The Caldwell Trust Company Blog

Market Preview Week of 12/11/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Major equity indices mixed once again
  • Rotation toward value stocks continues
  • Global capital markets performance excellent year-to-date
  • Domestic bond yeilds remain range bound

As was the case last week both the Dow and the S&P 500 rose this week while the NASDAQ Composite slipped. Returns for the week were muted. It does appear the rotation we have been experiencing continues. An excellent article appeared in the WSJ Friday looking at the rotation in detail. As outlined here last week there has been a rotation out of the Technology sector into the Telecommunication and Financial sectors. The WSJ article (Growth Still Beats Value in Stock Fight by James Mackintosh– page B1) goes into further detail on the rotation. In fact, what is happening across every S&P 500 sector is movemen from growth to value stocks. The article argues that part of the rotation is a consequence of the gains growth stocks have realized versus value stocks this year and really since the sub prime crisis. To provide perspective, this year alone, growth stocks have outperformed value stocks across the board (meaning in the large, mid, and small capitalization spaces) on average by better than a 2:1 margin. The larger question posed by the article is whether this is simply a result of growth stocks being overbought and expensive or does it signal a more permanent rotation based on the expectations that economic growth and inflation will pick up meaningfully? Time will tell but clearly the long slow grind higher of the domestic equity markets and growth stocks is a function of the low domestic economic growth and lack of inflation for several years now.

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Topics: Market Preview

What Happens To Your Digital Legacy When You Go?

Posted by Sandy Pepper

When developing an estate plan, there are so many elements to worry about that many people end of forgetting a whole category of assets: digital. Digital (especially social media) has become such a nuanced and integral part of our lives in such a short period of time that it becomes a blind spot. However, your digital legacy is just as important as the rest of your assets. In today’s post, we’ll give you a rundown of what you need to know before you start digital estate planning, how digital assets should be integrated into your estate plan, and why this process matters in the first place.

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Topics: Trusts & Estate Planning

Market Preview Week of 12/04/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Major equity indices mixed
  • Volatility picks up late week on news out of D.C.
  • Rotation out of growth stocks into value stocks
  • Domestic bond yeilds remain range bound

Last week’s trading action in the domestic equity markets was more interesting than the usual weekly grind higher we have experienced most of the year. The Dow rallied nearly 3% for the week while the NASDAQ dropped over .5%. The S& P 500 was up just over 1.5%. It was one of the few weeks all year where news out of D.C. noticeably impacted the markets. This was evidenced Friday as the S&P 500 and Dow dropped almost 1.5% before making back most of the losses. Mike Flynn’s guilty plea in the ongoing Russia investigation and the increasing probability of tax reform being passed meaningfully impacted trading.

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Topics: Market Preview

Year-end Planning: What's coming?

Posted by Wendy Fishman

As 2017 draws to a close, it’s time to look to 2018 tax planning. This can be important for knowing how much you want to spend, how much you need to spend, and much more. The GOP recently released the details of its tax reform plan, which is dubbed the Tax Cut and Jobs Act. While it has yet to be passed, it would be wise to start educating yourself on the changes that might take place as well as begin planning with this proposed legislation in the works.

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Topics: In the News

Market Preview Week of 11/27/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Equity and bond marketing move higher
  • With five weeks remaining, 2017 equity returns very strong
  • Fundamentals continue to be mostly positive
  • Potential yield curve inversion cause for concern

In a holiday shortened trading week both domestic equity and fixed income markets powered higher once again. The S&P 500, NASDAQ, and Dow were all up meaningfully for the week. Bonds moved marginally higher as yields declined slightly for the week. As we approach the end of November it appears the NASDAQ is headed towards a 30% annual return; the S&P 500 and the Dow are nearing 20% annualized returns. The broad domestic bond market is on track to return between 3%-4% this year. High Yield bonds domestically have returned around 7% year to date even with the recent sell off.

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Market Preview Week of 11/20/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Equity markets mixed
  • 10-year Treasury yeild down slightly
  • Wal-Mart psots strong earnings
  • Tax reform legislation winds through Congress

The broad domestic equity markets were mixed on the week with the Dow and S&P 500 posting losses and the NASDAQ gaining about .5%. The last couple of weeks the markets have been consolidating. Energy shares struggled last week, and along with Telecommunication shares are the only two S&P sectors posting negative returns year to date. On the positive side of things, Wal-Mart reported very strong earnings last week and the shares jumped 8.5%. Results were driven in part by Wal-Mart’s strengthening position in e-commerce. Of all the traditional brick & mortar retailers Wal-Mart is best equipped to compete head on with Amazon.

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Market Preview Week of 11/13/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Domestic Markets Trade Down for the Week
  • Telecommunications and Bank Stocks Decline
  • Earnings Season Nearing Conclusion
  • General Electric Announces Restructuring Plans Monday

Both domestic equity and fixed income markets sold off last week though relatively slightly. All three major equity indices were down less than a percent for the week; the yield on the 10-year Treasury rose just over 6 basis points. Several events contributed to the declines including the Senate version of tax reform which pushed the proposed decrease in the corporate tax rate into 2019 (the House version calls for implementation in 2018). The Senate version may have also contributed to the decline in bank stocks last week - in conjunction with concern over the flattening of the yield curve. The Financial sector declined over 1 % last week second only to the decline in Telecommunication (Telecom) stocks (down 1.39% on the week).

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Topics: Market Preview

Market Preview Week of 11/06/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Jerome Powell nominated as next Federal Reserve Chairman
  • Tax reform legislation introduced
  • Strong Jobs Report
  • General Electric shares placed on hold

Thursday’s Wall Street Journal put it most succinctly regarding Jerome Powell being nominated by President Trump as the next Chairman of the Federal Reserve – “a move likely to combine continuity on interest rate policy with perhaps a lighter touch on financial regulation.” Expect the relatively accommodative stance of the Federal Reserve with respect to interest rates to continue. The consensus continues to project an increase in the Fed Funds rate in December with three more currently slated for next year.

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Topics: Market Preview

Do You Come First with Your Financial Advisor?

Posted by Sandy Pepper

Caldwell Trust Company serves as a true fiduciary meaning we hold ourselves to a higher professional standard. Over the past 12 to 24 months the term fiduciary has been mentioned in several articles due to the Department of Labor’s ruling on the Employee Retirement Income Security Act (ERISA) of 1974.  What you may not be aware of is how a fiduciary differs from a Broker or Financial Advisor as it relates to the management of your retirement funds or other matters.

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Topics: Investments

Market Preview Week of 10/30/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Friday's session propels equity indices higher for the week
  • Bond yields rise marginally once again
  • Better than expected initial reading on Q3 GDP
  • Next week busy with earnings, tax reform news flow, and Fed chair appointment

All the weekly gains for the S&P 500 and the NASDAQ Composite index (and then some) occurred Friday of last week. The Dow Jones Industrial average also ended the week marginally higher. Extremely strong earnings releases from Amazon, Alphabet (Google), and Microsoft drove technology shares higher. The Technology sector was up 2.75% for the week. In aggregate, earnings releases were good last week though there were a few stumbles in the Health Care sector.

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Topics: Market Preview

 


 

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