The Independent Market Observer

Monday Update: Consumer Confidence Mixed in August

August 31, 2020

Last week was jam-packed with economic news, with reports covering wide swaths of the economy released. Both major measures of consumer confidence for August revealed mixed results. This week will be busy once again, with updates focusing on business confidence and the August employment report.

Continue reading → Leave a comment

Don’t Worry About Interest Rates

August 28, 2020

There has been a great deal of commentary surrounding the change in how the Fed is going to manage inflation. As announced yesterday, the Fed will be using a “flexible form of average inflation targeting.” This means that rather than the prior objective—to keep inflation below 2 percent at all times—the Fed will now aim for an average inflation level of around 2 percent. Since inflation is well below 2 percent and has been for some time, markets are interpreting this announcement as the Fed will be willing to let inflation run hot (i.e., above 2 percent) for some time to restore the average. Cue the worries about hyperinflation.

Continue reading → Leave a comment

Coronavirus Update: August 28, 2020 [Video]

August 28, 2020

Today, I'd like to give an update on the coronavirus, including the effects on the economy and markets. On the pandemic front, we’ve had some good news. Case growth is down significantly, and the case growth rate is below the lows seen in mid-June. Further, outbreaks in most states have been contained, although there are emerging worries in the Midwest. Testing does remain a weak spot, as the number of tests has trended down and the positive rate remains well above what it should be. Nonetheless, the big picture is that, for the moment, the pandemic is under control.

Continue reading → Leave a comment

Are the Economic Risks on the Rise?

August 27, 2020

The good news is that the second wave of infections has continued to come under control in the past two weeks. Case growth is down significantly from the peak, and the case growth rate has ticked back down below the lows seen in mid-June. Despite the higher case counts, the pandemic is once more under control. The control measures are working.

Continue reading → Leave a comment

Are the Markets Moving Past the Pandemic?

August 26, 2020

Tomorrow, I will give my usual pandemic update (spoiler alert: improvement continues). But today I’d like to focus on what is becoming increasingly clear: the stock market and, to a lesser extent, the economy have started to move past the pandemic. While it clearly isn’t over and will continue to have an effect on both, the headlines and market reactions have moved on.

Continue reading → Leave a comment

What’s Driving the Market’s All-Time Highs?

August 25, 2020

It’s my first day back from vacation, and I’m thinking I should take time off more often. Not only did we get some great posts here from my colleagues (thank you, all!), but my absence apparently allowed markets to hit new all-time highs. With investors getting excited, many expect the run-up to continue, despite the fact that I am now, metaphorically, back in the office. Sentiment is increasingly positive, and the fear of missing out is becoming a powerful driver for nervous investors to get back in the market. But should they?

Continue reading → Leave a comment

Monday Update: Housing Sector Recovery Accelerates

August 24, 2020

Last week, the economic highlight was the housing sector, which has continued to impress since reopening efforts took hold, driven by record low mortgage rates. This will be a busy week for updates, with reports scheduled to cover wide swaths of the economy.

Continue reading → Leave a comment

Municipal Bond Market Update

August 21, 2020

Brad here. Today we’ll get an update on the municipal bond market from Nick Follett, manager of fixed income on our Investment Management and Research team. Over to you, Nick.

Continue reading → Leave a comment

How Do You Position a Portfolio for Uncertainty?

August 20, 2020

Brad here. With so much unknown in our world, it seemed the perfect time to discuss how to position a portfolio for uncertainty. Today, Christ Stuart, a senior investment research analyst on our Investment Management and Research team, will do just that. Take it away, Chris.

Continue reading → Leave a comment

The Growth Vs. Value Disparity

August 19, 2020

Brad here. Today's post on the growing disparity we're seeing between growth and value stocks is brought to you by Peter Roberto, an investment research analyst on Commonwealth’s Investment Management and Research team. Take it away, Peter.

Continue reading → Leave a comment

Dethroning of King Dollar?

August 18, 2020

Brad here. Today’s post on the recent volatility of the U.S. dollar comes from Anu Gaggar, senior analyst on the Investment Management and Research team here at Commonwealth. Take it away, Anu.

Not too long ago, Brad wrote that the dollar is not going away. While that may be true, we are seeing considerable volatility in its value. What’s going on—and what does it mean for your investments? Of course, there is no crystal ball to answer such questions, but we can certainly take a deeper dive to better understand what is happening and how to deal with it.

Continue reading → Leave a comment

Monday Update: Retail Sales Growth Slows in July

August 17, 2020

Last week was relatively busy on the economic update front, with a focus on inflation, retail sales, and consumer confidence. The reports came in mixed, with better-than-expected results for consumer confidence and jobless claims offsetting disappointing retail sales data and faster-than-anticipated inflation in July. This week will be relatively quiet for economic updates, with releases focusing on the housing sector and the minutes from the Fed’s most recent meeting.

Continue reading → Leave a comment

Coronavirus Update: August 14, 2020 [Video]

August 14, 2020

Today, I'd like to provide an update on the coronavirus, including the effects on the economy and markets. We had some good news on the pandemic front this week, with the virus now back under control. Nationally, the daily spread rate is down to around 1 percent per day, and the daily number of new cases has held steady at about 55,000. Plus, the data shows that outbreaks are being contained in most states. One area of concern is testing. The number of tests has trended down over the past two weeks, and the positive rate remains well above what it should be.

