The Return of Volatility
October 17, 2014
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Talking Points for Your Clients on the Recent Market Volatility
We normally (and still) don’t generally react to day-to-day market movements—in fact, as I write this, markets have fallen and reversed on the order of 1.5%. But, as clients often see negative headlines first and call their advisor second, we wanted to share some items that could be of some help in framing recent volatility into a broader perspective. Continue reading
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Weekly Economic Update
Economic Update 10-13-2014
- It was a light week for domestic economic reports, generally focused on employment subtleties; however, global economic growth expectations were downgraded by the IMF, causing additional market tumult.
- Typical October volatility returned to markets as domestic stocks experienced some of the widest day-to-day swings of the year and ended sharply negative. Conversely, bonds gained as yields fell to their lowest levels in over a year.
Posted in Economic News
Tagged Carl Icahn, Christine Legarde, Eurozone, FOMC minutes, IMF, Mario Draghi, oil prices, VIX, Volatility
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Weekly Economic Update
Economic Update 10-5-2014
- Economic reports were mixed in terms of improvement, but continue to show strength. The highest-profile report of the week, the government employment situation, came in much stronger than expected and featured an unemployment rate under 6%.
- Equity markets experienced more volatility as investors worried about global growth and geopolitics, such as the demonstrations in Hong Kong. Bonds rose a bit on lower yields and ‘risk-off’ tendencies.
Posted in Economic News
Tagged dollar index, Europe, foreign currencies, oil prices, stronger dollar, unemployment rate, Yahoo!
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The new PIMCO without Bill Gross
PIMCO Elects Daniel Ivascyn as Group Chief Investment Officer
Firm Names Andrew Balls, Mark Kiesel, Virginie Maisonneuve, Scott Mather and Mihir Worah Chief Investment Officers
- Kiesel, Mr. Mather and Mr. Worah named Portfolio Managers for Total Return Fund
- Saumil Parikh, Mr. Ivascyn, and Mohsen Fahmi named Portfolio Managers for Unconstrained Bond Fund
- Douglas Hodge and Jay Jacobs continue in their roles as Chief Executive Officer and President
September 26, 2014 (Newport Beach, CA): PIMCO, a leading global investment management firm, has elected Daniel Ivascyn to serve as Group Chief Investment Officer (“Group CIO”), succeeding William H. Gross who has left the firm. In addition, the firm appointed Andrew Balls, CIO Global; Mark Kiesel, CIO Global Credit; Virginie Maisonneuve, CIO Equities; Scott Mather, CIO U.S. Core Strategies; and Mihir Worah, CIO Real Return and Asset Allocation. Douglas Hodge, PIMCO’s Chief Executive Officer, and Lew “Jay” Jacobs, President, will continue to serve as the firm’s senior executive leadership team, spearheading PIMCO’s business strategy, client service and the firm’s operations. Continue reading
Posted in Fund News
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Weekly Economic Update
Economic Update 9-29-2014
- Economic news was generally mixed on the week, with housing providing a slightly more optimistic tone. GDP for the 2nd quarter was revised a bit higher as well, casting a more positive light on the prior period.
- Markets experienced a bit more volatility this week, ending in the negative, with U.S. blue chips the best of a bad bunch. Bonds eked out a small return on slightly lower yields, as the broader market news was strangely overshadowed late in the week by Bill Gross’ move from PIMCO to Janus.
Posted in Economic News
Tagged Alibaba, Bill Gross, Ebola in West Africa, economic news, Janus, PIMCO
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The ‘Bond King’ Jumps Ship
In breaking news this morning, Bill Gross is leaving the company he founded for Janus Capital Group.
Weekly Economic Update
Economic Update 9-15-2014
- Aside from the FOMC meeting—where language was scrutinized but little actually changed—the economic week was mixed. Several regional economic indexes came in with positive results, inflation was virtually unchanged and housing results were a bit disappointing relative to expectations.
- Equity markets were higher in the U.S. with a lack of hawkish surprise from the Fed and a few other geopolitical risks (notably Scotland) easing, and outperformed foreign markets. Bonds were slightly higher on rates that initially rose and then retreated.
U.S. stocks gained over a percent on the week, led by early speculation (later validated) that the Fed would keep an accommodative tone in their post-meeting statement. In news abroad, sentiment was perhaps validated by the People’s Bank of China lending a significant amount ($81 billion) to the five largest banks to ease the slowdown, although that may have helped U.S. sentiment more than it did foreign. From a sector standpoint, health care and materials gained over a percent, while consumer discretionary and energy barely gained on the week.
