The Caldwell Trust Company Blog

Market Preview Week of 10/16/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Money center bank kick off Q3 earnings season
  • Bank earnings generally in line with expectations
  • Domestic markets slightly higher on for the week
  • Pace of earnings reports pick up next week

The four largest money center banks kicked off Q3 earnings season reporting Thursday and Friday of last week. Citigroup and J.P. Morgan reported Thursday. While both beat consensus earnings estimates the quality of Citi’s earnings continue to be poor relative to peers. They reported marginal revenue growth and poor operating efficiencies. J.P. Morgan put in solid earnings driven by strong lending and asset management business. Friday, Bank of America and Wells Fargo reported. While Bank of America exceeded consensus earnings estimates Wells Fargo missed. Wells Fargo was hurt by mortgage lending and legal costs. Bank of America reported margin expansion and strong lending results. Of the four issues J.P. Morgan and Bank of America, in our view, have the most upside potential. Two other institutions on our Buy List also reported this week, BlackRock and PNC Financial Services (which owns a 20%+ stake in BlackRock). Both companies reported strong earnings.

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Topics: Market Preview

6 Misconceptions About Retirement Best Practices

Posted by Tony Blasini, CPC, QPA

When it comes to retirement planning, many people in the workforce don’t really think about it. They put money into the 401k provided by their employer and focus on their financial needs in the moment. Unfortunately, this lack of true planning leads to a lot of misconceptions about retirement best practices. Here are seven assumptions you may be making about retirement, along with the reality you need to be aware of.

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Topics: Retirement Plan Services, Trusts & Estate Planning

Market Preview Week of 10/9/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Equity markets up strongly last week
  • Economic releases largely positve for the week
  • Large money center banks report Q3 earnings next week
  • 10-year Treasury yeilds rise slightly; trading in the 2.35% range

All three major domestic equity indices were up once again, in a relatively big way, notching gains over 1% for the week. The broad market as measured by the S&P 500 is now up over 15% for the year. Apart from the Energy and Telecommunication sectors equities were up strongly across the board. Domestic markets continue to hit new highs quietly with historically low volatility.

Economic releases last week – ISM Manufacturer’s Index, Durable Goods orders, and Jobless Claims – were all positive; the Payrolls report released Friday was disappointing but largely viewed as temporal due to the effects of September hurricanes. As noted here previously, two things lacking in the current recovery has been strong economic growth and inflation. The numbers reported last week argue for a pick-up in growth. Next week will provide insight into the current inflation picture with the release of both the Consumer Price Index (CPI) and the Producer Price Index (PPI).

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Topics: Market Preview

Market Preview Week of 10/1/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Equity markets advance solidly in Q3
  • All major global equity markets positive YTD in 2017
  • Broad domestic bond results solidly positive QTD and YTD
  • Tax reform proposed and outlined by adminsitration

Without exception major world equity markets have turned in positive returns through the third quarter of this year. The vast majority of returns are double digit. YTD in the U.S. the total return on the S&P 500 is 14.24%; NASDAQ 20.67%, and the Dow 13.37%. Growth stocks continue to overwhelmingly outperform value stocks. Domestically, bond returns are positive YTD with the broad market advancing 3.14% and High Yield bonds returning 7%. Enjoy it.

In the U.S., the Technology and Health Care sectors have turned in the best performances YTD (26.02% and 18.75% respectively). Energy and Telecom sectors have generated the worst returns, returning -8.62% and -8.07% respectively. That said, Energy stocks reversed in the third quarter and were the second best performing sector (behind Technology) gaining 6.03%. To a lesser extent Telecom issues reversed course and put in robust performance.

