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August 2018 Market Commentary

This week, emerging market investors were greeted by a plunging Turkish Lira, which as of this writing is down more than 15% relative to the major developed market currencies (see chart below). As carry trades are unwound as investors head for safety and lick their wounds, we are reminded of the volatility that erupted in emerging market currencies between 1998 and 2002.

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May 2018 Market Commentary

As we reach the end of a stellar Q1 earnings season, the US equity markets continue to trend sideways in search of the spark that will reignite the “animal spirits.” More than 400 of the S&P 500 constituents have reported Q1 results thus far, with 75% delivering upside surprises on the top line and 81.5% beating on the bottom line.

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March 2018 Market Commentary

The U.S. equity markets remain in a corrective trading range between the January 26th high of 2872 and the rising 200 day moving average of 2588. After an extended period of tranquility following the U.S. Presidential election, volatility has broken out of its own trading range. Beginning with the blowup that led to the closing of several leveraged inverse VIX ETFs, intraday market swings over the last six weeks have been wide and wildly unpredictable (see chart 1). From a technical perspective, the S&P 500 closed the week with a successful retest of the 200 day moving average, providing some hope for the bulls going into the weekend.

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January 2018 Market Commentary

Friday’s domestic equity markets saw both the S&P 500 and NASDAQ 100 indexes mark new all-time highs, although both were slightly off of the intraday peaks recorded during yet another strong session. Thus the strong start to 2018 continues, with the S&P 500 logging its strongest start to a year since 1987, up 5.4% year to date, comfortably ahead of the start to 2017. The same can be said of the NASDAQ, which has gained 6.87%, as tech companies regained their footing after wobbling to the finish in Q4 2017. International equities have also continued to build on a strong 2017, with the MSCI EM index posting gains of 6.4% and MSCI Frontier Markets index up 6.29%. While I would not try to predict the months ahead by extrapolating results from a two-week sample, but it is safe to say that investor spirits are alive and well.  

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Global Investment Outlook: December 2017

On the surface, the last month of trading has seemed rather placid, as the S&P 500 has managed to eke out a positive gain of 1.54% since November 7th while trading in a 100 point range between 2560 and 2660. However, underneath the surface we have witnessed a violent rotation out of the technology sector and into financials and consumer related equities. This has generated a significant dispersion of performance across sectors, despite the calm appearance of the broad index. Industry groups that were left by the side of the road earlier in the year, such as apparel manufacturers, consumer staples, banks and retailers were bought, with those purchases being funded by heavy selling in semiconductors and software stocks. Meanwhile, the VIX (CBOE Volatility Index) currently trades at 11.2, a level that does not insinuate fear in the overall market.

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Global Investment Outlook: Oct. 2017

Yesterday marked the 30-year anniversary of “Black Monday,” a day when the Dow Jones Industrial Average (DJIA) fell 508 points in a single trading session, representing a market cap loss of nearly 22%. Even more fascinating than the speed and size of the decline, was that there were no major announcements released over the preceding weekend, leaving investors struggling to make sense of the sell-off.

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Global Investment Outlook: Sept. 2017

As we enter the last two weeks of Q3, the global equity indexes continue to brush off the warnings from market naysayers and set new highs. Just this week in the U.S., the DJIA has broken through 22200, the Nasdaq 100 closed above 6000, and the S&P 500 missed closing above the 2500 level by a mere 1.63 points. The progress for the latter two U.S. markets has stalled since, so it is premature in either case to call the breakouts confirmed by follow through buying. On the other hand, at a time when the commentary that is has been dominated by calls for a 5% to 10% pullback, the simple fact remains that equity markets have found the will to push higher throughout the summer, despite the geopolitical concerns, natural disasters, and overall lack of legislation in Washington.

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