Affirmative Impact April 2020

on May 13, 2020 3:00:00 PM By | Holly Testa | 0 Comments | Affirmative Impact
Shareholder Engagement in the Midst of COVID-19 By Holly Testa  |  Download the PDF The traumatic impacts of the ongoing COVID- 19 outbreak are necessarily focusing attention to immediate concerns at the expense of just about everything else. Some thoughts on the challenges and opportunities we see as we navigate the changing day-to-day landscape:  Our Work Continues The COVID-19 crisis will do much to shape our agenda going forward, but we continue to focus on long-term systemic issues even as we re-focus our short-term strategy. We had already filed 11 shareholder proposals on behalf of clients for the 2020 proxy season prior to the onset of COVID-19, taking leadership on two resolutions.
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Market Commentary April 2020

on May 11, 2020 9:23:54 AM By | Theresa Gusman | 0 Comments | Market Commentary
Markets Respond to a Global "Time Out" By Theresa Gusman, Chief Investment Officer The US equity market was persistently hitting new highs following a 31.5% gain last year – until a few weeks ago. This surge drove the Dow Jones Industrial Average to an all-time high of 29,551 on February 12th. Then the bottom fell out. In response to the spreading coronavirus pandemic and resultant global “time out”, the S&P 500 plunged 33.9% from its peak on February 19th to its trough on March 23rd. For the quarter, US stocks lost 20.6% and global equities fell 24.0%. The healthcare (-13.9%), technology (-14.4%), and utilities (-15.5%) sectors fared best. Energy stocks had their worst quarter ever, falling 53.4% as oil prices plunged 66.4% to $20.50 per barrel from $61.10 at the start of the year. Strategies incorporating environmental, social, and governance (ESG) factors broadly outperformed traditional strategies and indices in the first quarter as the emphasis shifted to quality and sustainability during the “flight to quality” and energy related companies, which are often excluded from ESG strategies, underperformed. Uncertainty surrounding the virus led to a sharp rise in volatility. In mid-January, we noted, “according to the Wall Street Journal, the stock market is in one of its longest historic streaks without a daily move of 1% or more”. In contrast, in March, there was only one day where the S&P 500 did not move by more than 1%. Attention is now beginning to turn to the trade-off between easing the “time out” that has crippled the global economy and spurring new outbreaks of COVID-19. The effort to balance these two conflicting and potentially disastrous outcomes has created a no-win situation for policymakers – and set the backdrop for continued market volatility and unpredictability in the coming months.
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Economic Commentary April 2020

on Apr 9, 2020 5:05:05 PM By | Mel Miller | 0 Comments | Economy Stock Investing Economic Commentary
"March Madness" Turns to March Sadness By Mel Miller, CFA®, Chief Economist  |  Download PDF As an economist, I rely on government and industry statistics to determine not only my analysis of the current economy but to formulate my forecast of the future direction of the economy.  Tempering my investigation is the built-in lag time in the releases of at least one month. Typically a one month lag is of little consequence as an economy does not change rapidly but merely continues or reverses well-established trends. In a “normal” economy, I feel reasonably confident in describing the current situation, adding my interpretation, and forecasting the next quarter’s economic outcome within a small margin of error.  I define this process as writing “non-fiction.”
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What's An Investor To Do?

on Mar 17, 2020 5:06:00 PM By | Theresa Gusman and Mel Miller | 0 Comments |
By Theresa Gusman and Mel Miller |  Download the PDF We are going to try and answer the question of “What is an investor to do?” Going into 2020, the economy and the market seemed on reasonably stable ground. Expecting the record-breaking eleven plus years of economic expansion to continue, the stock market, as measured by the S&P 500, reached a record level on February 19th.    What has caused the dramatic change in less than a month? The expanding coronavirus pandemic, disrupting life and supply chains in addition to existing restrictive trade policies, has roiled the markets as valuation measurers become meaningless. Short-term investors and speculators sought safe havens. Gold and treasury bonds became the investments of choice as both gold and the treasury index recorded approximately 10% returns since February 19th. Amazing.   
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Advocacy and Impact January 2020

on Jan 31, 2020 4:54:39 PM By | Holly Testa | 0 Comments |
By Holly Testa  |  Download the PDF Proxy Voting Trends Our track record on proxy voting continues to contrast sharply with overall averages, as our proxy voting guidelines establish standards not typical within the mainstream investment community. We voted against over 40% of nominating committee board members due to lack of gender and racial diversity and against almost 50% of compensation committee board members due to their oversight and approval of excessive executive compensation.
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Market Commentary January 2020

