Perspectives

Investors remain at the mercy of trade headlines which are light on substance. The major indices eked out slight gains last week despite contradictory statements on the progress of finalizing the Phase One agreement. The Dow Jones Industrial Average rose 1.17%, followed by the S&P 500® Index (+0.88%), the Nasdaq (+0.77%) and the Russell 2000® Index (-0.15%). Negotiations stalled this week as China stated that it expected a tariff roll back as a condition for an agreement. The U.S. counter… View More

In the stock market, expectations matter. At any given moment, the stock market will reflect a certain set of expectations. And so, what moves markets are changes in those expectations. In other words, news doesn’t have to be good or bad on an absolute basis to move markets. It just has to be relatively better or worse than what was expected. Based on this logic, you can have bad news crossing the wires. But as long as investors and traders were expecting worse, you should in turn expect price… View More

Fears that a slowing economy might lead to a recession eased last week as corporate earnings continued to outperform expectations; Friday’s jobs report provided additional optimism. The S&P 500® Index and the Nasdaq reached new highs as investors moved from safe harbor U.S. Treasuries into the equity markets. For the week, the Russell 2000® Index (1.96%) led followed by Nasdaq (1.74%), S&P 500® (1.47%) and Dow Jones Industrial Average (1.44%). Over 70% of companies in the S&P 50… View More

Trade commentaries and earnings results provided momentum for a third straight week of gains. The Nasdaq led with a gain of 1.90% followed by the Russell 2000® Index (1.51%), the S&P 500® Index (1.22%) and the Dow Jones Industrial Average (0.70%). With earnings results from approximately 36% of the companies in the S&P 500®, nearly 80% of reporting companies exceeded analysts’ expectations. Companies across many sectors (including Microsoft, Intel, Phillips 66, Boston Scientific, An… View More

Last week the S&P 500® Index (0.54%) posted its second consecutive weekly gain on the strength of corporate earnings. For the week the Russell 2000® Index (1.56%) led the major indices followed by the S&P 500® (0.54%) and the Nasdaq (0.40%) while the Dow Jones Industrial Average fell -0.17%. The Dow lost ground on reports from Johnson & Johnson of a baby powder recall (due to traces of asbestos) and Boeing (on reports the company failed to disclose “concerning” instant message… View More

The markets closed higher for the week, and ended a three-week losing streak, following Friday’s announcement of a “phase 1” partial trade deal. The White House announced the suspension of tariffs scheduled for this Tuesday on $250 billion worth of Chinese imports; China agreed to purchase between $40 billion and $50 billion of U.S. agricultural goods. For the week, the Nasdaq rose 0.93% followed by the Dow Jones Industrial Average (+0.91%), the Russell 2000® Index (+0.75%), and the S&… View More

Through September, the S&P 500® Index posted a year-to-date gain of 19%, its best performance since 1997; these results, though, mask the modest 2.2% one-year performance. The equity markets reversed course last Tuesday following the release of the September ISM Manufacturing Index; the 47.8 reading, the lowest level in ten years, heightening recessionary fears. On Friday, the equity markets recovered with a “goldilocks” jobs report. The economy added 136,000 jobs in September and unemp… View More

With non-farm payrolls set to be reported on Friday, the headline September data has, thus far, left something to be desired. While this is far from new news, investors have stretched the growth discount in the opening days of the quarter. While we’d bet better than even money this corrective phase continues in coming weeks, we do not anticipate a re-play of the 4Q’18 experience. For one, despite a weaker Sept. U.S. PMI, global activity gauges have actually improved M/M, a far cry from circu… View More

Politics overshadowed trade again this week with House Speaker Pelosi’s announcement of a formal impeachment inquiry into President Trump. The equity markets reaction reflects concern that the inquiry might imperil Congress’ approval the USMCA agreement and hold up spending bills. The resulting “risk off” sentiment led to across-the-board weekly declines as the Russell 2000® Index declined 2.52%, followed by Nasdaq (‑2.19%), S&P 500® Index (-1.01%) and Dow Jones Industrial Averag… View More

The equity markets, following three consecutive weekly gains, declined last week as concerns relating to trade, Federal Reserve policies and oil supplies weighed on market sentiment. The Russell 2000® Index fell 1.17%; losses for the other indices included the Dow Jones Industrial Average (-1.05%), Nasdaq (‑0.72%) and S&P 500® (-0.51%). The week began with news of drone attacks, purportedly by Iran, on Saudi Arabia’s production facilities; the impact on production, 5.7 million barrels … View More