When do sectors matter, and what can you do about it? Sometimes the sector composition of an equity portfolio strongly affects its returns. At other times, single stock effects or overall market effects dominate. Sector-based products such as ETFs and futures have been around for decades, but recently they have attracted growing interest. Exhibit 1 Read more […]
After the hottest January in 30 years, the broad market rally continued with 38 of 42 segments of the U.S. equity market positive in February (as of Feb. 28, 2019.) After the Fed said it could take a break from rate hikes and it would be flexible with its balance sheet, and the market rallied, Read more […]
This morning brought a report that “retail investors have returned to Wall Street, pouring money into mutual funds focused on US equities for the first time since early 2015, according to data from TrimTabs Investment Research…. ‘Maybe people think, in times of higher volatility, active managers will do a better job,’ Winston Chua, an analyst Read more […]
“The more you look at ‘common knowledge’, the more you realise that it is more likely to be common than it is to be knowledge” – Idries Shah, Reflections Statements such as “sell in May and go away” can become accepted wisdom without always facing proper scrutiny. Another aphorism, particularly timely at the present moment, is Read more […]
In the first seven trading days of 2019, the S&P 500 had its hottest start since 2003. That happened following the Fed’s message that it was in no hurry to raise interest rates. The Fed met again yesterday signaling it might end the interest rate increases, which pushed the S&P 500 up 1.55% for the day (Jan. Read more […]
Style, the name for the value (growth) factor, is one of the oldest known investment factors. It can be defined in different ways, but in the S&P Composite 1500 that includes the S&P 500, S&P MidCap 400 and S&P SmallCap 600, style is measured by growth and value along two separate dimensions, with three factors used to Read more […]
Today’s Fed announcement keeping the Fed funds target range at 2.25% to 2.5% was more than simply leaving rates unchanged for the moment. Behind the headlines are changes in their expectations for inflation and the economy and adjustments in their operating procedures: The FOMC will be patient as it determines what future adjustments to the Read more […]
Since the sector shakeup on Sep. 24, 2018, the S&P 500 fell 19.5% through the close of Dec. 24, 2018 then rebounded 12.2% by the close of Jan. 23, 2019 for a loss of 9.6% in the full period. The annualized volatility of 22.8% in the past 82 days has been the highest since the 82 Read more […]
In the first seven trading days of 2019, the S&P 500 returned 3.6%, its 12th best start on record since 1928 and best since 2003. Also, the S&P MidCap 400 and S&P SmallCap 600 surpassed large caps by posting their best gains ever to start a year. Lastly, more than half the segments by sector, size Read more […]
Recent anxiety about an imminent recession sparked discussion of inverted yield curves and falling long term interest rates, The slope of the yield curve – the difference between the yield on the five or 10 year treasury note and a short term instrument like three month T-bills – may signal a recession. The chart shows Read more […]
