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Financial Markets

S&P 500 Dividend Aristocrats Lag In This Down Market

 May 7 2020
A favorable characteristic of the S&P 500 Dividend Aristocrats is this basket of stocks generally holds up better in broader market pullbacks as seen in the below table. Where the entire row is highlighted, it represents a significant market pullback and the Aristocrats outperformed the S&P 500 Index by double digits. The S&P 500 Aristocrats are companies in the S&P 500 Index that ...

What Happens In March Stays In March

 May 7 2020
After an incredibly volatile and severe drawdown in March, most markets rebounded in April and recovered some first quarter losses. It was certainly a welcome reprieve for investors as volatility fell, supporting liquidity and allowing for more normal trading activity. The CBOE Volatility Index (VIX), which measures the implied volatility in the U.S. equity market, dropped to an average of 41.5 in...

Investor Cash Continues to Build

 May 5 2020
This past Friday our webinar looking at contrarian indicators included commentary on the level of cash in money market mutual funds. The below money market chart is an update from the one in the webinar and the chart shows cash levels continue to rise, now equaling $4.73 trillion. Clearly the current cash level is higher than the level reached at the peak of the financial crisis in early...

Downside Earnings Revisions Tend To Peak Near Market Bottoms

 April 22 2020
It is not surprising company earnings revisions have been mostly downside revisions with most of the country/consumers sitting at home. What is noteworthy though is the upside to downside earnings revision ratio tends to bottom near equity market bottoms. During the 2008/2009 financial crisis, the revision ratio bottomed in late February and the S&P 500 Index bottomed a little over two months ...

Equity Markets Defy Emotions

 April 15 2020
From February 19 to March 23 the S&P 500 Index went from trading at a record high to being down 30.75% for the year, all in the span of 23 trading days. The speed of the decline caught most investors by surprise. In the fifteen trading days since the March 23 low though, the Index is up 27.2% and regained 608 of the 1,148 points lost in the contraction. In spite of the strong recovery, a major...

Emerging Markets Better than Expected?

 April 15 2020
In the wake of the sharp declines across global markets driven by the uncertain and virulent spread of novel coronavirus, investors may have concern over the impact in countries where the pandemic originated; namely, emerging markets. To assess, we will look at performance of emerging markets in context to historical crises. Click here to read more.

Retest the Low or Onto New Highs?

 April 14 2020
Of course March 23 is not even a month in the rear-view mirror, but the S&P 500 Index is up over 23% since the low on that date. Some have commented the market will retest that market low before achieving new highs while others say the Fed's intervention minimizes the likelihood of a retest. As time moves further past the March 23 day, it seems "the no retest" chorus is sounding more probable....

Spring 2020 Investor Letter: The Bears Woke Up

 April 10 2020
The first quarter was an unprecedented one as the S&P 500 Index decline was the fastest 30%+ sell-off ever. The market ultimately fell 33.9% from February 19 to its low on March 23, just 23 trading days.  Click here for the information.

An Unprecedented Shock: Historic Fall-out from COVID-19

 April 8 2020
The emergence of COVID-19 in the U.S. as well as the subsequent measures to stem the spread of the virus sparked a rapid deterioration in markets and the economy that has no clear parallel in history.  Click here to read more.

NFIB Survey: Small Business Survival At Risk

 April 8 2020
Small businesses (less than 500 employees) account for around 50% of total private payrolls. The broad virus initiated and widely mandated "stay at home" orders across most states are having an extreme negative impact on small businesses, all business for that matter.  Click here to read more.
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