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Quarterly Market Review – Q4 2021

By | January 10th, 2022|Dimensional Fund Advisors, Markets, Quarterly Market Review|

This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.

The report also illustrates the impact of globally diversified portfolios and features a quarterly topic. “All-Time High Anxiety”.

Click HERE  to download a full copy of the report.

Q4 quarterly-market-review

U.S. Performance Dashboard – December 2021

By | January 10th, 2022|General, Markets|

  • Despite the ongoing pandemic, record inflation, and looming rate hikes, U.S. equities had a banner year, with the S&P 500® reaching 70 closing highs on its way to a 29% return. Mega-caps outperformed, with the S&P 500 Top 50 up 31%.
  • International performance was positive, with the S&P Developed Ex-U.S. BMI up 11%. Emerging markets managed to eke out a gain, with the S&P Emerging BMI up 1% despite large losses in the S&P China BMI, which makes up almost 40% of the benchmark’s weight.
  • All sectors posted gains in 2021, led by Energy, up a dramatic 55%, a stunning turnaround after its 34% loss in 2020.

 

December 2021 Market Review

U.S. Performance Dashboard – November 2021

By | December 1st, 2021|Markets, Quarterly Market Review|

  • It was not entirely smooth sailing for U.S. equities in November, as concerns about the Omicron strain coupled with less-than-transitory inflation and accelerated tapering by the Fed roiled markets during the last three days of the month. The S&P 500® posted a loss of 1%, outperforming mid and small caps, as the S&P MidCap 400® and S&P SmallCap 600® declined 3% and 2%, respectively. Volatility spiked, as the VIX® closed at 27.19.
  • Growth led among factors, followed by a number of defensive strategies, including Quality, Low Volatility, and Dividend Aristocrats.
  • Among sectors, IT led, followed by Consumer Discretionary, while Financials lagged.

 

dashboard-us-2021-11

On the Mind of Investors : November 7th, Weekly Recap

By | November 16th, 2021|Markets|

  • U.S job openings fall to 10.4M
  • PPI for final demand +0.6% in Oct.

What to watch in the week ahead: Retail Sales.

Inflation has heated up significantly this year as surging consumer demand collided with supply shortages across major sectors of the economy. CPI inflation has been tracking above 5% year-over-year since the start of the summer, with the latest year-over-year gain in CPI at 5.2% overall and 4.0% excluding food and energy. The year-over-year gains in inflation have been amplified by declines in prices a year ago, but supply chain issues have been a problem. In particular, the global semiconductor shortage has increased the prices of a wide range of goods throughout the economy, and most notably for autos. These higher input costs have sent inflation higher, as well as a general recovery in prices of air fares, restaurants, and rents from their pandemic lows.

 

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U.S. Performance Dashboard – October 2021

By | November 2nd, 2021|Markets|

  • Despite lingering inflation concerns, U.S. equities recovered strongly in October, thanks to robust corporate earnings. The S&P 500® posted a gain of 7%, outperforming mid- and small-caps, as the S&P MidCap 400® and the S&P SmallCap 600® rose 6% and 3%, respectively. Volatility declined, as the VIX® closed at 16.26.
  • All factors posted gains, with Growth and High Beta in the lead. Unsurprisingly, defensive factors trailed in October.
  • All sectors posted gains. Consumer Discretionary led, followed by Energy, which continued its dramatic turnaround, up 58% year-to-date.
dashboard-us-2021-10

October : National Cyber Security Awareness Month – Tips for Protecting Yourself

By | October 21st, 2021|General|

National Cyber Security Awareness Month is observed each October and is designed to increase the public’s awareness of cybersecurity and cyber-crime issues.

To help you protect your personal information, we are sharing content from the American Bankers Association’s brochure “7 Tips for Protecting Yourself Online.” According to Symantec, 12 adults become a victim of cybercrime every second. Though the internet has many advantages, it can also make users vulnerable to fraud.

