HORAN Capital Advisors

Citgroup Economic Surprise Indices Have Little Bearing On Equity Market Performance

 October 15 2017     David Templeton
One set of indices that seems to cycle from positive to negative over a relatively short period of time are the Citigroup Economic Surprise Indices (CESI). This aspect of these indices means they gain prominence from a commentary standpoint when they reach high and low points. What is important for investors to know is the CESI is a mean reverting index, that by design, cycles between highs and lo...

Synchronized Global Growth

 October 14 2017     David Templeton
Much of the sentiment and global market data continues to come in on the positive side of the ledger. Friday's University of Michigan Consumer Sentiment jumped six points to 101.1 for October and is the highest reading in thirteen years. As reported by Econoday, "The expectations component is up nearly 7 points to 91.3 with the component for current conditions posting a nearly 5 point gain to 116....

A Decline In Small Business Optimism

 October 10 2017     David Templeton
Today, NFIB reported the September Small Business Optimism Index results and they showed the Index fell 2.3 points to 103, which was below the lowest consensus forecast. In spite of the decline, the index remains at a high level as can be seen in the below chart.A larger percentage of the index components declined in September as the report noted,"Six of the 10 Index components dropped in Septembe...

Fall 2017 Investor Letter: The Hated Rally Continues

 October 2 2017     David Templeton
Our Fall 2017 Investor Letter has a music lyrics theme to it and since we have an age-diverse team as it relates to the employees of HORAN Capital Advisors so goes the taste in music for our colleagues as readers of the newsletter will find out.  As Chuck Prince, former chairman and CEO of Citigroup, said almost a decade ago,  "As long as the music is playing, you got to dance." This seems to be o...

Shifting Investor Sentiment

 September 28 2017     David Templeton
It seems the market's consistent bid to move higher this year might be confusing the individual investor. That is, the fact the market has escaped any material pullback this year may be weighing on consumers in that they are prepared for or expect a pullback. As the below chart shows, the market has avoided such a pullback of more than 3% so far this year.This lack of volatility has not translated...

A Recession And Equity Market Bubble Five Years Ago Did Not Materialize, Now What

 September 27 2017     David Templeton
I was communicating with a client today who reminded me of a conversation we had five years ago almost to the day about whether or not the U.S. equity market was in a bubble. The discussion was prompted by the USA Today article, Consumer Sentiment Stat Hints that Bull Market May be Stalling Out, that highlighted a data point from the recent University of Michigan Sentiment Survey. In the survey it...

Higher Bond Yields A Headwind For Technology Stocks

 September 24 2017     David Templeton
In a recent note from the John Murphy of the stockcharts.com website ($$) he notes technology stocks tend to have an inverse relationship to bond yields. In his commentary he noted,"One of the lesser known intermarket principles is the inverse link between bond yields and technology stocks' relative performance...Growth stocks like technology...do better in a slower economy which is usually associ...

Market Is In An Uptrend And Trends Tend To Persist

 September 17 2017     David Templeton
One strategist I read regularly and who prepares weekly technical commentary, Charles Kirk at The Kirk Report, had a reference in this week's report relative to the strength of the current market. Kirk highlighted the below quote from James DePorre,"If you simply focus on what the pricing action is saying, then your job of profitably navigating the market becomes a lot less complex. The simple fac...

Stocks Need Some Healthy Competition

 September 16 2017     David Templeton
It seems a day does not go by where various strategists lament the market's valuation and lack of any significant pullback in over a year and a half. Not only are the valuations of a number of equity indices above their long term average, some might say the valuations are indicative of the speculative froth in the market. One data point highlighted is the margin debt level. Certainly margin debt h...

The Risk Of De-risking The Equity Portfolio

 September 15 2017     David Templeton
The unique aspect of the current U.S equity market has been the market's desire to move higher without any significant pullback. As the below chart shows, the last correction (double digit decline) occurred in early 2016 and culminated with a 13.3% decline ending February 11, 2016. Since the February correction, two other pullbacks of around 5% occurred around June 2016 and November 2016.So far th...
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