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Entries for 2017

An Increasing Dividend Payout Ratio Is A Positive Indicator For The Market

 October 22 2017     David Templeton
Admittedly, in an equity market run investors are currently experiencing, i.e., the second longest run without a 20% pullback, a common theme that continues to seep into ones thinking, including mine, is when is the market going to experience a bear market correction of 20% or more. Even a double digit pullback is a scarcity as the below chart of the S&P 500 Index shows. The last double digit pull...

Citgroup Economic Surprise Indices Have Little Bearing On Equity Market Performance

 October 15 2017     David Templeton
One set of indices that seems to cycle from positive to negative over a relatively short period of time are the Citigroup Economic Surprise Indices (CESI). This aspect of these indices means they gain prominence from a commentary standpoint when they reach high and low points. What is important for investors to know is the CESI is a mean reverting index, that by design, cycles between highs and lo...

Synchronized Global Growth

 October 14 2017     David Templeton
Much of the sentiment and global market data continues to come in on the positive side of the ledger. Friday's University of Michigan Consumer Sentiment jumped six points to 101.1 for October and is the highest reading in thirteen years. As reported by Econoday, "The expectations component is up nearly 7 points to 91.3 with the component for current conditions posting a nearly 5 point gain to 116....

A Decline In Small Business Optimism

 October 10 2017     David Templeton
Today, NFIB reported the September Small Business Optimism Index results and they showed the Index fell 2.3 points to 103, which was below the lowest consensus forecast. In spite of the decline, the index remains at a high level as can be seen in the below chart.A larger percentage of the index components declined in September as the report noted,"Six of the 10 Index components dropped in Septembe...

Fall 2017 Investor Letter: The Hated Rally Continues

 October 2 2017     David Templeton
Our Fall 2017 Investor Letter has a music lyrics theme to it and since we have an age-diverse team as it relates to the employees of HORAN Capital Advisors so goes the taste in music for our colleagues as readers of the newsletter will find out.  As Chuck Prince, former chairman and CEO of Citigroup, said almost a decade ago,  "As long as the music is playing, you got to dance." This seems to be o...

Answering Your Equifax Questions

 October 2 2017     Anna Pfaehler
Nearly half of all Americans were affected by the Equifax breach announced last month. This post is a follow up to our “Equifax Data Breach – What You Need to Know”. If you have not yet read our initial communication, please do so before continuing. Concerning Minors Children typically do not have a credit file unless a parent has added them on a credit card or they are identi...

Shifting Investor Sentiment

 September 28 2017     David Templeton
It seems the market's consistent bid to move higher this year might be confusing the individual investor. That is, the fact the market has escaped any material pullback this year may be weighing on consumers in that they are prepared for or expect a pullback. As the below chart shows, the market has avoided such a pullback of more than 3% so far this year.This lack of volatility has not translated...

A Recession And Equity Market Bubble Five Years Ago Did Not Materialize, Now What

 September 27 2017     David Templeton
I was communicating with a client today who reminded me of a conversation we had five years ago almost to the day about whether or not the U.S. equity market was in a bubble. The discussion was prompted by the USA Today article, Consumer Sentiment Stat Hints that Bull Market May be Stalling Out, that highlighted a data point from the recent University of Michigan Sentiment Survey. In the survey it...

Higher Bond Yields A Headwind For Technology Stocks

 September 24 2017     David Templeton
In a recent note from the John Murphy of the stockcharts.com website ($$) he notes technology stocks tend to have an inverse relationship to bond yields. In his commentary he noted,"One of the lesser known intermarket principles is the inverse link between bond yields and technology stocks' relative performance...Growth stocks like technology...do better in a slower economy which is usually associ...

Market Is In An Uptrend And Trends Tend To Persist

 September 17 2017     David Templeton
One strategist I read regularly and who prepares weekly technical commentary, Charles Kirk at The Kirk Report, had a reference in this week's report relative to the strength of the current market. Kirk highlighted the below quote from James DePorre,"If you simply focus on what the pricing action is saying, then your job of profitably navigating the market becomes a lot less complex. The simple fac...
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