By Mitchell Anthony
October 21 2019
US Economy continues to ebb and flow.
The recovery in the equity markets that began in January paused in the third quarter as investors became uneasy with weak economic data on global economic conditions, as well as a deteriorating industrial sector here in America. The consumer side of the economy remains quite robust and as contributed to optimism that has kept the market on a plateau and gave sellers reason to pause.Read more
Q2 2019 - Markets advanced with defensive leadershipBy Mitchell Anthony
The US Economy continues to ebb and flow producing steady but below trend growth for several quarters. This trend seems likely to continue as the economic environment stays extremely stable with low inflation, friendly fed policy, and employment at all-time highs. The Current trends in the US economy show a mixed picture but generally improving economic fundamentals are visible. Read more
Corporate American SuperstarsBy: Mitchel Anthony
Facebook, Amazon, Apple, Netflix, and Google (The FAANG) have been the pride of corporate America for many years and have been at the top of the list of most growth portfolios. Their innovation has changed the world and given America reason to be proud of what capitalism can produce. Every economic cycle has growth leaders but these great companies have set a standard that will be remembered for decades if not centuries to come. There are always doubters and those that believe the growth leaders in our economy are somehow cheating or taking advantage of consumers of their products. We have seen this talk in the past and undoubtedly will see it again.
The political mess in Washington somehow believes that Facebook, Amazon, and Google should be broken up because they have become too big and powerful and as a result are stifling competition. This has investors concerned and their stock prices have waned as a result. Apple is suffering from a different type of political problem. They are caught up in the middle of a trade war that impacts prices for their products. As a result the growth outlook for the FAANG has clouds on the horizon.Read more
The news flow over the last few weeks has centered on Trumps attempts to level the playing field with America’s adversaries and partners. This would include China, Mexico, and much of Europe. The game at play involves global trade and Trumps desire to better position America as a major exporter of goods and services to the emerging middle classes in China, India, and Asia. Investors are always worried about change and this game at play could put America back into a whole new cycle of amazing growth similar to the nifty 50s. Thus far we have seen more pessimism rather than optimism. As a result the markets have fallen 5 to 7% on this recent news flow. Synthesizing the right decisions out of these developments is our challenge as we try to stay ahead of where investors will go over the next year as they watch Trump do what he does best - negotiate and deal. Read more
Donald Trump surprised the markets and investors last week when he announced decisions to continue to aggressively battle China and seek significant gains in a trade agreement as his reelection year approaches quickly. Most investors believed that Trump was more concerned about the short-term gains for the economy than the long-term potential that would be derived from a trade agreement. As a result investors likely believed that Trump would back off the aggressive tone he had taken previously toward the Chinese and either sign a compromised agreement or allow this opportunity to pass. This obviously did not happen.
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US equity markets rebounded at an amazing pace in the first quarter of 2019. Historically it has almost been unheard of for equity market corrections of 15% or more to be retraced at the same or better pace than what occurred during the fall. This is exactly what occurred in the first quarter of this year. This obviously has us thinking deeply about what was behind the selloff that occurred in the fourth quarter and whether it was in fact a manufactured correction by hedge funds seeking to make enormous amounts of money through a big short. We hypothesized in January of this year that the selloff in the fourth quarter was likely due to a big short put on by hedge funds and institutional investors and not likely due to fears from investors worried about a substantial change in the economic environment. This seems to be what primarily occurred. Now in hindsight there are some other observations that can be made and clearly more data is available about the economic conditions that were the headline news driving markets lower in Q4. Read more
By Mitchel Anthony
The US economy continued on its path of acceleration in the third quarter at the expense of rest of the globe. Virtually all sectors of the US economy reported robust growth and improving demand for their goods and services throughout the third quarter. While the naysayers worried about the impact of tariffs and the trouble in social media, the equity markets notched a terrific quarter with returns exceeding 7% or more across most domestic large-cap indices. MACM’s dynamic growth portfolio advanced 9% in the quarter and its diversified equity portfolio advanced 10.1% in the quarter far exceeding the bogey of the S&P 500 which was up 7.4%. Read more
Equity Markets Delink From Economic Data And Get Distracted With Washington Policy.
Equity markets in America suffered their worst quarter in over two years as 2018 began on a soft note. The softness in equities in Q1 followed an outstanding year for equities in 2017 and was not surprising for many investors but was unwelcome for traders. The S&P 500 fell .76% in the first quarter of 2018. Mitchell Anthony Capital Management (MACM)’s clients enjoyed much better performance in Q1 with almost all strategies posting positive returns. MACM’s diversified equity portfolio advanced 4.8% , DYNAMIC GROWTH advanced 3.5% HIGHLY FOCUSED EQUITIES advanced 5.4%, ASSET ALLOCATION INCOME advanced 3%, and GROWTH advanced 4% in the quarter. MACM’s clients enjoyed 372 - 620 basis points of positive alpha in Q1 of 2018. This outperformance was attributed to the superior group of equity holdings in the portfolios managed by M ACM. Positive alpha was gained from holdings in healthcare, Internet retailing, technology, and financials. Conversely MACM had only modest holdings in areas like telecom, energy, utilities, and consumer staples (which led the equity market lower).Read more
2017 began with optimism from investors, consumers and businesses. The market’s great year began with a great first quarter followed steadily by similar gains in Q2 - Q4. Washington policy took a turn for the better despite unrest amongst the liberal socialists in our country. Trump’s first year was difficult for him and the nation as the country failed to unite; however, progress was made as Trump proved himself worthy of the job and did get one of his initiatives done! The tax cut was a great victory for business and had some modest benefits for most Americans as well. The obstruction to Trump's plans was unfortunate. It continues but shows signs of waning as liberal democrats are losing face, and possibly their will to continue, as meritless attacks failed to distract the White House agenda, but did wear on the American public’s tolerance for dishonesty from their leaders and the media.
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The American Economy continues to show signs of improvement and the growth picture has improved. As a result the equity markets have moved significantly in the first half of the fourth quarter. Economic results showing the health of the consumer, industrial sector, and globe have trended higher throughout Q4. This along with strong corporate earnings announcements since the end of Q3, have provided fuel for higher equity market prices. While many thought the leadership in the market was due for a change toward value, this has not occurred, and better earnings continue to drive the growth markets higher.Read more
