The H Group Blog

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

Weekly Review - September 21, 2015

Guest Post - Monday, September 21, 2015

Summary

  • The week was highlighted by the Fed’s decision to keep interest rates at zero for yet another meeting, despite growing expectations for an increase. Retail sales results were stronger, as did jobless claims, but several regional manufacturing surveys came in weak. CPI was little changed, as expected, and remained at low levels.
  • Large-cap U.S. equities were largely negative on the week, while small cap and foreign equities turned in positive results. Investment-grade bonds offered slight positive returns as rates declined upon no action from the Federal Reserve.
 Read Entire Article Here

Question of the Week - September 14, 2015

Guest Post - Monday, September 14, 2015

Volatility has sure picked up. What’s the best way to think of volitility?

Even with the recent correction aside, this type of volatility is actually much more normal than the opposite condition of low volatility. Since the 1950’s (when the S&P 500 was created), absolute daily changes in the S&P 500 amounted to about +/- 0.7% per day. Interestingly, if we take this back further to the inception of the DJIA in 1896, daily changes are a remarkably similar +/- 0.75%. Markets and trading technology have no doubt changed, but these provide interesting behavioral benchmarks for what ‘normal’ expectations might look like. So, 1% up or down days aren’t really that strange after all. Since the standard deviation of those daily changes is just short of 1% as well, even a band twice as wide as the ‘normal’ daily move isn’t overly unusual historically.

 Read Entire Article Here

Weekly Review - September 14, 2015

Guest Post - Monday, September 14, 2015

Summary

  • In a relatively light week for economic data, producer prices came in flattish, on par with tempered inflation trends, while some sentiment data weakened a bit, as expected due to market volatility recently. Labor measures, including JOLTs and jobless claims, continued to show improvement to the point of looking ‘normal.’
  • Volatility continued to be the new normal for global equity markets, with it ending positively for equity markets. Bonds lost ground in a risk-on week and higher interest rates.
 Read Entire Article Here

Weekly Review - September 7, 2015

Guest Post - Tuesday, September 08, 2015

Summary

  • Economic data was mixed with weakness seen in manufacturing, while services remained strong, albeit weaker than last month. The monthly employment report disappointed relative to expectations, although it contained some positive revisions.
  • Equity markets continued to experience heightened volatility, losing ground on net for the week. Bonds benefitted from the risk-off environment, gaining as interest rates fell back. Oil prices ticked upward on the week, despite volatility there as well.
 Read Entire Article Here

Weekly Review - August 31, 2015

Guest Post - Monday, August 31, 2015

Summary

  • From a domestic standpoint, economic data last week was decent, with durable goods orders stronger than expected, decent housing gains and a sharply-revised second-quarter GDP number. Much of the economic concerns continued to reside abroad, namely in China.
  • Market experienced one of their more volatile showings in years, with an early-week drawdown followed by a sharp recovery by Friday—U.S. stocks ended higher while foreign stocks were mixed. Along similar lines, bond yields plummeted early in risk-off trading before recovering higher later in the week, resulting in negative performance for many investment-grade bond indexes.
 Read Entire Article Here

Question of the Week - August 24, 2015

Guest Post - Tuesday, August 25, 2015

What happened with China’s currency devaluation?

The media has certainly made an issue of this, largely because it appeared mysterious and more sudden than some expected (action at all was surprising to many). The impact was a devaluation of just under -2% in dollar terms on the first day, combined with a new ‘target,’ that turned into about a -4.5% devaluation over several days. Then, Chinese officials calmed markets by Wed. evening/Thurs. morning, announcing that the ‘re-valuation’ was generally over. Markets have generally recovered from a quick, but not severe, drop, believing this is the case. This may have seemed like a big move for a few days, for sure, but it really wasn’t in the whole scheme of broader currency trends (which can go into the double-digits for multi-month periods). It was, however, the first deliberate move of the sort by the Chinese in over 20 years.

 Read Entire Article Here

Weekly Review - August 24, 2015

Guest Post - Monday, August 24, 2015

Summary

  • Economic data in the U.S. was again mixed, with regional manufacturing surveys offering conflicting results, while housing metrics turned out well and showing some moderate improvement. However, the story abroad was the problem, as Chinese manufacturing survey figures showed continued contraction.
  • Equity markets globally reacted with the strong negative returns, in response to global growth concerns. Consequently, bonds fared well in the risk-off environment as interest rates fell sharply. Crude oil fell to new multi-year lows in the $40 range, while gold rebounded somewhat as a safe haven.
 Read Entire Article Here

Weekly Review - August 17, 2015

Guest Post - Monday, August 17, 2015

Summary

  • Economic data on the week generally turned out mixed to better than expected, with positive results in retail sales and industrial production, while several employment metrics were a bit weaker.
  • Despite weakness early due to concerns about the Chinese currency devaluation, markets rebounded to result in a positive week in the U.S., while foreign stocks generally lost ground. Bonds were little changed as yields across the curve barely budged. Crude oil prices fell in the U.S. by a few percent, while Brent crude and gold rose—resulting in just a slight decline in commodity indexes overall.
 Read Entire Article Here

Weekly Review - August 10, 2015

Guest Post - Monday, August 10, 2015

Summary

  • Economic data for the week was generally decent, with the ISM manufacturing and non-manufacturing reports showing expansion, an improved willingness of bankers to lend, and a jobs report generally on par with expectations—showing continued growth in a variety of areas.
  • Equity markets in the U.S. fell with a few mediocre earnings reports and fears of a Fed rate hike sooner than expected. Bonds were oddly mixed, with results dependent on yield curve status. Crude oil continued to struggle, with lower pricing on the week, which brought down commodity markets overall.
 Read Entire Article Here

Weekly Review - August 3, 2015

Guest Post - Monday, August 03, 2015

Summary

  • Economic data last week was highlighted by a lukewarm GDP report, mixed housing and consumer confidence surveys, but more positive near-term industrial reports. The FOMC meeting statement didn’t offer any radically new insights, as expectations for an initial rate hike continue to be focused on later this year.
  • U.S. equities performed positively on the week with decent earnings reports, and foreign stocks were largely in line. Bonds also gained as investors apparently felt comfortable with the Fed’s current hints on interest rate policy. Commodities suffered additional losses this week, as crude oil fell below $50/barrel, ending a painful July for the energy patch.
 Read Entire Article Here

* Required





Subscribe to: The H Group SALEM Mailing List

Archive


Recent Posts