• The Economy Is Rocking, but Badly Designed Policy Distorts Behavior

    Investors were shocked by the “meager” 266,000 increase in payroll employment despite very widespread evidence that the economy is roaring back. It seems very clear that many workers prefer to take generous unemployment benefits rather than return to work, even as firms struggle to hire the labor they need to operate, even when they offer…

  • Will the Dollar Always be Mighty?

    Our ACM International ADR and Global strategies feature unique, high-quality international companies, many of which do not have a U.S.-based equivalent or competitor. This is the most important reason for investing in ADRs in my mind, and given that the overwhelming majority of our clients are U.S.-based, this foreign-focused strategy expands a typical investor’s opportunity…

  • What’s Different This Time?

    The S&P 500 continues to make new highs and the economy is reopening at a rapid pace. A great deal of this is likely due to the successful Covid vaccination rollout – everyday we’re getting that much closer to normal. As well, the Fed’s current accommodative monetary policies remain firmly entrenched. And Congress just passed…

  • Infrastructure and Productivity

    President Biden recently announced the outline of his much-anticipated American Jobs Plan, commonly referred to as the “Infrastructure Bill”. Despite a name that aspires to benign bipartisanship common to pieces of legislation, it has unsurprisingly failed to avoid the level of debate and scrutiny one would expect of a $2.3 trillion government spending package. One…

  • How investors can approach the semiconductor stocks

    Click yellow play button to watch here or use this link to open. Despite the global chip shortage, a number of semiconductor stocks were up sharply year-to-date as of Monday morning, outperforming the S&P 500. JoAnne Feeney, partner and portfolio manager at Advisors Capital Management, joined “Squawk Box” on Monday to discuss how investors can…

  • All Investment Grade Fixed income is NOT created equal

    Many fixed income investors with traditional investment-grade bond portfolios were likely disappointed by their performance in 1Q’21. This is understandable, because for the 5 years through 2020, the average annual investment-grade bond returned over 6.5%, whereas in 1Q, that return was -4.6%. Investors may not appreciate that the average investment-grade bond has a maturity of…

  • Consumer staples are ‘hidden gems’ in the growth trade: Portfolio manager

    Advisors Capital Management Partner and Portfolio Manager, JoAnne Feeney, said investors were too quick to shift from growth to value, adding that there are several lucrative growth opportunities in places where many aren’t looking- consumer staples. Click here to watch on BNN Bloomberg

  • Chip Shortage Will Last Into 2022, Says Advisors Capital Management’s Feeney

    JoAnne Feeney, Advisors Capital Management Partner, discusses the chip shortage and sees it lasting into 2022. She speaks with Emily Chang on “Bloomberg Technology.” (Source: Bloomberg)

  • S&P Closes at a Record as Fed Plans to Stick with Easing Policy

    The S&P narrowly hits a record close on Wednesday as stocks ended the day mixed. Chuck Lieberman, Co-Founder and Chief Investment Officer at Advisors Capital Management, says expectations for the economy continue to rise as the U.S. economy continues to reopen.

  • Advisor Capital’s JoAnne Feeney on the recovery trade

    Click yellow play button to watch! JoAnne Feeney, Partner and Portfolio Manager at Advisors Capital Management, joins Worldwide Exchange to discuss how she is playing the recovery trade, and what sectors stand to benefit.

  • Full Sprint!

    The economy is now in full sprint, after being “Off to the Races”, as we wrote a month ago. Payroll jobs surged by 1.07 million in March, including upward revisions to prior months, and additional mega-sized jobs gains are likely in the coming months, as vaccinations continue to roll out rapidly and the economy reopens….

  • Gold: The Historical Reserve Currency

    As humans evolved from small groups of nomadic hunter-gatherers towards larger and more complex societies, they were inevitably confronted with the need for mediums of exchange. Two forms of money arose from this need: representative money and commodity money. Representative money, which pre-dates the invention of coinage, is money that has no intrinsic value but…

  • The Close Digital Full Show (03/23/2021) – Dr. JoAnne Feeney

    Caroline Hyde & Taylor Riggs bring you the latest news and analysis leading up to the final minutes and seconds before the closing bell on Wall Street and tackle the testimonies of Powell and Yellen, Regeneron’s antibody cocktail and GameStop earnings Guests Today: Joanne Feeney of Avisors Capital Management, George Yancopoulos of Regeneron, James Gellert…

  • The Future of Cryptocurrency

    Given the seemingly national obsession with Bitcoin I’ve had to become more of an expert on the king of digital coin and other cryptocurrencies like Ethereum, Ripple, Litecoin, Tether, and Dogecoin. Equity investing is the heart of my comfort zone, but my colleague Randy Coleman’s commentary Is It Really Different This Time? last week compelled…

  • Is It Really Different This Time?

    This week marks a year since pandemic lockdown altered our lives forever. To say it has been a strange year would be a gross understatement. It has been extraordinarily strange. Everything changed. Work, travel, living arrangements, simple trips to the store, doctor visits, movies, coffee shops, football games, baseball games, birthday parties, you name it,…

  • Invest in growth at a reasonable price: Advisors Capital Management’s Feeney

    Advisors Capital Management Partner and Portfolio Manager JoAnne Feeney says investors should put money in growth names that have good cash flow and multi-year drivers. She notes companies like Apple and Texas Instruments have exposure to 5G and electric cars which make them long term investing opportunities.

  • CNBC – Dr. JoAnne Feeney, 03-10-2021

    Click yellow play button to watch! JoAnne Feeney of Advisors Capital Management and Sarah Kunst of Cleo Capital discuss the big rally in tech and momentum stocks following the recent pullback, and whether these names will continue to hold favor with investors.

  • Off to the Races

    The larger than expected increase of 379,000 jobs in February (and a good-sized upward revision to prior data and another slight decline in the unemployment rate to 6.2%) suggests that the economy is already lifting off after shutdowns due to the pandemic. We were expecting this to start in March or April. Now, it appears…

  • yahoo!finance – Market Recap: Wednesday, March 3

    Stocks traded mixed Wednesday after sliding a day earlier, as investors weighed optimism over widespread post-pandemic business reopenings against concerns over economic overheating. The Dow rose while the S&P 500 fell in afternoon trading, while Treasury yields resumed advancing across the curve. The yield on the benchmark 10-year Treasury note closed in on 1.5%. A…

  • Tech seeks a comeback amid rising rates

    Click yellow play button to watch! JoAnne Feeney, Partner and Portfolio Manager at Advisors Capital Management, joins Worldwide Exchange to discuss the rebound the tech sector is looking to make as rising yields spook investors.

  • Stocks Close Higher as S&P Has Best Day Since June

    Stocks started off the week on a positive note, closing higher across the major indexes following good news on stimulus and vaccine news. JoAnne Feeney, Partner and Portfolio Manager at Advisors Capital Management, says investors have to really think about who the big winners were in 2020 and how they could really change this year…

  • Fundamental Shift in Market Dynamics: Are You Ready?

    Many investors benefitted last year from the sharp appreciation in stocks of popular work-from-home companies represented by the FANG stocks (FB, AMZN, NFLX, GOOG), while those looking for income were left behind. This year is off to a very different start as last week’s gyrations made clear, and rightly so. FANG+ stocks (ETF: FNGS )…

  • Sell-off is result of investors looking to diversify, says Advisors Capital Management’s Feeney

    Click yellow play button to watch! Joanne Feeney, Advisors Capital Management partner and portfolio manager, and Loreen Gilbert, Wealthwise Financial CEO, join ‘Power Lunch’ to discuss the market sell-off and if it’s more focused on tech or high-growth stocks. Click here to watch

  • Are Stocks Overheating?

