A Strong Dollar Favors U.S. Large Cap Equities

Posted by David Templeton on Friday, November 21, 2014
Today China announced a rate cut, the first in two years, and Mario Draghi announced the ECB would expand its stimulus program if inflation did not return to the ECB's target level. These two announcements have resulted in global equity markets spiking higher. The two actions are likely to result in further strength in the US Dollar. With this in mind, investors should remain cognizant of market performance when the dollar strengthens. As the below chart shows, emerging markets historically unde...
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One Chart The Bears Hate

Posted by David Templeton on Wednesday, November 19, 2014
In September I posted a similar chart as the one below; however, data in the earlier post represented returns and duration for the S&P 500 Index. The article was republished on Seeking Alpha and most of the comments to the SA article took exception to how the chart was constructed. One commented noted "More upside? Unlikely..." Absent the market's October swoon, the U.S. equity markets continue to close at record highs. The below chart of the Dow Jones Industrial Average is from Chart of the Day...
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Week Ahead Magazine: Contrarian Investment Opportunities

Posted by David Templeton on Monday, November 17, 2014
Over the weekend Andrew Nyquist published an article on See It Market's website titled, Is The Nasdaq 100 Overheating? The article noted the sharp advance of the Nasdaq 100 Index in 2014 versus other U.S. focused indices as noted in the below chart from the article. The strong index performance can be partly attributed to the strength in Apple's stock as it comprises nearly 15% of the Nasdaq 100 Index. From The Blog of HORAN Capital AdvisorsMarket commentary over the past week seems to be cente...
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Global Companies Report Lower Revenue And Earnings Growth In Q3

Posted by David Templeton on Monday, November 17, 2014
One factor evident this earnings season is the stronger US Dollar is likely having a negative impact on companies more exposed to global business. Certainly, the economic slowdown in Europe is having an impact as well; however, the recent strength in the US Dollar has been a headwind for multinational companies as well.From The Blog of HORAN Capital AdvisorsFactset recently summarized company revenue and earnings growth for S&P 500 companies that have reported third quarter earnings. As the belo...
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REITs Will Be Separate GICSĀ® Sector

Posted by David Templeton on Saturday, November 15, 2014
Earlier this week S&P Dow Jones Indices, along with MSCI, announced real estate investment trusts (REITs) will be separated into their own sector under the Global Industry Classification Standard (GICSĀ®). The current REITs contained within the S&P 500 Index are noted in the below spreadsheet.Full ViewThis change will increase the number of GICS sectors to eleven from the current ten. In a post on S&P's website they note,"Real Estate, previously part of the GICS financial sector, will be the 11th...
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Individual Investors Becoming Too Bullish?

Posted by David Templeton on Friday, November 14, 2014
Yesterday the American Association of Individual Investors released their weekly sentiment survey. As the below chart clearly indicates, individual investors have certainly become more bullish. Some highlights from this week's survey report.Bullish sentiment of 57.91% is a high for this year.The bull/bear spread of 38.6% is at a high for the year and above the average plus one standard deviation totaling 26.8%.Since mid October when the bullish sentiment fell to 35.42%, the S&P 500 Index is up o...
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Silver And The U.S. Dollar

Posted by David Templeton on Wednesday, November 12, 2014
Given the decline in silver prices, it is not surprising we are beginning to field questions from investors about the potential opportunity in silver and commodities in general. One of the easiest ways investors are able to invest in silver is via the exchange traded fund, iShares Silver Trust (SLV). As the below chart shows, this index has been on a fairly steady decline since peaking in early 2011.From The Blog of HORAN Capital AdvisorsAs timing would have it, today's Wall Street Journal conta...
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Week Ahead Magazine: The Presidential Election Cycle

Posted by David Templeton on Monday, November 10, 2014
With the mid-term elections in the U.S. over, the market can focus on the fundamental underpinnings of the economy. Technically, however, the presidential election cycle and the election outcome are suggestive of a positive period for equities. According to Ed Yardeni, Ph.D of Yardeni Research,"...since 1942, the S&P 500 rose on average by 8.5% for the subsequent three-month periods, 15.0% for six months, and 15.6% for 12 months. There was only one out of the 45 periods that was down, and just f...
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Week Ahead Magazine: A Bullish Period For Equities

Posted by David Templeton on Monday, November 03, 2014
Investors enjoyed a sharp recovery in equity prices last week. The major U.S. indexes were higher by 2.7% to nearly 5% for the small cap Russell 2000 Index. The small cap return pulled the index into positive territory for the year: up .8%. This week investors will digest a large number of earnings reports, but the short term focus may be the mid-term election on Tuesday. This week's magazine includes a number of articles that focus on equity market returns around the mid-term election cycle. In...
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Investor Letter Fall 2014: Sailing Into The Wind

Posted by David Templeton on Friday, October 31, 2014
HORAN Capital Advisors recently published its Fall 2014 Investor Letter. The consensus view at the start of 2014 was interest rates would rise and economic growth would be globally synchronized led by the U.S. Now three quarters of the way through 2014, it appears economic growth in the U.S. is the only consensus viewpoint being realized.Although we are just a month past the end of the third quarter, September 30th seems a distant memory. The third quarter ended on a weak note for most asset cla...
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