The US dollar gained again on Wednesday following the Fed meeting, on the order of almost a percent. As we discussed last week, currency values can generally fluctuate for a number of reasons—in this case, a planned end of QE as well as higher interest rate projections for coming years, which remove some inflation risk. Continue reading
Weekly Economic Update
Economic Update 9-15-2014
- In a slower week for economic data, results came in tempered to positive (retail sales being a more important release), but included no major surprises. Geopolitically, the highlight originated from a developed market this time, as polls showed a stronger possibility of Scotland’s secession from the United Kingdom before this coming week’s vote.
- Equity and fixed income markets were both lower, with little extreme news to move the needle in either direction, but an upcoming Fed meeting and concerns over when rates may be increased have taken the forefront again.
U.S. stocks suffered a down albeit quiet week, with a variety of mixed messages and lack of any strong positive catalysts to take indexes higher. Smaller-caps suffered on par with large-caps, but foreign equities overall lagged domestic names. From an industry standpoint in the U.S., technology was the only positive-performing group on the week (seemingly helped by Apple’s iPhone 6 release and introduction of their wristwatch), while energy and utilities suffered the worst—not surprising due to weaker crude prices and fears of higher interest rates.
A 1% gain in the U.S. dollar served as a headwind for the bulk of foreign markets. In developed nations, Japanese equities were only down a half-percent, while Europe and the U.K suffered declines of 1-2%. Emerging markets experienced the worst week, led by weakness in Brazil (-10%) as Moody’s downgraded their outlook from stable to negative due to ‘sustained low growth and worsening debt metrics.’ Support for the current president appeared to solidify—lowering chances for change during upcoming elections in a few weeks there. Hopes for change through leadership reshuffling often add an element of bullish optimism to EM equities, especially in the wake of a new reformer (as we’ve witnessed in India this year), although the change has to occur within a certain time limit. If chances for reform (i.e. getting conditions/policies more inline with what developed markets deep appropriate) dissipate, often, so do the returns. Russia and China were also down last week, but by only half as much as Brazil. Continue reading
Posted in Economic News
Tagged economic data, Fed, fixed income, FOMC, interest rate, interest rates, U.S. dollar, Yahoo!
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Weekly Economic Update
Economic Update 9-8-2014
- Economic data for the week came in fairly strong, highlighted by the ISM manufacturing report, which is closely watched by markets. However, the August employment situation report for August was a bit disappointing.
- S. stocks gained on decent economic data and eased geopolitical tensions; bonds lagged on higher rates.
U.S. equities moved slowly higher on the week. From a sector standpoint, consumer staples led with a 1% gain, followed by utilities, while energy fell back, losing almost -2% on the week. Large-caps continued to outperform small-caps domestically.
Developed market foreign stocks were mixed, with half-percent gains in Europe and Japan, while the U.K. fell backward by almost a percent. Emerging markets were the leaders again on the week, this time led by Russia, China and Poland—the former due to a reported cease-fire with Ukraine (strange being that they were never an official participant, but involved nonetheless).
The seesaw in fixed income continued, with mid- to long-rates moving higher by 10-15 bps on some stronger economic growth numbers—consequently, long bonds suffered the brunt of the damage, but the higher volatility didn’t help any segments to a positive degree, at least in the U.S. Some areas like high yield corporate were lower on a seasonal change from summer slumber to an autumn-like higher-issuance mode, creating some spread widening. Continue reading
LSA PORTFOLIO TRADE DAY
PORTFOLIO TRADE DAY!
TODAY (FRIDAY, SEPTEMBER 5th, 2014) is trade day for the LSA models listed below.
Please login to the LSA site to view all changes:
Revisions are NOW POSTED today, September 3, 2014.
Private Client (Not Traditional)
PC Tax Efficient
PC L100K 75-100
PC Blended
Schwab NTF (Not Traditional)
BME
CBP
THESE ARE THE ONLY MODELS WE ARE REVISING AT THIS TIME!
If you have any questions, please feel free to contact us at support@LSAportfolios.com or call us at (866) 581-5724.
Posted in Uncategorized
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LSA PORTFOLIO REVISIONS
LSA will be making changes to the models listed below to be traded on Friday, September 5, 2014. Revisions are all posted online and ready to view and prepare to trade. These are the ONLY models that we are making revisions to at this time.
The portfolio revision video explanation and presentation has also be posted under “Monitoring Reports/Portfolio Management today! Please login to the LSA website to view detailed information behind this round of revisions.
** TRADE DATE SCHEDULED FOR FRIDAY SEPTEMBER 5, 2014! **
Private Client (No changes to PC Traditional strategies)
PC Tax Efficient
PC L100K 75-100
PC Blended
Schwab NTF (No changes to Schwab NTF Traditional strategies)
BME
CBP
THESE ARE THE ONLY MODELS WE ARE REVISING AT THIS TIME!
If you have any questions please feel free to contact us at support@LSAportfolios.com or call us at (866) 581-5724.
Posted in Portfolio Updates
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