on Jan 27, 2020 2:58:33 PM By | Theresa Gusman | 0 Comments | Market Commentary
Buy on the Rumor, Sell on the News By Theresa Gusman, Chief Investment Officer  |  Download PDF US equities continue to hit new highs. A 9.1% fourth quarter surge propelled the S&P 500 to a 31.5% increase in 2019 – and the index continues to advance. A mixed start to 2019 yielded to strong fourth quarter gains in international equity markets. The MSCI ACWI, Ex US index advanced 8.9% in the fourth quarter and 21.5% in 2019. Volatility diminished during the gradual climb in global equity prices. In fact, according to the Wall Street Journal, as of mid-January the stock market is in one of its longest historic streaks without a daily move of 1% or more. Amid the improving global economic and earnings backdrops, global markets look poised to continue to shrug off myriad geo-political risks and stretched valuations in the near term. As we move through the year and the election looms, we anticipate increased volatility in the US – which could provide a chance for international equity markets to stage a relative comeback.
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Economic Commentary January 2020

on Jan 22, 2020 12:04:52 PM By | Mel Miller | 0 Comments | Economy Stock Investing Economic Commentary
Civility On Hold By Mel Miller, CFA®, Chief Economist  |  Download PDF The current political environment turned even more toxic during the fourth quarter of 2019. One can only hope that historians will look back on 2019 as the low point of civility. President Trump, impeached in the House of Representatives, following partisan wrangling in what observers feel was the most toxic hearing in U.S. history. The septic environment has bifurcated groups and families making for tense Holiday gatherings. Judged by friendly Republicans, the President will likely prevail in the Senate.
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Affirmative Impact October 2019

on Nov 1, 2019 10:15:00 AM By | Holly Testa | 0 Comments | Affirmative Impact
Gun Violence: Are We Moving Beyond Thoughts and Prayers? By Holly Testa  |  Download the PDF Recent events give us hope that the answer is yes, even in the face of an unresponsive Senate. In the last few months we have seen significant developments: In the absence of viable federal legislation, state lawmakers have been taking action, with numerous states enacting new gun laws that strengthen background checks, increase age requirements and restrict magazine size and accessories that enhance rapid firing capability. New Jersey Governor Philip Murphy asked banks doing business in the state to disclose relationships with gun manufacturers and sellers. The U.S. House passed a bill that represents the first substantive attempt to enhance federal firearms regulation since 1994. Walmart terminated hand gun and short barrel rifle ammunition sales after a mass shooting killing 20 in one of their own stores. CEO Doug McMillon publicly asked for public policy action. 145 CEOs signed a letter asking the Senate to pass legislation mandating background checks for all firearms sales and to enact a strong red flag law.
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Market Commentary October 2019

on Oct 30, 2019 11:30:00 AM By | Theresa Gusman | 0 Comments | Market Commentary
In this issue: Global Market Highlights  |  Outlook - Climbing A Wall Of Worry...Until We Get To The Top  |  Quarterly Bond Market Overview Earnings and Economic Growth Decelerating, Valuations Stretched - Markets Rising? By Theresa Gusman, Chief Investment Officer  |  Download PDF US equities continue to hit new highs. After its best first half in 22 years, the S&P 500 posted a 1.7% gain in the third quarter. Global equity markets were mixed. Japanese, European and US equities rose in the third quarter, while non-Japan Asia and Emerging Markets declined, paring gains for the year. Volatility persisted during the quarter. Global equity markets advanced and declined along with trade tensions, Brexit news, and monetary easing amid slowing economic activity and continued low inflation. Despite the volatility, equity markets remain resilient, even as global growth slows, earnings growth decelerates sharply, and valuations are stretched.
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Economic Commentary October 2019

on Oct 28, 2019 5:02:37 PM By | First Affirmative | 0 Comments | Economic Commentary
Falling Leaves and Economy? By Mel Miller, CFA®, Chief Economist  |  Download PDF Fall is here.  As I watch leaves drifting down to the ground from my office window, I have to ask whether the economy will follow a similar pattern of slowly drifting lower.  The summer was a record-breaker in terms of rainfall here in Wisconsin as flooding captured the headlines.  The economy also is in the record-breaking territory, as the expansion is now the longest continuous expansion in history. 
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