The February Job Openings and Labor Turnover Survey showed a drop in openings of 538,000. Commentary on the February report used terms like plunged and disaster. Admittedly, the decline in openings should not be dismissed out of hand; however, it has not been an unusual occurrence for openings to fall as seen in the below chart.Importantly, openings continue to exceed the number of unemployed by 8...
A potential downside for investors employing a strict longer term strategic investment allocation based on a specific benchmark or index is that the strategy fails to incorporate shorter term tactical changes. It certainly can go without saying but indexing strategies are popular ones for investors. In fact we utilize some index products in our investment approach with our clients. The downside fo...
As the end of March neared, the 3-month Treasury interest rate surpassed the 10-year Treasury interest rate and this resulted in a 3-month/10-year inversion of the yield curve, the first since 2007. This inversion has unwound as the curve has started to steepen with a move higher in the 10-year yield. At HORAN we focus more on the 2-year rate versus 10-year rate and this portion of the curve has y...
Yesterday S&P Dow Jones Indices reported stock buyback activity for the S&P 500 Index as of the end of the fourth quarter 2018. Highlights from S&P DJI report:Q4 share repurchases increased 62.8% year-over-year to a record $223.0 billionTotal 2018 buybacks set record $806.4 billion, up 55.3% year-over-year, and up 36.9% from the record $589.1 billion set in 2007Almost every S&P 500 constituent – 4...
The Investment Company Institute releases fund flow and ETF net issuance data on Wednesday's with a one week lag. In Wednesday's report for the week ending March 13, 2019, ICI reports domestic equity inflows spiked to $12.8 billion. This represents the largest weekly inflow since March 20, 2018 when domestic equity inflows totaled $19.1 billion.On a cumulative basis over the last one year period, ...
Since the equity market peak in the third quarter of 2018, the average return of the FAANG basket of stocks, i.e., Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Alphabet f/k/a Google (GOOGL), has underperformed the broader S&P 500 Index as seen below. I have highlighted the significant contribution the FAANG's have had to overall market returns in prior posts like the Growth verse...
With today's release of the January Job Openings and Labor Turnover Survey (JOLTS), there is further confirmation that the job market remains tilted in favor of job seekers. As Econoday noted in their report, "employers are increasingly scrambling to fill [openings]." Even with new hires increasing by 1.5%, openings exceed hires by a record 1.78 million individuals.A year ago with the March 2018 ...
From 2014 to mid-2015, investors seemed to have a favorable view on stocks if one bases the observation on ETF and mutual fund flows. As the below chart shows, the increase in S&P 500 Index until mid-2015 coincided with positive flows into domestic equity focused mutual funds and ETF's. Beginning in mid 2015 though, investor flows turned negative (maroon line.) During late 2016 and early 2017 the ...
Since the beginning of 2018, investors have encountered a stock market that is more volatile, yet at a level of volatility that is more normal. The below chart shows the return pattern for the S&P 500 Index since 1/2/2018 and the steep decline that began at the end of last September has been followed by a sharp recovery in 2019.Leading the recovery has been small cap stocks that are up 18.1% year ...
Several recent releases of various investor sentiment reports show an improvement in overall investor sentiment. In late December I noted a number of the sentiment measures were indicating extreme fear on the part of investors. Since my December post both sentiment and the equity market have experienced a marked improvement. One example is this week's release of the AAII Sentiment Survey. Individu...