Ralph Cole, CFA, recently spoke with KXL Morning News on the market reaction to the 2020 election.
Wealth Management Insights: Ready, Set, Wait ...
Samantha Pahlow, CTFA, AWMA, discusses the proposed tax changes that could affect clients’ tax planning for 2021.
From Bad to Better
As the world’s battle against coronavirus rages on, we offer our best regards to those on the front lines battling the pandemic and express our sympathies to those whose health and welfare are being directly impacted.
Texas Tea
One of the four takeaways in our 2018 Outlook was, “It’s the Economy,” meaning that over the long term, financial markets tend to do a good job shrugging off headline risk and political drama. Instead, markets focus on the health of the economy. This attribute was once again demonstrated this week with equity markets gaining more than 2 percent despite heightened geopolitical tension as the U.S. formally exited the 2015 Iran nuclear deal.
January Is the Market's Groundhog?
This week we experienced something we haven’t in some time: a down week. Stocks struggled to a close, down 3.8 percent with no help from blue-chip names. Alphabet (GOOGL) and Apple reports weren’t favored by Wall Street, driving the stocks down 5.2 and 4.3 percent, respectively.
Runnin' Down a Dream (of Tax Reform)
After eight consecutive days of positive returns, U.S. equities closed slightly lower Friday and finished the week up 1.10 percent. Emerging markets, up 2.75 percent, extended the lead as the best performing asset class of 2017 with a total return greater than 30 percent.
Fovinci Quoted by Bloomberg
Fed Taper Brings Risk to Mortgage Bonds Unseen in Treasuries
For all the talk that Janet Yellen’s plan to shrink the Federal Reserve’s balance sheet will hurt Treasuries, U.S. mortgage bonds face a bigger test.
Rattle and Hum
Headlines screaming, “fire and fury,” and “ballistic rockets are on constant standby,” could have surely warranted a multi-percentage sell-off. Fortunately, the market’s reaction was somewhat muted, falling just over 1 percent for the week. Historically, North Korean headlines have had minimal impact on the stock market. In 2006, when they detonated their first nuclear device, U.S. stocks were actually up.
Christianson, Frankel and Jones Receive Promotions
Ferguson Wellman Capital Management recently promoted three professionals, Scott Christianson, CFP®, Josh Frankel, CFP®, and Peter Jones. Christianson has been promoted to senior vice president, Frankel, has been promoted to executive vice president and Peter Jones has been promoted to vice president.
Show Me the Money
The Friday job report was slightly on the light side with December payrolls coming in at 156,000, 19,000 below economist’s estimates. Positively, the previous two months showed 19,000 in upward revisions. However, wages grew at their highest rate since June 2009, coming in at 2.9 percent year-over-year growth.
Times They Are A-Changing
A Nobel Prize for Bob Dylan couldn’t buoy the markets this week. Uncertainty in China and a rocky start to earnings season resulted in a down week for stocks. While equities rallied on Friday, the S&P 500 ended the week down close to 1 percent. Pre-announcements from Honeywell, Dover and Fastenal weren’t a positive way to start the week; however, [...]
The Contagion of Scary Clowns
Mixed economic data led to weaker stock markets around the world this week. U.S. equities were down around less than 1 percent, while international benchmarks were modestly negative as well. One would expect with negative equity markets that interest rates would have dropped as well, but
Cole Quoted in Bloomberg
Originally appeared on Bloomberg.com on September 28, 2016
Stumpf’s Pay Cut Eclipsed by Fury as Yellen, State Join In
Wells Fargo & Co. Chief Executive Officer John Stumpf gave up $41 million to buy a reprieve from the bank’s widening scandal.
Seasons of Change
After an unusually long spell of low volatility, stocks and bonds sold off in tandem to end a week that was previously on the quiet side following the Labor Day holiday. Coming into Friday, stocks had essentially earned out the high single-digit returns we foresaw for 2016. Low levels of economic growth globally should renew profit growth in future quarters, but neither stocks nor bonds are cheap at this point.
Leaded or Unleaded?
