Commentary

The Plumbing Clogged, but Do Not Throw Out the Baby With the Bath Water

According to John Sheehan, the recent selloff in Investment Grade fixed income was exacerbated by technical factors. In his view, regulatory changes implemented after the 2008 crisis removed a critical shock absorbing mechanism that caused spreads to spike.

Commentary

Equity Investment Outlook

As we have written several times over the last 10 years, inflation has been kept down by the twin forces of globalization and technology (particularly digital technology). These forces are not going away, and in fact, digital technology is becoming increasingly pervasive throughout the economy, dramatically increasing efficiency and lowering costs in industry after industry. We do not see this trend abating.

Commentary

Headwinds Are Blowing, But the Ship Sails Onward Total Return Market Outlook

2019 proved to be a very strong year for almost all financial assets, as equities and bonds rallied in tandem. The Federal Reserve (the Fed) was compelled to play defense against a weaker global economy (particularly in Europe) and continued uncertainty related to the trade dispute between the U.S. and China.

Commentary

Are We There Yet?

2019 was a very good year for investors. Surprisingly, both offensive and defensive sectors did well, which is a marked about-face compared with 2018. We believe this is mostly due to a central bank shift to policy easing, especially in the U.S., coupled with a relatively steady economy.

Commentary

When Evaluating Venture-Backed Initial Public Offerings, Patience Is a Virtue

The venture capital industry has created a robust pipeline of new public companies, but in our view discipline is the key to finding the best opportunities.

Commentary

When Evaluating Venture-Backed Initial Public Offerings, Patience Is a Virtue

The venture capital industry has created a robust pipeline of new public companies, but in our view discipline is the key to finding the best opportunities.

Commentary

How Low Can Rates Go? Total Return Market Outlook

The fixed income market benefited in the third quarter as both global growth fears and the trade dispute continued to drive uncertainty in financial markets. With Europe remaining in an economic rut and China showing signs of slowing from the protracted trade conflict, investors sought the safety of U.S. Treasuries, pushing up prices and reducing yields.

Commentary

Snoozefest or a Seismic Shift?

Looking at the beginning and ending levels for equities and fixed income during the third quarter, one might erroneously conclude that it was another summer snoozefest. However, there was volatility during the quarter as the equity markets shrugged off a sloppy August awash in second quarter earnings disappointments and staged a solid comeback rally through September.

Commentary

Equity Investment Outlook

During the third quarter, the stock market, as measured by the S&P 500 Index (S&P 500), posted a modest 1.70% gain, while the U.S. economy enjoyed a continuation of the recovery begun in 2009. Both achievements were remarkable...

Commentary

Aligned Incentives: Our Key to Navigating the Diverse High Yield Market

In our experience, family-owned private firms and small-to-medium sized public companies are most likely to borrow responsibly and prioritize bondholders ahead of other investors.

Commentary

Investment Grade Credit Report: An Impressive First Half

According to John Sheehan, accommodative Fed policy and favorable market technicals drove the investment grade credit market’s strong start to 2019.

Commentary

Catching the Wave: Why Secular Growth Matters

In our view, the specific market dynamics that influence a company's sales growth prospects have a greater impact on equity returns than the overall direction of the economy.

Commentary

Heads I Win, Tails I Win Total Return Market Outlook

Fixed income markets will be hard pressed for an encore performance of the second quarter. Risk assets of all flavors rallied in conjunction with Treasury yields falling – whether this is causal or simply concurrent remains to be seen.

Commentary

Do My Eyes Deceive Me? Strategic Income Outlook July 2019

The financial press is replete with stories about what possible calamity awaits if the Federal Reserve (the Fed) does not cut the fed funds rate soon. Services that track the odds of a cut (at this writing) are calling with near certainty for one in July.

Commentary

Equity Investment Outlook July 2019

During the second quarter, the stock market continued to rebound from last year’s fourth quarter swoon. This reflected the recognition that neither the trade war nor Federal Reserve (Fed) monetary policy was about to torpedo the long, slow recovery from the 2008 housing debacle.