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S&P500 is the Most Extended Above its 4-Year Moving Average Since 2000
by Team of GaveKal Capital,
Stock prices as measured by the S&P 500 have risen some 190% from the low in March of 2009. The spectacular thrust this bull market has seen has put stocks above their moving average price levels by a wide margin. Our most recent data indicate the current price level of the S&P 500 is about 33% above its four year moving average price, which is exactly one standard deviation from the mean going back to 1931.
Will Firming Fundamentals Lead to a Firmer Fed?
by Team of Northern Trust,
Real gross domestic product (GDP) of the U.S. economy declined at an annual rate of 2.9% in the first quarter. Bad weather and distortions from the Affordable Care Act (ACA) left overall growth significantly weaker than expected. Nominal GDP fell at an annual rate of 1.7% in the first quarter, the first such occurrence during an expansion in the entire post-war period.
Looking Back - Beta Drove Returns Last Week
by Team of GaveKal Capital,
As we tend to do at the beginning of a new week, we are going to look back briefly at the previous week to see what of our 30 factors had the highest explanatory value to the market. The "winner" last week was Beta which had a 0.90 r-square value to the market. TIPS yield had the second highest r-square at 0.87. Over the past year, the 3-month change in EPS estimates continues to have the greatest r-square value followed by P/E and P/B.
Why Invest in International Now?
In light of the strong performance from U.S. stocks over the past five years, its reasonable for an investor to ask Why international stocks now?. We are convinced that the reasons for investing internationally are even more compelling today than they were twenty years ago. Permit us to illustrate the most significant reasons for investing internationally today.
On Top of the Market Chart Book - "Global Equities Inch Forward in the First Quater"
Now updated through 1Q. This compendium provides an historical perspective of economic data compared to today's results, and provides comments on any developing trends. We also include a synopsis of financial markets results. The OTOTM Chart Book is designed with easy-to-read graphics to tell a story and help you visualize the changes taking place in today's economy.
Weekly Market Update
by Team of Castleton Partners,
Treasury yields fell across the maturity spectrum last week, with longer dated maturities recording the largest price gains relative to shorter dated bonds and notes. With geopolitical concerns continuing to weigh heavily on investors minds, interest rates were propelled lower on the surprising revision to the 1st quarter GDP and the resulting downward revisions to 2nd quarter GDP estimates.
Weekly Economic Commentary
by Team of Northern Trust,
The recovery which began in 2009 has been weak and uneven. Some have blamed scarring from the financial crisis: wounds to the balance sheets of households, banks, and governments are taking a long time to heal. Under this school of thought, returning to pre-crisis normalcy is simply a matter of time, with the mending promoted by accommodative monetary policy. If the strategy works, well eventually return to the 3% real growth that weve averaged over the past generation.
F.A.S.T. Fundamentals On CSX Corp
by Team of F.A.S.T. Graphs,
CSX has performed exceptionally well over the past decade. The usual suspect metrics like P/E ratios, dividend yield and expected earnings growth indicate that the company might be a reasonable investment. This article takes a behind the scenes view of a variety of additional fundamental data.
Avoiding the Losers
by Team of Hotchkis & Wiley,
In Hotchkis & Wiley's 2014 High Yield 2Q Newsletter, Ray Kennedy, Mark Hudoff, and the rest of Hotchkis & Wiley's high yield team discuss the team's belief "that averting mistakes is the single most important quality in successful high yield investing," and that an "avoid the losers mentality can be achieved by focusing on securities that are senior in the capital structure, emphasizing asset coverage, and looking closely at covenant packages, a third level of defense that the team believes is often overlooked by high yield investors.
Weekly Market Update
by Team of Castleton Partners,
With geopolitical risks abound, financial markets were resilient yet again last week, thanks to the mostly dovish tone struck by the Open Market Committee of the Federal Reserve and its Chair, Janet Yellen. Despite recent economic indicators registering a pickup in growth and inflation, namely CPI, the FOMC reiterated its lower for longer theme in managing interest rate policy.
What Exactly Is An Intangible Asset?
by Team of GaveKal Capital,
As another relatively quiet week in the market comes to a close, we thought we would step back from analyzing the market and briefly introduce to our readers a topic that we care greatly about and one that most of our readers are probably unfamiliar with. That topic is investments in intangible assets. The first question that probably comes to your mind after reading the previous sentence is...Why?
June Municipal Market Commentary
by Team of SMC Fixed Income Management,
In order to gauge the potential impact of an interest rate hike on a fixed income portfolios performance, not only does the amount of the rate move have to be ascertained, but the timing and duration must also be quantified. In summary, investors should not necessarily jump to the conclusion that rising interest rates automatically result in negative total returns.
The Fed Continues Tapering; Tightening Still Seems Far Off
by Team of Northern Trust,
At its June meeting, the Federal Open Market Committee (FOMC) extended its predictable string of asset purchase reductions. Most of the attention was trained on an updated set of forecasts from the Fed that offers some clues to the future path of American monetary policy.
