• Markets Grapple With The Coronavirus

    Posted on February 28, 2020 by Gemmer Asset

    Printable VersionMarkets Grapple with the Coronavirus   There’s an old saying that markets take the escalator up and the elevator down. That sure was the case this week. Selling pressure was intense all week as investors grappled with the implications of the coronavirus spreading beyond China’s boarders. The S&P officially hit correction territory with a decline of more than 10% from the high. As you can see below, this is the eighth correction of more…
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  • Market Recap

    Posted on February 21, 2020 by Gemmer Asset

    Printable Version    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…
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  • Market Recap

    Posted on February 14, 2020 by Gemmer Asset

    Printable Version   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…
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  • Market Recap

    Posted on January 31, 2020 by Gemmer Asset

    Printable Version   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…
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  • Market Recap

    Posted on January 17, 2020 by Gemmer Asset

    Printable Version   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…
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  • Market Recap

    Posted on January 10, 2020 by Gemmer Asset

    Printable Version   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….
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  • Market Recap

    Posted on November 15, 2019 by Gemmer Asset

    Printable Version   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…
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  • Market Recap

    Posted on November 1, 2019 by Gemmer Asset

    Printable Version   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…
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  • Market Recap

    Posted on October 25, 2019 by Gemmer Asset

    Printable Version   Faint Positive Hints in the Manufacturing Sector…   There wasn’t a lot of new economic data this week, but what there was hinted at stabilization, not deterioration. The Richmond manufacturing index hooked higher, as you can see below.     While this is a narrow regional number, it gets a lot of attention because it is tightly correlated with the national ISM manufacturing number (chart below).     It raises the possibility…
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  • Market Recap

    Posted on October 4, 2019 by Gemmer Asset

    Printable Version   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…
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