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The Caldwell Trust Company Blog

Chris McGee, CFA CAIA

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Special Market Commentary

Posted by Chris McGee, CFA CAIA

The Bottom Line - - We continue to be optimistic and have advocated not taking any drastic action during this period of heightened volatility and decline. We believe that this environment will persist through the elections in two weeks but that the bias is ultimately to the upside. In our view, the current market environment presents a buying opportunity. Many stocks have been put on sale and we will continue to seek out solid companies with decent prospects for the future. We believe fixed income investing will continue to be difficult but that opportunities still exist in short term securities tied to increasing interest rates, low volatility portfolios, and high yield bonds.  

 

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Topics: Market Preview

Market Preview for Week of 10/15/18 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

Executive Summary:

  • Domestic equities decline meaningfully
  • Global markets generally fare worse
  • Equity markets repricing after rates rise

Let’s dispel some topical misperceptions regarding last week’s sell-off in the domestic equity markets.

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Topics: Investments, Market Preview

Monthly Market Commentary: September 2018 Recap

Posted by Chris McGee, CFA CAIA

Considering it was September, domestic equity markets performed relatively well last month. The red-hot NASDAQ cooled a bit losing .63%. Both the S&P 500 and Dow posted gains; .81% for the S&P, 2.56% for the Dow. Year-to-date the NASDAQ, S&P 500, and Dow have advanced 16.56%, 8.99%, and 7.04% respectively. 2018 could be a very good year for domestic stocks as we enter the fourth quarter which is a time of year domestic equity returns typically excel.

Performance on the sector level reflects the strong performance the Dow turned in last month as the Industrial and Energy sectors rallied both gaining more than 3% for the period. Health Care issues continued to rally tacking on another 3.35% in September. For the year the Health Care sector has advanced over 15%. The Technology and Consumer Discretionary sectors continue to outperform all other sectors for the year with gains north of 20%. Many of the defensive sectors continue to underperform on a relative basis.

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Topics: Market Preview

Investor Sentiment August 28 2018: Dow Jones Industrial Average up .47% for the Week

Posted by Chris McGee, CFA CAIA

 

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Topics: Market Preview

Investor Sentiment August 21 2018: Health Care Stocks Suddenly Performing Well

Posted by Chris McGee, CFA CAIA

  • Equity markets mixed for the week
  • Health Care stocks suddenly performing well
  • Defensive sectors performing the best
  • Broad domestic equity market doing better than it feels

Domestic equity markets were mixed for the week with the Dow and the S&P 500 both up and the NASDAQ declining slightly. The Dow put in the best performance gaining over 1%. More importantly, concern over the situation in Turkey and potential for a contagion dissipated. Several high visibility companies (Cisco and Walmart) reported strong earnings and prospects. On the negative side Nvidia which has been a darling lowered forward guidance and shares sold off. We are at the very tail end of Q2 earnings season.

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Topics: Market Preview

Investor Sentiment - Monthly Summary - August 2018

Posted by Chris McGee, CFA CAIA

July was kind to the domestic equity markets as the major indices all advanced meaningfully. The S&P 500 and the Dow Jones Industrial Average were up 300 basis points or better. The NASDAQ which has lead markets higher all year was up almost 250 basis points for the month. While it may not feel like it the S&P 500 is on track to post normal annualized gains in 2018. All three major indices are positive year to date: S&P 500 index up 5.34%; the NASDAQ up 11.13%; The Dow is up 2.82%.

Global equity markets also improved on the month but are negative for the year the MSCI EAFE index (Europe, Australia, and the Far East) is down just over 2% and the Emerging Markets index is down mid- single digits. These returns pale in comparison to last year and have a lot to do with the dollar strengthening and currency fluctuations.

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Topics: Market Preview

Investor Sentiment - Strong Initial Q2 GDP Numbers Released

Posted by Chris McGee, CFA CAIA

  • Domestic equity market returns mixed on the week.
  • Bond yields inch up
  • Strong initial Q2 GDP numbers released

For the second week in a row both the S&P 500 and the Dow Jones Industrial Average turned in positive results while the tech heavy NADAQ declined. The Dow was up over 1.5% for the week; the S&P 500 over .5%, and the NASDAQ declined just over 1%. The easing of trade tensions may have helped money flow into some of the more cyclical sectors like Industrials and Materials.

Facebook’s earnings results – slowing subscriber growth and less optimistic guidance – renewed concerns over the dominance of a handful of technology stocks driving market performance. Financial issues have also posted a strong month which has hurt the NASDAQ’s performance on a relative basis (compared to the S&P 500 and Dow) as of late. That said, the Technology and Consumer Discretionary (heavily influenced by Amazon) sectors have dominated performance for both the last 3 months and year-to-date.  Read More
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Topics: Market Preview

Investor Sentiment - Q2 Earnings Coming in Strong

Posted by Chris McGee, CFA CAIA

  • Domestic equities flat; bond yields rise slightly.
  • As expected Q2 earnings coming in strong.
  • Investors' continue to focus on news flow.

The domestic equity markets spent a considerable amount of time last week going nowhere. All three major indices were for all intents and purposes flat. The only bright spot was that financial stocks finally led all sectors advancing over 1% on the week. Overall, the financials that have reported have exceeded earnings estimates and forward guidance has been decent. Loan growth for the banks could be stronger and the interest rate environment could be more constructive. Energy stocks were the worst performers declining almost 2% as the sector continues to be among the most volatile. Telecommunication issues had yet another poor showing.

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Topics: Market Preview

Additional Tax Reform in Sight?

Posted by Chris McGee, CFA CAIA

We are always looking to add value to client relationships. One way to achieve this is to make our clients aware of potentialities that have a decent chance of becoming reality. Along these lines we want to give everyone a “heads up” on talk of additional tax stimulus which is gaining traction in political circles in D.C.

While attending an annual economic conference in Washington this spring the idea of indexing capital gains for inflation was brought up. Subsequently, a number of articles have appeared in the financial press, and of late an Op-Ed piece in the Wall Street Journal.

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Topics: Trusts & Estate Planning

Investor Sentiment - Signs of Economic Growth and Inflation Accelerating

Posted by Chris McGee, CFA CAIA

  • Stocks have strong week
  • Banks report mixed Q2 results
  • Many high-profile companies report earnings next week
  • Signs of economic growth and inflation accelerating

Equity returns were strong across the board last week as all three major domestic market indices advanced 1.50% or better. The Dow Jones Industrial Average is once again in positive territory for the year as the index gained 2.30%. Q2 earnings season kicked off with Pepsi turning in great results on Tuesday. Three big banks reported Friday and results were mixed. J P Morgan beat both top and bottom line estimates. Citi beat profit estimates but came up short on revenue expectations. Wells Fargo missed both revenue and earnings estimates. All three stocks traded off and the financials as a sector declined for the day. For all the positives supporting an advance in the banks and financials the sector continues to underperform.

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Topics: Market Preview

 


 

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