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Topics: Market Preview

Market Preview Week of 9/25/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • The Federal Reserve holds short rates steady
  • Unwinding of the Fed's balance sheet commences
  • Impacts of Harvey & Irma to distort economic releases
  • S&P 500 Q3 earnings expected to grow 4.5%
  • Equity markets mixed on the week

As was widely anticipated the Federal Reserve Open Market Committee elected to keep short term rates steady in a range of 1% - 1.25%. The Fed will commence reducing the size of its balance sheet in October by not reinvesting proceeds from maturing securities. In theory, the “run off” of Treasuries and Mortgage Backed securities could push longer maturity yields higher over time. The last couple of weeks have seen longer term interest rates move higher in anticipation of the Fed’s actions.  The Fed has emphasized it will implement its program slowly, and its intentions have been well telegraphed though are unprecedented. Rising rates implies principal loss for bondholders. We are currently conservatively postured in portfolios from an interest rate perspective. We don’t intend to make any major changes to our fixed income positioning and will monitor the impact of the Fed’s balance sheet reduction.

 

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Topics: Market Preview

Are You Losing Sleep Over Your Finances?

Posted by Tony Blasini, CPC, QPA

Would it surprise you to learn that more Americans are losing sleep over their finances now than they did during the Recession? Nearly two-thirds of all Americans (65%) are losing sleep over their money worries, which is up 3% from the financial crisis, and more than a third of those (37%) are sleepless thanks to worrying about their retirement. But planning for retirement doesn’t have to fuel your anxiety. Today’s post will give you an overview of how much you need to save for retirement, discuss planning for retirement, and share tips to help you get started.

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Topics: Retirement Plan Services

Market Preview Week of 9/18/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Domestic equity markets continue to move higher
  • The Dow puts in its best weekly performance of the year
  • Domestic bonds yields reverse and move higher

Events external to the capital markets continue to have negligible impact on the markets’ steady climb upward. All three major equity indices were up over 1% last week with the Dow Jones Industrial Average posting its best gain of the year (up 2%+). The markets’ ignored, for the most part, yet another North Korean missile launch, fallout from hurricane Irma, and politics in Washington.

The yield on the benchmark 10-year Treasury bond reversed and moved higher closing the week with a yield of 2.2%. The Federal Open Market Committee (FOMC) meets Tuesday and Wednesday, it is expected that rates will not be raised. It is expected that they will announce commencement of reducing the size of their balance sheet through bond sales. Janet Yellen will hold a news conference Wednesday afternoon after the close of their meeting.

 

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Topics: Market Preview

Could Selling Your Business be Enough for Your Retirement?

Posted by Tony Blasini, CPC, QPA

You may be like a lot of small business owners (39%) and generally plan on selling your business to fund your retirement, especially if your revenue is about $500,000 (52%). Are you also among the 30% that have no succession plan for their company, or the 17% that haven’t even identified a potential buyer? It’s an unfortunate misconception in small business retirement planning to think that just selling a company is a safe bet for long-term goals.

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Topics: Retirement Plan Services

Market Preview Week of 9/12/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Domestic equities trade off on the week
  • Hurricane relief passed in Washington with strings attached
  • Domestic bonds and gold continue to rally
  • Relatively quiet on the earnings and economic front next week

Domestic equity markets were down slightly for the week in lackluster trading. Markets were preoccupied with the aftermath of hurricane Harvey and the anticipation of hurricane Irma. Congress passed and the President signed into law a $15+ billion aid package for the two hurricanes tied to extending the government’s funding and suspending its debt limit until early December. The major equity indices domestically remain in a trading range and while up since mid-year, have not advanced meaningfully.

Hurricanes Harvey and Irma, and continued worries over North Korea’s nuclear threat helped domestic bonds rally once again this week. The yield on the benchmark 10-year Treasury bond is approaching 2%. While we have commented previously on domestic lackluster growth and very low inflation, the financial media has increasingly noted the apparent lack of inflation globally and its ultimate impact on interest rates. Time will tell but with the coming economic disruptions from Harvey and Irma economic data in the short term may become more muddied adding uncertainty to the markets.

 

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Topics: Market Preview

Office Hours following Hurricane Irma

Posted by Kelly Caldwell

We hope you and your families are safe and well.

All of our staff have been contacted and all have successfully weathered this signifcant hurricane and remain safe. We are so thankful. Second, both offices are in good shape and only experienced landscaping debris. In case you need anything, our office hours the next following days for both offices are as follows: 

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Topics: Corporate

 


 

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