    Front and center are two topics that seem to be on investors’ minds: the equity market’s current valuation given its all-time high price level and are interest rates and inflation about to inflect higher. The Biden administration appears to be set on providing swift and significant pandemic relief using the budget reconciliation process that only…

  • Alan Greenspan Revisits Irrational Exuberance

    The meteoric rise in the stock price of GameStop seems to have brought up the question of irrational exuberance in the markets. Irrational exuberance is a state of investor psychology, when the pendulum between fear and euphoria has swung too far towards the latter. In other words, stock prices are the aggregation of the myriad…

  • Recovery-themed stocks set for a boom

    Advisors Capital Management Partner and Portfolio Manager JoAnne Feeney says the high dividend paying stocks in COVID-beaten sectors have seen encouraging earnings in the first quarter of 2021. She says sectors like auto manufacturing are able to raise prices because of a chip supply crunch for electric vehicles. Click here to watch

  • The Impact of Covid in Europe

    Target2 (Trans-European Automated Real-time Gross Settlement Express Transfer System) is the clearinghouse for the Eurozone’s central banks. It is a centralized payment system which enables both central and commercial banks to process euro payments in real-time. Target2 replaced the Eurozone’s original “Target” system beginning in 2007 as a more secure and efficient real-time gross settlement…

  • Fixed Income is Sleepy, But Investors Need to Wake Up

    Too many fixed income investors surprisingly do not pay close enough attention to their fixed income portfolios, mostly because they think their investments are safe and they think they have few other options for a safe portfolio. While fixed income yields are currently near record lows, investors can do far better with a mix of…

  • GameStop and Other Forms of Entertainment

    The roiling of the equity market by individuals using Reddit to act collusively in stocks like GameStop, AMC Entertainment, Blackberry, and numerous others is likely to continue for the near-term. Many hedge funds that are short these stocks will be forced to cover their shorts and will suffer large losses, which implies sizable profits for…

  • Is a U.S.-China War over Taiwan Imminent?

    If you believe some of the recent headlines, yes. For example, Forbes published an article titled Those Bombers China Sent Toward Taiwan? They Were a Dress Rehearsal For War. The piece discussed military tactics China would use to attack and unify Taiwan. The article suggested a military invasion is inevitable and that a massive Chinese…

  • Could the Recovery Be Too Strong?

    Monetary policy remains highly accommodative, as unemployment is still high in the aftermath of a sharp, deep recession, while inflation remains below the Fed’s 2% plus objective. Many people fear that the Fed’s injection of trillions in liquidity will cause inflation to surge. We do not see rising inflation as a serious risk this year,…

  • Surge!  Plunge!  A Look at Inauguration Day Performance

    The word of the week is “inauguration.” Wednesday is inauguration day, bringing with it all the pomp, circumstance and government transition associated with it. The United States will have a new president and vice president and how will markets will react? (Quiz time!): Stocks will A. Surge; B. Plummet; C. Remain Unchanged; D. None of…

  • A Bumpy Ride, But Recovery is Coming

    Last week was full of surprises, though by looking at the market’s performance you wouldn’t know it. Between the attack on the Capitol, the now 50-50 split in the Senate, and the first (net) loss in jobs since April, one might have expected a pullback in stocks. Yet last week, the major indices continued to…

  • The Weight of GDP – CONTINUED

    The correlation between growing economic activity and growing weight of real GDP apparently peaked in the late 1970s. In recent years, the conceptual contribution to economic activity has reflected importantly the explosive growth in information gathering and processing techniques, which have greatly extended our capability to substitute ideas for physical volume. In the years ahead,…

  • Vaccine, low interest rates, upcoming stimulus are driving markets: Expert

    Dec. 18, 2020 – 8:36 – Payne Capital Management President Ryan Payne, Surevest CEO Rob Luna and Advisors Capital Management partner JoAnne Feeney provide insight into today’s markets. Click to watch on Fox Business

  • A Shot in the Arm

    The pace of the economic recovery is slowing, as governments close restaurants and other facilities to stymie spread of Covid. But approval and widespread distribution of at least two vaccines ensure the economy will soon get a booster shot (figuratively) even as the population gets a booster shot in the arm (literally). Within 6 months,…

  • There’s Plenty of Reason for Optimism on Stimulus, Investor Says

    Chuck Lieberman, Partner and CIO at Advisors Capital Management, joined Cheddar to discuss why he’s optimistic a stimulus deal could get done sooner rather than later. Watch on Cheddar TV

  • The Market Has Rallied Huge. What’s Next?

    COVID-19 continues to wreak havoc, as cases spike throughout the country during this holiday season (chart below). California, responsible for about 15% of US GDP, has recently issued the widest and most restrictive stay-at-home orders. Hospitals throughout the country are running out of ICU beds available for COVID-19 patients. And yet the S&P 500 and…

  • S&P and Nasdaq Close at Record High as Pfizer Rolls Out Vaccine in UK

    The S&P and Nasdaq closed Tuesday’s session at a record, while the Russell 2000 also records a record close on a day when Pfizer rolls out its coronavirus vaccine in the UK. JoAnne Feeney, Partner & Portfolio Manager at Advisors Capital Management, says the market is building in a lot of hope and expectation for…

  • Many Fixed Investors Are Playing With Fire

    Many investors do not realize they are playing with fire in the fixed income portion of their portfolios by choosing to own common, high quality investment grade bonds. The typical, easy to construct investment grade portfolio of brand name bonds will leave investors with low yielding assets that have significant interest rate risk exposure. These…

  • CNBC Closing Bell 12/02/2020 with Dr. JoAnne Feeney

    ACM Portfolio Manager, Dr. JoAnne Feeney, on CNBC’s Closing Bell.

  • Japan – The Times They Are A-Changin’

    The Bob Dylan anti-establishment, frustrated-youth song that became the anthem for change during the U.S. civil rights movement could also apply to corporate Japan today. Japanese equity investors, frustrated with decades of poor returns, are calling for significant change. It’s beginning to happen. It may seem surprising for us to project better equity returns from…

  • The Weight of GDP

    For generations Americans reveled in acres upon acres of massive motor vehicle assembly plants, ever taller skyscrapers, enormous dams, and longer bridge spans. I never ceased being in awe of America’s industrial might in the 1950s as I drove along the south shore of Lake Michigan toward Chicago, passing one huge steel mill complex after…

  • ACM: Who We Are

    Advisors Capital Management was established as an all-cap equity and fixed income manager to provide investors with the most personal and customized portfolio management solutions possible. Our people, resources and commitment are solely focused on the personal and financial objectives of our clients. Our separate account management platform offers investors a variety of strategies, each…

  • Buy, sell or hold: Coronavirus-related stocks

    Nov. 11, 2020 – 8:46 – Kaltbaum Capital Management President Gary Kaltbaum, Ladenburg Thalmann Asset Management CEO Phil Blancato and Advisors Capital Management portfolio manager JoAnne Feeney discuss today’s markets and play a game of ‘Outhouse or Woodshed’ about coronavirus-related stocks. Click here to watch

  • A Second Vaccine; It’s A New Game

    Moderna’s vaccine is reported to be 94.5% effective, making two vaccines showing higher efficacy than most expected. While results from both Pfizer and Moderna are preliminary, these early results are a very positive sign. Equally importantly, we should have enough doses of these two vaccines in the first half of 2021 potentially to vaccinate the…

  • The End is in Sight…

    The big news this morning is changing the investing landscape and adding to the positive market response to the election results. At 90% efficacy in the first release of a late-stage, large study trial, Pfizer’s vaccine candidate is giving investors renewed hope of controlling COVID and getting life back to normal. Not only are travel…

  • Fiscal policy and trade wars will see a lot of relief under Biden, portfolio manager says

    JoAnne Feeney, partner and portfolio manager at Advisors Capital Management, and Barbara Reinhard, head of asset allocation at Voya Investment Management, join “Squawk Box” to discuss how they plan to approach investing if Biden wins the presidency and the Republicans maintain control of the Senate. Click here to watch

  • Initial Post-Election Thoughts

    It may take a few days before enough votes are counted to determine who won the election, but there are a few preliminary conclusions that can be drawn. As of this moment, the presidential race remains too close to call, although it seems more likely that the Senate remains Republican by a few seats, and…

  • How to Find Growth Buys in the Stock Market at Value Prices

    JoAnne Feeney, partner and portfolio manager at Advisors Capital Management, says while the technology sector has been the big mover in the markets, there are more rewarding ways to play the group than the mega-cap movers. She suggests companies such as Zebra Technologies, which makes the handheld barcode readers that are used in every Amazon…

  • Surprise, Surprise, Surprise

    Tuesday, November 3rd is coming fast. That this particular Tuesday is a presidential election day comes as no surprise. Since 1845, the first Tuesday after the first Monday in November has been election day, and in years divisible by four, that Tuesday is a presidential election day. Markets don’t like surprises and it’s hard to…

  • How is the Market Near All Time Highs?

