Energy

Let's take a closer look at recent activity in US Treasuries. The yield on the 10-year note ended January 17, 2020, at 1.84% the 2-year note ended at 1.28% and the 30-year at 2.29%.

We analyze the historical reactions of various assets to past U.S. military actions in the Middle East to provide insight into what the current U.S.-Iran tensions may mean for markets in 2020. We examine the S&P 500, crude oil, gold, U.S. dollar, and U.S. 10-year Treasuries.

Now is the season for forecasting as one decade turns into the next. Pundits and market prognosticators too often treat nowcasts as true market forecasts, which can be very dangerous for investors’ financial health. Our forecasts for the decade ahead rely on empirically driven quantitative models.

Tensions in the Middle East and North Africa have once again brought geopolitical risks to the forefront of oil markets.

Emerging markets ended 2019 on a high note, but can the momentum continue? Our emerging markets equity team weighs in, highlighting the market news and events it has an eye on.

Month-over-month nominal sales in December increased by 0.3% (0.33% to two decimal points). Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, increased by 0.1% (0.12% to two decimal points).

Franklin Equity Group’s Fred Fromm gives his take on global oil markets amid elevated tensions between the United States and Iran.

One of our favorite financial writers is Bloomberg’s John Authers. He recently wrote a tongue-in-cheek article about an investment company by the name of Hindsight Capital. In hindsight, or in the company’s case, Hindsight Capital, he talked about what the firm did and what you should have done over the last ten years to produce outstanding returns.

A new decade, seismic shifts and the importance of diversification.

Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.

Read the latest Weekly Headings by CIO Larry Adam.

A restrained reprisal by Iran following the assassination of its top military commander has led markets to conclude that the latest threat to the global economy has been removed. But just because Iran and the United States have so far avoided a full-scale war does not mean that markets are out of the woods.

The Bureau of Labor Statistics released the December Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.29%, up from 2.05% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 2.26%, down slightly from the previous month's 2.32% and above the Fed's 2% PCE target.

The substantial economic calendar features inflation reports and housing, but also includes Michigan sentiment, the Fed’s Beige Book, and NFIB sentiment survey. We will also get the first earnings reports for the Q4 season.

What really is a bet? How does one make decisions under uncertainty and with imperfect information? In his latest memo, Howard Marks weaves his own life story to discuss the process of thinking in bets, parses the world of gambling, and draws parallels between investing and games of chance.

This is the year-end letter I sent to our clients. Feel free to adapt it for your own use.

On Tuesday of this week, the U.S. dollar experienced a “death cross,” a bearish signal that takes places when an asset’s 50-day moving average crosses below its 200-day moving average. We haven’t seen this from the greenback since May 2017.

The best environment would be moderate U.S. growth, a sideways U.S. market and a weaker U.S. dollar.

This commentary has been updated to include this morning's release of Nonfarm Employment. December's 145K increase in total nonfarm payrolls had revisions that resulted in 14K fewer jobs than previously reported. Annual revisions going back to 2015 were made. The Investing.com consensus was for 164K new jobs and the unemployment rate to remain at 3.5%.

Tensions between Iran and the United States brings a stressful start to 2020.

A year ago, the baseline scenario for the economy was moderate growth, but with an elevated level on uncertainty, with risks skewed to the downside. Trade policy uncertainty and slower global growth were dampening factors, but Fed policy was supportive. Investors were willing to look beyond the uncertainty.

Global stock markets rallied in 2019, defying political and macroeconomic uncertainty. Will investors be as fortunate in 2020? Since many risks remain, maintaining style diversity and finding investing themes that are detached from volatility drivers will be important ingredients for equity allocations.

Trump's decision to take out the Islamic Republic's most celebrated military leader, Qassem Soleimani, was a timely reminder that we face many problems. An armed conflict between the US and Iran is clearly one of them but far from the only one. Here is a list of the ones we worry mostly about, going into 2020.

To be honest it shouldn’t matter where you stand on the climate change debate, the way I see it these are words that we should all take seriously, if for no other reason just in case. It is a call to action that we ignore at our own peril and that of untold future generations to come.

One of the exciting buzz words among advisors and institutional investors is ESG, which stands for Environmental, Social and Corporate Governance. This subject is almost always granted a wonderful panel reception at any conference our firm attends as it is the topic du jour.

Expect a steeper yield curve, according to Jeffrey Gundlach. Investors should be “defensive” with respect to long-term bonds. Gold will go up, inflation will be subdued, there is a 30% to 35% chance of recession and – his “highest conviction” idea – the dollar will weaken. His most surprising prediction was who will be the Democratic nominee.

The last couple of years have been remarkable ones for yields. The 10-year note hit its historic closing low of 1.37% in July of 2016 and then rose 55 BPs to 1.92% as of the December 31 close.

