2Q Earnings Results Hint at Firming Fundamentals
While the market has been somewhat volatile over the last few weeks, we’re increasingly encouraged by recent fundamental readings. The earnings beat rate for the S&P 500 is tracking at 72.5% so far this quarter, a marked improvement over the prior quarter’s reading and in line with the last 10 quarters’ average. We are especially […]
1st Quarter 2019: Rebounding Returns
Storm clouds gave way to sunshine for investors during the first quarter of 2019, resulting in very strong returns for risk assets. The S&P 500 Index posted a 13.65% return in the three months ending 3/31/19, representing its best quarterly gain since late 2009 and its best first quarter since 1998. As if investors needed […]
Markets Vote “No” on More Fed Rate Hikes
Including the most recent .25% increase in December 2018, the Fed has hiked rates nine times over the past three years. Furthermore, as late as early October of last year, the Fed was indicating that future rate hikes were likely to occur into 2020. While the Fed heavily influences short-term bond yields via their power […]
Consumer Staples: (Still) Expensive
The S&P 500 Consumer Staples sector has declined by almost 5% so far in 2019, continuing a trend of disappointing returns over the past several years. In fact, the S&P 500 Consumer Staples Sector SPDR is trading at the same levels it was in the summer of 2016, versus the 30%+ gain for the broader […]
A Buyable Trough in Semiconductor Orders?
Semiconductor chips are essential to modern life, as they are the “brains” that power everything from smartphones to iPads to cars, communication networks, and household appliances. However, despite their importance to the global economy, the cyclicality of the semiconductor industry can make it challenging for investors to navigate. As this chart shows, global semiconductor orders are […]
Salesforce Has Developed into a ‘Winner Take Most’ in CRM
On Fox Business, JAG Capital Management CEO Norm Conley discusses his “winner takes most” stock picks. Watch now: Fox Business, March 13, 2019
Valuation Snapshot: Earnings Yields versus Bond Yields
As most experienced investors know, stock market valuations are a terrible timing tool for investors. Bull markets have often persisted for years after stocks have reached above-normal valuations (i.e. late 1990’s). Similarly, bear markets can develop even when valuations appear to be undemanding (i.e. late 2007). There are innumerable ways to assess value in the […]
Pay No Attention to the Inversion Behind the Curtain
Traditional wisdom says that investors should head for the hills as soon as the yield curve inverts. As you can see above, of the 36 treasury yield spreads calculated, just 5 (or about 14% of the overall curve) are currently inverted. Despite this warning sign, investors continue to bid stocks up in 2019. In […]
Time to Tilt Away from Mega Caps?
The last several years have been more than a little challenging for investors in smaller companies. Between 2014 and 2018, the small-cap Russell 2000’s annualized total return of 4.3% lagged the large-cap Russell 1000 by almost 3% per year. The difference is largely attributable to the recent dramatic outperformance by mega-cap growth stocks, sometimes collectively […]
Could Cyclicals Make a Comeback in 2019?
Historically, investors tend to flock to lower-volatility and so-called “defensive” stocks during periods of high market volatility. Last year’s action was no exception, as the Consumer Staples, Utilities, Health Care, and Real Estate sectors collectively generated positive absolute and relative performance compared to the broader market. On the other hand, cyclical sectors like Materials, Energy, […]