    The stock market continues to hang in near all-time S&P highs, even as unemployment is still quite high, virus cases spike, politicians are unable to agree on a fiscal stimulus package despite the agreed upon need, and election uncertainties loom. How can this be? A critical part of the answer to the question is people…

  • Stock Prices

    Why do stock prices rise so persistently over the decades? The bottom line is that over the long run, stock price-to-earnings ratios, and hence their inverse, earnings-to-stock price ratios, have no discernible trend going back to at least 1890. The equity yield peaked in 1949 at 16 percent and ranges between 5 percent and 10…

  • 7 Warning Signs Your Bond Portfolio May Be Yielding 1% (or Less)

    If anything, the title is an understatement. Some investors own a large basket of high quality, investment grade bonds of well-known companies. The yields on such securities have declined dramatically and many are now 1% or even less. Many investors do not realize this, however, because they are looking at their coupons. The same logic…

  • What Does a Post Vaccine Environment Look Like?

    The current news is very concerning and, to many people, very disruptive. We have fires raging in California and social unrest in many cities. The presidential debates got off to an unruly and ugly start. Voting by mail looks to be a divisive issue, and, in turn, may lead to a contested election outcome. The…

  • China’s Five-Year Plan

    With the arrival of Autumn, the U.S. Presidential election will increasingly take center stage as the candidates spell out their economic and foreign policy agendas. The outcome is important, not just for the U.S., but for foreign economies as well. Possibly even more consequential is another event happening in the world’s second largest economy. I’m…

  • Revisiting the Stock vs. Bond Allocation

    Virtually everyone appreciates that Treasury bonds are close to all-time record low yields, but how should investors adapt to that fact? Bonds still have a legitimate role to play in any portfolio, but it is appropriate for every investor to revisit their allocation to bonds. Professor Jeremy Siegel of Penn’s Wharton School has stated that…

  • Measuring the Economic Damage of Covid-19

    In order to forecast our economic landscape going forward, we must first assess the extent of the damage done to the U.S. economy from the once-in-a century occurrence that has emerged over the past half year. This coronavirus has caused record levels of unemployment and impairment in national output not seen since the Great Depression….

  • ‘Powell is the adult in the room trying to make sure the recovery continues’: Advisors Capital’s Chuck Lieberman on the Fed

    Charles Lieberman, CIO at Advisors Capital Management, joined The Final Round to discuss his outlook for the market and his thoughts on how Fed Chair Jerome Powell is handling the economy and its recovery amid COVID-19. Click here to watch.

  • A Market Rotation is Underway

    When I wrote this weekly commentary in July, Elon Musk had just overtaken Warren Buffet on the Bloomberg Billionaires Index. Well, what a difference six weeks can make. As of August 31, Elon had rocketed ahead of Warren, adding another $33 Billion to his nest egg. In that commentary, I posed a simple question: how…

  • 881,000 Jobless Claims Filed Last Week, Better Than Expected

    First time weekly unemployment claims came in better than expected, with 881,000 Americans filing for first-time unemployment insurance last week. Dr. JoAnne Feeney, Partner & Portfolio Manager at Advisors Capital Management, joined Wake Up With Cheddar to break down what this means for the job market. Watch on Cheddar TV

  • Is the Fed Move a Game Changer?

    Federal Reserve Chairman Jay Powell announced a shift to an “inflation averaging” rule last week at the virtual Jackson Hole monetary policy conference and many investors are wondering whether this should alter portfolio strategy. The short answer is, for now, no. But what of concerns that the Federal Reserve is continuing to feed the market’s…

  • Wall Street vs. Main Street

    This past week the S&P 500 made a new all-time high and Apple reached $2 trillion in valuation. It would seem that the pandemic is already in the rearview mirror. After the shortest bear market in U.S. history, a brief 33 days compared to the median of 302 days for the prior twenty bear markets,…

  • Alan Greenspan: US-China Relations

    The key to global economic balance over the next generation will be defined by the increasingly contentious relationship between the United States and China. China is endeavoring to wrench global hegemony from the United States. This conflict was foreshadowed by Xi Jinping’s declaration, shortly after ascending to the leadership of the Communist Party of China,…

  • There’s still a lot of noise in the market, portfolio manager says

    JoAnne Feeney, partner and portfolio manager at Advisors Capital Management, and Greg Branch, partner at 1847Financial, join “Squawk Box” to discuss tech stocks extending their slide in trading on Tuesday and whether the move lower means a rotation could be taking place in the market.

  • A Fixed Income Portfolio Likely Yields 0.75-1.25%. Good News, You Have Options.

    Fixed Income yields have declined rapidly in 2020 and many investors are not fully aware how little their ‘traditional’ Fixed Income portfolio likely yields. Two main forces account for this common misunderstanding. First, fixed income yields have moved dramatically and quickly in 2020 because of record low Treasury interest rates and relatively tight credit spreads….

  • Progress, Even If the Road Is Rough

    Second quarter GDP collapsed at a 32.9% annual rate, as was widely expected. Nonetheless, more timely data shows that the economy is bouncing back. It has a long ways to go and the path back will not be smooth or easy. But the recovery process is clearly underway. Let’s start with Q2 GDP. It actually…

  • Europe – Looking Attractive

    The surge in global equity markets since late March, led by the major markets of China and the U.S., has left Europe behind and stocks there are receiving scant attention. Ranking last of the big three regional powers in year-to-date equity performance is not an uncommon position for Europe. In dollar terms, the pan-European STOXX…

  • Alan Greenspan: A Long-Term Perspective

    Prior to the emergence of COVID-19, as I have previously indicated, the defining characteristic of the 21st century was the inexorable aging of its population. Almost a fifth of the population of the industrialized countries of the world were age 65 and older. In earlier centuries, the vast proportion of the population worked until they…

  • Near-term uncertainty will make investors look past earnings, expert says

    JoAnne Feeney, partner and portfolio manager at Advisors Capital Management, and Darrell Cronk, chief investment officer of Wells Fargo’s Wealth and Investment Management, join “Squawk Box” to discuss what they’re watching out of second-quarter earnings season.

  • Recovery for the S&P 495?

    Financial websites were abuzz Friday afternoon with the news that Elon Musk had overtaken Warren Buffet on the Bloomberg Billionaires Index. Tesla (founded by Musk) shares popped 10% that day, adding $6 Billion to Musk’s personal fortune. For the year-to-date period, Tesla has gained a whopping 269%. Meanwhile, the world’s preeminent blue blood investor, Mr….

  • Adjusting to a Jekyll & Hyde Market

    The market has been behaving like Dr. Jekyll and Mr. Hyde over the past month, bouncing between good and bad news. Which personality will arrive this week? The extent of uncertainty applies to this year’s earnings, but also 2021 and 2022. As we’ve noted before, we are in a strange situation where near-term risks are…

  • Two Steps Forward, One Step Backwards

    The surge in Covid 19 cases unnerved investors this past week, which is understandable. People did get complacent as various states reopened, particularly those that hadn’t been hit hard when the pandemic first arrived in the U.S. So infections spiked notably in places that hadn’t previously been subjected to large numbers of cases. At a…

  • Not Your Father’s Fixed Income World. Now What?

    During the first half of 2020, fixed income yields moved substantially, behaving far more volatile than normal and deviating from historical levels of normal volatility (perhaps the understatement of the year!). Consequently, almost every fixed income portfolio has seen the widest swings in principle values since the Global Financial Crisis. All this volatility, combined with…

  • Have World Equities Disconnected from Economics, Politics, and Reality?

