June 08, 2020
Ending on June 3rd, the S&P 500 had the biggest 50-day rally in its history, gaining 37.7% over that period, and the NASDAQ Composite Index set a new all-time high on June 7th. As of the date of this letter, every stock in the S&P 500 is up over the last 10 weeks. S&P 500 valuations are the highest in nearly 20 years, as investors apparently think corporate profitability will dramatically increase relatively soon. The most common question we are receiving from clients is whether this rally can be sustained.READ MORE
April 03, 2020
As we continue to track the COVID-19 situation and assess its impact on financial markets, we wanted to share some of the resources we’re monitoring on a daily basis. Useful data is scattered across the internet, so we look at a variety of sources to get a fuller picture of how various states and countries are handling the pandemic, particularly how case and death curves are trending.READ MORE
March 13, 2020
First, and most importantly, we hope you are doing well and staying safe.
The longest bull market in the history of US equities came to an end this week as the S&P 500 fell more than 20% from its peak in breathtaking speed. As of yesterday’s market close, the S&P 500 is down 26.3% from that peak and 22.9% YTD. Small- and mid-cap stocks once again underperformed the S&P 500, and international equities also swooned. Risky credit such as corporate high yield and emerging market debt also suffered significant losses, but not to the extent of equity market losses. READ MORE
February 25, 2020
In the last several days, fears about the Coronavirus spreading have resulted in a “risk off” environment in financial markets: equity markets globally have lost value and US Treasury prices have risen. As of the time of this letter, on February 25th, the S&P 500 is down 7.2% from its peak , the MSCI Emerging Market Equity Index is down 8.00% from its recent high, and the yield on the 30-year US Treasury Bond is at an historic low of 1.79% (bond yields move in the opposite direction from price).READ MORE
Newcomers are arriving in record numbers to the Pacific Northwest. Home inventory levels are at ten year lows in many market areas. Three factors, listed below, have the potential to put continued pressure on available housing and consequently drive up valuations.
THE MILLENNIAL MORTGAGE BOOM
Three events in financial markets have received significant media attention in the last week: a potential Greece exit from the Eurozone, a potential default by Puerto Rico on its bond holdings, and the significant decline (after a rapid advance) in China’s equity markets. The Coldstream Investment Strategy Group thought it important to cut through the “media noise” and let you know our views on these events.
Near Term Uncertainty in Greece
As you may have heard, Greece missed a $1.7 loan billion payment to the International Monetary Fund on Tuesday. While this event and the closure of the Greek banking system are dominating news coverage this week, a $3.9 billion bond payment due to the European Central Bank on July 20 is much more important to world markets, since failure to pay would put Greece into a formal state of default. The situation remains extremely fluid, with developments coming nearly hourly. It is unlikely that current negotiations will lead to an agreement prior to a scheduled July 5 referendum, which will indicate whether the public will accept further austerity in order to stay in the Eurozone. Since the current government was elected on an anti-austerity platform, it may collapse if the referendum passes or if a deal on further spending cuts and tax increases is struck in the meantime.
Potential OutcomesREAD MORE
September 2013 marks the five-year anniversary of the financial market collapse in 2008; we have certainly come a long way in those five years. With the S&P 500 and the Dow eclipsing all-time highs and interest rates having stayed low for the longest stretch in 50 years, most investors have already received quite a benefit from the fount of cheap money. Since September 2008, a meaningful economic recovery has taken place. Look at the results since the equity markets bottomed out in March of 2009:READ MORE
Coldstream had the honor of hosting Strategas Research Partners on January 23rd at Overlake GCC. Strategas’ Chief Strategist and a regular on CNBC, Jason Trennert shared his major investment themes for 2013 in a post-election environment with “fiscal cliff” uncertainty.
Watch the video: https://www.coldstream.com/events
It came down to the very last minute, but compromise was made and the majority of the fiscal cliff averted. Not surprisingly the markets rallied early on news of the pending compromise. What was surprising was the resilience of the market during weeks of tough negotiations. Those expecting a repeat of the prior year’s debt ceiling debate and market fall were disappointed. With the compromise in place much of the uncertainty over tax policy has been put aside. The Bush tax cut rates have been made permanent for the vast majority of tax payers. Still ahead, a debt ceiling compromise and meaningful tax and spending reform as the fiscal cliff “fix” has added $4.6 Trillion to projected deficits over the coming decade. READ MORE