HORAN Capital Advisors

A Steeper Yield Curve Should Benefit Financial Stocks

 December 26 2019     David Templeton
In 2018 the Federal Reserve pursued an interest rate policy the led to the yield curve (10y/2y) inverting. This year the Federal Reserve Bank has reduced the Fed Funds rate three times in response to a slowing economy that developed in 2018. The last 25 basis point rate cut occurred in October and some now believe this may be the last cut of this cycle. Coinciding with the last cut was a paper rel...

Sentiment Tends To Provide Insight Into Future Market Returns

 December 25 2019     David Templeton
In investing no one metric tends to provide 100% certainty into the future direction of the market or individual stock or bond for that matter. Though sentiment measures do provide insight into the so-called mind of the market, or better yet the mind of the individual or institutional investor. This is one reason I report on sentiment and fund flows from time to time during the year.Last week I pr...

Top Economist Ed Hyman Has Favorable 2020 Outlook For The U.S.

 December 24 2019     David Templeton
WealthTrack's Consuelo Mack is in the midst of conducting her annual year end interview with Ed Hyman, Vice Chairman of Evercore and this year, Matthew McLennan of First Eagle Investment Management. Part I of the interview below focuses on the U.S. with a later Part 2 interview focusing on the international outlook. As noted by WealthTrack, "Ed Hyman is the Founder and Chairman of its Evercore ISI...

Buybacks Resume Growth In The Third Quarter

 December 20 2019     David Templeton
Buybacks for companies in the S&P 500 Index turned higher in the third quarter to $175.89 billion after declining from a peak of $222.98 billion in Q4 2018 as represented by the red line in the below chart. With a resumption of higher buybacks, the total of dividend and buybacks increased in Q3 to $299.01 billion versus $284.14 billion in Q2 2019. Quarterly totals for dividend payments consistentl...

Individual Investor Sentiment Swings To Bullishness

 December 19 2019     David Templeton
Today's AAII release of the Sentiment Survey reported a 6.5 percentage point jump in individual investor bullishness. This increase came mostly from the bearish category as it declined 5.6 percentage poitns. With the bullishness reading now reported at 44.1%, this is above the long term bullish average of 38.0%. The plus one standard deviation above the average is 48% so individual investors are a...

Just Not Enough Workers

 December 17 2019     David Templeton
The October Job Openings and Labor Turnover Survey (JOLTS) released today reported a 235,000 increase in job openings to 7.3 million. The survey continues to show the economy is functioning at a level with more job openings than unemployed individuals. This can be seen in the following two charts with the first one showing only .81 unemployed workers available per job opening. The second chart sho...

Dividend Income Strategies Lagging In Strong Up Market

 December 15 2019     David Templeton
Investors positioned for higher stock and bond prices during the year have not been disappointed. With the Federal Reserve pursuing a lower interest rate policy, bond yields declined for most of the year with a commensurate increase in bond prices. Stock prices have mostly trended higher as well with some of the price increase a recovery from last year's fourth quarter selloff. Returns across most...

Small Business Carrying Its Weight

 December 10 2019     David Templeton
According to the November release of the NFIB Small Business Optimism Index, small businesses have a favorable view on economic growth. The index rose 2.3 points in November to 104.7, the largest monthly increase since May 2018. There was not much to not like in the report as 10 of the seven index components rose.Highlights from the report include:"The NFIB Uncertainty Index fell 6 points in Novem...

Investor Cash Balances Elevated Or Maybe Not So Much

 December 9 2019     David Templeton
Over the course of the equity rally this year, periodically I have noted the significant level of outflows from equity mutual funds and ETFs. Commensurate with these outflows has been the significant inflows into bond mutual funds and ETFs and money market mutual funds. The Investment Company Institute (ICI) is one organization that tracks fund and ETF flows and for the week ending November 26, 20...

Gold Losing Its Luster

 December 8 2019     David Templeton
There can be a number of reason for an investor wanting to have an allocation to Gold. One reason for owning Gold is it tends to serve as a safe haven asset and perform well in an environment where economic activity is slowing. On the other hand investors might look to Copper as an investment if they expect a pickup in economic activity as it tends to rise with a growing economy. As noted in a rec...
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