    With COVID-19, ongoing trade issues, and now riots, many equity investors are asking if equities worldwide have disconnected from reality. The U.S. and Europe, hardest hit by the pandemic, are still dealing with ongoing economic challenges. Investors also worry as tensions between the U.S. and China, the world’s two largest economies, have flared again, and…

  • Upsized Uncertainty: The Opposite of Lower for Longer

    Within just a mere few days in early March, the U.S. went from economic expansion and record low unemployment to a severe, deep contraction and record-high unemployment. The S&P 500 reflected this by falling 34% from its high on February 19th to the March 23rd low. And since that low, the S&P has rallied by…

  • Celebrating the Grand (Re)Opening?

    Investors saw it coming – as they often do. The reopening is underway. Restaurants are beginning to serve sit-down meals, beaches are open, hair is being cut, and nails polished. Workers are being called back to factories and offices, although many who can work remotely will continue to do so. The precipitous drop in GDP…

  • The Only Constant is Change

    I had the dubious honor of writing this commentary last time on January 27, just before things got really weird. In that piece, I posed two questions: Will it get worse? and Will it be disruptive? As the months drew on, my questioning changed. I wrestled with the question of permanence versus transitory behavioral changes….

  • Why Is the Market Rallying While the Economy Is Collapsing?

    Observers are trying to reconcile the sharp rally in the stock market even as the data show that economic activity has declined dramatically. It is natural to ask how the market can only be down a little more than 10% and the NASDAQ is now up for the year, when we’re still in the midst…

  • Perspectives on Record Low Interest Rates

    While there are lower-risk and higher-risk fixed income assets, investors could find no safe havens during the recent selloff. From the early 2020 highs to the March lows, investment grade corporates, high yield, and preferred indices declined by 15%, 24% and 38% respectively. This compares to the S&P500’s peak decline of 36% and highlights that…

  • An Opportunity in International Equity

    A recent piece by CGTN (China Global Television Network) highlighted the city of Wuhan. Ostensibly to feature the city’s cultural and culinary reputation, but no doubt, this was also an effort to move the ongoing news narrative away from the city being the COVID-19 birthplace to project the idea that business is getting back to…

  • Still a Ways to Go

    Earnings season got off to a rocky start, but that was to be expected. Comments from management teams regarding the future were laced with cautious sentiment. Even though most investors understand that companies will struggle to estimate this year’s sales and earnings, they are still hoping that companies have some visibility to the end of…

  • An Earnings Reckoning is Coming. How Much Should You Care?

    You may have forgotten, given more urgent concerns surrounding the coronavirus, but we are once again at the cusp of earnings season. Make no mistake, this will be ugly. First quarter results will begin to show the impact of the shutdowns, and second quarter guidance even more so. Earnings estimates from Wall Street analysts have…

  • Thinking Ahead

    Everyone is naturally fixated on the daily news on the Covid 19 pandemic and the economic repercussions. We know the news will remain horrific on both fronts for at least a few more weeks. But we also have good reason to expect most people who contract the virus and the economy to recover. “The sun…

  • Recession Investing: This Time is Really Different

    Investors cheered the government’s $2.2 trillion relief package last week. The S&P 500 climbed 17.8% from Monday through Thursday, although it did give back 3.4% on Friday when the deal actually passed the House. Investors recognized that, while the package will help brunt the blow, containing the virus will take longer than the few weeks…

  • Finding Opportunities in the Recent Dislocations in Fixed Income Markets

    The economic upheaval triggered by efforts to mitigate COVID-19’s spread is disrupting not only equity markets, but also the fixed income world in ways that have surprised many investors. Volatility has jumped in a market where investors thought they were shielded. But the news is not all bad. The source of the erratic moves in…

  • Setting Expectations with Clients

    “Your money or your life?” is the crystal-clear offer that muggers will give their victims to minimize a scuffle. Those, in their right minds, will hand over their wallet and spare their lives. The markets, economy, and investors are getting held-up right now by COVID-19. Though tempting to hold onto on the wallet, it’s time…

  • Coping with Two Black Swans

    The market’s been pummeled by two shocks, the coronavirus and the collapse in oil prices. Both will depress the U.S. and global economies. Much depends on how policymakers respond. So there’s considerable uncertainty on both accounts. Coronavirus The coronavirus is still being transmitted widely and testing remains inadequate, even though it appears that test kits…

  • Advisors Capital Management Market Discussion – 03/09/2020

    ACM’s Market Discussion from 03/09/2020.

  • Be Strategic, Not Reactive

    If you’d gone away for a silent meditation retreat last week, you’d have come back to find your portfolio little changed and would have remained fairly calm, but only until you turned on the news. The S&P 500 finished last week roughly flat, but the violent ride from Monday to Friday was anything but calming…

  • Coronavirus Threat Grows, But Is The Market Overreacting?

    The news on the novel coronavirus continues to roil markets and we are getting more frequent questions as to the likely economic and market impact, and what, if anything, investors should do about it. As recent reports shifted from rising recoveries in China to new cases in Europe, Asia, and, now, the U.S., investors are…

  • What’s going on in Bond land? … How did we get here? … Why do you care?

    Hey, can you do me a huge favor? Can you borrow $100,000 from me for 10 years, and in 10 years you can give me less money back? Pretty please! Do we have a deal? This proposal sounds ridiculous and goes against all logic, but bond land is a funny place nowadays. Interest rates have…

  • Stocks Are Around Fair Value

    I still read quite often how stocks are extremely expensive or badly overvalued. Such a determination can’t be done in isolation. It is necessary to place the valuation of stocks into context versus other asset prices. Stocks are certainly not expensive relative to Treasury bonds or real estate. In reviewing the evidence, we judge that…

  • Mexico says Hasta la Vista NAFTA, Hello USMCA, but Does this Make Investing in Mexico Attractive?

    Lost in the impeachment and coronavirus headlines the last couple weeks was the January 29th U.S. ratification signing of the United States-Mexico-Canada-Agreement, known as USMCA. Viewed as mildly positive for the U.S. but crucial for Mexico, the deal replaces the 26-year old North American Free Trade Agreement (NAFTA). Not yet ratified by Canada, but expected…

  • When Bad News is Good News

    Recent economic data, the spread of the coronavirus, falling interest rates, and a flattening yield curve may be giving investors pause. The S&P 500 dropped 1.5% Thursday and Friday to lock in a 1% decline for the month. Recent adverse news has been concerning and worth watching, but it can also be viewed as a…

  • Outbreaks: Fear and the Importance of Diversification

    When I started writing this piece on Friday, the total number of 2019 Novel Coronavirus (2019 nCoV) cases globally was 1,319, with 41 deaths attributed to the new and frequently fatal disease. As I continued writing Sunday, the count had risen to 2,863 cases with 81 deaths. Even as China has locked down Wuhan, the…

  • Thoughts on 2020

    The stock market doesn’t need a reason to go down. Nonetheless, we remain positive on its prospects for 2020, given that we see little risk of recession, a deal with China on trade, moderate GDP growth, a resumption in growth in corporate profits, still moderate inflation and a Fed likely to keep monetary policy unchanged…

  • CES 2020: I Was There and Real Investment Opportunities are Everywhere

    The broader U.S. economy appears to be growing solidly, yet many pundits wonder for just how long stocks can continue to rise. Valuations in most sectors are markedly above 5- and 10-year averages. Still, the big picture reveals that employers are creating more jobs (even with labor in short supply), the services sector remains firmly…

  • How did we get here, and what do we do now?

    2019 was an exceptionally strong year for fixed income, as well as for the equity markets. One consequence is that 2020 will be more challenging and require a somewhat different approach. We are unlikely to see the strong returns we captured in 2019, so we must position for low rates and tight spreads. Nonetheless, we…

  • In This Holiday Season, How About the Gift of International Investing?

