The Independent Market Observer

The Coronavirus and Your Investments

February 28, 2020

This week has been one of the worst in history for the stock market. With the Dow and S&P 500 now down more than 15 percent from recent highs (of only weeks ago!), fears are rising that this pullback might be the precursor to another crisis. So what should we, as investors, do to protect ourselves? Since panic is never the right answer, we need to think through and understand what is really happening—and what is not.

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Reassessing the Coronavirus Risk

February 27, 2020

In yesterday’s post, I pointed out that the markets were taking a break, stopping the sudden slide to think about whether the news surrounding the coronavirus is really as bad as all that. Today, they appear to have decided that, yes, things are that bad and may be even worse. Perhaps, then, it is time for me to reassess my conclusions.

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Coronavirus Concerns Keep Markets on Edge

February 26, 2020

Yesterday, the global financial markets experienced another notable drop, reflecting investor concerns regarding the ongoing spread of the coronavirus. The major U.S. indices went down an additional 3 percent or more. These losses, on top of the drops we saw on Monday, have taken down the market significantly—with the S&P 500 more than 7 percent off its high of four days ago.

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How Should Investors React to the Coronavirus?

February 25, 2020

It is now clear that the coronavirus has escaped the attempted containment by Chinese authorities and has spread around the world. According to the World Health Organization, there are 79,331 confirmed cases, of which 77,262 are in China and 2,069 are outside of China (as of February 24, 2020). The two largest country clusters are in South Korea (with 232) and Italy (with 64). And many of those numbers seem to be on the rise, with the Washington Post reporting on February 24 that there were 833 confirmed cases in South Korea and 53 confirmed cases in the U.S.

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Monday Update: Housing Market Remains Healthy

February 24, 2020

Last week’s economic updates highlighted the housing sector, which continues to hum along at a healthy rate. This week’s reports will cover broader territory, as we wrap up the month with important releases that hit on most major areas of the economy.

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Young People in Fancy Cars

February 21, 2020

Brad here. When I was younger, I had the oldest, most beat-up car of any of my friends. It was a 1981 Toyota Celica that I bought in 1988 and kept until 1997. Yes, I am cheap. My colleague Tom Scarlata, of Commonwealth’s Investment Management and Research group, is also cheap—which I applaud—as well as thoughtful. His observations and conclusions put some context around spending behaviors we see every day, but might not be thinking about enough. Thanks, Tom!

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Space Economics: The Final Frontier

February 20, 2020

Brad here. Besides being an economics geek, I am and always have been a science and space geek. As a human, I regard the growing presence of private enterprise in space as a significant breakthrough. As an investor, I’m more than excited by the opportunities presented by exploring space. On the other hand, as a cynic, I’m also very aware of the risks and concerns associated with expanding our boundaries. Tom Ryan of Commonwealth’s Investment Management and Research department does a terrific job outlining the real opportunities, as well as the risks, of investing in the final frontier. Thanks, Tom—ad astra!

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Looking Too Far Ahead Can Leave Investors Far Behind

February 19, 2020

Brad here. One of the things we try to do as investors is see into the future. To some extent, we can—but not as much as we wish and often not as far as we think. In today’s post, Brian Glazer, a senior investment consultant here at Commonwealth, takes a look at how to keep those expectations under control.

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Monday Update (on Tuesday): Consumer Confidence Continues to Rise

February 18, 2020

Last week’s economic updates came in mixed, with solid reports on retail sales and consumer confidence offsetting a modest uptick in inflation and disappointing industrial production results. Given the importance of consumer spending to the overall economy, the positive reports represent a good tailwind for economic growth to start the year. This week, the focus will be primarily on housing-related updates, with forecasts for continued year-over-year growth in this important sector of the economy.

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No Love for Retail Spending This Valentine’s Day

February 14, 2020

This morning, I stopped to get a card and balloon for my son for Valentine’s Day. I was shocked—once again—at how much the greeting card companies have monetized our need to be loving parents, spouses, and so forth. With these kinds of prices, you would think retail spending would have soared last month. Think again.

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Monthly Market Risk Update: February 2020

February 13, 2020

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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Economic Risk Factor Update: February 2020

February 12, 2020

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!

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Looking Back at the Markets in January and Ahead to February 2020

February 11, 2020

January was a tough month. We started with a U.S. attack on an Iranian general (creating thoughts of war) and ended with the possibility of a new global pandemic (with the Wuhan coronavirus spreading around the world). In between, of course, we had the impeachment spectacle here in the U.S., as well as the British exit from the European Union. All in all, it was quite a difficult month from a news perspective. Which made it somewhat odd that markets were not hit harder than they were.

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Monday Update: Business Confidence and Employment Beat Expectations

February 10, 2020

Last week, two major measures of business confidence and January’s jobs report came in better than anticipated, as did most of the other economic updates. This week will be another busy one for reports, with the focus on consumer prices, spending, and confidence.

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Searching for a Leading Economic Indicator

February 7, 2020

Brad here. Today, I’m pleased to introduce a post by Andrew Kitchings, a portfolio manager with Commonwealth’s Investment Management and Research team. Enjoy!

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Jobs Report Preview: Good News Ahead?

February 6, 2020

Tomorrow, we get the big one, the most (in my opinion) significant economic report of all: the jobs report. So, what should we expect?

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Appearance on CNBC’s Power Lunch, February 05, 2020 [Video]

February 6, 2020

From retail sales to housing, we're seeing a real rebound in the economy. I discussed this and more yesterday on CNBC’s Power Lunch.

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As Goes January, So Goes the Year?

February 5, 2020

The idea behind the old adage “as goes January, so goes the year” is this: if the market closes up in January, it will be a good year; if the market closes down in January, it will be a bad year. In fact, it is one of the more reliable of the market saws, having been right almost 9 times out of 10 since 1950. Last year, January saw gains of 7.9 percent for the S&P 500 (the best January since 1987), predicting a very good year. Indeed, that is just what we got.

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Market Thoughts for February 2020 [Video]

February 4, 2020

The year started with a slight setback, with both U.S. and international markets down. Some of this poor performance was driven by fear over the coronavirus. Although the virus is something to watch, it's not likely to be a long-term risk. Indeed, economic growth in the U.S. has been steady, and business and consumer confidence have improved.

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Appearance on Yahoo Finance's On the Move, February 03, 2020 [Video]

February 4, 2020

Yesterday I appeared on Yahoo Finance’s On the Move to discuss the impact of coronavirus on the market. Listen in to hear more.

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Monday Update: Consumer Confidence, GDP Growth Are Highlights

February 3, 2020

Last week, results came in mixed for the large number of data releases. Highlights included better-than-expected results for two major consumer surveys and fourth-quarter GDP growth. This week, the focus will be on the business side of the economy, with updates on manufacturer and nonmanufacturer confidence, international trade, and employment all on tap.

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