Wealth Management Blog | WrapManager | WrapManager's Investment Policy Committee (15)

Eagle Asset Management - Interest Rates and Equity Markets

Posted by WrapManager's Investment Policy Committee

October 27, 2015

Eagle Asset Management's Richard Skeppstrom reviews the Fed's interest rate decision and discusses current equity markets in this month's market perspective.

"Interest-rate constipation

U.S. economic growth was nearly 4 percent in the second quarter and the U.S. Federal Reserve decided to leave rates at 0. It was rumored to be a close call but labor conditions aren’t perfect: too many aren’t looking for work, international markets are unsettled and infl ation remains just below target. I didn’t believe 0.25 percent made any difference anyway but equities weren’t thrilled. You might think that after watching these things for 20-some years, I’d know if the news were good or bad; however, I’m not even sure what the news was in this case. Some countries aren’t well-run? Some people would rather not work? In any case, the Fed still believes it imprudent to pay interest on savings. Congrats to the borrowers.

Eagle Asset Management - Market Volatility Perspective

September 30, 2015

Eagle Asset Management's Richard Skeppstrom says we're in no danger of a recession and asks investors not to panic. Continuing market volatility and the possibility of a slight increase in interest rates do not necessarily spell disaster. "Don't Panic The market’s momentum was ebbing with the slowing of global growth. The return of volatility was inevitable and corrections are a fact. People panic for a reason; there’s generally no shortage of reasons and happily there are very few good ones. Unfortunately, in the last 15 years, we’ve had two wrenching stock collapses and they remain fresh in everyone’s minds. In the first, the U.S. Federal Reserve tightened to rein in the tech bubble (that it had ignored/blessed) and associated nonsense but there’d been too much excess and the economy fell into recession. In the second, the Fed tightened to rein in the housing bubble (that it created) and associated nonsense but there’d been too much excess and the banking system nearly collapsed, dragging the economy into the Great Recession. [+] Read More

ClearBridge Investments Commentary - Large Cap Growth Portfolios

September 2, 2015

ClearBridge Investment's Peter Bourbeau and Margaret Vitrano provide their perspective on the second quarter discussing their large cap growth portfolios. "As with stocks, the U.S. economy continued its slow march forward through the second quarter. Employment continued to lead the way, with payrolls increasing by an average of 221,000 per month, and the unemployment rate declining to 5.3%, its lowest level since April 2008. Consumer spending and new and existing home sales showed healthy improvement in May, while consumer confidence bounced back late in the quarter. The CEO of a major retailer we spoke with during the quarter indicated that consumers are now feeling good enough about their finances to expand purchases from basic staples to higher-priced apparel and home furnishings. Offsetting those gains were disappointing reports on GDP growth, with the final revision to first-quarter data showing that the economy contracted by 0.2% in the three months of the year, as well as industrial production. [+] Read More

Cambiar Investors Commentary - China, Greece, and Interest Rates

August 27, 2015

Cambiar Investor's Q2 2015 market commentary discusses China, interest rates, and what it all means so far this year. "The Waiting Game Financial market returns were quiet in the second quarter, seemingly waiting for some kind of definitive signal that never arrived. The S&P 500 Index, MSCI EAFE Index, and MSCI Emerging Markets Index were each essentially flat for the quarter, with relatively limited volatility. The former two had each about a 3% gain going into the last 10 days of the quarter, but surrendered their gains as Greece threatened (for the fifth time in as many years) an uncontrolled debt default and exit from the Euro system. The Greek's gamesmanship was once again cauterized by international financial agencies only after the Greeks were very bluntly threatened back with the same medicine. This suggests that European authorities are no longer concerned that a Greek Eurozone exit would be a systemically destabilizing event. [+] Read More

