January 2015 Market Recap
January 2015 is now in the books. Let’s reflect on the beginning of the year. For portfolios, it was bad for equity prices and good, not great, for bond prices. The S&P 500 was down 3%, the Dow Jones Industrial Average was down 3.57%. Just when we were starting to think large US companies would stay on top forever! Moving down the equity asset classes, mid growth declined .71%, mid value declined 2.41%, small growth declined 1.37% and small value declined 3.72%. Emerging markets were positive, barely, at .55% (MSCI EM PR USD) and the rest of the world gave up some ground, declining .35% (MSCI World exUSA NRUSD). Bond prices were up just shy of 2%. There has never been a year when January was negative and the year-end return was greater than 10% for the US market. UNTIL last year! Could this year be a repeat?
On the good news front, the Consumer Price Index for all urban consumers (the headline rate) declined .4% in December and increased .8% for all of 2014. Quantitative easing and fiscal stimulus have not caused inflation as feared seven years ago. They may have prevented deflation. Which brings us to Europe. They are suffering through deflation and their central bank, The European Community Bank, announced quantitative easing in the form of $60 billion, give or take, of bond purchases each month for a total of over $1 trillion in monetary easing. The inflation hawks will make no sounds. This is one-fourth the monetary stimulus of the US Fed and the situation is arguably worse. However, this policy should benefit the European economy over time. So that is good news.
There was also a shred of good news in the US GDP number (up 2.6% for the fourth quarter 2014). Spending by US consumers, 70% of our economy, increased over 4% during the fourth quarter. Jobs are being created and filled at a significantly higher rate. More good news.
The consumer is also benefitting from low gas and oil prices. Good news for them but bad news for oil companies. There are more consumers than oil companies so for the overall economy that is good news.
Right now, based on the fundamental economic data we have, we expect a single digit return for US equities, low single digit total returns for bonds (we’ll go out on a limb and say no interest rate hikes for 2015), and low double digit returns for international stocks both developing and emerging markets. We strive to make your portfolios work for you by paying dividends and interest. We also pursue price appreciation in a risk conscious manner.
It was a down quarter / year-to-date for almost every asset class. For US equities, only growth stocks held on to their gains with large growth up
- Since 1950 there have been 59 different 10 year periods (rolling periods). The S&P 500 has produced a positive total return
3/15/2018 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February on a seasonally adjusted basis after rising 0
1. Returns for 10 year time horizon:
- Global Equities: 3.9% total return (due to
For at least the second January in a row, we can report a strong market, strong economy and good prospects for the new year. Unlike last January,
The second longest bull market in American history continues. In a couple months we will mark the 9th anniversary of the low point for
The US market seems to be excited about corporate tax cuts and is charging ahead. Interestingly, value stocks kept up with growth over the past
US economic growth recorded its second straight quarter of 3% GDP growth, earnings are beating estimates, interest rates and inflation are low. It
It was a great three months for equity markets. International stocks continue to shine. Emerging markets increased 7% for the quarter and are up
The US economy is still strong. Jobs are growing, unemployment is very low partially due to the historically low labor participation rate,
US sectors Financials, Healthcare and Technology continue to drive the returns for US growth stocks. Consumer stocks and energy stocks are lagging
US growth equities continue to rise for the year. US value equities are barely breaking even. The growth equities are up mid-single digits for the
Two groups have done well this year: mega caps (like members of the Dow Jones Industrial Average) and lower profitability growth companies (per
Looking back it’s been a good couple of months and quarter (Dec – Feb). US growth equities are beating their value
The consistent performance of US small cap equities and to a lesser extent value stocks (all sizes) has aligned the returns for the quarter and
The year and the quarter come to a close and if you look at the one year returns it looks very orderly but we know it wasn’t. All the US equity
GDP for the third quarter was revised up from 2.9% to 3.2%. Unemployment is below 5%. Initial jobless claims have been below 300,000 for the
Portfolios allocated across several asset classes held on to their year to date gains and in all but the most conservative case have exceeded the
Value investing continues to lead the way for US equities. Large cap growth is the laggard so far this year and this may be the first year in
August was hot outside but the equity markets were only lukewarm. The reversion to longer term performance averages continues which means value
If you could avoid the daily news and market fluctuations, it was a good quarter. It was good even if you did follow the news. It just may not
Value equities especially US continue to outperform growth equities. Large value is up 6.8% year-to-date vs. -2% for Large growth. Small value
Consumer Price Index – April
The consumer price index for April (released May 17th) showed a .4% increase in
US value equities have now consistently outperformed their growth brethren this
If emerging markets could speak, they might be saying, “I told you so.” MSCI Emerging Markets Index has been at the bottom or next to the bottom
Wednesday, March 16th was a big day for macroeconomic news. The Consumer Price Index (CPI) also called the headline inflation rate was
US value stocks have continued to outperform their growth counterparts this year but it is masked by the fact that all US equity asset classes are
January was a wild month in the equity and bond markets. There are many wild predictions being thrown around both optimistic and pessimistic.
01/22/2016As we write this, the S&P 500 is climbing again. Its price is within a couple points of an all-time high set on February 28,01/04/2016
2015 In Summary
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FYI, 3rd quarter estimated tax payments must be postmarked by tomorrow, 09/15/2015.09/01/2015
Last week’s market volatility offered investors06/01/2015
On a rolling03/06/2015
Stocks are again near record highs after a dismal January, echoing 2014. The U.S. economy remains in growth mode despite a decline in the02/04/2015
January 2015 is now in the books. Let’s reflect on the beginning of the year. For portfolios, it was bad for equity prices and good, not great,01/13/2015
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Inflation is not dead!
But it isn’t grabbing headlines, either. The Bureau of Labor Statistics of the Department of Labor released the07/30/2014
I had a professor at the University of Georgia who taught business law. We learned enough to be dangerous and know that we needed a lawyer to