The Ten Surprises of 2019 worked out plenty well. While we don't go through this process with the objective of getting a high score, knowing that you have been able to anticipate some of the generally unexpected events that are going to influence the financial markets during the coming year is gratifying.

It has been a great year for equity investors. The S&P 500 index posted a 31% annual return, the Dow 25%, and the NASDAQ a spectacular 39%. More than $6T of equity paper wealth was created for domestic investors this year alone.

The outlook for the global economy has improved over the past three months, but there may be less capacity to combat a recession when it comes. We discuss seven key macroeconomic themes we expect in 2020 and implications for investors.

The longest economic recovery on record continues, with January being the 128th consecutive month of growth. The first seven years, from mid-2009 through 2016 saw average real GDP growth of 2.2%. Since the start of 2017, US real GDP growth accelerated, to an average annual growth rate of 2.6%, while the unemployment rate now stands at the lowest level in 50 years (and is likely headed lower).

Following another year of strong returns, Emerging Markets (EM) fixed income has outperformed developed bond markets by a significant margin over the past four years. The outperformance is likely to continue in 2020, because EM fixed income remains attractively priced both in absolute terms and relative to bonds in developed markets as well as under-owned and well-supported by an improving fundamental backdrop.

The scientific evidence increasingly indicates that the world may soon reach a point of no return regarding climate change. So, rather than worrying almost exclusively about economic and political inequality, rich-country citizens need to start thinking about how to deal with global energy inequality before it’s too late.

Brace yourselves. In an unexpected move on January 3, the United States carried out a drone strike that killed a key military figure in Iran, General Qassem Soleimani. Soleimani was the head of the Iranian Revolutionary Guard Corps' Quds Force, the architect of Iranian military influence across the Middle East and the second most powerful figure in Iran after the Grand Ayatollah Khamenei.

I’m optimistic that the U.S. will stand as a beacon of freedom and opportunity in the 2020s and beyond, but with more and more younger Americans supporting socialism over capitalism, I believe it prudent to proceed with caution. That means making sure you’re holding some gold in your portfolio.

Investor optimism remained strong in the first day of trading 2020, but news that the US. Military had assassinated an Iranian general sent share prices lower. The price of oil rose and bond yields fell in response to heightened uncertainty.

What can investors expect this year? Continued economic expansion, unaltered interest rates and new equity highs, says CIO Larry Adam.

In response to a standing request, here is an updated comparison of four major secular bear markets. The numbers are through the Tuesday, December 31.

What were the top financial news stories of 2019? To answer that question, Frank looks back at his five most visited articles from the year that was.

We’re still missing a lot of information on the fourth quarter, but recent reports paint a picture of moderate growth in the overall economy. That picture will become clearer as December data arrive next month. The economy was mixed in 2019, and should remain mixed into the first half of the year.

The economic calendar is very light and interrupted by the mid-week holiday. We can always see volatility when volume is low, but many market participants will be on an extended holiday. This includes much of the A-team punditry, but someone will be left to fill the airtime.

Boris Johnson’s victory bodes well for Trump in 2020. The British PM’s Conservative party toppled the so-called “red wall,” winning seats across rural, working-class North and Midlands counties that had for decades been considered safe Labour territory.

Stock market participants remained optimistic, despite impeachment. The economic data were mixed, but consistent with moderate growth in the overall economy.

Personal Income (excluding Transfer Receipts) in November rose 0.63% and is up 4.3% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 0.47%. The real number is up 2.8% year-over-year.

The Fed’s policy statement, the revised dot plot, and Chair Powell’s press conference reaffirmed expectations that monetary policy will remain on hold for the foreseeable future. That doesn’t mean that rates won’t be changed. The Fed stands ready to provide further accommodation if conditions warrant. However, the hurdle for a rate increase appears to be relatively high.

Once upon a time—of all the good days in the year, on Christmas Eve—old Ebenezer Scrooge sat busy in his counting-house. Rise from your bed, O Investor and hear first from our very own Ghosts of Investing Past, Present and Yet to Come.

I’ve learned my goal-oriented focus had a negative impact on my happiness. It took an artist and a lizard to show me a better way.

Hennessy Funds’ CIO and veteran portfolio manager, Neil Hennessy, will explain why he believes the current bull market will continue into 2020. He and his tenured investment team will discuss what’s driving energy, utilities, and financial stocks and the opportunities they are finding in those sectors.

You will learn why:

• Fundamentals should prolong the current bull market
• Natural gas has grown to be a fuel of choice in the U.S.
• U.S. energy supply growth is altering the global supply and demand balance
• The banking industry is healthy and the opportunity in non-bank financials

The presenters will be available after the presentation to answer attendees' questions live.

