News & Publications

Q2
2017

Our View

July 2017

In the second quarter the S&P 500 advanced 3.1%, bringing the index up 9.3% year to date1. We have used strength in the equity markets to further reduce exposure to U.S. equities, and we are now underweight U.S. equities within long-term growth strategies2 (predominantly common stocks). U.S. corporate profit growth has been the main driver of the stock market year to date; however, expectations for substantial reform initiatives in healthcare and corporate taxes appear bogged down in Washington, and are quite likely to be watered down and delayed. In addition, the Federal Reserve plans to begin “balance sheet normalization” which could result in higher interest rates, a higher cost of debt, and tighter money supply. read more ❯

Q1
2017

Our View

April 2017

The S&P 500 has returned 11.3%1 since last November’s election on the premise that a pro-business agenda focused on tax cuts, deregulation, and infrastructure spending would be positive for the economy and the stock market. Five months into the rally and with little in the way of concrete results yet, this upturn will need to be accompanied by policy achievements in Washington and continued improvement in the U.S. economy to support the market’s higher valuations. We believe the following are important if U.S. equities are to continue to advance: read more ❯

Q4
2016

Our View

January 2017

The election of Donald Trump as President was a surprise to the majority of voters and a shock to some. As a result, the positive response of the U.S. equity market (the S&P 500 increased 5% from Election Day through year end) was also a surprise to many. However, on analysis the market’s reaction appears rational: • President-elect Trump campaigned on a pro-business agenda, focusing on a combination of tax cuts, fiscal spending, and less regulation. read more ❯

Q3
2016

Our View

October 2016

As the third quarter closes, there appears to be a substantial amount of cautiousness in financial markets, if not some outright bearishness. However, we do not think there is justification for the degree of bearishness that exists. The stock market is not statistically cheap, but there are no signs of exaggerated exuberance. read more ❯

Q2
2016

Our View

July 2016

U.S. equity investors have struggled with conflicting economic data, feeding arguments for both bulls and bears. The non-farm payroll number is a clear example of why investors are confused. May’s payroll number (11,000 new jobs) was very weak and declined for the third month in a row. The June payroll number was very strong (287,000 new jobs), indicating that May’s number was an aberration, confirmed as well by continued low unemployment claims. Bears have also cited the flattening of the U.S. Treasury yield curve – often a sign of slowing growth or a possible recession. read more ❯

Q1
2016

Our View

April 2016

It has been an interesting and difficult quarter for investors. The S&P 500 closed last year at 2044 and now trades at 2060, a very modest gain for first quarter. However, on February 11th it sold at 1829, a decline of 10.5% from year-end, and down 14% since its peak of last July. In fact, the market’s behavior since then has been one of substantial swings; there have been four significant declines and four recoveries and, on balance we are still 3.2% below the peak last summer. Importantly, many stocks have performed much worse than the averages and have inflicted notable damage to portfolios. read more ❯

Q4
2015

Our View

January 2016

2015 will go into the record books as a disappointing year: developed and emerging market equity returns1 were mostly negative with only a few exceptions; U.S. Treasury and Agency bonds eked out a small return, and investment grade and high yield corporate bonds declined; other segments of the market did poorly, especially commodities. read more ❯

Q3
2015

Our View

October 2015

The stock market performed poorly in the third quarter as the S&P 500 total return was -6.4%, the worst quarter in four years. Global equity markets declined even more, with a total return of -12.1%(1). read more ❯