The H Group Blog

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

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.
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Weekly Review - January 25. 2016

Guest Post - Monday, January 25, 2016

Summary

  • Last week's economic data was mixed, with manufacturing not as bad as expected, continued low inflation driven by commodity price declines over the past year, and mixed housing results to end the year.
  • A terrible start to the week in equity markets was turned around a bit by Friday, resulting in global stocks ending up positively for the week. Bond provided slightly negative returns as interest rates ticked back upward. After an early drop below $30/barrel, oil prices moved sharply higher over that level toward week's end.
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Question of the Week - January 25, 2016

Guest Post - Monday, January 25, 2016

Is a recession imminent?

The answer to this is always yes...the problem is, we just don't know when. At the start of any given year, whether or not conditions in January are viewed as strong or weak, there's about a 20% chance of a recession beginning in that particular year. Since business cycles have tended to be in the 5-year range, give or take a few years, this is just based on a rough weighted average. Recessions are a natural and required part of the business cycle. Without moderate recessions happening on a regular basis, excesses would build up in a variety of areas—especially in credit or through inflation—that would result in unsustainable conditions resulting in an eventual worse blow-up down the road. Historical stats aren't always easy to tabulate, but it's estimated that the U.S. has experienced up to 50 recessions in its history (that ends up being about one every five years). The old Wall Street maxim says, 'No tree grows to the sky,' but that applies to economic growth as well. A more accurate description would be something like four steps forward, one step back.

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Weekly Review - January 18, 2016

Guest Post - Monday, January 18, 2016

Summary

  • Economic data on the week was largely disappointing, with retail sales and manufacturing figures falling below expectations—manufacturing results continuing a trend downward. However, employment measures as well as business/consumer sentiment both improved.
  • For the second straight week, markets suffered as investors worried about China and oil, causing a negative response for global equities. Bonds gained in risk-off fashion as long-term interest rates fell again to levels not seen in a while. Crude oil again hit and fell below $30 as oversupply concerns dominated market sentiment.For the second straight week, markets suffered as investors worried about China and oil, causing a negative response for global equities. Bonds gained in risk-off fashion as long-term interest rates fell again to levels not seen in a while. Crude oil again hit and fell below $30 as oversupply concerns dominated market sentiment.
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Weekly Review - January 11, 2016

Guest Post - Monday, January 11, 2016

Summary

  • The first batch of economic data on the year was mixed, to a bit disappointing, with ISM manufacturing and non-manufacturing missing expectations, with industrial numbers generally continuing a pattern of recent weakness. The employment report for December, however was quite good and surprised on the upside.
  • Global equity markets experienced their worst start to a year in several decades, losing several percent as a result of concerns over China and energy. Speaking of energy, crude oil dropped to multi-year lows as continued uncertainty surrounded markets. Safe-haven bonds were the sole winning asset class on the week, as investors left risk assets.
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Weekly Review - January 4, 2016

Guest Post - Monday, January 04, 2016

Summary

  • Economic numbers for the last week of the year was mixed, with more poor manufacturing data (which has been in a back-and-forth trend all year), housing prices moving higher while pending home sales fell. Improvement in consumer confidence was a rare bright spot.
  • Equity markets ended on a lackluster note, both for the week and the full year, with falling energy prices playing a key role in the poor results. Bonds were flat with little changes in interest rates on the week, and on net for the year as well, despite some volatility in between. Commodities lost ground generally with oil prices falling on the week, capping off a year of substantial price declines for a variety of energy contracts.
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Question of the Week - December 28, 2015

Guest Post - Monday, December 28, 2015

2016 (Part 2): How is the investment environment shaping up?

Now that we have the Fed policy move out of the way, talk has shifted to what's next. As usual, the year-end holiday season encompasses optimistic hopes and dreams for the coming year.

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Weekly Review - December 28, 2015

Guest Post - Monday, December 28, 2015

Summary

  • For a short Holiday week, quite a few economic data points were released, including flattish durable goods orders, mixed housing results but improved consumer sentiment.
  • Equity markets rallied during the week, with help from some improvement in energy prices. Domestic bonds were down on interest rates ticking upward a bit, while commodity prices benefited from oil inventory news and weakness in the dollar.
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Question of the Week - December 21, 2015

Guest Post - Monday, December 21, 2015

2016 (Part 1): How is the economic environment shaping up?

To some degree, more of the same, but perhaps some shifts are likely. Economic conditions continue to demonstrate signs of repair in the long aftermath of the financial crisis, and market valuations have normalized. Finally, the question has turned from when will interest rates start to rise, to how quickly and how dramatically.

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Weekly Review - December 21, 2015

Guest Post - Monday, December 21, 2015

Summary

  • The most significant piece of economic data for the week was the FOMC's decision to raise the fed funds rate for the first time in a decade, as overall conditions appeared stable enough to policymakers to withstand such a policy shift. In other news, several industrial indicators continued to show some weakness, inflation remained tempered and monthly housing stats came in stronger for the prior month.
  • Equity markets began strongly in advance of the FOMC meeting, but gave up gains by week's end. Interest rates ticked slightly higher, which brought down bond returns during the week. A trend of a strong dollar and low oil prices continued, which negatively affected commodity prices.
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