Bond markets have made some dramatic moves over the last few weeks and I thought it an opportune time to review. Credit spreads have narrowed considerably over the last few weeks as risk takers have re-entered the markets. High yield, IG corporates and emerging market bonds have all enjoyed significant rallies. It is our judgement though that - for now [...]
Biotech stocks have taken a beating the last few months, down roughly 35% since peaking in July of last year. And for good reason I think. Biotech at the top was sporting a pretty rich multiple, 25 times forward earnings for the biotech stocks in the S&P 500 and a lot more than that for the ones that aren't. Now, [...]
This past Wednesday, March 9th, marked the seven-year anniversary of the current U.S. bull market. The recent correction notwithstanding, this is quite an accomplishment considering that historically, the average bull run is about 59 months. Since March of 2009, the major indices have registered some hefty gains through this period, the NASDAQ up 266%, the Dow Jones industrials up 159% [...]
The risk budgets this month are again unchanged. For the moderate risk investor, the allocation between risk assets and bonds remains at 40/60 versus the benchmark of 60/40. The changes in our indicators since last month's update have not been sufficient to warrant a change. Credit spreads did narrow significantly over the last month but the widening trend is still [...]
Economic Reports Scorecard The economic reports of the last two weeks have generally been a little firmer. The Chicago Fed National Activity index, Existing home sales, Durable Goods orders, Personal Income and Outlays, the ISM Manufacturing index and Construction spending all improved month to month. None of them were however, what one could classify as particularly strong but improvement must [...]
Economic Reports Scorecard Relative to expectations, the incoming reports over the last two weeks have run about even, just about as many better than expected as worse. That’s a significant improvement over the trend from last year and early this year. I would emphasize however this is a result of reduced expectations not an improvement in the actual data. From [...]
“To him who is in fear, everything rustles.” - Sophocles Smart philosopher, Sophocles and although he wasn’t referring to investors, a better description for today’s market participants is hard to find. Nervousness and plain old fear seem to have relegated the financial markets to short-term, news driven schizophrenic behavior. It is visible in the bond markets, commodity markets and, of [...]
The jolly old elf was a disappointing no-show this year - no Santa rally for stocks. And the New Year isn’t off to a very happy start either unless you happen to be holding one of those winning Powerball tickets. In fact, 2015 as a whole was pretty unsatisfying – challenging for investors of all kinds; bonds, stocks, and commodities [...]
The risk budget this month is unchanged. For the moderate risk investor, the allocation between risk assets and bonds remains at 40/60 versus the benchmark of 60/40. The BofA ML US High Yield Master II OAS did widen on the month but still remains below the 7.5% level I identified last month as a trigger point for a further reduction [...]
Top News Headline Stocks end down after wild 700 point range trading. US ends oil export ban. Crickets chirp. Republicans debate, Democrats debate, the nation shudders. Star Wars: The Force Awakens shatters box office records. I visit the mall to Christmas shop, discover the obesity epidemic is not solved, mirrors in short supply. Economic News Fed hikes rates by 25 [...]
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