August 27, 2014

What are credit markets telling us?



James Swanson, Chief Investment Strategist, describes how the credit markets have been early indicators of equity market excesses, but are providing little evidence of a bubble now.

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August 19, 2014

A curious investing conundrum



US growth is accelerating and profits are rising, says James Swanson, Chief Investment Strategist, while China and Japan are slowing, and Europe’s recovery is faltering.

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August 13, 2014

Wrapping up the earnings season

Market watchers have claimed that this summer’s selloff is a long overdue correction in US equities.
We believe that in the long run, market movements tend to align with earnings and revenue growth.
Based on second-quarter reports, the S&P 500 Index has actually been moving with fundamentals.


Earlier this year, pundits in the financial media lamented when the stock market hit new highs — as if that was a bad thing. Then the summer selloff came, and these authorities on the market asserted that US equities had been due for a correction all along.

Whatever these commentators choose to think, we believe that market movements tend to align with earnings and revenue growth over long periods of time. Accordingly, this year’s highs are not surprising but rather, actually in line with history. From June 2009, when the recession ended, through 8 August 2014, the price-only S&P 500 Index (before dividends) and operating earnings on this benchmark both rose about 180%.