Posted on October 28, 2013 by Sam Wardwell
Wardwell’s Weekly Market Report
Observations on the Capital Markets – Week Ended October 25, 2013
- Markets settle into a new “normal”
- Mixed data for labor, housing and the economy
- Watching Europe, China and Japan
- Next week: Wednesday’s Fed statement and lots more data
Markets Settle into a New “Normal”
All sorts of economic data were released last week, but volatility has dropped: rightly or wrongly, market forecasts about the pace of quantitative easing (QE) and earnings growth in the U.S. appear to have coalesced around an outlook for “slow growth with ongoing QE”.
- Currencies: The dollar dropped about 1/2% against the euro and yen
- Bonds: The 10-year Treasury yield fell 7 basis points (bps) to 2.53%; the 10-year TIP yield fell 8bps to 0.34%. Key indexes returned 0.5% with credit outperforming as the BoA Merrill Lynch High Yield Index fell 4bps to 442. Foreign sovereign markets were generally quiet.
- Equities: The S&P 500 was up almost 1% for the week, led by Industrials, Utilities, and Consumer Discretionary. Financials and Energy lagged. The MSCI Europe was up about the same, but MSCI Emerging Markets was down 1% and MSCI Japan fell more than 2%.
- Commodities: Gold was up 2%; WTI oil was down 1%.
Filed under: Equity Market Insights, Europe, Fixed Income Market Insights, Macroeconomics, Sam Wardwell, Uncategorized | Tagged: Capital Markets, ECB, emerging markets, Europe, Sam Wardwell | Leave a Comment »
Posted on July 31, 2013 by Sam Wardwell
Wardwell Market Report 7/31/13
Second quarter 2013 U.S. Gross Domestic Product (GDP) growth came in at 1.7% (flash estimate) better than the 1%-ish growth some feared . . . but first quarter growth was revised down from 1.8% to 1.1%, so first-half growth is not surprising on the upside, despite the decent second quarter report.
- Personal consumption expenditure growth was weaker than typical, holding growth down.
- Nonresidential investment, residential investment, and business inventories were fine.
- The trade deficit (a small increase) and government (essentially flat after two quarters of being a drag) were small numbers. (more…)
Filed under: Macroeconomics, Sam Wardwell, Uncategorized | Tagged: 2013, 2nd Quarter, 2Q13, GDP, U.S. Growth, US Growth | Leave a Comment »
Posted on June 24, 2013 by Paresh Upadhyaya
In an interview on Bloomberg Radio with Tom Keene and Ken Prewitt, I shared my thoughts on the Fed’s recent announcement that it would continue its QE efforts for the time being. If you missed the segment, I’ve summarized that conversation here for you. (Note that this is not an official transcript of our conversation).
Filed under: Fixed Income Market Insights, Macroeconomics, Paresh Upadhyaya, Uncategorized | Tagged: Central Banks, EM, Fed Action, FOMC, global growth, Interest rates, Paresh Upadhyaya, rising interest rates | Leave a Comment »
Posted on May 31, 2013 by Paresh Upadhyaya
Co-Written by Paresh Upadhyaya and Michael Temple
Certain pundits suggest we have entered a new volatility regime – that volatility has been tamed by the massive amount of liquidity injected into worldwide capital markets by very accommodative central banks. We take a different view. While volatility has been declining across many asset classes, it is creeping into several that may have escaped some investors’ attention. (more…)
Filed under: Equity Market Insights, Fixed Income Market Insights, Macroeconomics, Mike Temple, Paresh Upadhyaya, Political, Uncategorized | Leave a Comment »
Posted on April 18, 2013 by Paresh Upadhyaya
Central banks have taken numerous measures to inject liquidity into their domestic economies. This has helped boost risk appetite and investor sentiment.
- The European Central Bank’s stabilization programs have successfully reduced financial market and sovereign tail risk for banks.
- Global growth troughed in Q2 2012, but has been on an upward trend since.
- Market concerns over the U.S. debt situation are easing as the U.S. economy proved surprisingly resilient to many uncertainties.
As a result, investors are concerned that bond yields, which move inversely to prices, have bottomed for the U.S. 10-year Treasury and will surge, raising fears of a bond bear market along the lines of the Great Bond Bear Market of 1994. (more…)
Filed under: Equity Market Insights, Fixed Income Market Insights, Macroeconomics, Mutual Fund Industry, Paresh Upadhyaya, Political, Uncategorized | Tagged: Central Banks, debt to gdp, ECB, fundamentals, inflation expectations, Interest rates, interest rates rise, rates will rise, rising interest rates, rising yields, where should Treasury yields be trading, where yields should be | Leave a Comment »
Posted on April 15, 2013 by Ken Taubes
We had a little flush of activity in the first quarter, which we believe will lead to much better GDP – potentially well over 3% – than people anticipated in the beginning of the year. We look at this activity as a little bit of a catch-up, for a couple of reasons: (more…)
Filed under: Europe, Ken Taubes, Macroeconomics, Uncategorized | Tagged: Bank of Japan, Central Banks, China, Europe, Fed policy, Ken Taubes, Slow growth, US GDP | Leave a Comment »
Posted on November 29, 2012 by Mike Temple
An insightful client exclaimed to me last week, after I had enumerated the many risks facing bond market investors, that he felt like a deer in the headlights. “Bear” with me for a paragraph or two while I elaborate. . . Imagine you’re a deer on a lonely stretch of highway late at night. To either side are high walls of rock (the psychologically difficult-to-scale barriers of asset allocation into equities). Behind is the long uphill that bonds have coasted on (with some bumps) for the past 30+ years. In front, coming closer every second is a set of large, bright headlights. Scary, huh? (more…)
Filed under: Contributors, Fixed Income Market Insights, Macroeconomics, Mike Temple, Mutual Fund Industry, Political, Uncategorized | Leave a Comment »