Continue reading → Leave a comment

Monthly Market Risk Update: August 2020

August 14, 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!

Markets continued to rise in July, showing the second wave of the pandemic was not enough to derail the economic recovery. The S&P 500 increased by a strong 5.64 percent during the month. The Nasdaq Composite and Dow Jones Industrial Average (DJIA) also saw positive performances, marking a solid start to the third quarter. Although the continued market rebound in July was certainly welcome for investors, very real risks to markets remain, as we can see when we look at the key factors that matter when determining the overall risk level.

Continue reading → Leave a comment

Medical Risks Contained, But Economic Risks Have Risen

August 13, 2020

The good news is that the second wave of infections looks to have peaked and turned back down in the past two weeks. Case growth is down significantly from the peak, and the case growth rate has ticked back down to the lows seen in mid-June. Two weeks ago, we discussed the peak of the second wave, and this decline is the next step. The data indicates that, in most states, outbreaks are being contained.

Continue reading → Leave a comment

Appearance on CNBC’s The Exchange, August 12, 2020 [Video]

August 13, 2020

Yesterday I appeared on CNBC’s The Exchange to discuss the sectors I favor right now and the markets. 

Continue reading → Leave a comment

Economic Risk Factor Update: August 2020

August 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!

Continue reading → Leave a comment

How Will the Presidential Election Affect the Stock Market?

August 11, 2020

We’ve reached that point in the election cycle where I've started getting questions, from both sides, about the effect of the upcoming election on the markets. “Surely,” the question goes (and note that it is not really a question), “if Candidate X wins, the market will tank for the following reasons . . .”

Continue reading → Leave a comment

Monday Update: Jobs Report for July Beats Expectations

August 10, 2020

Last week’s major data releases all came in above expectations, helping to calm concerns that rising COVID-19 case counts are interrupting the economic recovery. Highlights included better-than-anticipated results for business confidence and hiring in July. This week will be another busy one, with updates focusing on inflation, retail sales, and the first look at consumer sentiment in August.

Continue reading → Leave a comment

Has Sustainable Investing Reached a Tipping Point?

August 7, 2020

Brad here. In today’s post, Sarah Hargreaves, an investment management analyst on our Investment Management and Research team, discusses whether the coronavirus pandemic has pushed sustainable investing to a tipping point. Over to you, Sarah.

Continue reading → Leave a comment

Finding Income in a Low-Rate Environment

August 6, 2020

Brad here. Today, Rob Swanke, an analyst with Commonwealth’s Investment Management and Research team, takes a look at the benefits and the risks of preferred stock as a source of yield in a portfolio. Over to you, Rob.

Continue reading → Leave a comment

Does the Stable Value Fund Make Sense for 401(k) Investors?

August 5, 2020

Brad here. Today's post on why the stable value fund is becoming a more common investment option in retirement plan menus comes from Michael Geraci of Commonwealth's Retirement Consulting Services team. Take it away, Michael. 

In today’s uncertain economic environment, interest rates have declined, and the Fed has expressed its commitment to keeping them low. This environment has put pressure on money market funds yielding close to 0.1 percent, which has affected those retirement plan participants seeking preservation of capital. Many of these same participants are close to retirement and cannot afford to lose a significant portion of their retirement portfolios, but they’re also seeking returns to keep pace with inflation.

Continue reading → Leave a comment

A Look Under the S&P 500 Hood

August 4, 2020

Today’s post on the recent strong performance of growth stocks comes from Brian Price, senior vice president of investment management and research here at Commonwealth. Over to you, Brian!

Continue reading → Leave a comment

Market Thoughts for August 2020 [Video]

August 3, 2020

Overall, July was a good month for the markets. As the month began, we saw strong job gains, declining layoff numbers, and rising consumer confidence and spending. Markets rose on this good news. But then infection counts went up, leading to state-level closures. This shift hit hiring and confidence, slowing the recovery. As a result, several market indices declined from their midmonth levels.

Continue reading → Leave a comment

Monday Update: Economy Contracts at Record Rate in Q2

August 3, 2020

Last week was packed with economic updates that touched on wide swaths of the economy. The first estimate of second-quarter GDP growth drew a lot of attention. It showed the economy contracted at the fastest quarterly rate on record, highlighting the devastating economic impact of anti-coronavirus measures. This will be another relatively busy week for economic updates, with a focus on business confidence and the July employment report.

Continue reading → Leave a comment

Subscribe via Email

Crash-Test Investing

Hot Topics



New Call-to-action

Conversations

Archives

see all

Subscribe


Disclosure

The information on this website is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets.

The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. All indices are unmanaged and investors cannot invest directly in an index.

The MSCI EAFE (Europe, Australia, Far East) Index is a free float‐adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of 21 developed market country indices.

One basis point (bp) is equal to 1/100th of 1 percent, or 0.01 percent.

The VIX (CBOE Volatility Index) measures the market’s expectation of 30-day volatility across a wide range of S&P 500 options.

The forward price-to-earnings (P/E) ratio divides the current share price of the index by its estimated future earnings.

Third-party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided on these websites. Information on such sites, including third-party links contained within, should not be construed as an endorsement or adoption by Commonwealth of any kind. You should consult with a financial advisor regarding your specific situation.

Member FINRASIPC

Please review our Terms of Use

Commonwealth Financial Network®