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May 16, 2017 | Post by: Roman Chuyan, CFA Comments Off on What Volatility Drain Means To The Market

What Volatility Drain Means To The Market

After a rebound in the second half of April, U.S. equities (+8% year to date) stabilized, while global markets excluding the U.S. continued to push higher, driven by a relief rally in European markets after the French election on May 7th. When the stock market rises, its volatility tends to

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May 02, 2017 | Post by: Roman Chuyan, CFA Comments Off on Earnings Growth Drives Market Upside

Earnings Growth Drives Market Upside

Double-digit earnings growth is fastest since 2011 The Q1-2017 earnings reporting season is well underway. While equity market valuation remains high, profit growth momentum is gathering pace. Blended Q1 earnings growth (actual and estimated) currently stands at 12.5% according to Factset. This is the highest year-over-year earnings growth for the index since

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Apr 05, 2017 | Post by: Roman Chuyan, CFA Comments Off on Reality Check For The Market?

Reality Check For The Market?

The surge in optimism since November has been remarkable, as I wrote in recent reports. Consumer sentiment measures remain near their highest in 15 years (see chart), and small business confidence is near a 12-year high. But consumer spending has not yet experienced sustained growth. While manufacturing and durable goods

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Mar 23, 2017 | Post by: Roman Chuyan, CFA Comments Off on TIPS and Tactical Investing

TIPS and Tactical Investing

I begin with an overview of tactical investing applied to fixed income. TIPS recommendation is reiterated. The available TIPS products are compared. In last week's article, I wrote that Treasury inflation-protected securities became attractive. Our model made this recommendation based on the level of 10-year real yield (60 basis points

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Mar 14, 2017 | Post by: Roman Chuyan, CFA Comments Off on The Recipe For Rising Rates: TIPS

The Recipe For Rising Rates: TIPS

It's been tough market for bond investors since the last week of February. The odds of the Fed's rate hike on March 15th jumped from 35% to nearly 100% in three weeks. Longer-term rates also jumped, and bond prices, which are inverse to yields, fell. The Fed officials are compelled

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Mar 03, 2017 | Post by: Roman Chuyan, CFA Comments Off on The Fed Is Back In Play

The Fed Is Back In Play

Treasury yields jumped and bonds fell this week as investors bet that a Fed interest rate hike would come this month. New York Fed President William Dudley – one of the most influential U.S. central bankers, and usually considered a dove – said late Tuesday that the case for tightening

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Feb 10, 2017 | Post by: Roman Chuyan, CFA Comments Off on How will Trump’s Economy Look?

How will Trump’s Economy Look?

There is this to be said about the Many. Each of them by himself may not be of [much] quality; but when they all come together it is possible they may surpass the quality of the few best. ~ Aristotle, Politics (around 340 BC) via Arthur Herman, The Cave and

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Jan 20, 2017 | Post by: Roman Chuyan, CFA Comments Off on Inflation Is Now 2%, Negative For Bonds

Inflation Is Now 2%, Negative For Bonds

Summary December CPI inflation rose to 2.07%. A number of reasons to expect interest rates to continue to rise in the near term, but perhaps more gradually than last year's jump. I have reiterated our recommendations for active fixed-income investors. Global interest rates began to rebound since reaching all-time lows

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Jan 04, 2017 | Post by: Roman Chuyan, CFA Comments Off on 2017: Optimistic For Stocks, But Not Bonds

2017: Optimistic For Stocks, But Not Bonds

I provide a summary of our market outlook to mid-2017. Post-election surge in consumer sentiment brightens 2017 economic outlook. I give updated recommendations for our tactical fixed-income portfolio. In my first 2017 post, I wanted to provide a summary of our market outlook to June of 2017. Mid-year is chosen

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Dec 21, 2016 | Post by: Roman Chuyan, CFA Comments Off on Economic Effect Of Higher Rates

Economic Effect Of Higher Rates

Auto and home sales have not been affected by higher interest rates. The president-elect's policies boosted rates, but also brought about remarkable surge in optimism. If perception becomes reality, higher growth may offset the impact of higher interest rates. I reiterate my short-duration recommendations to active bond investors, and share

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