Category Archives: Market Recap

Market Recap

Posted on February 21, 2020 by Gemmer Asset

    Gauging the Economic Fallout   Up until Thursday the markets remained pretty buoyant in expectation that the Coronavirus infection rate had peaked. This seemed to change on Thursday and Friday as attention turned away from infections towards the economic fallout.   The change of tone could be detected after Japan reported a miserable fourth quarter GDP number. Growth in the fourth quarter fell at an annual rate of -6.3% (chart below) after Japanese…
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Market Recap

Posted on February 14, 2020 by Gemmer Asset

  Infection Rates Seem to be Slowing   As you would expect the coronavirus situation was the headline story all week. The situation continues to evolve, but it is pretty clear that simply counting the number of infections is far from simple. Is China fully disclosing the number infected? If infection rates have plateaued, why are roughly 400mm people in China under some form or quarantine? Investors were also thrown off balance on Thursday when…
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Market Recap

Posted on January 31, 2020 by Gemmer Asset

  Economic Backdrop   Before we get to the Coronavirus discussion, a few macro notes.   Earnings   We are still in 4th quarter earnings season. Key observations:   – 38% of S&P 500 companies have reported Q4 earnings   – 73% beat EPS estimates, surprising positively by 4%   – EPS growth is coming in at +6% y/y. All sectors except Energy and Materials are delivering positive earnings growth   – Sales growth is…
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Market Recap

Posted on January 17, 2020 by Gemmer Asset

  Housing Fundamentals Improve   There were a few economic reports this week, but the main one concerned home construction, which hit the highest level in 13 years. New housing starts jumped in December to a seasonally adjusted rate of 1.608m, the highest level since December 2006. That was an increase from November’s upwardly-revised 1.375m and cruised past the median forecast among economists for 1.375m.     As you can see above, the hook high…
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Market Recap

Posted on January 10, 2020 by Gemmer Asset

  Welcome to 2020!! Another decade down and on to the next one. What can you say about 2019 other than ‘that went better than expected.’ It almost doesn’t matter where you invested last year, you saw decent returns. About the only exception in the U.S. were oil and gas stocks. Just look at the oil services ETF (orange line below). It managed to lose -5.6% despite a +34.5% rise in crude prices. That takes…
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Market Recap

Posted on November 15, 2019 by Gemmer Asset

  Economic Recap – Faint Hints of a Trough   The large-cap domestic equity indexes continued to push to new highs this week. It’s always hard to peg why the markets do what they do short-term, but these three reasons have to rank reasonably high on any list:   – Optimism that a trade deal of some sort gets done before year-end.   – Chairman Powell talked again this week and basically said there are…
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Market Recap

Posted on November 1, 2019 by Gemmer Asset

  Economic Recap – Faint Hints of a Trough   A number of key economic reports this week:   Decent Growth in Q3   The advance estimate for Q3 GDP came in at 1.9%, a modest dip from 2.0% in Q2, but well ahead of expectations of 1.6%.     Manufacturing Recession Continues   The ISM manufacturing index increased for the first time since March but remains in contraction mode. To early to call a…
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Market Recap

Posted on October 4, 2019 by Gemmer Asset

  Week in Review   It was one of those weeks where underwhelming economic news morphed into decent news for the markets simply because it meant more love from global central banks. This trumped (that’s almost unforgivable, I know) impeachment talk, and don’t even start on the Saudi attacks – that seems like a lifetime ago!   On the economic front we found out manufacturing really stinks (I guess we sort of knew that already)…
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Market Recap

Posted on September 20, 2019 by Gemmer Asset

  Week in Review   The focus this week, at least as far as the markets are concerned, was meant to be one thing and one thing only – the Fed meeting on Tuesday and Wednesday. But when the futures opened Sunday evening it was all about oil. Oil prices soared following a drone attack on the Abqaiq oil-processing plant and the Khurais oilfield in Saudi Arabia on Saturday. At one-point oil surged as much…
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Market Recap

Posted on September 13, 2019 by Gemmer Asset

  Week in Review   It was relatively quiet on the economic news front. Really the only major report was Friday’s retail sales number. Headline retail sales rose 0.4% in August, exceeding economists’ expectations for a 0.2% increase (see chart below). August’s jump was driven by strong sales of motor vehicles and online retailers that was partially offset by weakness at restaurants and clothing stores.     The dynamic of weak manufacturing/solid consumer continues to…
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