Charts that Scare Wall Street

A recent article in Bloomberg offers a compilation of what it calls “Wall Street’s chilling charts” that highlight ongoing concerns about high levels of corporate debt, volatile markets and the “ills in industrial sectors of the economy.” The charts are captioned by comments from industry professionals. Here is a sampling of the data and comments featured in the article: Quality: Jill Carey Hall of Bank of America Merrill Lynch says that quality has grown scarce… Read More

Small Caps Stall Amid Weaker Economic Data

Small cap stocks, which surged after President Trump’s election and through last summer, have stalled a economic data has weakened and investors have begun bracing for a possible recession. This according to a recent article in The Wall Street Journal. The asset class is generally considered “riskier in periods of stress and more prone to a pullback because of their inconsistent earnings, higher debt levels and lack of diversification in their business activities,” the article… Read More

Deep Dive into Value Performance

For the first in a three-part article series, Morningstar used its database to “dig into the current spell of underperformance for value funds” by analyzing the historical landscape, putting recent returns into a long-term context and examining allocation data. The article reports, “The September stock market swings saw value strategies stage their strongest monthly performance in years, but that wasn’t enough to affect the long-term trends.” The past three years, it explains, have been particularly… Read More

Why Stock Dividends Are Slowing Down Around the World

The latest installment of the quarterly Janus Henderson Global Dividend Index shows that while second-quarter global dividends hit a new record, they grew at a slower rate as a result of a strong dollar. This according to a recent article in Barron’s. The report shows that global dividends for the second quarter of this year totaled $513.8 billion compared to $508.1 billion one year ago—a growth rate of 1.1% compared to a 14.1% increase last… Read More

This Value Investor Sees a Comeback in the Offing

Atlantic Investment Management founder Alexander Roepers thinks things are about to change for value investors, according to a recent article in Institutional Investor. In a report published last month on his firm’s website, Roepers said that the current stock market and macroeconomic conditions signal a “rotation back to value,” and explained, “We believe we’re nearing a possible inflection point in the equity market dynamic.” Roepers attributes the long run of growth outperformance to post-crisis monetary… Read More

The Danger of Judging Decisions by Their Outcomes

Judging the quality of your decisions can be one of the most challenging aspects of investing. The process can seem simple on the surface because every investing decision you make produces a measurable result in the performance that it generates, but performance is not the obvious yardstick that many investors think it is. The correct decisions in investing sometimes don’t generate the best results. The reason is that investing is not just a game of… Read More

El-Erian on the Meaning of the Market Rebound

A recent article by Bloomberg columnist Mohamed El-Erian discusses the implications of the robust rebound in U.S. stocks that occurred earlier this  month, noting that it “raised several questions related to market behavior, policy and economics,” adding that how these questions are answered will “prove consequential not only for market prospects but for the global economy.” El-Erian argues that the equity rebound in the first week of June stood in contrast to two other market… Read More

Market Movements and Generational Mindsets

An article in CFA Institute shares the opinion of Fundstrat Global Advisors co-founder Thomas Lee, CFA, that “major economic shifts occur in tandem with generational milestones.” “Generations drive markets way more than we appreciate,” Lee told an audience at the CFA Institute Equity Research and Valuation Conference last year, noting the following correlations: The demographic peak year of the Greatest Generation was 1930, just after the beginning of the Great Depression. The generation that followed… Read More

FOMO Drives Stocks

A small percentage of stocks account for most of the market’s gains, putting pressure on investment managers. This according to a recent article in The Wall Street Journal. “Fear of being left behind is a powerful force among fund managers,” the article says, “even if it means taking big risks.” The article notes that in the first six months of this year, technology shares accounted for all of the S&P 500’s gains, adding that “managers… Read More

Stocks Facing the Economy Versus a World in Turmoil

The stock market has “some things going for it right now,” says a recent article in The Wall Street Journal, citing rising corporate earnings and economic growth as contributing factors. However, it adds, “what they hadn’t anticipated were the other risks that would weigh on stocks,” such as an aggressive Fed, slowing growth overseas and looming trade conflicts. Policy makers are leaning toward two more rate hikes this year, the article reports, and increasing inflation… Read More