    To keep from dampening cheer this holiday season I won’t discuss politics, the economy, or even the markets – although equity markets have been in a giving mood lately. Rather, in this, the giving season, I want to highlight ADRs or American Depositary Receipts, and the role they play in international investing. Advisors Capital Management…

  • Smooth(er) Sailing Ahead?

    Investors got two out of three wishes this past week, as a trade deal was finally struck with the Chinese and the U.K. gave Boris Johnson an overwhelming mandate for Brexit. The remaining open sore for investors is the impeachment of Donald Trump, although that cloud is likely to be lifted by February. With so…

  • Whipsawing Headlines

    As we approach year-end it’s appropriate to reflect on what’s taken place and how things look going into 2020. The current quarter, in particular, is representative of the entire year, in that the headlines seem to be so negative and concerning, even as the markets and economy are looking pretty decent. This quarter, we’ve been…

  • ‘Tis the Season

    Tax-loss harvesting, holiday shopping trends, and 2020 market outlooks take center stage for investors this time of the year. Don’t neglect the first, keep track of the second, and ignore the third. This year, tax-loss harvesting is a bit more challenging, given the S&P 500’s 25% rise year-to-date. The strength of the consumer is partly…

  • Bonds, Bonds Everywhere, But Little Yield to Buy

    Investors allocating capital to fixed income generally are looking to achieve two main objectives: stability and moderate returns in excess of inflation. However, with central banks globally focused on providing unprecedented levels of accommodative policies, trillions of dollars of debt are currently trading at a negative yield. While U.S. rates remain well above zero, the…

  • Weak Data? The Devil is in the Details

    The sluggish behavior of capital investment is commonly highlighted as one of the key concerns when people worry about a weak economy. But investment spending is an amalgam of several types of spending with only one component that is quite weak. Much of the weakness in capital investment over the past year has occurred in…

  • Investing Internationally? The Real Benefits of Meeting the Real Companies

    Fresh back from the semiannual ACM due diligence conference in Washington, D.C., I would like to expand on a topic that my colleague Dave Ruff touched on during our presentation highlighting ACM’s international and global strategies. International equities generally trade at lower multiples than U.S. equities, and while that may suggest opportunities, investors should take…

  • House of the Rising Sun

    Looking east from China you see the House of the Rising Sun, otherwise known as Japan. Indeed, you would think Japan would “rise” with its number one export destination, China, being the fastest growing major economy on earth. By supplying critical integrated circuits, machinery, instruments, robotics, vehicles, transportation equipment, LCDs, optical fibers, and specialized chemical…

  • If It Bleeds, It Leads

    Most every day there are multiple articles advising investors how to prepare for the impending recession, or forecasting recession, or highlighting the vulnerability of record stock prices to the widely expected recession. These articles reflect the need of the media to attract eyeballs and the desire of some pundits to garner attention. Anyone can always…

  • How Worried Should We Be?

    It’s mid-October which means fall football, playoff baseball, and beautiful fall scenery. This fall, however, financial markets still seem to be experiencing above average amounts of uncertainty due to ongoing trade disputes and concerns over slowing economic growth. And, quietly and somewhat reluctantly, the Federal Reserve Bank has increased its monetary accommodation and taken steps…

  • When Is a Home Run Not a Home Run?

    I am a fantasy baseball geek. And, as a fantasy baseball geek I get together with 10 friends from all over the country each year for a 7 hour fantasy baseball draft.  The methods that we use to evaluate the skills of a player have changed a lot and have advanced far beyond ERA and…

  • Fed Repos Absolutely Do Not Indicate a Crisis

    Overnight repo rates (repurchase agreements) soared on September 13 to around 10%, which triggered an outpouring of concern that the financial system might suffer a meltdown similar to 2008.  Now, almost two weeks later, the concern focuses on the Fed’s almost daily injections of funds into the overnight market, typically $75 billion at a clip,…

  • Ignore the Clutter Behind the Market’s Wild Ride

    Investors may be pleased to realize that the S&P 500 has risen 19% year to date, even as they lament that the market has slowed down considerably this quarter, having risen just 0.9% thus far. Moreover, the ride has been a bumpy one, as the chart below illustrates, and reflects the many news headlines about…

  • Implications of the Attack on Saudi Arabia

    The weekend attack on a major oil processing facility in Saudi Arabia knocked out around 5.7 million barrels per day of supply, driving up crude prices by nearly 15%.  What are the implications for investors? What actually happened and why? It appears that Iran launched a major cruise missile attack from Iran directly at the…

  • Why Investing is an Endurance Event

    Hi. My name is Randall and I am an addict: I ride my bicycle long distances. I’m not one to brag, but most people that I know agree that riding a bike 200 miles in a single day qualifies as a “long distance endurance event.” I completed my 64th 200-mile ride last Saturday. These are…

  • Hong Kong Police and Protesters Continue to Clash. Will the Hong Kong Economy and Stock Market Crash?

    The short answer is no. While the confrontation may worsen and possibly include Chinese army involvement, these kinds of protests rarely lead to economic stagnation and failure.  Paradoxically, many of these kinds of violent demonstrations in other parts of Asia have helped bring political reform and improved economies.  Thailand, Malaysia, South Korea, and the Philippines…

  • Fear Is Rampant. And I Love It!

    Analysts describe investors as “Twitchy,” Skittish,” and “Anxious.”  It is impossible to read a financial publication without being informed that inverted yield curves signal recession.  The decline in yields on Treasuries is commonly taken as the market anticipating or preparing for recession.  The trade war is taken as the cause of slower growth around the…

  • US Debt is Large and Getting LARGER

    This past week the Congressional Budget Office (CBO) released an update to its economic outlook for the next decade.  It was largely just another news story that doesn’t get a lot of attention with all of the focus on trade concerns, curve inversion, etc.  But the federal deficit figures are large and getting ever LARGER: …

  • The Yield Curve Has Inverted, Run For the Hills?

    Last year one of the players on my 9 year old son’s baseball team was hit by a pitch in the neck and was removed from the game. While initially scary, after some icing and time on the bench he was physically fine. Mentally, however, the event had a more enduring impact. In all subsequent…

  • The Future is Now: Cybersecurity

    As if we don’t have enough to worry about, every week—sometimes every day—brings a new revelation of some computer security breach. Millions of consumers affected. Millions of records stolen. Millions of dollars in ransom demands. Millions of dollars in regulator fines. Add it all up and you end up with a Whole Lot of Cyber…

  • Volatility Returns

    The recent escalation in trade tensions, following Trump’s announcement that he intends to impose a 10% tariff on the remaining $300 billion of Chinese imports, has sent markets into another downward spiral and pushed volatility (as measured by the VIX) back above 20. A 10% tax on the rest of imports from China would land…

  • Earnings Season Telling Two Very Different Tales

    Nearly half of the S&P 500 companies have now reported results for last quarter and the vast majority of them are beating expectations. This is not as good as it sounds. Expectations were low to begin with and those “beats” continue to point to another quarter of lower earnings, relative to last year’s second quarter….

  • What Should Investors Do With a 10-Year at 2%

    While fixed income investors have enjoyed relatively strong returns in 1H19 after a tough 4Q18, most are likely trying now to handle lower interest rates and very tight credit spreads. As a reminder, the credit spread is the incremental yield an investor demands on a corporate bond versus a Treasury bond of the same maturity….

  • The Fed Will Soon Lower Rates. But Should It?

