The Independent Market Observer

The View from the Aisle: The 2–10 Treasury Spread

November 29, 2019

Brad here. Today, we’re launching a new monthly column in which members of Commonwealth’s Investment Management and Research team will share their learnings and viewpoints on various topics with you. Our first post is from Nicholas Follett, manager of fixed income. Enjoy!

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A Time to Give Thanks

November 27, 2019

It has been proven that being grateful is one of the best ways to make your life better—to be both happier and more successful. Here on the blog, I try to focus on gratitude a couple of times a year. Of course, Thanksgiving is the perfect occasion to take a break and think about all the things we have to be grateful for.

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12 Record Highs for the S&P: What Does It All Mean?

November 26, 2019

This morning, I saw a commentary piece that pointed out we have had 12 record highs for the S&P 500 in the past month. A record is usually a big deal, and I often get calls to comment on what it all means. But I have to admit, I did not realize there had been that many in the past month. So, what does this series of highs mean, if anything?

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Monday Update: Housing Stays Hot, Consumer Confidence Jumps

November 25, 2019

Last week, the housing sector continued its recent rebound, as low interest rates and increasing consumer confidence helped deliver potential home buyers to the market. Despite the holiday, this week will be busy again. Tuesday and Wednesday are packed with economic updates as we head toward month-end.

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What Can History Teach Us About Today’s Marijuana Industry?

November 22, 2019

Brad here. One of the hot topics in the past year or so has been marijuana investing. Stocks have soared—and crashed. So, how can we know what to do if we want to invest? Peter Roberto, an investment research analyst on Commonwealth’s Investment Management and Research team, went back to history for some guidance. This perspective is a great way to think about this problem, and many others. Over to you, Peter.

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The Death of Retail?

November 21, 2019

One of the consistent narratives that has been playing out in the investing world is the death of retail. With Amazon and other online retailers continuing to grow and take market share, the world of brick and mortar has been said to be dying a slow and largely well-deserved death. Sears is the poster child here, with the once dominant retailer collapsing. (In that case, however, Amazon doesn’t seem to be the primary cause.) Other retailers have also taken hit after hit, and their stock prices have generally trended down. This trend is seen as something new and different—and something to worry about. The death of retail!

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Risk Focus: Domestic Politics

November 20, 2019

When you read the papers and watch the news, you won’t see much about economics. With earnings season just about over and with the major economic reports looking a bit better, investors don’t have a lot of data to worry about—at least until the next set of releases. Instead, now we are worrying about politics.

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Best Practices for Teaching Children About Money

November 19, 2019

Brad here. As a parent, one of the things I am struggling with is how to teach my son about money. Today, we have a terrific post from Brian Glazer, a Commonwealth investment consultant here at the home office, who is clearly doing a much better job at it than my wife and I are. I learned a lot, and I hope you will, too. Thanks, Brian!

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Monday Update: October Retail Sales Beat Expectations

November 18, 2019

Last week, we saw that core inflation pressure remains muted for both consumers and producers, despite increasing gas prices. Retail sales rebounded in October, following a disappointing decline in September. This week, we’re focusing on important updates on the housing markets and consumer confidence, as well as the release of the FOMC minutes.

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Is Japanification the New Normal?

November 15, 2019

Brad here. I have been writing about how demographics have become increasingly determinative of economic performance, especially around growth and interest rates. Today, Anu Gaggar, Commonwealth’s senior research analyst for international equities, puts these ideas into a historical and geographic context: what has happened in Japan—and what that might mean for the U.S. and for our investments. Over to you, Anu.

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How Bad Will the Next Recession Be?

November 14, 2019

Over the past two days, we have looked at the signs that a recession is coming, going so far as trying to time it to the middle of next year. What we haven’t done is look at perhaps the most important question: how bad will the recession be when it hits? After all, the timing may not matter that much, but whether it’s going to be mild or severe certainly makes a difference.

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How Close Is the Next Recession?

November 13, 2019

Yesterday, I discussed how the recent un-inversion of the yield curve suggests a recession is likely in the next year. So, I thought I would extend the same analysis to the other three indicators we follow here on the blog. Looking at one indicator is valuable, but we really need to evaluate all four to see if they align with one another—or not.

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Appearance on CNBC's Nightly Business Report, November 11, 2019 [Video]

November 13, 2019

I appeared on CNBC's Nightly Business Report (my segment starts at 4:43) on Monday to discuss the industrial sector. Listen in to learn more.

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What Does an Un-Inverted Yield Curve Mean?

November 12, 2019

Today, we are going to do some “inside-baseball” analysis around the recent changes in interest rates and what they mean. Normally, I try not to get too far into the weeds here on the blog. But interest rates and the yield curve have gotten a lot of attention, and the recent headlines are not actually all that helpful. So, put on your thinking caps because we’re going to get a bit technical.

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Monday Update: Consumer and Service Sector Confidence Rise

November 11, 2019

Last week was relatively quiet for economic news—the few major reports released related to international trade and service sector and consumer confidence. The trade deficit narrowed as expected, while service sector and consumer confidence both increased by more than anticipated. This week, a little more action is forthcoming, as we’re expecting updates on consumer and producer inflation, retail sales, and industrial production.

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Don’t Invest Based on the Headlines

November 8, 2019

Last night, I spoke at a client event for one of our Commonwealth advisors. As usual, it was a great group—thoughtful, interested, full of great questions. And, of course, worried. Worried about politics, worried about the debt and deficit, and, most of all, worried about what all of this means for their kids.

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Monthly Market Risk Update: November 2019

November 7, 2019

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Market Risk Update. Thanks for the assist, Sam!

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Appearance on Yahoo Finance's On the Move, November 07, 2019 [Video]

November 7, 2019

Is the market trading on fundamentals or politics? I discussed this and more today on Yahoo Finance’s On the Move.

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Economic Risk Factor Update: November 2019

November 6, 2019

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam!

The economic data released in October largely came in better than expected, with increasing service sector and consumer confidence offsetting some of the declines we saw in September. Job creation also came in better than anticipated, and the yield curve normalized for the first time in months. Despite these positive results, the longer-term trends continue to deteriorate, suggesting there are still very real risks in the economy that should be monitored going forward.

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A Look Back at the Markets in October and Ahead to November 2019

November 5, 2019

September and October are historically the two weakest months of the year, and markets did enter October in a nervous state. September ended on a positive note, but there was a drop that continued into the start of October. That decline took away all of the gains from the prior month and threatened to take the markets even lower. This move would have made sense, as the economic news was weakening. But markets went on to rebound and have a very good month. That reversal is the story of last month and very possibly of this one.

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Monday Update: Economy Grows Faster Than Expected in Third Quarter

November 4, 2019

Last week was jam-packed with economic updates, many of which beat expectations. Faster-than-expected GDP growth in the third quarter and a stronger-than-expected October employment report highlighted a week in which the Fed cut the federal funds rate by 25 bps. This week will be quieter, with notable releases on international trade, the service sector, and consumer confidence.

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Market Thoughts for November 2019 [Video]

November 1, 2019

October was a great month, with U.S. markets doing well and international markets doing even better. This positive news was surprising, given the impeachment inquiry, weak job growth, and declining business confidence. Still, major sectors of the economy remain strong. Consumers continue to earn and spend more. Plus, the Fed has gotten behind the markets with rate cuts at its last two meetings. But is there volatility ahead? Watch my latest Market Thoughts video to learn more.

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