Brookmont Capital Dividend Equity Strategy Commentary

August 25, 2015

Brookmont Capital's Dividend Equity Strategy provides their Second Quarter report covering perspective on foreign markets, more assumptions on interest rates and how they positioned their portfolio in response. “The markets struggled to move higher during the second quarter due to a conflux of bad news from foreign markets and earnings disappointments from several domestic companies. The markets took their biggest hit during the month of June as fears about Greece, China’s economy, and second quarter earnings announcements led to widespread sales activity. The Dividend Equity Strategy was repositioned during the second quarter in anticipation of increasing risk in the equity markets. Valuations were becoming stretched based on expected earnings growth and consensus assumptions that the Federal Reserve will raise short-term interest rates during the second half of the year. During the second quarter we reduced our position in mid-cap stocks by 50% and now represent only 16% of the portfolio. This is our lowest weighting in small and mid-cap stocks since early 2009. This market sector outperforms during the early stages of an economic recovery and has historically underperformed when interest rates rise and the market cycle has peaked. [+] Read More

Eagle's Skeppstrom on Greece and China's Woes

August 19, 2015

Eagle Asset Management's Richard Skeppstrom provides his colorful perspective on the recent market events including Greece, China and his candid friends. “Confused situation, imperfect advice One of my closest friends reached out to me on Father’s Day to say he thinks I am a better father than stock-picker. I was touched. And then more recently, another very dear friend said he enjoyed my writing but wished I’d say something. Lovely friends. Most folks just don’t care enough to give you such thinly veiled criticisms. [+] Read More

Granite Investment Partners - Interest Rates, Market Volatility

August 13, 2015

Granite Investment Partners provides their reflections on the second quarter. Topics discussed are mixed economic data, weaker GDP growth and the question on everyone's mind, when the Fed will raise interest rates. "Reflections Market remains little changed amidst volatility The market remained largely range-bound in the quarter and for the year. The S&P 500 index ended the quarter basically flat, gaining +0.28%, bringing year-to-date total return for the first half of 2015 to +1.23%. Investors remain in somewhat of a holding pattern as they continue to monitor signals from the Federal Reserve in anticipation of the end of the prolonged period of easy domestic monetary policy. Market consensus has shifted expectations for the first rate hike forward into September, albeit with a fair amount of uncertainty due to conflicting economic data signals. [+] Read More

Clearbridge Investments - Multi Cap Growth Q2

August 4, 2015

Clearbridge's Richard Freeman and Evan Bauman, provide their perspective on the second quarter discussing views on market volatility, focus sectors, and interest rates. "Market overview and outlook U.S. stocks traded in a tight range during the second quarter, with the major indexes ending largely unchanged. The large cap S&P 500 Index gained 0.28% for the quarter, the small cap Russell 2000 Index added 0.42%, while the broad market Russell 3000 Index gained 0.14%. Volatility remained low as investors awaited a clear signal from the Federal Reserve on when it will commence raising short-term interest rates. The S&P 500 sustained its longest stretch without a 2% daily move up or down since 2007. That more than six-month stint was snapped on June 29 when the index fell 2.09% following the breakdown of talks between Greece and its creditors. The sharp drop – the largest for the S&P 500 since April 2014 – pared gains for most equity benchmarks. [+] Read More

Federated - Strategic Value Dividend Q2 Commentary

July 29, 2015

Federated has released their second quarter, managed account commentary for their Strategic Value Dividend portfolio. "Market Overview The major equity indexes slipped in June, as generally better-than-expected data on the U.S. economy gave way to worries late in the month over a possible Greek default, exit from the euro or both.The bulk of the monthly decline, which saw the S&P 500, Dow and NASDAQ fall a respective 2.1%, 2.2% and 1.6%, came on June 29, when a strong risk-off trade sent global equity markets tumbling as the Greek issue came to a head. June’s losses were enough to push the S&P to a virtually flat total return for the quarter. [+] Read More

Geneva Advisors - Market Volatility

July 23, 2015

Geneva provides its second quarter market overview for 2015. They discuss geopolitical risks effect on volatility, global economic positioning and their optimism for the future. “Market Overview U.S. equities generated modest gains in the second quarter. Improving economic data, continued easy global monetary policy and increased merger and acquisition activity combined to help sustain higher equity prices.Geopolitical risks, however, now including those in Greece and China, caused increased market volatility. [+] Read More