    Fed Chairman Jerome Powell signaled quite clearly that the FOMC will lower its policy rate at its July meeting. But should it? Powell justified reducing rates by pointing to inflation being below the Fed’s 2% target, while the trade war with China and weaker growth overseas increase uncertainty over the economic outlook. At the same…

  • The Longest Expansion is US Economic History Sure Doesn’t Feel Like It

    July 1st marked the point of the longest economic expansion in U.S. history which started on June 1, 2009.  And this past week saw all three major equity indices reach all-time highs.  In the first half of 2019, the S&P climbed 18.5%, having had its best first half since 1997.  The unemployment rate of 3.7%…

  • Human Beings Are Genetically Built to Overreact

    I was recently coaching my son’s travel baseball team for a typical game during our busy summer season and one of the kids on our team was batting while I was manning first base. The first pitch arrived, a close pitch but probably just a bit too far outside, and it was called a strike…

  • Electric Power – Not Your Parent’s Industry

    Growing up as a Midwest farm kid in the 1970s, I frequently listened to the group Kansas.  One of my favorite songs was “The Point of Know Return.”  The seemingly grammatically incorrect title was intentional.  The lyrics signaled the crossing of an imaginary line beyond the known, familiar, and safe to the new, unexplored, and…

  • Powerful Market Driver: Demographics

    It’s not hidden, it’s not a secret, and everyone is part of it. Hidden in plain view are the demographic trends that drive the long-term evolution of populations and by, extension, societies. Frequently, short-term market gyrations capture investor interest at the expense of inexorable trends and it is useful and instructive to pause and take…

  • Investing Amidst a “Wait and See” Economy

    The yin and yang of U.S. markets was on display yet again over the last couple of weeks as the S&P first fell 3.3%, but then rose 4.4% last week. Even as the market dropped on Trump’s threatened tariffs on Mexico and as new jobs came in much weaker than expected, those tariff plans were…

  • Five Common Fixed Income Mistakes

    Fixed Income is often poorly understood by equity and retail investors. Sure, investors analyze every word the Fed says, discuss market interest rate expectations, and, my personal favorite, often ask themselves “what is the bond market telling us?” However, beyond these high level observations, the important nuances of fixed income investing are often misunderstood and…

  • Will the Trade Wars Ever End?

    The battle with China over trade continues, with markets reacting to every change in tone.  At some point, this is likely to stop because the markets become inured, not because of whatever agreement is reached.  The battle over trade does threaten growth, because some businesses will tend to defer investment until they know the rules…

  • The Tariff War on Display

    The market was caught off-guard when an anticipated trade agreement between the US and China has become a trade dispute. This led to a sudden increase in volatility and a drop of 4% in the S&P 500 index to start the first couple weeks of May.  First, the prospect that a trade deal with China…

  • When Does ACM Become Bearish?

    At a recent conference I was asked why ACM so often has a rosy outlook on both the economy and the stock market. After all, both go up and down and if we could simply get ahead of just a few of the declines it would be enormously valuable. While this is obviously true, finding…

  • ACM’s Dr. Charles Lieberman from Envestnet: How Likely is it the Fed Will Cut Rates? (VIDEO)

    Recorded at Envestnet conference: Austin, TX Convention Center May 1, 2019.

  • The Chinese Reboot

    The ongoing U.S. / China trade negotiations continue to dominate news storylines, but an arguably more important recent event for the global economy appears to be largely unnoticed.  The Belt and Road Initiative (BRI) Forum held in Beijing from April 25th through 27th was extensively covered by most Asia news outlets, but only received cursory…

  • Why Avengers is Like an IPO

    Another headline showing record-breaking results this week: “’Avengers: Endgame’ Sets Box-Office Record at $1.2 Billion.” Eye-popping numbers, for sure, with an added “shown on 4,662 screens in the U.S. and Canada, the most ever.” That’s a lot of people shelling out a lot of money for a new thing. Blockbuster films and IPOs (Initial Public…

  • Bargain Hunters Likely to Come Out This Earnings Season

    Investors know that first quarter earnings reports are going to be weak, so investor attention will be on outlooks for the full year. While the fourth quarter’s sharp decline in stock prices turned out to be an overreaction to unfounded recession fears, the resilience of the subsequent recovery—and the prospects of further appreciation from here—may…

  • Like A Lion, We Are Just Waiting To Pounce…

    Thus far in 2019, the Fixed Income markets have seen a major tightening of credit spreads across the entire credit spectrum as rational minds prevailed following the fear-driven sell off in 4Q18. As a reminder, the credit spread is the incremental yield an investor demands on a corporate bond versus a Treasury bond of the…

  • Can the Govt Print Money to Support the Green New Deal?

    A hot debate has erupted over “Modern Monetary Theory”, which is alleged by its promoters as justifying a sizable rise in government deficit spending to pay for the Green New Deal and various programs.  The government would issue as much debt as needed to raise the funds and the Fed would buy the debt by…

  • Have Equities Moved Too Far Too Fast?

    With the Fed messaging that they are on “pause,” financial conditions have eased significantly and this has led to a very fast-paced and significant equity rally in last three months.  Since the low point of the steep market decline at the end of last year, the market, as measured by the S&P 500, is up…

  • Even Warren Buffet Has a Bad Decade: Investing for the Long Run

    It is well documented that the historical investment performance of retail investors is poor and most sources suggest that the group’s average annual return is under 3%, a level of performance that is dramatically worse than bonds and remarkably below the average annual CPI since 1980. This happens because retail investors often panic at times…

  • Fixed Income Investors Think They Prefer Stability, but Occasional Volatility Creates Rare Opportunities

    Since the end of September, it’s been a wild ride by fixed income standards. In the first week of October, hawkish Powell comments combined with a strong employment report amplified market volatility. In the first week of October, the 10-year Treasury rose 17bps (basis points) from 3.06% to 3.23% and the 2-year Treasury rose 7bps from 2.82%…

  • Do Emerging Markets Offer Value?

    Turn on CNBC, Bloomberg News, or any other business news channel and you’re likely to hear at least one market pundit explain why emerging markets have outperformed recently and give a prediction about their continued leadership.  The basis for this discussion is the fact that over the last three and six months, EM indices have…

  • 5 Conditions for Stocks to Continue to Rally

    Fed policymakers no longer seem inclined to hike interest rates to get to neutral.  Instead, they are more open to accepting some risk that inflation may increase and some would welcome inflation exceeding the Fed’s 2% target as an offset to inflation remaining below 2% for several years.  The most important two consequences of such…

  • Is Growth Dead? Finding Growth in a No-Growth Environment

    Tweets screaming about growth. Headlines screaming about growth. Endless news flow screaming GROWTH IS DEAD! Yes, these lines breed fear, and fear sells news, but is the fear warranted? Is growth dead? Let’s step back and examine growth: what it is, what it means, and, ultimately how investors find it in a Low/No-Growth Environment. What…

  • Stock Selection is More Important than Ever

    Over the last few months, investors have suffered through a 16% drop in the S&P 500, from September to the bottom in late December, and have been relieved to see the recovery of 15% from that bottom by last Friday. The market remains 7.6% below its September peak, so many wonder whether the recovery continues…

  • A Possible Rebound for Housing in 2019

    2008 and 2018 had one thing in common – neither was particularly good for housing-related stocks. Home builders, furniture makers, and suppliers of home supplies all struggled.  But the housing market is far healthier today than it was in 2008. In 2018, home affordability declined, mortgage rates increased, and fears a U.S. economic slowdown accelerated….

  • Just What the Doctor Ordered: How the Disabled Can Help Maintain this Economic Expansion for Years

    The Peterson Institute for International Economics recently put out a working paper about the labor force participation rate and it provided a more concrete look into why so many prime-aged workers (aged 25-54) have left the work force. Their departure has had a profound impact on the available pool of workers in the U.S., and,…

  • Where Did the Bear Market Go?

    “Wall Street predicted nine out of the last five recessions.”  (Paul Samuelson, Nobel Laureate in Economics.) It was truly remarkable how carried away market pundits became in response to the fourth quarter swoon, even as the economy continued to plow ahead.  Yet predictions of recession were everywhere and hyped by the media.  Now, we’re simply…

  • Will Earnings Season Bring Some Sense Back to Stock Prices?

    Earnings season begins this week with six of the largest banks reporting, and while investors have been encouraged by somewhat positive economic data and progress (maybe) on China trade talks, the real test will come in the form of earnings guidance. We should expect companies to be cautious—and we have seen hints of that in…

  • Is China Slowing Down?

