Apr 28, 2016

FDP Quarterly Market Commentary

Market Review Q4 ’15


An end of January headline from Bloomberg News summed it up well—Stocks Post Worst January Since 2009. Th­e New Year definitely roared like a lion, and not in a favorable way. For those who gave in to their emotions and dumped stocks in January, the reversal to the upside in February proved costly. By the time the seven-year anniversary of the 2008-09 Bear Market lows rolled around in March, a solid stock market recovery was well underway. Overall, 2016 has been a favorable market for globally diversified strategic portfolios.…READ ON

U.S. stocks continue to carry a relatively high correlation to oil prices. Let me bring back a recent chart on oil and stocks. Figure 1 graphically illustrates the close relationship between what’s been happening in the oil patch and the performance in the broad-based S&P 500 Index.…READ ON

After raising rates once at the end of 2015, investment markets largely rejected the expectation that the Fed would continue to raise rates early in 2016. Instead, the Fed turned dovish by the end of the quarter. At its March meeting, Fed officials projected just two rate hikes for the remainder of the year, down from four projected hikes at the December meeting. Assuming the Fed follows through, it would put the fed funds rate at 0.75–1.0%, which is up from the current range of 0.25–0.50%.…READ ON


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How Do Investors Spell Relief?

Investors celebrated an ‘in line with expectations’ CPI that suggested the rate of inflation isn’t accelerating. It’s a small win, but it was enough to send the three major market indexes, the Dow, the Nasdaq, and the S&P 500 to new highs.

An Annual Ritual at the Gas Pump

You’re right if you have this nagging feeling that gas prices rise in the spring. As the graphic illustrates, on average prices rise through Memorial Day, plateau over the summer, and slip in the fall. This year is no exception, as prices echo the seasonal pattern.

Rate Cuts Still on the Table, Timing Less Certain

We often discuss the Federal Reserve and interest rates because both greatly impact investors. For starters, changes in interest rates have a significant impact on stock prices and income earned on savings. Sharply higher rates in 2022 pushed equities into a bear market.

Just Do It

That ubiquitous phrase from one of America’s most extensive athletic footwear and apparel makers seems to have been adopted by most American shoppers. The U.S. Census Bureau reported last week that retail sales jumped 0.7% in March, following a strong 0.9% rise in February.

The Road to Lower Inflation Takes a Detour

The rate of inflation is accelerating. That’s not how we hoped to start this week’s Insights. Take a moment and review Figure 1. The 4-month moving average has broken out of its long-term downward trend (red-dashed lines). On a monthly basis, prices bottomed in June and began to gradually turn higher. The upward trajectory picked up in January.