George Hosfield, CFA, discusses Ferguson Wellman's quarterly strategy titled, "Inflation's Flame Flickers," which addresses the narrow market leadership, the impact of higher interest rates on inflation and how assets are priced at this stage of the economic cycle.
George Hosfield, CFA, discusses the firm's quarterly strategy titled "Stalemate," which highlights the Fed's ongoing battle to tame inflation along with our views on the health of the banking industry and capital market expectations for the balance of the year.
Director and Chief Investment Officer George Hosfield, CFA, discusses the Fed raising interest rates, peaking inflation and our view on equities and volatility across all asset classes in our Investment Strategy titled, “Balancing Act.”
This week, there was a plethora of economic and company-specific news for investors to digest. Specifically, the release of first quarter U.S. GDP, reported quarterly earnings by major technology companies and the unanimous vote by Twitter’s board to approve Elon Musk’s offer to take the company private. In response to this news, the market declined 4%, with all of the weekly losses occurring Friday afternoon.
This week, Federal Reserve Board Chair Jerome Powell announced that later this month the Fed will begin “tapering” its asset purchase program now that the economy has moved past the need for extraordinary stimulus. As a reminder, to combat the recessionary effects of the pandemic and stimulate the economy, the Fed reduced interest rates to 0% and reintroduced an asset purchase program to the tune of $120 billion per month. By any measure, this is a remarkably large stimulus program.
On Monday, Facebook experienced an outage across its platform of apps for nearly six hours, affecting billions of users. The network disruption reminds us how interwoven social media is into the fabric of the global economy and many of our personal lives.
A week that began with the sharpest pullback in equities since last fall concluded in remarkable fashion, as investor concerns about the economic repercussions of rising COVID-19 infections gave way to an increasingly constructive second quarter earnings season.
On the back of the strongest election week returns since 1932, markets rallied sharply to begin this week as Pfizer announced 90 percent efficacy on a COVID-19 vaccine. Even more, the industries performing best were those most sensitive to economic momentum, instead of the “stay-at-home” trade that has dominated the market for the majority of the year with Amazon, Apple, Microsoft, Facebook and Google accounting for around 80 percent of the S&P 500 return.
For many, 2020 has been a year to forget. Headlined by the COVID-19 pandemic and the ensuing global response, stimulus from central banks and governments has helped limit the damage, as the U.S. economy has now experienced its shortest and steepest recession ever.
“The path of the economy will depend significantly on the course of the virus.” Chairman Jerome Powell reiterated this point emphatically in his comments following the two-day meeting of the Federal Open Market Committee (FOMC). To most people this may seem like stating the obvious, but sometimes it bears repeating, especially considering the data released this week.
This week, Alphabet Inc., parent company to Google, became the fourth company to join the “trillion-dollar market value club,” that includes Apple, Microsoft, and Amazon. Besides the significance of their “trillion dollar” size, why do we care so much about the market value of these companies?
The Roman poet Marcus Manilius, proposed author of Astronomica, the earliest work describing astrology, characterized the sign Libra as “the sign in which the seasons are balanced.” Last week, Facebook announced that Libra is now the moniker for its new blockchain-based payment system.
If you break the stock market down into its most basic elements only two things matter: earnings of companies and what investors are willing to pay for a dollar of earnings. This week, earnings season for the second quarter of 2018 was in full swing and investors are digesting the news.
In the face of unquestionably strong economic data, global equities declined nearly 5 percent on the week with the S&P 500 falling close to 6 percent. The sharp selloff can be attributed to a confluence of factors, none of which will have any impact on near-term earnings momentum.
As investors, the best thing about earnings season is it filters a lot of the other noise out of the market. A month ago, a tweet, tariff headlines or even a longshot tax proposal would have moved the equity markets. But now that we are in the throes of earnings season, equity investors are focused on the most important factor in investing: earnings.
