22
Apr
2020
Dodging Commodities
One of the best decisions that our Investment Committee made was back in 2008 when we decided not to add commodities to the portfolio. It’s hard to believe now, but there was a lot of pressure back then to add it because stocks were down and commodities were doing well. If you look at the 12-month period ending on June 30, 2008 just before the worst part of the storm,… Read More
21
Apr
2020
Oil Gets Weird
When US Treasury bills first traded with negative yields in 2008, I took a screen shot, printed it and put it in a folder of interesting stuff that I look back at every few years. I never dreamed that interest rates would be negative all the way out to 10-years in Europe. Well, it turns out that it’s not just interest rates that can trade completely upside down – yesterday… Read More
20
Apr
2020
Unemployment Today
One of the most jarring aspects of the coronavirus epidemic is the speed and magnitude of job losses. We now have four weeks’ worth of data, and a shocking 22 million people have filed for unemployment benefits. For reference, the previous record for initial jobless claims over a four- week period was 2,697,00 during the 1982 recession. During the 2008 financial crisis, the record was 2,637,000, just shy of the… Read More
16
Apr
2020
Portfolio Insights
We are pleased to provide a digital copy of Portfolio Insights, our quarterly newsletter. Table of Contents: Stock Market Summary Bond Market Review CARES Act Summary The Big Picture Click here to read the issue: Q1 2020 Portfolio Insights
15
Apr
2020
Junk Bonds in Today’s Market
Yesterday, I discussed corporate bonds, and how their yield tells us something about investor risk appetite. You can read the article here. The same thing applies to non-investment grade bonds, which are also called ‘high yield,’ or less pleasantly, ‘junk bonds.’ The first chart below is exactly like the first chart in yesterday’s article, but also includes the yield on junk bonds (in yellow) in addition to Treasury bonds (in blue)… Read More
14
Apr
2020
Corporate Bonds in Today’s Market
One of the areas of the market that we’re paying close attention to right now is corporate bonds. To raise money, companies borrow money in the form of bonds or issue stock by selling ownership in the form of equity. Corporate bonds are safer than stocks in the aggregate because if a company fails, the bond holders get their money back before the equity holders. While corporate bonds may be… Read More
13
Apr
2020
Coronavirus & Earnings Season
Earnings season kicks off this week, and although we’ve seen a few economic data releases, earnings announcements will offer a lot of information about how the coronavirus is impacting companies. Right now, according to FactSet, earnings are expected to be lower by 10 percent compared to the first quarter last year. If that’s the case, it will be the largest year-over-year decline since the third quarter of 2009, when the… Read More
6
Apr
2020
Markets Stabilizing, but Still Turbulent
There is no question that we haven’t even started to see the economic impact of the coronavirus, since all of the data that we get is in arrears. For example, last week we got two important pieces of data about unemployment that told different stories. The good news is that the unemployment rate in march was 4.4 percent, which is an increase from the previous month, but not bad. However,… Read More
30
Mar
2020
A Breath of Fresh Air
Stocks rallied in response to the fiscal and monetary policy response from the government. On the monetary side, the Federal Reserve announced that they would provide ‘unlimited’ quantitative easing (QE), and announced new facilities to support credit markets. The Fed had recently committed to buying $500 billion in Treasury bonds and $200 billion in mortgage-backed securities, and said that it would continue in the amounts needed to support smooth market… Read More
26
Mar
2020
COVID-19 and Acropolis
**UPDATE** We’d like to share an update to the original post below. Acropolis has re-opened our office. Details below: Acropolis employees have returned to the office. Clients are welcome to visit according to their comfort level. Client Zoom meetings will still be available. As always, please don’t hesitate to reach out to your Portfolio Manager or any of our leaders with any questions or concerns. ___________________________________________________________ Original Post – March… Read More