Average Stock Is 8% Off 252-Day High and 31% Above 252-Day Low
by Team of GaveKal Capital,
While the MSCI World Index is just a smidge off it's all-time high, the average stock is about 8% below it's 252-day high. Recent history suggests that we will need a slight consolidation, either through price or time, in order to make way for further gains.
Housing Starts Stuck At 1 Million
by Team of GaveKal Capital,
US housing starts for May came in below consensus at 1,001K units vs expectations of 1,036K units. Housing starts are still about 9.5% higher than they were a year ago. Regionally, housing starts are strongest in the Midwest while in the Northeast, starts are actually 5% lower than they were a year ago. Building permits were also below expectations in May (991K vs 1,062K expected). Charts below.
Weekly Market Update
by Team of Castleton Partners,
The grind toward higher Treasury yieldsand Junes bearish momentum in interest ratespersisted through most of last week, only to reverse on Thursday with an escalation in geopolitical concerns, especially Iraq. After reaching a high of 2.70%, 10 year Treasury notes recovered on the selloff in risk assets and closed the week up only 1 basis point, at 2.60%.
German Defense: Spending Spree?
by Team of GaveKal Capital,
A Bloomberg article today highlighted the potential need for Germany to invest more in its defenses, in light of recent geopolitical instability. As a percent of GDP, defense spending has been falling since the early 1990's. However, if we look at absolute spending levels, yearly totals have recently matched or even exceeded those reached more than 20 years ago.
Taking A “FUN” Look At Kimberly-Clark
by Team of F.A.S.T. Graphs,
Kimberly-Clark is a storied company and often a reasonable investment opportunity based on ordinary metrics. Frequently investors view these few basic metrics and come to an investment decision. With this article we would like to highlight additional fundamental data on this specific company that that might be useful.
Digging Into Dividends - Who Actually Pays Dividends
by Team of GaveKal Capital,
Q: Which sector in the MSCI World Index has the highest percentage of companies paying a dividend? A: No, it's not your "bond proxy" sectors like Telecom or Utilities. No, it's also not coming from the financial sector. The answer,surprisingly, is the Consumer Staples sector.
Stocks' Correlation to Real Interest Rates was the Most Significant Factor Driving Returns Last Week
by Team of GaveKal Capital,
Real interest rates as measured by TIPS yields proved to be the most significant factor driving stock prices last week while other macro factors such as stocks' correlation to the Japanese yen and euro were also important. It is also noteworthy that the beta factor is making its way back to the top of the list after having been insignificant over the last one and three months. Below we show the top ten factors driving returns for each region.
Weekly Market Update
by Team of Castleton Partners,
Treasury yields rose sharply last week, with intermediate and long date bonds registering the sharpest price declines, as US equities again reached new highs. Fridays eagerly anticipated May employment report came in line with market expectations, continuing to signal gradual improvement in the labor market. With +217,000 jobs created last month, May marked the first 4-month string of payroll reports over +200,000 since 1999.
What Factor Drove The Market In May?
by Team of GaveKal Capital,
Of the 30 factors that we track, Price to Earnings ratio had the highest correlation to the market in May followed closely correlation to the Euro and 1-month change in sales estimate. For the past year, Price to Book ratio has the highest correlation (0.94).
Pending Home Sales Can't Blame The Weather For The Latest Miss
by Team of GaveKal Capital,
Pending home sales rose by only 0.4% in April vs estimates of a 1% month-over-month gain. Pending home sales are down over 9% year-over-year. If you are living in the West or the Northeast than that decline looks great compared to fall they are experiencing in those regions.
A Deeper look at Corporate CapEx and Stock Buybacks
by Team of GaveKal Capital,
Yesterday we analyzed aggregate capital spending on tangibles for non-financial constituent companies in the MSCI World Index (90% of global investible market cap). We found that CapEx as a % of sales has been extremely steady over the last nine years, fluctuating in a 0.9% range. In 2013 CapEx as a % of sales, at 7.9%, registered the second highest reading over the 9 year period.
Is Gold Signaling A Move Higher in TIPS?
by Team of GaveKal Capital,
For the last decade, TIPS yields and gold have had a negative 88% correlation. The logic is simple enough: since gold doesn't generate any income, falling TIPS rates reduce the opportunity cost of holding gold. We can see this play out in the charts below. In early 2008, the peak in gold was accompanied by a trough in TIPS yields, and then later in 2008, the trough in gold was accompanied by a rise in TIPS yields.
