Globalization Continues

 May 3 2017     Matt Woebkenberg
A recent Bloomberg article noted that, "the volume of world trade in February was 4.2 percent higher than it was last July," according to the World Trade Monitor from the Netherlands Bureau of Economic Policy Analysis.  This is an interesting time period for this dramatic increase in global trade considering that the BREXIT vote that truly began the global "protectionist" path took place on June 2...

Best Stocks in 2017

 May 2 2017     Matt Woebkenberg
Here are the best stocks so far this year (Market Cap above $5 billion, traded in the U.S.):Here are the top performers among the S&P 500 constituents:Perhaps unsurprisingly, there are a lot of Health Care and Technology names in this mix.  Companies in each of these sectors can offer a lot of upside, but with a lot of risk. The biggest company in the S&P 500, Apple, is up 24.6% so far this year (...

French Election Update

 May 1 2017     Matt Woebkenberg
We have mentioned before on this blog and in our quarterly investor letters that the French election this year could have important implications for the future of the European Union.  This is especially true now that the final two candidates have been chosen and the victor will be decided in a run-off on May 7.  According to Reuters, "Polls predict that Macron, a former economy minister, will win ...

Credit Card Firms' Earnings Reports A Sign Of Potential Weakness With The Consumer

 April 29 2017     David Templeton
The first reading for Q1 2017 GDP came in at a weak .7% at an annualized rate. A particularly weak component of the report was consumer spending which rose only .3% and is the weakest level for spending since the fourth quarter of 2009. The blue portion of the bars in the below chart represent the consumer contribution to GDP and the weak report in Q1 2017 is evident.Over the past few years, first...

Friday Financial Terms: Derivatives

 April 28 2017     Matt Woebkenberg
Derivatives are any financial product (security) that derives it's value from another financial product.  Examples of derivatives are options (calls, puts), futures, forwards, and swaps.  Stocks and bonds are not derivatives because they derive their value from an underlying business.  A business doing well makes stocks and bonds worth more.  Derivatives, on the other hand, would do well if the re...

Investor Sentiment Turns More Bullish

 April 27 2017     David Templeton
Since my post published nearly two weeks ago on widespread market bearishness and a potential indication of a market turning point, the S&P 500 Index has bounced higher by 2.6%. True to form, this overly bearish sentiment was followed by higher equity prices. Also, sentiment has improved with the AAII bullish sentiment reading reported at 38.05% today, a 12 percentage point increase. This improvem...

Recovery in Technology

 April 27 2017     Matt Woebkenberg
The technology sector has provided a wonderful example of the need for diversification.  If you bought the technology sector ETF at the peak of the tech bubble in 2000, you would just now be breaking even on that investment (chart below).This is one of many examples of this phenomenon.  Another very famous example is Japan's Nikkei 225 Index.  The Nikkei peaked in December of 1989 and still has no...

Long Term Progress

 April 26 2017     Matt Woebkenberg
We have written before about the importance of gradual improvement, and I recent stumbled across a new post that depicts exactly that.  This article, "A history of global living conditions in 5 charts," takes a 200 year perspective to show just how much things have improved in a few important categories. Child MortalityIn 1920, 32% of children died in first five years of life.  In 2015, that numbe...

Markets and International Politics

 April 25 2017     Matt Woebkenberg
Markets are inextricably linked to politics.  Government policies can have a dramatic effect on individual industries, and over time, entire markets.  With the rapid globalization of the past couple decades, domestic markets are now effected by policies in other countries.  This makes perfect sense as domestic companies become more reliant on their international businesses for growth.  In fact, 45...

How are Tax Dollars Spent?

 April 24 2017     Matt Woebkenberg
Interesting picture on where your tax dollars go from the National Priorities Project.We will be watching to see how increasing interest rates grow the relative allocation to interest payments on the Federal Debt.
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