November 2016 Market Review
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 longest period of time since 1970 when, arguably it was a larger percentage of the labor force. Inflation increased but only slightly. Based on these and other economic data, we believe the Fed will increase interest rates .25% at their meeting in December. There might be a market reaction and counter reaction but the smart money has already baked it into current valuations.
Small value equities are on track to take all the return performance accolades for the year. They are up 25.2% year to date, 9% over 3 years and 15.5% over 5 years. Only mid value has done better. Large value is up 15.2% year to date as the lowest performing value class for US equities. Growth stocks are positive as a whole with small growth leading, up 8.8% year to date, mid growth up 6.43% and large growth slightly above breakeven at .8% (all year to date). The S&P 500 is obviously buoyed by its large value components and is up 9.79% year to date.
In international equities, emerging markets gave up some of their gains over the past rolling quarter. They are up 8.6% and developing markets are down .5% year to date. The value of the dollar relative to world currencies will continue to be a wild card factor in the performance of international equities. A growing US economy is good for the world and a rising US dollar may help as well.
As mentioned above, we expect the Fed to raise interest rates in December but we also expect a continued slow movement back to neutral monetary policy. Watch for changes in the definition of neutral monetary policy. Some argue that a 2% Fed funds rate is neutral. That would have been considered an easing policy rate in recent history. We are starting to see correlations break down and portfolios are realizing the benefits of diversification, asset allocation and rebalancing. The current bull market is in its 93rd month, Only the 1990 – 2000 bull market lasted longer. But bull markets don’t die from old age. We hope for the best and plan for the less than best. Have a safe holiday season.
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
As we scan the four pages of year-end 2015 index returns that Morningstar generates, we see one US12/02/2015
Following a mid-month decline, U.S. equities rallied to end November in the black, as both the Dow Jones Industrial Average® and the S11/05/201511/02/2015
The US equity market has started the recovery process from the correction which began09/14/2015
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
The foundation of personal finance is saving. Specifically, we mean the establishment of an emergency fund. In order to guarantee that this key08/20/2014
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