Capital-Market Impact Articles for Advisors

Slow, steady march higher despite uncertainty

December 9, 2019

Wall Street analysts have been taken off guard by the strength of equity markets this year. Following the weak performance in the fourth quarter of last year, most analysts in January cut expectations for the S&P 500 this year to roughly 2,900. With the S&P 500 currently near 3,150, analysts have been forced to upwardly revise 2019 expectations. The outlook for 2020 remains quite modest, with the average forecast only 3% higher than today.

Capital market impact

Record highs as analysts watch holiday spending

December 2, 2019

For November, the S&P 500 returned 3.6% (9th positive month this year), bringing the year-to-date total to near 27%. If the year ended today, this would be the best year since 2013 and third-best since the technology bubble.

Capital market impact

Markets pause, but display resilience

November 25, 2019

With the 26% total return this year (best since 2013) with heavy reliance on P/E expansion, there is some justifiable concern about what 2020 brings. The average Wall Street analyst target implies just a 5% gain from current levels. A trade deal teamed with accelerating earnings and the boost from the recent Fed rate cuts could lead to upward revisions.

Capital market impact

Current yield curve is a good sign for economic growth

November 22, 2019

The gap between 10-year and 2-year Treasury yields reached its widest level since July, signaling a more optimistic view of the economy. Normalization of the yield curve is a sign, though interest rate rises will likely be limited until global central banks slow their bond-buying programs.

Capital market impact

S&P 500 Index hits six-week winning streak

November 18, 2019

A factor in the recent market strength is the growing belief that a trade deal with China is imminent, despite the continued mixed signals from both countries. This weekend was supposed to be the APEC conference where “phase one” was signed but was cancelled because of security concerns in Chile. There were reports of a “constructive,” high-level phone call over the weekend, driving Asian shares higher.

Capital market impact

Investor sentiment shift drives markets higher

November 12, 2019

Investor optimism is also evident in the movement of the yield curve in recent weeks. Last week saw a dramatic steepening of the yield curve resulting in a normal-shaped (un-inverted) curve. The 10-year yield jumped 0.42% since August, showing the largest three-month jump in three years. The spread between the 10-year and 2-year was negative as recently as September is now approaching the widest level in a year.

Advisor Blog

Advisor Blog