George Hosfield, CFA, discusses Ferguson Wellman's quarterly strategy titled, "Inflation's Flame Flickers," which addresses the narrow market leadership, the impact of higher interest rates on inflation and how assets are priced at this stage of the economic cycle.
George Hosfield, CFA, discusses the firm's quarterly strategy titled "Stalemate," which highlights the Fed's ongoing battle to tame inflation along with our views on the health of the banking industry and capital market expectations for the balance of the year.
Director and Chief Investment Officer George Hosfield, CFA, discusses the Fed raising interest rates, peaking inflation and our view on equities and volatility across all asset classes in our Investment Strategy titled, “Balancing Act.”
Stock markets were higher this week, despite Hurricane Harvey and a weaker-than-expected jobs report. The S&P 500 was up 1.5 percent, ending the week close to the all-time high of 2,480 from early August. Bond yields slid slightly lower, with the benchmark 10-year Treasury yield dipping to 2.14 percent. August’s nonfarm payrolls report showed a gain of 156,000, which was below the expected 180,000 jobs.
The dog days of summer have officially set in. Millions of people took Monday off to watch the eclipse, while millions more merely peeked out their office windows.
For the week, the equity markets were down more than 1 percent as investors followed political events in Washington D.C. While the markets have been mostly focused on the global surge in earnings growth this year, political drama took center stage this week as there are concerns that the current administration will be unable to successfully enact tax reform and deregulation.
Headlines screaming, “fire and fury,” and “ballistic rockets are on constant standby,” could have surely warranted a multi-percentage sell-off. Fortunately, the market’s reaction was somewhat muted, falling just over 1 percent for the week. Historically, North Korean headlines have had minimal impact on the stock market. In 2006, when they detonated their first nuclear device, U.S. stocks were actually up.
The slow creep higher in the markets continued this week. The S&P 500 finished the week up 0.12 percent with financials stocks leading the way, up 2 percent. The ADP jobs report on Wednesday and the nonfarm payroll today gave us “not too hot, not too cold” readings.
Amid the busiest week of second quarter earnings reports, blue-chip stocks continued to trade near record levels. With nearly 40 percent of the S&P 500 companies having reported over the past five days, the clear plurality of results has exceeded expectations.
Equity markets sold off on Friday, but were mixed for the week. The S&P 500 closed out the week slightly higher, returning a positive .45 percent for the week. The Dow Jones Industrial Index ended the week about -.30 percent lower, with energy leading decliners. The Nasdaq returned a strong 1 percent for the week.
Led by a 3.8 percent gain in emerging markets, global equities sustained their upward march this week. The S&P 500 returned 1.4 percent and again flirts with an all-time high. 10-year U.S. Treasury yields fell seven basis points as soft inflation data weighed on expectations for future interest rate hikes. The Fed continues to grapple with conflicting signals in an attempt to balance the dual mandate of maximizing employment and stabilizing prices.
Despite improving economic data, the S&P 500 finished the week flat. Solid global PMI’s continue to move interest rates higher around the world. 10-year yields in Germany hit an 18-month high, and the 10-year U.S. Treasury finished the week at 2.39 percent. Just 11 days ago the benchmark U.S. rate was at 2.13 percent.
For the shortened holiday week, equity markets were down by almost 1 percent as investors followed events in Russia and North Korea. Interest rates were lower with the 10-year Treasury declining in yield from 2.36 to 2.22 percent.
As investors, the best thing about earnings season is it filters a lot of the other noise out of the market. A month ago, a tweet, tariff headlines or even a longshot tax proposal would have moved the equity markets.
The broad markets performed as expected this week as the Federal Reserve announced its much expected rate hike Wednesday. The Dow Jones Industrial Average did set a new high after the announcement but finishes the week up only 0.4 percent.
Global elections continue to stir up markets this week. U.S. stocks and the dollar rose as the British pound declined after the U.K.’s Conservative Party lost its parliamentary majority just as the Brexit negotiations begin
The S&P 500 was up nearly 1 percent again this week as economic data continues to confirm a growing economy. An underwhelming jobs report on Friday took yields on 10-year U.S. Treasuries to a new low on the year of 2.15 percent.
Buoyed by the best quarterly earnings growth in six years, blue chip equities are forging new highs, with investors disregarding the turmoil in Washington and discounting increasingly lofty expectations for the remainder of 2017.
Political risk has always been frustrating for investors. We like the rules of the game to be known and the playing field level. Any kind of uncertainty leads to volatility in markets. While many believed that the Republican sweep would deliver pro-growth initiatives, Trump’s troubles have led to concerns regarding those outcomes.
In a week full of geopolitical news, the market showed a bit of malaise. The S&P 500 posted a small loss of 0.4 percent. Bonds were similarly docile with the 10-year U.S. Treasury ending the week off two basis points at 2.3 percent.
The S&P 500 headed toward a third weekly increase on a rebound in hiring and economic optimism. The benchmark 10-year Treasury is currently trading at a yield of 2.35 percent, which is lower for the day but seven basis points higher than last week. The euro reached its highest level of the year, at 1.098, against the U.S. dollar, rallying on polls that favor a Macron win in France. Oil regained 2 percent after briefly dropping below a six-month low of $44 per barrel due to mounting concerns over a supply glut.
As investors, the best thing about earnings season is it filters a lot of the other noise out of the market. A month ago, a tweet, tariff headlines or even a longshot tax proposal would have moved the equity markets. But now that we are in the throes of earnings season, equity investors are focused on the most important factor in investing: earnings.
First quarter earnings season kicked into high gear this week and investors were treated to a smorgasbord of blue-chip results across a range of industries. As they typically do, numbers for most companies have exceeded Wall Street expectations, but with almost 20 percent of the S&P 500 now having reported, the .75:1 ratio of “beats” is modestly better than where it has been over the last several quarters.
