The H Group Blog

Investment and Financial Planning news from some of the best in the business.

Weekly Review - March 14, 2016

Guest Post - Monday, March 14, 2016

Summary

  • In a slow week for meaningful economic data, the few reports that did surface showed a bit of small business pessimism, some inventory build-up, perhaps some benefit of a flattening U.S. dollar and strength in consumer mortgage demand.
  • Equity markets experienced gains on the week, mostly due to positive sentiment as a result of the European Central Bank's decision to lower interest rates further and add to monetary easing efforts. Bonds were mixed as interest rates ticked higher in the U.S., although credit saw gains with additional price recovery in crude oil markets.
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Weekly Review - March 7, 2016

Guest Post - Monday, March 07, 2016

Summary

  • Economic data was mixed to better on the week, with manufacturing ISM a bit stronger, yet several measures remained in contractionary territory. Services looked stronger, including construction, as did Friday's employment report.
  • Equity markets experienced positive results as oil pushed higher, and decent economic numbers resulted in interest rates also moving upward, punishing fixed income markets.
 Read Entire Article Here

Question of the Week - February 29, 2016

Guest Post - Monday, February 29, 2016

What's with all the negative interest rate talk again?

We brought up the topic of negative yields a year ago, when bond yields in Switzerland fell below zero, followed by a similar occurrence in several other European fixed income markets. The first type of negative yield concerned secondary market bonds, where underlying prices moved high enough over par to push the yields-to-maturity so low (remember the teeter-totter of yields and prices having an inverse relationship) that these actually dipped below zero. How this works is, while the actual stated bond coupon interest rate can still be positive, a negative YTM number guarantees a loss on the bonds when they're held to maturity after both interest and price change (price depreciation in that particular case) are added together. The only time such a position makes sense is if, as a shorter-term trade, one thinks rates could go even more negative (moving bond prices higher), there exists a lack of other options for large flows seeking 'safe' assets, or one is compelled to own a certain amount of sovereign bonds due to an investment mandate—such as those held by governments, pension plans, etc. But, based on standard economics, it doesn't make much sense. Nevertheless, almost a third of government debt globally is now trading at negative yields, surprisingly enough.

 Read Entire Article Here

Weekly Review - February 29, 2016

Guest Post - Monday, February 29, 2016

Summary

  • Economic data for the week came in stronger than expected in areas such as durable goods, personal income/spending, home prices, jobless claims and an upward revision to last quarter's GDP; consumer sentiment measures were mixed.
  • Equity markets rose in the U.S. as economic data outweighed the global growth concerns of recent weeks; foreign stocks rose as well, with an effect tempered by a stronger dollar. Bonds were flat on the week with minimal moves in interest rates. Oil prices ticked upward as talk of a production cut by major global producers subsided.
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Weekly Review - February 22, 2016

Guest Post - Monday, February 22, 2016

Summary

  • Economic data on the manufacturing side showed some improvement over the prior month, although several key metrics remained in the negative. Housing numbers released were weaker than expected, although weather could have played a role. Inflation figures were slightly higher than expected, showing strength in the non-energy side, although conditions remain tempered overall.
  • Equity markets recovered globally, while the higher inflation numbers caused bond yields to tick slightly higher. Oil prices experienced some stabilization as several nations discussed the idea of production cuts.
 Read Entire Article Here

What's Going on with the Stock Market?

Ron Kelemen - Wednesday, February 17, 2016

The 2016 market correction is the second in just six months.  Historically, it’s reasonable to expect a -10% equity market downturn once every 12-18 months.  However, until last fall, the last correction was over five years ago.  In addition to this most recent correction, the equity markets have been very volatile.  Much of this volatility appears to be concerns about slowing global growth and by the dramatic drop in energy prices due to oversupply and lack of global demand. Here are our takes about some of the positives and negative things going on with the economy and the financial markets.    Read Entire Article Here

Question of the Week - February 16, 2016

Guest Post - Tuesday, February 16, 2016

1. Why is the market reacting so violently this year?

The market correction so far in 2016 is the second in just a few months. Historically, it's not unreasonable to expect a -10% equity market downturn once every 12-18 months, but, until last fall, several years had passed since the last episode. So, aside from being overdue, volatility events have a nasty habit of clustering. So, just as periods of lower volatility tend to perpetuate for a while, so do periods of higher volatility.

 Read Entire Article Here

Weekly Review - February 16, 2016

Guest Post - Tuesday, February 16, 2016

Summary

  • Economic data last week was decent, highlighted by better-than-expected retail sales and lower jobless claims, while consumer sentiment fell somewhat.
  • Stock markets experienced another down week, as concerns over global growth and oil prices continued to dominate sentiment; U.S. equities outperformed foreign. Bonds fared well as investors fled away from risk assets, which also helped precious metals continue their strong run this year.
 Read Entire Article Here

Weekly Review - February 8, 2016

Guest Post - Monday, February 08, 2016

Summary

  • Economic data was highlighted by better-than-expected results in manufacturing and weakness in services—both the opposite of recent trends. The Friday employment situation report was mixed, leaving investors wondering about possible effects on upcoming central bank policy.
  • Global equity markets fell on the week, with uncertainties about economic growth and volatile oil prices. Fixed income gained on the risk-off week, with lower interest rates. Foreign assets were affective positively, at least for U.S. investors, from the largest one-week decline in the dollar in several years.
 Read Entire Article Here

Weekly Review - February 1, 2016

Guest Post - Monday, February 01, 2016

Summary

  • In a packed week for economic news, the FOMC kept the interest rate level unchanged, while the Japanese decided to lower rates to negative territory. The flurry of other data was generally variable, with economic growth, manufacturing, housing and sentiment measures coming in showing mixed and occasionally contradictory results.
  • Global equity markets ended the week on the positive side following the Japan easing news on Friday. Bonds also ended positively, with long-term interest rates falling back below 2%. Commodities gained as oil prices recovered somewhat on the week.
 Read Entire Article Here

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