August Monthly Recap

by Tom Brown on Sep 10, 2018

Weekly Market Commentary, Finance, Investments

The domestic equity market continued to roll right along in August, driven by the Information Technology, Health Care, and Consumer Discretionary sectors. Given the much higher representation of these sectors in the growth indices, it is no surprise that growth outperformed value across the market cap spectrum. The Energy sector was the worst performer for the month, driven by the falling price of oil from its early August highs. This is the fourth consecutive month of positive returns for the large cap indices and the sixth consecutive month for the small cap indices.

Digital Oil

by Tom Brown on Aug 30, 2018

Finance, Investments, Weekly Market Commentary

Although the cryptocurrency market may not be snagging headlines to the degree it did in late 2017 and early 2018, Venezuela, formerly Latin America’s richest country, has fallen into an economic downward spiral, and now is looking at the crypto market as a source of “de-risking” its economy. This is somewhat ironic, given that demand for cryptocurrencies can be viewed as a proxy for financial risk appetite. However, Venezuela’s goal in adopting cryptocurrency is to help fight the hyperinflation that is devastating this resource-rich country.

Are Emerging Markets Signaling Contagion?

by Tom Brown on Aug 20, 2018

Finance, Investments, Weekly Market Commentary

Emerging markets stocks have declined significantly thus far in 2018, after a solid rally last year that led to the asset class’s best return since 2009. After reaching highs in late January, the space has slumped nearly 20%, stoking fears of further downside and potential contagion. The sharp pullback has caused many investors to question their commitment to emerging markets. Should they be worried, or is this pullback to be expected, given the historical volatility of the asset class?

Have Domestic Equities been De-FAANG’d?

by Tom Brown on Aug 13, 2018

Finance, Investments, Weekly Market Commentary

Oh how the mighty have fallen…or have they? FAANG, an acronym that represents five of the most popularly traded Information Technology stocks, including Facebook, Apple, Amazon, Netflix, and Google (whose parent company is Alphabet), generally sets the tone of the domestic equity markets. Looking at attribution for large cap growth managers, over and underweights to these stocks in many cases have influenced the returns of their investment portfolios relative to their peers and benchmarks.

July Monthly Recap

by Tom Brown on Aug 6, 2018

Investments, Finance, Weekly Market Commentary

Domestic equity markets posted strong returns in the month of July, with most of the price appreciation coming in the first two weeks of trading. During the month, markets reached highs not seen since the end of January on news of strong economic data. The unemployment rate declined to 3.9%, the second lowest rate in the last 48 years, and second-quarter US Gross Domestic Product (GDP) grew 4.1%, the highest rate in almost four years.

Domestic Fixed Income: Where to Now?

by Tom Brown on Jul 30, 2018

Finance, Investments

Beginning in the second half of 2010, asset managers and economists began forecasting the Federal Reserve’s (the Fed) first postfinancial crisis rate hikes, and higher rates across the curve by the middle of 2011. It would be more than five years before the Fed’s first actual rate hike at the end of 2015, but for most of that period, the belief that higher rates were just around the corner convinced most asset managers to position their portfolios with shorter average maturities to minimize potential losses the higher rates would inflict.

The IMF’s Updated World Economic Outlook: A Stark Change in Sentiment

by Tom Brown on Jul 24, 2018

Finance, Investments, Weekly Market Commentary

Earlier this week, the International Monetary Fund (IMF) issued an updated World Economic Outlook, keeping its global forecast unchanged since April. It continued with an optimistic prediction that the world economy will grow 3.9% through 2019, but warns that expansion will be less synchronized, with risks tilted to the downside. 1 The IMF believes that near-term momentum in the US will continue, but is less optimistic about the eurozone, Japan, Latin America, and the U.K.

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