Market Commentary July 2020

on Jul 17, 2020 4:15:00 PM By | Theresa Gusman | 0 Comments | Market Commentary
A Wild Ride By Theresa Gusman, Chief Investment Officer |  Download the PDF Overview It’s been a wild ride – and like the terminus of a dizzying, high-speed roller coaster, we’re right back where we started. After hitting an all-time high in mid-February, plunging 34% from its peak, bouncing in late March, and advancing 20.5% in the second quarter, the S&P 500 is down less than 2% year-to-date. The Consumer Discretionary, Technology, and Energy Sectors performed best in the second quarter, and the Utilities, Consumer Staples, and Financials were the worst performers as investors’ risk appetite returned. The growth versus value chasm continued to widen in the second quarter, which is not surprising given the increase in risk appetite and sector performance in the second quarter. Strategies incorporating environmental, social, and governance (ESG) factors broadly outperformed traditional strategies and indices in the second quarter as the emphasis continued to shift to quality and sustainability. Uncertainty surrounding the COVID-19 led to a sharp rise in volatility in March, which continued through the – albeit to a lesser extent and to the upside (which always feels better). Attention remains focused on the trade-offs among rising COVID-19 cases, quarantine-fatigue, progressively easing the shutdown that crippled the global economy, and “whatever it takes” monetary and fiscal policies. The effort to weigh conflicting and potentially disastrous outcomes – both personally and collectively – sets the backdrop for continued market volatility and unpredictability in the coming month
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Market Commentary April 2020

on May 11, 2020 10:15:00 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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Market Commentary January 2020

on Jan 27, 2020 10:15:00 AM 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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Market Commentary October 2019

on Oct 30, 2019 10:15:00 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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Market Commentary June 2019

on Jul 31, 2019 10:15:00 AM By | Theresa Gusman | 0 Comments | Market Commentary
In this issue: Quarterly Performance Benchmarks  |  Global Market Highlights  |  Outlook – Climbing a wall of worry…Until we get to the top  |  Quarterly Bond Market Overview Download PDF Mixed signals: New Highs, Decelerating Earnings Growth, Stretched Valuations By Theresa Gusman US equities continue to hit new highs. The S&P 500 posted its best first half in 22 years, rising 18.5% through the end of June. Stock markets advanced worldwide, with developed and emerging international markets up 14.0% and 10.6%, respectively, year-to-date, and 3.7% and 0.6% in the second quarter. Volatility persisted during the quarter, with global equity markets rising and falling along with trade tensions -- until it became apparent that the Federal Reserve would be quick to reduce rates amid slowing economic activity and continued low inflation. Fresh highs come amid slowing global growth, sharply decelerating earnings growth and stretched valuations.
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Market Commentary March 2019

on Apr 25, 2019 1:15:00 PM By | First Affirmative | 0 Comments | Market Commentary
Also In this Issue: Outlook — Modest Equity Returns Amid Higher Volatility | Quarterly Performance Benchmarks | Fixed Income Commentary Download PDF Volatility reigns: It just feels better on the upside By Theresa Gusman Volatility reigned in the first quarter. The US stocks surged higher, posting their best quarter in nearly a decade and offsetting the fourth quarter downdraft. Equity markets rebounded worldwide led by China, as US-China trade tensions eased, and the Fed signaled that it is unlikely to raise rates in 2019. The first quarter was the mirror image of the fourth. Growth stocks outperformed value, small outperformed large, economically sensitive sectors topped the performance charts, oil prices rebounded, and China was the top performing market in the world. We remain convinced that the fourth quarter ushered in a period of equity market volatility (which always feels better on the upside), asynchronous and decelerating global economic and profit growth, and negative earnings surprises.
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Market Commentary December 2018

on Jan 23, 2019 1:45:00 PM By | First Affirmative | 0 Comments | Market Commentary
Also In this Issue: 2019 Outlook — Modest Equity Returns Amid Higher Volatility | Quarterly Performance Benchmarks | Fixed Income Commentary Download PDF It's (still) the Earnings... By Theresa Gusman Ushering in a period of asynchronous and decelerating global economic and profit growth and negative earnings surprises, equity markets fell amid volatile trading in the fourth quarter, erasing gains for the year in the US. US equities slid 13.5% in the fourth quarter, overwhelming increases through the first nine months and resulting in a 4.4% decline for the year. The globally sensitive Energy (-18.1%), Materials (-14.7%), and Industrials (-13.3%) S&P 500 Sectors were the worst performing in 2018, and Health Care (+6.5%), Utilities (+4.1%), and Consumer Discretionary (+0.8%) fared best. Although the pace of decline in non-US equity markets slowed in the fourth quarter, emerging markets fell 14.6% in 2018, as developed international markets dropped 13.8%. Except for Wheat (+3.6%) and Live Cattle (+2.6%), commodity prices ended the year lower. WTI Crude Oil plunged 20.5% in 2018 and 37.5% in the fourth quarter and economic bell weathers Zinc (-23.4%) and Copper (-21.3%) were among the worst performers in 2018.
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Market Commentary October 2018

on Oct 23, 2018 10:15:00 AM By | First Affirmative | 0 Comments | Market Commentary
Also In this Issue: Quarterly Performance Benchmarks Download PDF It's the Earnings... By Theresa Gusman U.S. equities surged 7.71% in the third quarter as earnings remained strong. The MSCI KLD 400 Social Index underperformed this quarter, but continued to track the broader market this year. U.S. interest rates and the dollar continued higher, along with the economy. Non-U.S. equities showed signs of life, as both emerging and developed markets advanced.
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Market Commentary Q3 2018

on Jul 1, 2018 10:15:00 AM By | First Affirmative | 0 Comments | Market Commentary
Also In this Issue: Quarterly Performance Benchmarks | The Smartest Guys in the Room Download PDF As Good As It Gets By Theresa Gusman Following a brief first quarter hiatus, the US equity market resumed climbing a wall of worry in the second quarter. International markets did not follow suit, with significant losses in emerging markets. As we look toward the second half and 2019, the outlook for global equities is clouded by decelerating economic and earnings growth, rising inflation and interest rates, higher oil prices, and trade headwinds.
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Market Commentary Q2 2018

on Apr 1, 2018 10:15:00 AM By | First Affirmative | 0 Comments | Market Commentary
Market Commentary - April 2018
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