    Apple’s announcement that sales will be weaker than expected was largely blamed on slower growth in China.  Indeed, Chinese growth has been decelerating for several years to a reported 6.5%, although many suspect that the official numbers are overstated.  Nonetheless, China does have levers to pull to maintain its expansion. The metaphorical phrase “when the…

  • Another Ride on the Roller Coaster

    It was a breathtakingly volatile week in the equity market, even more remarkably so for the paucity of reasons for the wild fluctuations.  A host of explanations were given, yet none were satisfying.  In fact, stocks have demonstrated such outsized volatility surprisingly often in the past.  For the most part, it is primarily noise.  That’s…

  • Can/Should Trump Fire Powell?

    Rumors have emerged suggesting that the President has looked into the possibility of firing Jay Powell as Fed Chair, which raises many questions.  Can he?  Should he?  What would be the consequences for trying to do so?  And should the market be selling off as much as it has? It is not at all clear…

  • A Conversation with Dr. Alan Greenspan

    Former Chairman of the Federal Reserve, Dr. Alan Greenspan was badly misquoted yesterday.  In an interview to promote his latest book, Greenspan responded to a wide range of questions and indicated he remains concerned about the economy’s long-term prospects, because of the increase in entitlements financed by growing budget deficits.  But when I followed up…

  • Every Word Counts, Especially If Your Name Is Jay Powell

    Volatility has increased since Powell’s October interview in which he said that interest rates are “a long way” from neutral. The 10-year Treasury rate increased from approximately 3.05% to around 3.25% before fully reversing course by late November as the equity market declined amidst global economic concerns. Interest rates started declining further on November 28th…

  • The Only Thing We Have to Fear is Fear Itself(?)

    Since last week was a time to remember past presidents, my thoughts strayed to FDR and his insightful warning. The “Fear Index,” officially known as the CBO’s Volatility Index, moved sharply higher in October and remains elevated. Equity prices pulled back as jittery investors demanded lower prices to hold onto risky equity.  At the same…

  • Brexit Risks Escalating

    Britain’s exit from the European Union, passed by a June 2016 U.K. referendum, and formally begun in March 2017 by triggering the so-called article 50 of the Lisbon Treaty, is approaching the two-year deadline to define the new terms of a Britain/Europe relationship.  While the lack of a deal could end Theresa May’s stint at…

  • Made In Hollywood

    The news is filled with predictions of economic slowdown and a possible recession in 2019, or surely likely by 2020, but that’s just the media filling the 24/7 news cycle with material to influence readers and viewers to supply more eyeballs.  Yes, there are ebbs and flows in the data.  That’s normal.  Underneath it all,…

  • Have Recession Fears Increased?

    Recent data from around the world have increased domestic recessions fears. Tariffs and Italy were known risks but this week was complicated further by data that showed that both German and Japanese GDP contracted during the third quarter.  Scary stuff; the U.S. must also be headed for recession. Ironically, a Japanese and German slowdown could…

  • The Canary in the Coal Mine Is Doing Just Fine

    Despite the recent equity market sell off, the bond market is reminding investors that the economy is actually doing quite well. Given all the background noise, it is easy for investors to confuse how the economy is doing with short term movements in the equity markets. Despite two 10%+ stock market corrections in 2018, the…

  • Herd Movements

    “They’re moving in herds.  They do move in herds.”  Dr. Alan Grant, paleontologist, Jurassic Park. Alan Grant was speaking of herbivorous dinosaurs in a movie, but he could have been speaking of equity investors last month.  It doesn’t take much to set off a stampede in the equity market and any excuse (or no excuse)…

  • Panic or Patience? The Answer Depends on Your Time Horizon

    Despite continued strength in broad measures of the U.S. economy, markets took a pretty sharp tumble starting in the second week of October, culminating last week with a drop in the S&P 500 of 4%. Even Friday’s better-than-expected GDP report failed to stem the bleeding. You can find many plausible explanations, and some of them…

  • Growth Stocks Have Enjoyed Their Day in the Sun

    Several weeks ago I wrote about the valuation of the S&P after removing the four FANG stocks (Facebook, Amazon, Netflix and Google) from the calculation. Using this measure, the S&P was inexpensive relative to history. FANG stocks, like a lot of momentum driven growth stocks, have performed incredibly well over the past 2 years. Remarkably…

  • Chicken Little Comes Out of the Woodwork

    Anytime the market takes a tumble, the Chicken Littles of the world come out to predict the coming stock market collapse.  Because market corrections are quite common, they get this forecast right roughly one out of ten times, if that often.  Such forecasts suit the needs of the media, however, so they get plenty of…

  • Safety First!

    Last week saw the 10-year Treasury rise from 3.056% to 3.227% and stocks pulled back. The market’s recognition of coming rate increases was long overdue. That 17 basis point increase in the 10-year was prompted by Wednesday’s ADP report of strong employment gains, comments by Fed Chairman Jay Powell, and Friday’s job market data. It…

  • Your Savings Account Is Likely Costing You Hundreds Or Even Thousands Of Dollars Per Year

    We recognize that many investors have hoarded more cash than necessary as a result of lingering fears from the Great Recession. However, this is becoming increasingly detrimental to your long-term wealth as inflation and interest rates have increased. Despite the recent rise to 2.0-2.25% of the benchmark short-term interest rate in the U.S. (the Federal…

  • Why Does the Stock Market Keep Going Up?

    Why does the stock market keep going up and setting new highs when there is so much turmoil domestically and internationally?  That’s the most common question we hear from advisors and clients and it comes up in almost every single discussion.  Despite all that political turmoil, economic fundamentals remain outstanding.  The economy keeps producing jobs…

  • The S&P at 13 Times Earnings

    What if I told you the S&P is now trading at 13.3x earnings? Would you consider that to be attractive? Obviously that would be very attractive as the market hasn’t traded at that valuation in a long time. It might imply slowing cash flows and a weak economy. If the S&P were indeed trading at…

  • Things We Worry About

    There’s certainly no shortage of things to worry about, as we are frequently reminded.  But most of the issues are fairly widely recognized and are clearly on the to-do list of policy makers.  There’s no assurance good solutions will be found, but well known problems rarely cause significant meltdowns in the market.  So I worry…

  • How Low Can Credit Spreads Go?

    Credit spreads are discussed casually, but they are rarely getting factored into fixed investment portfolios. Everyone seems to be solely focused on yield, although investors were reminded of the danger of duration risk after witnessing the poor performance of most fixed benchmarks. The Barclays Aggregate Bond Index, for example, delivered a negative total return for the…

  • Turkey’s Goose is Cooked

    The meltdown in the Turkish lira filled the news this past week, but for good reason.  Turkey is in a war with the financial markets and with President Trump and it is likely to lose both battles.  That’s what happens when a country ignores the economic consequences of its actions.  Large fiscal expenditures financed with…

  • Apple’s Story is the Market’s Story

    I joined Advisors Capital Management in March of 2015, and at numerous investor events between then and now, I have been repeatedly asked whether the market has reached its peak. The S&P 500 is up 35% since that spring of 2015 when I gave my first presentation to a roomful of advisors and clients on…

  • The Economy is Rolling

    A really solid GDP report sets us up for this coming Friday’s employment release, which should continue the run of good economic news.  The economy is performing very well.  So it also makes sense for the Fed to continue to hike interest rates slowly, which suggests they will make no changes to policy at the…

  • Duration Doesn’t Always Pay, And It Has Likely Cost You

    Many people think they can’t lose money in fixed income securities unless a company goes bankrupt. Technically, that’s true if you hold every bond to maturity. However, when interest rates rise, your fixed-coupon bond starts earning a below-market rate of interest. This risk is duration, and duration has caused many fixed income benchmarks to have negative…

  • Hang on to Your Hats!

