The H Group Blog

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

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.
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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.
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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.

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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.
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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.
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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.
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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.
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Question of the Week - August 3, 2015

Guest Post - Monday, August 03, 2015

Commodities appear to be challenged again. Do they still offer any benefits?

Commodities are a very unique asset class. Rather than considering them as one group, it’s more relevant to break them apart into their various categories. However, the asset class as a whole does have some commonalities—for instance, positive correlations with inflation (especially surprise increases in inflation) as well as an inverse relationship with the value of the U.S. dollar (as inflation and currency valuations are related).

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Weekly Review - July 27, 2015

Guest Post - Monday, July 27, 2015

Summary

  • It was a very slow week for economic news, but included a strong showing from housing and jobless claims—two series which have shown improved strength as the recovery moves along.
  • Equity markets lost ground on the week around the globe, while bonds benefitted from the risk-off environment and lower interest rates. Commodities continued to struggle along with lower oil pricing and concerns over fundamental demand from China.
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Question of the Week - July 27, 2015

Guest Post - Monday, July 27, 2015

What's the status of the active vs. passive debate these days?

Unsurprisingly, the answer is-it depends. In a competition between an active fund portfolio or a passive ETF strategy, the winner/loser seems to change every year, which fuels the ongoing debate many advisors have about which is the better approach.

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