To help protect yourself we recommend you follow a few easy steps:

  • Keep your computers and mobile devices up to date.  Having the latest security software, web browser, and operating system are the best defenses against viruses, malware, and other online threats. Turn on automatic updates so you receive the newest fixes as they become available.
  • Set strong passwords. A strong password is at least eight characters in length and includes a mix of upper and lowercase letters, numbers, and special characters.
  • Watch out for phishing scams. Phishing scams use fraudulent emails and websites to trick users into disclosing private account or login information. Do not click on links or open any attachments or pop-up screens from sources you are not familiar with.
    • Forward phishing emails to the Federal Trade Commission (FTC) at spam@uce.gov – and to the company, bank, or organization impersonated in the email.
  • Keep personal information personal. Hackers can use social media profiles to figure out your passwords and answer those security questions in the password reset tools. Lock down your privacy settings and avoid posting things like birthdays, addresses, mother’s maiden name, etc.  Be wary of requests to connect from people you do not know.
  • Secure your internet connection. Always protect your home wireless network with a password. When connecting to public Wi-Fi networks, be cautious about what information you are sending over it.
  • Shop safely. Before shopping online, make sure the website uses secure technology. When you are at the checkout screen, verify that the web address begins with https. Also, check to see if a tiny locked padlock symbol appears on the page.
  • Read the site’s privacy policies. Though long and complex, privacy policies tell you how the site protects the personal information it collects. If you don’t see or understand a site’s privacy policy, consider doing business elsewhere.

A few more best practices we would like to share may seem very basic, but each could help keep your personal information safe.

  • Do not leave devices unattended. We suggest always locking or closing personal devices before walking away from your screen.
  • Avoid emailing sensitive information such as credit card numbers or account numbers. Always ask the person you are emailing if they have a secure portal to provide those details.
  • Back up your data regularly. Set a monthly reminder to back up your personal devices.
  • Do not store personal information on mobile devices. It can be tempting to save a quick note in your phone of a password that you will want to reference easily, avoid doing that and instead use a third party password management tool.
  • Do not turn off a Two-Factor or Multi-Factor Authentication service. Some vendors will allow for you to turn that functionally off or suspend the service when you log – in. We recommend keeping it active whenever you can.
  • Use the passcode lock on your smartphone and other personal devices. This will make it more difficult for thieves to access your information if your device is lost or stolen.

By following these tips, you can help protect your personal information from getting in the wrong hands.

For more information, please check out this additional resource:

https://www.cisa.gov/cybersecurity-awareness-month

Quarterly Market Review – Q3 2021

By | October 6th, 2021|Dimensional Fund Advisors, Markets, Quarterly Market Review|

This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.

The report also illustrates the impact of globally diversified portfolios and features a quarterly topic ,”The 50-Year Battle for a Better Way to Invest.

Click HERE to download a copy of the report. 

q3-quarterly-market-review_portrait-version (1)

 

U.S. Performance Dashboard – September 2021

By | October 4th, 2021|Markets|

  • Mounting fears of inflation, an ongoing Congressional budget impasse, and anticipation of a reduction in Fed liquidity provision all weighed on U.S. equities in September. For the third quarter as a whole, the S&P 500® posted a gain of 1%, while mid and small-caps declined, as the S&P MidCap 400® and the S&P SmallCap 600® fell 2% and 3%, respectively. Volatility rose, as the VIX® closed at 23.14.
  • Momentum and Growth led in Q3, while High Beta (unsurprisingly) and some yield-focused factors were among the weakest performers.
  • Most sectors posted gains, with Financials in the lead, up 3%. Energy made a dramatic turnaround in September, rising 9% for the month and substantially diminishing its quarterly loss.

September 2021 Analysis

August Market Commentary: A Turning Point?

By | September 9th, 2021|Markets, Volatility|

August Recap and September Outlook

The equity markets advanced during a month when the Delta variant ravaged some states, which reinvigorated flagging vaccination rates. Positive developments, such as a bi-partisan infrastructure package, were overtaken in the news cycle by the tumultuous exit from Afghanistan. The month finished with Hurricane Ida’s one-two punch to the South and the Northeast. The big miss on August employment numbers (released September 3rd) underscored the potential for damage that the Delta variant may hold for our still-recovering economy.

Lets Look at Some Highlights:

The Month Opened with Good News

The services sector, which at 67% of GDP is a huge part of our economy, has lagged throughout the recovery as the impact of shutdowns, supply chain issues, and labor shortages hampered the ramping back up. The ISM Services PMI index, which tracks non-manufacturing industries, jumped to 64.1 in July, a big increase over 60.1 in June. All 17 services industries reported growth, and the ISM Services Employment index rose to 53.8, from 49.3 in June, suggesting hiring conditions were improving.

But Consumer Confidence Told a Different Story

The University of Michigan consumer sentiment index was a big downside surprise. U.S. consumer confidence fell in August to the lowest level since 2011, as fears about the Delta variant and the reopening of the economy continued to spread. The consumer sentiment index fell 13% from the July reading to 70.2. Economists surveyed by Dow Jones expected a reading of 81.3 for August.

