Commentaries

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Commentaries 2019-09-11T18:04:26+00:00

Commentaries

Market Environment

The stock market continued its march upward in the second quarter of 2019 and was fueled by ongoing optimism that Central Bank monetary policies in the major developed countries would remain accommodative.   As European economies appear ready to falter, the ECB has stated that it stands ready to continue a program of securities purchases that would be expected to stabilize economic growth.  With 13 billion dollars of non-US debt carrying negative interest rates, it makes US debt relatively more attractive and “in demand” despite our own view of the paltry returns offered by US Treasuries.    Here in the US, the Federal Reserve appears to be opening the door to potential rate cut action in upcoming months in response in part to slowing economic growth and  falling inflation rates.  It is somewhat puzzling to fathom the need for interest rate reductions while the unemployment rate stands at cyclically low levels and the absolute level of growth in the US economy is still quite strong.  Still, there seems to be little doubt that markets in the short term are responding positively to the talk of potential monetary stimulation. (more)

 

Market Oriented Strategy & Outlook

The Market Oriented Core Strategy had an outstanding second quarter both on an absolute and relative basis.  The preliminary return for the second quarter ended June 30, 2019 was 6.5% versus the S&P 500 Index return of 4.3%.   The Market Oriented Strategy has had a very solid performance in the first half of 2019.  Given the recent commentary from the Federal Reserve that it would likely continue its accommodative monetary policy, it was not surprising to see the more cyclical sectors such as Materials, Financials and Technology lead the performance in the portfolio.  The portfolio remains highly overweight growth dominated sectors such as Information Technology and Consumer Cyclicals and Industrials.  The portfolio is currently slightly underweight Financials and Communication Services. (more).

 

Worldwide Equity Strategy & Outlook

The market continued to be very strong in the second quarter of 2019 and was fueled by the expectation that the Central Banks around the world would continue to take an accommodative stance towards monetary policy.  While global growth slowed in the quarter, inflation also continued to fall in the U.S. and the Fed appears to be positioning itself for potential interest rate reductions in order to counter some of the negative effects of a slowdown in global trade.   The trade tensions between the U.S. and China still hang in the balance and there has been no firm resolution to date.  We remain optimistic that both sides ultimately have a strong incentive to “strike a deal” and we believe that this would be a positive development for equity markets. (more).

 

Worldwide Dividend Plus Strategy & Outlook

The market continued to be very strong in the second quarter of 2019 and was fueled by the expectation that the Central Banks around the world would continue to take an accommodative stance towards monetary policy.  While global growth slowed in the quarter, inflation also continued to fall in the U.S. and the Fed appears to be positioning itself for potential interest rate reductions in order to counter some of the negative effects of a slowdown in global trade.   The trade tensions between the U.S. and China still hang in the balance and, to date, there has been no firm resolution.  We remain optimistic that both sides ultimately have a strong incentive to “strike a deal” and we believe that this would be a positive development for equity markets. (more).

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