved consumer balance sheet.Continue reading
While capital markets experienced some volatility during the first quarter of 2017, it
was significantly tamer than the tumultuous first quarter of the same time last year. The stabilization of oil prices and the consistent signs of economic stability, globally, set the backdrop for positive gains in the first quarter.
The political climate in the US, as well as the globally, seems to be the biggest driver of market expectations. Central banks around the globe have begun to take a back seat to policy makers and increasingly nationalistic agendas.Continue reading
The 4th quarter of 2016 was another remarkable quarter. For the second time in 2016, the market was upended by an unexpected election result. In the biggest surprise since the Brexit vote, Donald Trump was elected President of the United States. The market reaction was as strong as it was unexpected. Large U.S. companies (S&P 500 index) rose 3.82% for the quarter, while small companies (Russell 2000 index) appreciated 8.83%. The bond market was equally shaken with the BBgBarc US Aggregate Bond index down -2.98% and conversely the yield on the 10-year treasury increased from 1.61% to 2.45% during the quarter. Outside the U.S. saw a different reaction with foreign developed markets (MSCI EAFE index) down -0.71% and emerging markets (MSCI EM index) down -4.16% for the quarter.Continue reading
With Q1 2016 in the review mirror, let’s look back to see what transpired. On the Global Macro front we saw a lot of moving parts. The Central Banks in Europe and Japan are experimenting with negative interest rates. A central bank has never before implemented a negative interest rate policy.Continue reading