Wealth Management Blog | WrapManager | Economic/Market Outlook (7)

Eagle Asset Management - Volatility Examined

Posted by WrapManager's Investment Policy Committee

November 23, 2015

Richard Skeppstrom, of Eagle Asset Management's Strategic Return Portfolio, analyzes recent market volatility in Eagle's November Market Perspective.

"As the third quarter came to a close, equity markets were a stumble away from panic. Bankruptcy concerns were playing havoc in the commodity space while technicians nervously watched for a Dow sell signal. If the Dow had closed below the August trough of 15666: a blood bath. I wrote that I was comfortable with my equity allocation and would just wait and see, ignoble action possibly resembling chicken excrement. Of course, my reluctance to do anything was a reliable buy signal. Don Hayes, the longstanding strategist at fondly remembered Wheat First Securities, used to say the markets will do whatever they can to confound the most. The rebound this month certainly qualifies. Not only has the market staged a striking rebound, but also sector leadership completely reversed. Energy and commodities – hated a few weeks ago – have led while healthcare has lagged.

ClearBridge Advisors - Market Risk and Opportunity

November 10, 2015

ClearBridge Investments, a Legg Mason company, provides their Q3 commentary with discussion of the challenges and opportunities that exist within such a volatile market. "Market Commentary “Nothing any good isn’t hard.” – F. Scott Fitzgerald Memories of painful experiences are often a critical and adaptive part of living, in that painful memories can keep you out of harm’s way by minimizing repeat mistakes. The challenge, however, is that memories are highly subjective, and with the passage of time you often forget how intense something felt at the time. In the realm of physical pain, my biggest outlet for stress is training and competing in triathlons with my wife and several colleagues from ClearBridge. They are all better than me, which is painful enough, but I often don’t have enough time to fully prepare for the longer events. This inevitably leads me to swear off competing again, until I ultimately find myself standing in a cold body of water at the beginning of another grueling physical experience. In all seriousness, I love competing, and the rewards of doing so from a health and emotional perspective far outweigh short bouts of physical pain that are soon enough forgotten. [+] Read More

Cambiar Investors International ADR

November 9, 2015

While market concerns had investors scrambling for the exists, Cambiar Investors took advantage of the market weakness in Q3 to deploy capital into a number of new investments. Read their Q3 2015 commentary below. "Market Review After fairly muted performance for the first half of 2015, global equities sold off in the third quarter. In contrast to prior pullbacks that were often met with buyers stepping in to buy the dips, investor sentiment towards stocks deteriorated considerably in the quarter. A popular Wall Street phrase is “stocks climb a wall of worry” – referring to the tendency for equity markets to overcome a host of negative factors and move higher. Yet is seems the wall got too high in the quarter. Global growth fears (led by China), increasing uncertainty of U.S. monetary policy, and continued pressure in Emerging Markets were just some of the concerns that had investors scrambling for the exits. While all of these factors warrant careful consideration, it is Cambiar’s view that the correction in the quarter was of the “shoot first/ask questions later” variety, vs. fundamentally driven. Given our value orientation, such reflexive selling can provide attractive entry points; to that extent, Cambiar used the market weakness to deploy capital into a number of new investments during the quarter. [+] Read More

Federated Investors - International Market Commentary

November 3, 2015

Federated Investor's Q3 international strategic value dividend account commentary reivews the affect of August volatility and the ability of their strategy to provide a substantially higher-than-market yield and long-term dividend growth. "Market Overview" Equity markets pulled off their August low but were still down on the month, closing out their worst quarter in four years as investor fears over China, lower oil and a potential global slowdown outweighed generally better economic data at home.The Federal Reserve added to the uncertainty and volatility, choosing to put off liftoff at its September meeting, rattling the markets even though futures had put the odds of a move at well below even. [+] Read More

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

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

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