Freddie, Fannie, finis?
by Team of Northern Trust,
The destruction wrought by the 2008 financial crisis necessitated a good deal of repair. In some areas, that repair is complete; in others, it is well along. But in one spot, it hasnt really begun. Freddie Mac and Fannie Mae, the giant U.S. mortgage companies, remain in structural limbo more than five years after the American government rescued them. Just as plans to restructure these government-sponsored entities (GSEs) finally began making their way through the U.S. Congress, cross currents arose that greatly complicate the way forward. Some former shareholders are suing to recover so
The Percent of Individual Stocks Making New Highs Continues to Contract
by Team of GaveKal Capital,
It's no secret that we've been concerned about the lack of new highs in individual stocks since at least the beginning of the year. Indeed, we've made note of the divergence between headline stock indices and the number of stocks making new highs here, here, here and here and probably in a few other posts as well.
Are Corporate Balance Sheets Really That Liquid? Debunking the "Cash Mountain" Myth
by Team of GaveKal Capital,
We frequently read about the "cash mountain" that has piled up on corporate balance sheets since the global financial crisis. In many cases the level of cash is given as evidence that the the non-financial corporate sector is stronger now than ever before.
The Persistent Weakness in Lumber Continues
by Team of GaveKal Capital,
We watch lumber prices because lumber, being a largely domestically produced and consumed resource, can give a good early indication of changes in domestic economic activity. Lumber prices are also closely correlated to stock prices (the S&P 500 in this case) and so we like to see the two price series following each other.
Microsoft: The Progression of a Maturing Business
by Team of F.A.S.T. Graphs,
Everyone is keenly aware of the $300+ billion dollar company that is Microsoft (MSFT). From the classic Windows and Office products to the latest Xbox and Skype, the business doesnt exactly need an introduction. In fact, its quite likely that you are using or near a Microsoft product now; we used a couple just to get this article to you. So instead of providing a generic opening, we thought it might be interesting to highlight the company with some numbers.
Should We Worry More About The US Economy Or The International Economy?
by Team of GaveKal Capital,
The KBW Bank index is an index of 24 commercial banks in the US. It is considered a good proxy of the banking sector. Commercial banks tend to draw most of their profits from the local market, so the performance of the KBW Bank index is a decent proxy for profit expectations of the domestic sectors of the US.
Weekly Market Update
by Team of Castleton Partners,
With little escalation on the geopolitical front and no compelling data to shift broader economic expectations, interest rate markets were confined to narrow yield ranges in a rather tedious week. With intermediate and long dated Treasury rates failing to extend price gains from the prior weeks payrolls report, we suspect the path of least resistance this week for yields may be a gradual back up.
Now Is Probably Not The Time To Be Buying Telecom Stocks
by Team of GaveKal Capital,
Telecom valuations seem to be either in the penthouse (as they are now and as they were in 2005-2007) or in the outhouse (as they were from 2001-2003 and 2008-2010). The charts below show the percent of Telecom stocks that are trading within 25% of their 3-year, 5-year and 7-year max valuation. We look at P/E, P/CF, P/S and P/B on each chart.
Middle East/Africa: Regional Economic Review - Q1 2014
by Team of Thomas White International,
As the Middle East and Africa region stepped into the New Year, the three regional economies under our coverage did not see any material change in their political or economic situation. Labor problems remained the most immediate concern for South Africa while Egypt unveiled yet another stimulus program to mend an economy that has been struggling amid political uncertainty for three years now.
First Quarter Letter
by Team of Grey Owl Capital Management,
The broad equity market displayed a fair amount of volatility during the quarter, but essentially went sideways. This pattern continued through April; 2013s losers became 2014s winners and vice versa. In the broadest sense, bonds narrowly beat stocks on the heels of 2013s thorough drubbing.
Weekly Market Update
by Team of Castleton Partners,
US Treasury yields declined across the entire maturity spectrum last week, as renewed geopolitical risk more than outweighed a strong employment report. With inflation remaining well below the Fed?s target rate of 2%, long dated Treasury yields continued to decline at a faster rate than shorter dated yields, further flattening the yield curve.
The Impact of Interest Rates on Real Estate Securities
by Team of Forward Management,
Interest rate risk is one of most pressing topics being discussed among advisors, consultants and investors. As of March 2014, we have been through five and a half years of extraordinarily aggressive monetary policy and outright intervention in the capital markets by the U.S. Federal Reserve.
We're Still Not Seeing New Highs in Individual Stocks Despite the World Stock Index at All-time High
by Team of GaveKal Capital,
The MSCI World Index made a new all-time high last week on yet again a fewer number of stocks making a new 200-day high. In fact, only 7% of stocks in the MSCI World Index made a new 200-day high last Friday.
Housing may be returning to a bad neighborhood
by Team of Northern Trust,
The head of financial stability at the Bank of England recently called rising property prices ?the very brightest [hazard] light on its dashboard.? But he may have a difficult time getting his colleagues who are charged with promoting full employment to agree with him. And if they do, it is far from clear what they might do about the issue. Some favor supervisory curbs; others prefer the more-traditional method of raising rates. The recovery in global real estate has been pronounced. While it beats the alternative, one wonders whether the hard lessons learned in recent corrections have been su
Results 1,551–1,600
of 2,793 found.
