A Santa Claus Rally? Yes, Virginia…

Theories that aim to predict stock market performance range from the complicated and impenetrable to the arcane and simply ridiculous.  But some are wonderfully clear: for example, December is usually a good month.  In the festive spirit, and not to be taken too seriously,  we've duly found that the evidence supports the existence of a “Santa Claus Rally”. Our test of choice, which we may as well call a “Santa Score”, is the result of dividing the average performance each December Read more [...]

China’s Little (Or Not So Little) Secret

Below are some quotes from the latest Oil Market Report from the IEA that may overpower Chinese slowing demand growth - even with a surprise interest rate cut. "there is a degree of opacity" "The Chinese administration does not routinely disclose information... thus little up‐to‐date official information is available" "A particular uncertainty concerns the division between commercial and government storage" "unreported stock building could be occurring at unreported commercial sites" What Read more [...]

Canada’s Inflation is Heating Up For The Winter

The end of last year saw Canada’s CPI move up from the October level of 0.7 to a 1.2 for December.  Since then it has stepped up in 2014 peaking at 2.4 in June before trending back down to September's 2.0.  In light of this, the October report of 2.4 came as a surprise to the markets.  The economy may be running faster than the central bank originally thought. Inflation has exceeded the 2% target rate set by the central bank for 5 of the 10 months reported this year.  Given the broad nature Read more [...]

Healthcare Trends – The Full Story

It’s an obvious point, but having access to accurate information is a critical part of being able to manage healthcare costs for the long term. Economic commentators often talk about the increase in healthcare costs (or trends) as a single figure, but, as the S&P Healthcare Claims Indices demonstrate, the truth is that healthcare trends can vary significantly across geographic regions, among the different types of healthcare services and across different segments of the insured population. Read more [...]

Investment Grade U.S Preferreds, 16%!

U.S. Preferred securities continue to provide healthy returns for investors.  The S&P U.S. Preferred Stock Index has returned 0.79% for the month and currently returned 13.81% total return year-to-date. The ratings break-out between constituents of the preferred index has the S&P U.S. Investment Grade Preferred Stock Index even with its high yield counterparts at 0.83% on the month.  A current trend of risk-off from junk is reflected in the indices as the investment grades have returned Read more [...]

Active vs Passive: European active funds generally underperformed their benchmarks but…

Euro-Denominated Equity Funds Overall, European equity markets have continued their upward trend over the past year, despite geopolitical concerns in Ukraine and uncertainty over the ECB’s willingness to support struggling economies. It is generally believed that active management may be able to add value to investment portfolios in highly turbulent markets such as this one. However, this belief was once again found to be inconsistent with our findings. Over the past year, about 74% of European Read more [...]

Fear of Falling Prices

Anxiety over deflation is wide-spread and increasing.  The New York Times lead editorial on Sunday warned that weakening commodity prices may be a harbinger deflation or a hint of economic decline.   Despite a few contrary voices, both policy makers and investors seem concerned.  Are the fears misplaced? Or would deflation be a large step backward? The chart shows 101 years of American inflation measured by the CPI. Prices move all the time – not just stock prices but prices of almost Read more [...]

Are Green Bonds Really in the Red?

The green credit market has grown 50% annually since 2007, however market sentiment remains mixed on performance.  The S&P Green Bond Index is down 0.99% YTD, when most of the bond market has done quite well in 2014.  Abundant growth in concert with poor performance could prompt the suggestion that investors are deriving utility from social responsibility in lieu of returns. Abengoa Greenfield’s equity shares fell 18%, while the price of their 2021 notes fell from $96 to $83 Thursday, Read more [...]

THIS Could Change If Oil Slides 50% More

Now that brent broke the $80 mark, many are questioning whether a bottom has been reached.  The combination of slowing Chinese demand growth and Saudi's will to maintain market share make this an unlikely bottom, but it depends more on the supply growth than the slowing demand growth from China. Kuwait and Saudi Arabia have shown signs they are willing to tolerate lower prices.  If prices continue to drop significantly, there may be not only a pickup in demand but a split where regions that Read more [...]

Real Estate Rising and GICS

Real estate, once the villain of the financial crisis, is now lauded as the place to find yield, diversification and maybe stability.  Before REITs became eligible for the S&P 500 in October 2001, real estate investing either meant direct ownership or a specialized corner of the stock market.   The recovery from the financial crisis focused attention on real estate and REITs to understand what happened and why.  With equity markets at record highs and yields and interest rates at record lows, Read more [...]