Halfway Through Earnings: More Treats Than Tricks?

October 31, 2017

As of the end of last week, more than half (55 percent) of companies in the S&P 500 had reported earnings for the third quarter. So, it makes sense to see where we are and what that means for the markets. On the whole, the news is good. But it has to be understood in the context of the recent hurricanes, which—to no one’s surprise—have hammered earnings in the insurance sector. (All of the data here comes from the FactSet Earnings Insight analysis.)

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Monday Update: Surprisingly Good Data, Despite Hurricanes

October 30, 2017

Last week was a relatively slow one, but it still gave us a look at the economy as a whole. The data was surprisingly strong, especially in light of the hurricanes’ impact, and came in better than expected across the board. Despite some concerns about growth, this news was quite good and suggests some of those concerns may not play out.

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The State of the Market: Part 5

October 27, 2017

In part 4 of this series, we concluded that the map was separating from the territory, along with the reasons why that was so. Today, let’s take a look at what to do about it.

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The State of the Market: Part 4

October 25, 2017

As I mentioned yesterday in part 3, passive investing is a rule-based system and a fairly simple one. Put your money into an index, and buy all of the components at the current weight. This is the case regardless of whether you purchase a mutual fund, ETF, or some other vehicle. You simply buy the index, taking its weights as gospel.

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The State of the Market: Part 3

October 24, 2017

Last Friday, we talked about how artificial intelligence (AI) is, at heart, something simple: a set of rules and if-then statements. As such, AI can be very helpful in a simple environment, where relationships and rules remain constant, but it tends to stumble when those rules change. Waze, which is a great example of this, lives in a world of maps. It is very useful, but it fails when the reality doesn’t match up with the map. Any self-driving car will have to take closed roads, weather, and crazy drivers into account, which works well much of the time, but not always.

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Monday Update: Despite Hurricanes, Growth Remains Solid

October 23, 2017

Last week gave us a broad look at the economy, including industrial production and housing. While the business news was generally positive, housing was more mixed—suggesting a potential slowdown in the next couple of quarters. It is clear that growth continues and is likely to keep going for some time. Still, and despite the disruptions from the hurricanes, there are signs that we are in the later part of the economic cycle and will need to keep an eye out for slowing growth.

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The State of the Market: Part 2

October 20, 2017

As I mentioned in part 1 of The State of the Market, today I’d like to take a side trip into a different area: artificial intelligence (AI). One of the key themes we see pretty much everywhere these days is that computers, or robots, are taking over the world. This “age of automation,” as I will call it, is often seen as the rise of the machines (think the Terminator movies) and the associated demise of human jobs.

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The State of the Market: Part 1

October 19, 2017

After talking about where the bubble is and then Black Monday, there is something we must acknowledge: despite all the hand-wringing, the market is high and seems to be rising even further. Like the bumblebee— which, according to all sorts of sophisticated aerodynamic analysis, cannot fly—the market doesn’t know it can’t go higher and so it does.

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Black Monday Remembered

October 18, 2017

October 19, 1987, is a date that will live in stock market infamy. Known as Black Monday, it marks the largest one-day loss in history, with the Dow down exactly 508 points (22.61 percent).

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Where’s the Bubble?

October 17, 2017

Have you noticed how hard it is to blow a bubble these days? Things that were once considered out-and-out, no-doubt-about-it bubbles now get a “meh, I’ve seen bigger” reaction. It seems we’re all a bit jaded.

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Monday Update: Strong Performance After the Storms

October 16, 2017

Today's post is from Sam Millette, a fixed income analyst on our Investment Management and Research team.

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Should We Be Worried About Earnings Growth?

October 13, 2017

One of the key points in my argument that things are actually pretty good—and likely to get better—has been that with a growing economy, companies are selling more and making more money. Rising profits, especially on a per-share basis, are the foundation for a rising market.

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Still in 1999? The Timing May Be Shifting

October 12, 2017

I am at the Commonwealth National Conference in San Diego this week, talking with advisors from all around the country. Similar to the Financial Planning Association conference that I attended last week, everyone here wants to know what the market is going to do. In the short term, I suspect it is likely to keep rising.

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Monthly Market Risk Update: October 2017

October 11, 2017

Market risks come in three flavors: recession risk, economic shock risk, and risks within the market itself. So, what do these risks look like for October? Let’s take a closer look at the numbers.

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Economic Risk Factor Update: October 2017

October 10, 2017

Despite the impact of the hurricanes (in many respects, because of them), September’s data came in surprisingly positive. The headline figures were certainly affected by the storms, but the underlying details remained solid.

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Monday Update: Very Positive Data, Due in Part to Storms

October 9, 2017

Last week gave us a broad look at the economy, including business confidence surveys and the jobs report. The news came in surprisingly strong, at multiyear bests in many cases. This was, of course, positive and consistent with other data, but the magnitude of the improvements raises the question of how much the storms may have affected the results. That impact varies, but there is reason to believe that the improvements are real—although likely not as good as the numbers would suggest.

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Jobs Report: Weak Headline, Strong Details

October 6, 2017

Since I thought I had covered the most likely outcome of the jobs report in yesterday’s post, I had not planned on writing about it again this morning. Looking at the actual data, though, there are some worthwhile takeaways that deserve a closer look. So, here we are.

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What Should We Expect from This Month’s Jobs Report?

October 5, 2017

One of the most important economic reports—the jobs report—is coming out on Friday. This is always a big data release, in that jobs are the ultimate barometer of the economy. Companies don’t hire unless they are both confident and expanding, so the jobs report touches them. Consumers don’t spend unless they are working and making money, so it touches them. Inflation depends on how fast wages are growing, so it touches that, too. Basically, the jobs report sits right in the middle of everything that we as investors need to keep an eye on.

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The Role of Financial Planners: Lessons from Nashville

October 4, 2017

Yesterday, I was down in Nashville speaking at the Financial Planning Association’s national meeting. It was an interesting time! Speaking with the young man at the coffee shop, our conversation went something like this: “I’m from Alabama.” “How did you get here?” “Like everybody else, music.” Clearly, this is a one-industry town, from the convention center (the Music City Center) to the signs for the Grand Ole Opry.

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Market Thoughts for October 2017 [Video]

October 3, 2017

September was a great month for the financial markets. All three U.S. indices and developed markets around the world were up. These results are surprising given recent events. The U.S. was hit by some of the worst storms in history. Plus, the North Korea crisis persists, with credible talk of a nuclear war. Still, the markets continue to respond to the fundamentals, like strong consumer confidence and business investment.

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Monday Update: Despite Hurricanes, Solid Economic Data

October 2, 2017

Last week gave us a broad look at the economy, including housing, consumer confidence, business investment, and personal income and spending. Some weakness was apparent, but this seems to be due in large part to hurricanes Harvey and Irma and may therefore be short lived. With the exception of new home development, where the market appears to have normalized as supply and demand are close to normal levels, the overall news was good. This week’s data is certainly worth watching but—given the storm effects—not worth giving excessive weight to.

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