Financial markets were volatile this week, influenced by mixed messages from the Federal Reserve. The Fed minutes released on Wednesday were dovish, suggesting little chance of a Fed rate hike, while San Francisco Fed President Williams
No Respect for this Bull Market
The stock market was up for the week with the S&P 500 returning .20 percent. During the week, the S&P 500 climbed to an all-time high on Thursday. Bonds were higher in price and lower in yield with the 10-year Treasury moving from a
Let the Games Begin
With the opening ceremonies of the Rio Olympics set to begin tonight and on the heels of a strong number in the month of July in which the U.S. added 255K jobs, stocks ended the week with a bang. This was meaningfully ahead of
Ferguson Wellman's 40-Year Report
We are pleased to present our firm's 40-Year Report. In addition to sharing some milestones Ferguson Wellman and West Bearing Investments reached in 2015, we have collected facts, history and imagery that reflect who we are as a company and how Ferguson Wellman has grown over four decades. To read the report, please click here.
When Yellen Speaks, the World Listen
Stocks finished the week off by only 0.80 percent, recovering some of the losses suffered Thursday after the Fed voted to keep interest rates unchanged. Similarly, the Bank of Japan and Bank of England are also maintaining their monetary
Show Me the Numbers
by Deidra Krys-Rusoff Senior Vice President
The S&P 500, Dow Jones Industrial Average and NASDAQ ended the week nearly flat from last Friday, despite a volatile trading day today. The financial sector retreated 1.4 percent, as investors’ hopes of a Federal Reserve interest rate hike dwindled on the release of today’s nonfarm payrolls report. Utilities and phone stocks rose this week, benefitting from the prospects of lower rates. The Bloomberg Commodity Index rose to a seven-month high and is nearing a level marking of a 20 percent advance from the gauge’s January bottom, close to meeting the common definition of a bull market. The dollar dropped and ended the day trading at $1.14 per euro. International markets were mixed, with European stocks slightly down and the MSCI Emerging Markets Index advancing 1.5 percent to a one-month high. The benchmark 10-year Treasury rallied, with rates falling 15 basis points over the week to yield of 1.70 percent.
What’s in a number? A lot, when the number is the nonfarm payrolls reporting significantly weaker than even the most pessimistic economist expected. May’s payroll numbers rose by a mere 38,000 versus the consensus estimate of 160,000. The report further muddied the economic waters by revising the April increase downwards to 123,000 from 160,000 and March’s numbers to 186,000 from the robustly reported 208,000 increase. The Verizon strike temporarily played into these numbers, subtracting roughly 40,000 from the overall job growth that should reverse after the strike ends. This boost, up to what would have been a gain of 78,000, is still shockingly low. The report shows that the labor market deceleration was widespread. Private-sector hiring was at 25,000 versus 130,000 in April and government hiring added a scant 13,000 jobs to the May numbers. Job losses were seen in construction, manufacturing and wholesale trade. Hiring in the paid professional and business sectors also showed slowing.
Markets initially took the news hard: The S&P 500 Index initially dropped as much as 1 percent from a recent seven month high, the dollar sold off against the euro, and bond prices increased dramatically – dropping the yield of the benchmark 10-year Treasury to 1.70 percent from 1.80. However, U.S. equities pared the early losses to around 0.2 percent as commodity producers extended gains.
The unemployment rate fell to 4.7 percent, but this is unfortunately attributed to declining labor force participation or labor force dropouts. This year’s earlier rebound in jobs participation may be stalling out. One good piece of information from the government report was that the broader U-6 unemployment rate (which reflects underemployment) remained steady at 9.7 percent. Another positive note is that average hourly earnings advanced last month by 0.2 percent, which resulted in earnings 2.5 percent higher than last year’s levels.
The weak jobs number almost certainly takes a Federal Reserve rate hike off of the table for June. The Fed governors have repeatedly stated that their policy decisions will be data-dependent and we didn’t have to wait long to hear how the Fed governors feel about the number. Federal Reserve Governor Lael Brainard spoke to the Council on Foreign Relations this morning and stated, “In this environment, prudent risk management implies there is a benefit to waiting for additional data to provide confidence that domestic activity has rebounded strongly and reassurance that near-term international events will not derail progress toward our goals.” Prior to the jobs report release, the market was pricing in one to two hikes for the remainder of the year. Now the market is placing odds of a hike below 50 percent for July, September and November.
One stand-alone jobs number does not make a trend and this could easily be a one-time blip on the radar. As noted earlier, unemployment numbers are often revised in months following releases and this extremely low number may be revised upwards in coming months. While predicting unemployment numbers is a fool’s game, we can confidently predict that everyone will be watching and waiting for the June unemployment numbers release on July 8.
Our Takeaways for the Week:
- Despite a volatile trading day, markets ended the week nearly flat from last week
- May jobs number shocks economists; however, employment numbers are often revised
- Low payrolls growth likely takes June Fed hike off the table