• Investing Principles

    Posted on October 13, 2018 by Gemmer Asset

    Every once in a while it’s good to re-examine why you do the things you do.  Over the past few days the markets hit a bit of a rough patch.  Nothing catastrophic, just a bit more volatility than we’ve grown accustom to.  Times like these are perfect for revisiting basic investing principles, taking a step back and looking at the big picture.  With that being said, we thought this blogpost would be a good opportunity…
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  • Market Recap

    Posted on October 5, 2018 by Gemmer Asset

      Rising Rates Causing Indigestion   The story of the week was the bond market. U.S. Treasury bonds sold off sharply as interest rates increased across the curve. For the week the yield on the 10-year Treasury increased from 3.06% to 3.22%, a +16bps increase. Two-year yields were up +6bps. As a result, intermediate-term Treasury bonds lost -1.2% for the week while long-term bonds were down -3.4%.   For most of the year rising rates…
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  • A Dubious Milestone

    Posted on September 26, 2018 by Gemmer Asset

    Last week we wrote a piece on what has changed since Lehman’s failure. A key point we tried to make (read more here) was both banks and consumers had paid down debt (deleveraged) while the U.S. government had taken up the slack. Debt to GDP in the United States is on track to surpass the level last seen during the New Deal/World War II years, as you can see below.     On this point,…
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  • Market Recap

    Posted on September 21, 2018 by Gemmer Asset

      New Highs Despite Rising Trade Tensions   It was a mixed week for the U.S. equity indexes, but the S&P and Dow did manage to hit new highs. For the week the S&P added +0.9% but small-caps and the NASDAQ lost -0.6% and -0.3% respectively. The overseas markets performed much better for a change. Japan gained +3.4% while the EAFE was up +2.8% and the emerging world +3.0%. A softer dollar for the first…
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  • Global Equity Performance – What’s Driving the Divergence?

    Posted on September 20, 2018 by Gemmer Asset

    It’s no secret the U.S. equity market has dominated in terms of performance this year.     What’s interesting is how we got here. As you can see above, both US and international markets were essentially flat at the end of April after a bit of a roller coaster in the 1st quarter. Then the divergence began. Here’s how the performance breaks down:     Over the last 4+ months, the US has gone from…
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  • What Has Changed Since Lehman and What Lessons Have Been Learned?

    Posted on September 19, 2018 by Gemmer Asset

    Last week saw the 10-year anniversary of Lehman’s failure. In a way Lehman going under marked the point where the recession of 2008 turned into the Global Financial Crisis (GFC). For a moment everything stopped – would the system survive? Reputable figures were pulling hard cash out of the bank on Friday just in case it didn’t open on Monday. This was depression era type of stuff.   What Has Changed?   But it almost…
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  • Market Recap

    Posted on September 14, 2018 by Gemmer Asset

      Is Growth and Inflation Softening at the Margin?   The equity markets were generally higher this week while bonds lost ground. For the week the S&P added +1.2% and small-caps gained +0.5%. The overseas markets also performed well with the EAFE up +2.0% and emerging +1.0%.   In general, the economic reports have been decent with growth a touch on the soft side and inflation moderating, at least for a month. Big picture wise,…
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  • Core Inflation Takes A Breather

    Posted on September 13, 2018 by Gemmer Asset

    This morning the Bureau of Labor Statistics (BLS) released CPI inflation data. It showed that Core Inflation (ex-food and energy) grew +2.2% year-over-year. This is down from the +2.4% economists expected and is the first time since 2017 that a Core CPI data point was lower than the previous month.     At risk of getting too deep into the weeds, I’ll only mention that today’s number appears to be the result of one particular…
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  • Today’s Jobs Report – Wage Growth Picks Up

    Posted on September 7, 2018 by Gemmer Asset

    Today’s jobs report was a solid one with nonfarm payrolls rising by 201k, higher than both the 190k surveyed by economists and the 157K of the previous month. The unemployment rate stayed put at 3.8%, but average hourly earnings (a measure of wage growth) came in at 2.9% growth year-over-year, a new cycle high as you can see below.     This report, and the positive headlines associated with it were overshadowed by the Trump…
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  • Market Recap

    Posted on August 31, 2018 by Gemmer Asset

      First Turkey, Now Argentina   The emerging markets (EM) haven’t been in the news for what, a couple weeks? Dire headlines about Turkey’s problems were all the rage for a while. This week the spotlight, or more accurately the bulls-eye, shifted to Argentina.   By way of background, Argentina has a colorful history when it comes to debt repayments. Specifically, they have a history of not paying. Since independence Argentina has managed to default…
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