Tag Archives: Jack Ablin

POCKETBOOK: Week ending Oct. 13, 2017

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  • Inflation

 The wicked stepmother in the world of money is inflation. Like that hateful woman, should you know one, does all of her nasty business right in front of your very eyes without you noticing. Until it’s spending time and you find out the money you thought you had doesn’t nearly buy the same amount of goods and services it once did.

Like I said, it happens right in front of your very eyes.

Jack A. Ablin, BMOs chief investment officer, wrote about inflation in his most recent Current Market Update. Here’s history about inflation taken from that Update: “In an economic expansion spanning nearly 10 years, one missing ingredient has been inflation.  Year over year inflation has remained stubbornly below three percent consistently for more than six years.  Lackluster pricing power has vexed business leaders and the Federal Reserve who both would like to see incremental price growth.  Headline inflation has fallen short of the Fed’s two-percent target in 66 of the last 100 months.  Moreover, 2011 was the last calendar year when inflation hit three percent.  The trend has picked up marginally between 2014 and 2016, but last year’s inflation rate was a tepid 2.1 percent. ….”

If you’re wondering when inflation’s bite will get stronger, Ablin wasn’t specific. But he points out that if inflation flares up when there is no economic growth happening, that would represent a “bull markets financial threat.”

We shall see…

 

  • Market Quick Glance

Nothing spooky about Friday the 13th for three of the four indices followed below. All, with the exception of the Russell 2000, reached brand new highs.

All of this new high stuff is getting a little boring, if you ask me. And hard to figure if you’re looking for why’s from the talking heads. One of whom said that this market is going to continue upward as long as there are bundles of cash sitting on the sidelines.

Which– those in the know– say there is.

Below are the weekly and 1-year index performance results for four major indices— including the dates each reached new highs—according to CNBC.com based on prices at the close of business on Friday, October 13, 2017.

-DJIA +15.73% YTD up a tad from last week’s 15.24%.

  • 1 yr Rtn +26.37% up from last week’s 24.66%

And another new all-time high for the DJIA. This one of 22,905.33 was reached on October 13, 2017.

Its previous high was reached October 5, 2017 at 22,777.04.

On March 1, the Dow stood at 21,169.11.

 

-S&P 500 +14.04% YTD up from last week’s 13.87%.

  • 1yr Rtn +19.72% up from last week’s +17.98%

The S&P 500 reached a new high of 2,556,65 on October 13, 2017.

The previous high of 2,552.51 was reached on October 5, 2017.

On March 1, 2017, that index stood at 2,400.98.

 

-NASDAQ +22.71% YTD up a tiny bit from last week’s +22.42%.

  • 1yr Rtn +26.71% up from last week’s 24.18%

The Nasdaq reached a new all-time high of 6,,616.58 was reached on October 13, 2017.

Its previous high of 6,590.18 was reached on October 5, 2017.

On April 5, 2017 the index closed at 5,936.39.

 

-Russell 2000 +10.72% YTD down from last week’s +11.28%.

  • 1yr Rtn +23.60% up considerably from last week’s +21.18%

The Russell 2000 reached a new all-time high of 1,514.94 on October 5, 2017.

Its previous high of 1493.56 was reached on September 29, 2017.

On March 1, 2017 this index stood at 1,414,82.

 

-Mutual funds

Even with a week resulting in new highs for many indices, the year-to-date average cumulative total reinvested return for equity funds falling under the broad U.S. Diversified Equity Funds didn’t move much. It closed with a 13.54% average return on Thursday, October 12, 2017, according to Lipper. That’s down a tiny bit from the previous week’s figure of 13.65.

The average Sector Fund had a year-to-date total return of 9.83% with two fund types under that heading up over 30%: Global Science & Technology funds up on average 39.38% and your basic Science & Technology funds, +32.01.