Employment Missed Big – and Services Took the Hit

The consensus expectation for employment was that the economy would add 733,000 jobs in August, building on a very strong July number. The actual number of jobs added back was 239,000. The U.S. Bureau of Labor Statistics reported that after averaging growth of 350,000 jobs per month for the last six months, employment in leisure and hospitality was flat. This sector remains down 10% from the pre-pandemic level of February 2020.

Equity Markets

  • The S&P 500 was up 2.90% in August bringing its YTD return to 20.41%
  • The Dow Jones Industrial Average rose 1.22% for the month and was up 15.53% YTD
  • The S&P Mid-Cap 400 increased 1.83% for the month resulting in a 19.36% YTD return
  • The S&P Small Cap 600 gained 1.90% in August, raising the YTD return to 22.15%.

Source: All performance quoted from S&P Dow Jones Indices.

The idea of a “new high” is beginning to get a little jaded. The S&P 500 has posted 53 new closing highs this year. The record year to beat is 1995, with 77 new closing highs. The month of August had 22 trading days, and the market posted new closing highs on 12 of them.

Ten of the eleven S&P 500 sectors gained, with Financials recovering from a loss last month to post the best performance, and Communication Services following right behind. Real Estate is the best performing sector in the index YTD. Energy declined, but less than last month, and is still up 26.60% YTD.

Bond Markets

Fed Chairman Powell got into his thinking about inflation at the Kansas City Fed’s annual Economic Policy Symposium in Jackson Hole. Powell is wary of getting out in front of the economy with policy decisions that take time to take hold. The caution comes from a fear that tightening in response to temporary factors could result in a situation where an “ill-timed policy move unnecessarily slows hiring and other economic activity.”

Powell also clarified the timing around tapering off the $120 billion of monthly bond purchases; he indicated a timeline more aligned to the end of the year. This is largely expected to result in rate increases, and Treasuries rebounded somewhat, but yields remain at low levels, compared to forecasts for close to 2% that we saw at the beginning of the year.

Apart from high yield, most fixed income sectors were negative for the month.

The Smart Investor

The August employment report is the first to include the damage from the Delta variant. With the surge still uncontrolled and the disruption of Hurricane Ida, it doesn’t bode well for the recovery to able to continue at the pace we’ve seen so far this year.  Companies are revisiting back-to-work timelines considering the virulence of the Delta strain, and it’s clearly have an impact on travel, vacation and resuming normal life.

In his remarks in Jackson Hole, Chairman Powell highlighted the strong July employment report as the basis for the recovering economy. With the downside surprise in August employment and the likelihood that September may also be lackluster, both the timeline for tapering and the timeline for rate increases may be lengthened. For investors, while equity markets are still booming right along, volatility is likely to increase, and bond markets may well continue to struggle. With four months left in the year, the Bloomberg Barclays U.S. Aggregate Bond Index is still in negative territory.

Reviewing portfolio assets to ensure that your income needs are met and that you can withstand potential volatility always makes sense. With the strong gains this year, it may also make sense to tune-up asset allocations, as outperformance may have pushed risk parameters out of alignment.

This work is powered by Seven Group under the Terms of Service and may be a derivative of the original. More information can be found here.
The information contained herein is intended to be used for educational purposes only and is not exhaustive.  Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return.  If applicable, historical discussions and/or opinions are not predictive of future events.  The content is presented in good faith and has been drawn from sources believed to be reliable.  The content is not intended to be legal, tax or financial advice.  Please consult a legal, tax or financial professional for information specific to your individual situation.
This content not reviewed by FINRA

U.S. Performance Dashboard – August 2021

By | September 1st, 2021|Markets|

  • U.S. equities continued to march upward in August, climbing above 20% YTD. The S&P 500® posted a gain of 3% for the month, as the Fed’s dovish tone, combined with strong earnings reports, buoyed the market. While mega caps led, mid and small caps also posted gains, with the S&P MidCap 400® and the S&P SmallCap 600® both up 2%. Volatility declined, as the VIX® closed at 16.48.
  • All factors posted gains. “Risk-on” factors (e.g., Momentum and Growth) led in August, with “risk-off” factors (e.g., Low Volatility and High Yield) lagging.
  • All sectors except Energy posted gains, with Financials in the lead, up 5%.

 

August Market Update
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