In a recent appearance on CNBC, we were asked about what we do with stocks we own which have run-up recently. They asked us how we plan to handle Disney (DIS), JPMorgan (JPM) and Target (TGT) after those stocks enjoyed strong price increases this year.

The economic calendar is especially important. Several housing reports, JOLTs, and the final estimate for Q3 GDP lead the list. Despite this, I suspect a powerful draw from the Gregorian calendar. It is time for those annual forecasts!

The Federal Open Market Committee left short-term interest rates unchanged and indicated that the current stance of monetary policy was “appropriate” to support economic growth, a strong job market and inflation near the Fed’s 2% goal. The revised dot plot showed that 13 of 17 senior Fed officials anticipate no change in rates in 2020.

Predicting a major economic or financial event—whether that’s a recession, market downturn or even your own retirement—requires that you also take action. Otherwise your prediction was meaningless.

A review of last month’s market-moving events across countries and asset classes.

Did you know that more than $12 trillion in assets under management are engaged in one or more strategies of sustainable investment in the United States? This comprises more than 25 percent of the professional managed assets across the country and is a 38 percent growth from 2016 figures.

One way of thinking about the share price of a common stock is the price range as a teeter-totter. When the psychology of investors is very negative, enthusiasm for the company hits the ground. On the other end, when everyone is in love with a company’s shares, their end of the board can’t seem to get any higher. Where is the board end hitting the ground currently and who is stuck up in the air on a psychological high?

Research Affiliates discusses why they believe value investing is still alive and well and explains how changes to the display of expense ratios seek to enhance clarity for investors.

Environmentally minded investors, take note: a controversial new bond format that links a company’s sustainability goals to its bottom line could be a game changer in building a more sustainable future.

Positive returns across asset classes in 2019 may limit tax loss selling in closed-end funds, but we see potential long term value in select sectors where investors can still buy assets at a discount.

Over the course of 20+ years, families have been bamboozled into spending trillions on top-end colleges, while overlooking the fact that it's actually the academic major that is far more important.

While many risk assets have rallied in 2019, the lower-rated tranches of collateralized loan obligations (CLOs) have weakened. Is this a sign that the credit cycle is turning?

While the bulls are certainly hoping the “cash hoard” will flow into U.S. equities, the reality may be quite different.

One of the best ways to “supercharge” your gold position is with precious metal royalty and streaming companies. Think Franco-Nevada, Wheaton Precious Metals, Royal Gold and others.

We don’t have much time to get our house in order, either in the US or globally. Everything I’ve said today applies, to various degrees, throughout the developed world. Thinking that 2% inflation or zero interest rates coupled with massive deficits will somehow help is beyond wishful thinking.

As investors ponder the prospects for the Middle East and North Africa (MENA) region, Franklin Templeton Emerging Markets Equity’s Bassel Khatoun and Salah Shamma take stock of the investment landscape. They highlight some of the market developments in Saudi Arabia, Kuwait, Egypt and the United Arab Emirates (UAE) that have caught their attention.

The S&P 500 is up more than 25% year to date and has notched 26 record highs since January.

We have reached a stage in the cycle where you need to think out of the box in order to deliver respectable returns. Investing like most of us have done in the great bull market will not deliver returns anywhere near the levels we have enjoyed over the past 35-40 years. This month’s Absolute Return Letter offers a solution.

Yes, there is a downturn in the Global economy, numerous factors are combining together in what seems like a perfect storm of negativity to depress the global economy and quell even the hardiest of investors from any attempts at risk taking. Nothing could, or may I say should, be farther from the truth.

As Thanksgiving comes to an end, and the busy holiday shopping season begins, here are some need-to-know numbers you may have missed from this past week.

As we head into 2020, investors should be cautious in assuming that the return of central bank balance sheet growth means stocks will follow along. The real driver of the stock market in 2020 may be the outlook for growth tied to prospects for a comprehensive U.S.-China trade deal, which may revive growth in manufacturing and corporate earnings.

Like particles in a super collider, opposing forces of American culture smashed together this past weekend on a historic football field in Connecticut. And like a physics experiment, the resulting impact shed light on the state of the country and provides us all with a ready framed discussion for the Thanksgiving weekend.

The economic calendar is loaded with data and we have a holiday-shortened week. In some circumstances the many economic reports and the Washington stories would dominate. This week the market and economic context suggests a different theme.

U.S. stocks are “fairly valued,” according to Jeremy Siegel. But in our annual interview, he also warns of two major risks to the economy and to investors.

Although the PMI report is encouraging, there’s still reason to remain somewhat cautious long-term. The latest accounting of global debt levels was just released, and the news might be so bad that it’s good—for gold prices, at least.

Key Takeaways -Plentiful Jobs Harvest Should Help Economy Trot On -Low Turkey Prices Means More to Gobble Up -All S&P 500 Sectors Part of The Positive Parade