World Equity Funds were up on average 24.54%. Four of them have year-to-date average returns up over 30%: China Region Funds, +39.04; Pacific Ex-Japan Funds, +33.61%; India Region Funds, +32.05; and Latin American Funds, +30.94.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

•Best and worst ETFs

 There’s no overlooking the popularity of Exchange Traded Funds, ETFs. Their popularity and investment choice numbers have grown faster than, I’m gonna guess here, even Wall Street wizards could have ever imagined.

Knowing that, below are the three best and three worst ETF performers year-to-date through October 10, 2017 from ETFTrends.com:

  • Best: Ark Inovation (ARKK) up 74.3%; WisdomTree China Ex State Owned Enterprises Fund (CXSE) up 70.8%; and Kraneshares CSI China Internet ETF, (KWEB) up 68.2%.
  • Worst: United States Natural Gas Fund (UNG) down33.9%; PowerShares S&P Smallcap Eneegy Portfolio (PSCE), down 31.4%; and SPDR S&P Oil& Gas Equipment & Services Etf (XES), down 26.6%.

 

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POCKETBOOK: Week ending June 4, 2016

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  • Welcome to June

I’m guessing investors can expect the same from the equity markets this summer as they can from their summer travel experiences: No relief from worries about the direction of the stock markets or from the weather and the storms typically accompanying them.

Then again, worrying about things to come has never paid much of a dividend. Enjoying the moment, however, certainly has.

  • Market Quick Glance

-Indices:

Below are the year-to-date performance figures for the major indices through June 3, 2016, according to Bloomberg. To provide a longer performance perspective, 1-year returns have been added.

The Russell 2000 was the only index of the four below that enjoyed any noteworthy upward change—its y-t-d return gained about 1.5%.

-Dow Jones +3.49% YTD

1yr Rtn +2.44%

-S&P 500 +3.71%YTD

1yr Rtn +2.51%

NASDAQ -0.66% YTD

1yr Rtn -1.17%

Russell 2000 +3.12 YTD

1yr Rtn -6.31%

-Mutual funds

Through Thursday, June 2, 2016 the average U.S.Diversified Equity Fund jumped into positive territory ending the week up 2.65 percent, according to Lipper. Last week, if you remember, the average year-to-date returns of this group of 815 funds was down 1.29 percent.

It was Equity Leverage Funds that ruled the performance roost as the y-t-d performance of the 200 funds in that category had an average return of 7.40 percent. Behind it  Mid-Cap Value Funds with their average return of 6.45 percent followed by Small-Cap Value Funds at 6.45 percent.

Precious Metals Equity Funds are still rewarding their shareholders as the average return of this group was up 63.83 percent. Those rewards, however, just aren’t as much as they had been. Three weeks ago, (May 19), the average return of funds in this group was 75.64 percent. Now the return is 11.8 percent lower that the one reported on May 19.

One more thing: That 3-year average return of U.S.Diversifed Equity funds pointed out  in last week’s POCKETBOOK  of over 9 percent has shriveled  22 basis points to 8.80 percent.

I mention that only because investors need to look beyond current returns and back a few years to get a real sense of what’s happening in the market regarding the direction of equities.

It’s still an iffy market with recession worries that aren’t going away.

Visit www.allaboutfunds.com for weekly updates to see how equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • BMOs July outlook

I know, it’s still June but BMO likes to keep on top of things. And, in the BMO Wealth Management  June 2 report titled “July 2016 Outlook for Financial Markets” , its Summary by Jack A. Ablin,  BMOs Chief Investment Officer, is worth sharing.

Here’s the Summary:

“•Temp jobs are the first to go in a downturn. The sector has shed 27,400 jobs since December, reversing a five-year trend that saw it grow five times faster than overall employment.

“•Businesses are awash in more than $1.8 trillion of cash –and the 25 largest companies control more than half of the hoard. While this corporate “one percent” is up to its armpits in cash, the bottom 99 percent is swimming in debt.

“•What’s bothering the corner office? Consumers are confident, spending is strong and interest rates are low, yet companies aren’t spending.

“•Despite becoming an increasingly distant memory with every passing year, the housing bust and financial crisis inflicted lasting scars on American households.

“•Conviction and complacency are running hot, setting investors up for a surprise. “