    Earnings season has arrived and, once again, we may see strange behavior, such as stocks failing to respond positively even when reported profits beat expectations. Friday’s declines for Citigroup and JP Morgan are cases in point. Of particular interest this season will likely be company guidance for the future, rather than results over the last…

  • Job Growth is Strong

    The latest jobs data suggested that a major influx of job seekers is adding to the labor force, which is holding down wage inflation and providing some additional room for the economy to grow.  Part of this may be wishful thinking, specifically regarding inflation There was a significant surge of more than 601,000 new entrants…

  • Tax Code Impact Now Visible in Housing Market

    Since tax reform was passed by President Trump and the state and local tax deductions (SALT) were eliminated, the implications for the housing market have begun to take effect. The impact of these reforms has been most pronounced in higher income tax states where property taxes are also high. For expensive homes with high property…

  • The Significant, But Often Subtle Risks Of Preferreds

    For the past several years many investors have been hearing about the attractiveness of preferred stocks, since they typically offer much higher yields than investment grade bonds and less risk than many high-yield bonds. Preferred yields generally range from 4-8%, or even higher, and issues are available from large, well-known, high quality companies which provide…

  • Don’t Be Afraid of a Flattening Yield Curve

    Last week saw a host of positive economic announcements, not least of which were the Fed’s comments surrounding rate increases. The U.S. economy is indeed humming along very nicely, fears of a trade war notwithstanding, and the companies making up the S&P 500 are doing exceptionally well. Average revenue growth for the 500 or so…

  • Policy Evolution at the Fed

    The Fed’s perception of economic risks continues to evolve, as inflation has moved up to its target more quickly, even as unemployment has declined more rapidly than expected.  And the Fed recognizes that the risk of a more substantial rise in inflation has increased.  In response, the Fed increased the number of projected rate increases…

  • The Coming Week is Full of Major Developments

    The coming week is chock full of major developments that will garner considerable media attention and a few might actually matter for our economy or markets.  The G-7 meeting this past weekend started it all off, there’s a meeting tomorrow between Presidents Trump and Kim to discuss nuclear disarmament in North Korea, a U.S. judge…

  • Greece Part “Due”, Times 10

    Italy may be the source of fine wine, great pizza and creamy gelato, but it has been one of the most poorly run countries in Europe for decades.  Italy’s high debt levels, political dramas, rules and policies, and government turnover are not only inhibiting its ability to grow but also setting the stage for Europe’s…

  • Americans Are on the Move & Home Prices Are Up

    Late spring brings not only blossoming gardens, but also for-sale signs. Americans are on the move and home prices are up. Yet last month, existing home sales dropped 2.5% from March levels and were down 1.4% from April 2017. Are rising prices a sign of continuing expansion of the housing market, or should we expect…

  • Don’t Confuse Politics with Economics

    The equity market has been trading within a fairly narrow range for the past few months and now sits a mere 5 percentage points below its all-time high in late January.  Uncertainty is high as to whether the market will resume its ascent, or the rally will peter out.  (In truth, uncertainty is always high…

  • The Trade Deficit With China is Not the Problem

    This week Commerce Secretary Wilbur Ross stated that he thinks that China has, “agreed to the concept of a trade deficit reduction.” If true this would greatly diminish the risk of a full blown trade war with America’s largest trading partner. However, even if China ultimately agrees to buy more goods from U.S. companies to…

  • Don’t Be Distracted By The Stall

    A few weeks ago I advised readers to hang onto their hats because earnings season was likely to lead to puzzling drops in stock prices despite companies delivering strong earnings growth and “beating” expectations.  The vast majority of companies which have reported thus far have indeed beaten consensus forecasts handily (78%), yet the S&P 500…

  • Fed Policy Outlook

    Economic theory is playing out right in front of us.  Economic growth remains above potential, so a solid pace of hiring has tightened up the labor market, raising wages and inflation.  The bond market is responding by driving up interest rates.  Stock investors are more uncertain, since rising interest rates hurt, but growing profits helps…

  • Unemployment Gray Zone

    The unemployment rate has declined to a low 4.1%, a level lower than 90% of the past 50 years and a level at which the U.S. and most countries worldwide have experienced much higher levels of inflation than we are experiencing today. Where is the Phillips Curve and is it dead? Many economists have been…

  • Hang On To Your Hats

    Earnings season got off with a bang last week, though you wouldn’t know it by watching the market on Friday. Three major banks reported results well ahead of expectations, but all subsequently traded lower for the day. Is this a sign of things to come as earnings season kicks into high gear this week? Friday’s…

  • Much of the Trade Rhetoric Is Bluster

      Proposals to impose tariffs on China and counterproposals by China to hike tariffs on U.S. products are mostly in the bluster and public rhetoric stage.  Each side is playing to its own audience while trying to send messages to the other side.  A full-fledged trade war isn’t desired by either side, although you would…

  • Prison Populations and Disability Benefits Have Peaked

    The number of people in prison has climbed sharply for decades sucking people out of the labor force and permanently impairing their ability to obtain jobs even when they leave prison. At the same time, the number of people on disability benefits has also grown very sharply, further reducing the pool of workers available. These…

  • Cooler Heads Will Prevail

    Investors were buffeted last week by market-roiling news from several directions, and many of them headed for the exits. They shouldn’t have. Yes, the S&P 500 dropped nearly six percent, mostly on Thursday and Friday, and, yes, the week’s close marked a 12% decline from peak to trough thus far this year. These corrections are…

  • Markets Are Resilient with Upside and Some Risks

    The reversal in stock prices after Gary Cohn’s resignation as Economic Advisor to the President from quick large early losses to a minimal loss for the day demonstrated that the bull market remains on solid ground.  The jobs report on Friday simply added icing to the cake.  Still, there are risks to the outlook.  The…

  • The Government Giveth, The Government Taketh Away

    There is no shortage of criticism from the business community directed at President Trump’s decision to impose steep tariffs on steel and aluminum imports.   While the U.S. steel and aluminum manufacturers stand to benefit, just about everyone else loses—from construction companies and auto, aero, and appliance makers to consumers, who will end up paying…

  • Awakening From a Deep Slumber: A Potential Jump in Inflation

    I often tell my son when we’re driving home from school that before he can play games on his iPad he needs to finish his homework. This is a common behavior among parents and we do this to set expectations to try to reduce the chances for an argument. If I wait until my son…

  • Everybody Take a Deep Breath…

    The past two weeks have tried the nerves of the average investor, though a quick look at history would have provided reassuring perspective during the market’s gyrations. The S&P 500 dropped nearly 12% in just ten trading days, while market volatility spiked. Some investors fled both equity and bond markets. The SPDR S&P 500 ETF…

  • A Tale of Two Markets: Equities vs. Credit

    Global stock markets continued to sell off throughout the week. In the U.S. the S&P 500 closed the week down 142.58 points, although stocks finished the week with a strong rally into the weekend. As my colleague, Chuck Lieberman, mentioned last week, corrections are quite common in the stock market and current economic fundamentals remain…

  • Is This the Big One?

    The stock market finally managed to suffer a correction and like people who live in California, investors are wondering if this is the “big one”.  That’s pretty unlikely. It takes very little or nothing at all to start a short-lived correction of 5% or 10%.  Larger declines require a recession and our economy remains fundamentally…

  • New Life for an Old Recovery?

      GDP growth came in a bit below expectations on Friday, but reaffirmed the broader strength of the U.S. expansion. Solid growth, amidst a tight labor market, remains an encouraging sign for the future health of the economy and of stock markets. While some may worry that a recession must be just around the corner,…

  • What is Fueling the Market Rise?

    Since the year began just a few weeks ago the equity market has rallied over 4%, fueled by continued strong economic data, robust holiday sales, deregulation, and residual momentum stemming from the Tax Cut and Jobs Act. The tax cuts in particular warrant such a sudden move in markets. S&P earnings will benefit by a…

  • Charles Lieberman Sees A Strong U.S. Jobs Report

    Charles Lieberman, Advisors Capital Management chief investment officer, explains why the unemployment rate keeps on falling. He speaks on “Bloomberg Daybreak: Australia.” (Source: Bloomberg) Original television air date January 7, 2018

  • Tax Reform Creates Winners and Losers in High Yield

    The recent tax reform package signed into law for 2018 is an overwhelmingly positive development for U.S. corporations. The tax package promotes capital investment through lower statutory cash tax rates and accelerated depreciation for capital expenditures made in the United States. The headline 21% tax rate is applicable for adjusted domestic earnings. However, new limitations…

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