Month in Review: November 2017

Global growth estimates continued to grind higher in November and U.S. tax reform bills in Congress provided an additional tailwind to U.S. equity markets.  Valuations and geopolitics remain concerning and while the tax cut induced rally may have been a little optimistic, the cyclical picture remains favorable from both economic and policy perspectives.

Market Anecdotes

  • The House and Senate passed tax reform bills, projected to boost GDP by 0.8% over the ten-year budget window.  The bill is front end loaded with ...
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Month in Review: September 2017

Despite a triple dose of hurricanes, tension with North Korea, and a month known to be challenging and volatile, the S&P 500 delivered its biggest September since 2013 within one of the narrowest trading bands on record.  Not to be left out, the NASDAQ and Russell 2000 hit all-time highs and the DJIA fell only 0.06% short.  European equity markets led the way while emerging markets generated their first negative month in 2017.  With constructive economic reports prevailing both here ...

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Month in Review: August 2017

Positive corporate earnings and economic data propelled global equity markets to an eighth consecutive positive month.  Emerging and developed international markets outperformed the U.S. aided by a weaker U.S. dollar and a spike in commodity prices (excluding oil).  Major news items included tension with North Korea, Hurricane Harvey, the Jackson Hole Economic Symposium, and the political climate in D.C. (staff purges, Charlottesville).  Large multinational stocks outperformed small cap stocks again and by a wide margin due to encouraging non-U.S. economic ...

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Month in Review: June 2017

June put a bow on a very friendly first half 2017 for global equity investors but a quiet month it was not.  Comey congressional testimony, a Fed rate hike, closely watched elections in France and the U.K., and ample central bank narratives dominated the headlines.  Markets absorbed the information in step and, as opposed to recent years, we enter the second half of the year without a tangible dark shadow akin to the Greek debt crises or Brexit weighing heavily ...

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Month in Review: April 2017

Global equity markets continued to rally in April, navigating several high-profile developments throughout the month including a U.S. missile strike in Syria, saber rattling with North Korea, positive results in the French election, and the heart of first quarter U.S. corporate earnings season. Soft inflation data and geopolitical events during the month made U.S. treasury bonds more attractive to investors, pressuring interest rates lower in contrast to consensus calls for rising rates. Emerging markets outperformed developed markets again in April ...

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Month in Review: March 2017

Both U.S. equity markets and interest rates ended the month close to where they began but getting there was far from a straight line. Emerging markets and international developed markets outperformed the U.S. in March as political risks in Europe abated slightly (Dutch elections) and the U.S. dollar weakened relative to most foreign currencies.  Credit spreads compressed slightly over the course of the month while the yield curve flattened in sympathy with the Fed tightening rates.  From a sector standpoint, ...

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Month in Review: February 2017

Equity markets in February rallied sharply as markets rotated away from risk aversion and toward more of a growth and inflation mindset. Encouraging corporate earnings in the U.S., stable markets overseas, and moderately positive U.S. economic data all worked to support the rally in risk assets and uptick in bond yields.  Fed watchers and market gauges read the February tape as a green light for a 0.25% rate hike at the upcoming March FOMC meetings.

Key February Market Anecdotes:

  • In early ...
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Month in Review: January 2017

January introduced us formally to the new President of the United States who took office with the same bold style as on the campaign trail. Markets moved sideways for a couple of weeks but ultimately continued the risk rally that began in early November. With regard to U.S. and European political climate, we feel it is safe to say that it has been years, maybe decades, since political winds have held this much potential to drastically ...

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Month in Review: December 2016

Global equity markets, outside of China and Brazil, followed up a strong November with an encouraging December to finish out the year. The risk rally was clearly driven by optimism surrounding a rebound in corporate earnings and hopes for market friendly reforms in Washington. The importance of healthy earnings to bridge the gap of 2017 is high given the time and shape of new policies in Washington clearly fall more in the 2018 timeframe.

With regard to Washington, market friendly initiatives ...

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