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.”
Years ago, a market technician compared the markets to a car windshield. In this analogy, an investor is in the driver’s seat looking out for future obstacles or opportunities in the “road” ahead, such as discounting future earnings, economic data or signs of a recession. However, as any good driver knows, the rearview mirror is also in view, giving us a glimpse of what recently passed.
Over the past week the S&P 500 declined nearly 3% on persistent fears of inflation exacerbated by negative earnings reports from Walmart and Target, both of which were impacted by unexpected cost inflation. For the year-to-date, the S&P 500 has declined more than 17%. The good news from the week is that bonds have started to act more like bonds due to declining interest rates and a volatile equities market.
Santa Claus came in the waning days of December and brought his namesake rally. But as the calendar turned, Santa left, and the markets started the year with a stumble.
This week, President Joe Biden is expected to announce his choice of Federal Reserve chair. The two favorites are the incumbent Jerome Powell and current Fed governor Lael Brainard. Within the last several weeks, odds showed that Chair Powell was a shoe-in. But more recent indications show Brainard’s favorability increasing.
In the Pixar classic Finding Nemo, the characters Dory and Marlin were hovering over a trench, the black unknown below, and they had just lost their last hope of finding Marlin’s son, Nemo.
The S&P 500 is up over 15% this year and up almost 35% over the last 12 months. This week, the Dow Jones Industrial Average eclipsed 35,000 — another “round number milestone.”
Last year, when our economy began to emerge from the recession and to reopen, so too did concerns of inflation, even though it was below the Federal Reserve’s target interest rate of 2 percent.
Treasury Secretary Janet Yellen called for a global minimum tax in a speech this week coinciding with the Biden administration’s call for a corporate tax increase. Just like the rules of recess football, it’s not the rate that’s important, it’s the certainty in the rules itself that matter.
This week marks the one-year anniversary of the World Health Organization declaring the COVID-19 virus a pandemic. Since then, we have seen the largest economy in the world locked down, a massive spike in unemployment and the shortest economic recession on record, quickly followed by double-digit GDP growth.
This week, the conversation around the virtual water cooler centered on the unexpected and meteoric rise of GameStop’s stock price. The movie-worthy combination of hedge funds, internet forums and a 2,700 percent stock price jump culminated in worldwide news headlines and questions from our clients. Most notably, clients are asking: What is going on with GameStop and how is this impacting the rest of the market?
Assumed to be postulated by Aristotle, “horror vacui” roughly translates to “nature abhors a vacuum.” The financial market equivalent would be “horror incertae,” or “markets abhor uncertainty.”
For the fourth consecutive week, stocks posted negative returns with the S&P 500 trading near 3,220 for most of this week. Market technicians would view this as a technical support level or a base from which the market can work. At the current levels, the market can consolidate and take a breath to prepare for what is next.
In recent months, stocks have experienced an impressive rally, resulting in many commentators and analysts creating new and unusual analogies. This week, our favorite is “the market’s new coffee table.”
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?
While many eyes were on the impeachment proceedings this past week, we saw encouraging retail sales data and the prospect of a completed trade deal with China push equity markets to another all-time high this week. Even as these new highs are met, many investors have a bad feeling about the market.
The books are now closed on the 2019 fiscal year for the Ivy League endowments and for the fifth time in the last 16 years, the missed the mark.
On Wednesday at midday, the global financial media held their collective breath as the benchmark U.S. Treasury Yield Spread (2-year/10-year yield) inverted. Then, as they exhaled, minor hysteria ensued.
