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The Value Trap

By David O'Malley | February 21, 2017

In this short trading week, I will be watching to see if we get any more information on the Federal Reserve’s (Fed) current thinking when they release the January meeting minutes this Wednesday. If U.S. economic data remains strong, I expect the Fed to increase interest rates by 25 basis points at the March meeting. Also of interest this week is the expected release of Berkshire Hathaway’s earnings and Warren Buffett’s annual letter on Saturday, which to me is a must read.

Changes in Store for Fannie Mae & Freddie Mac

By Mark Heppenstall | February 16, 2017

The Trump Trade has emerged as new vernacular across the investment world since Election Day. In just three months, the Trump Trade has led to the Dow Jones Industrial Average breaking 20,000, a S&P 500 Index market capitalization in excess of $20 trillion and—maybe most remarkably—a hawkish Federal Reserve Chair, Janet Yellen.

Yellen and Inflation Highlight the Week Ahead

By David O'Malley | February 13, 2017

U.S. stocks reached new highs last week amid the continued slow process of cabinet appointments in Washington and the heightened noise associated with the new administration. Business optimism was fueled by the announcement that the administration’s tax plan will be released in the next few weeks, most likely at the state of the union address on February 28.

Could 2017 Mark the Return of the Tech IPO?

By Trevor M. Williams | February 9, 2017

2016 marked the slowest year for global technology initial public offerings (IPOs) as measured by both number and value in at least the last five years. The combination of uncertain market conditions, high private valuations and ample cash hordes allowed many companies to wait until public markets offered a more favorable environment. After a slow start, global technology IPOs recovered slightly in the second half of the year. We’re now entering into an environment that looks to be highly favorable for companies seeking to go public.

What is the Consensus Market View?

By David O'Malley | February 6, 2017

Last week was fairly uneventful from a market data perspective, as all eyes continued to be glued on Washington and the almost constant coverage of the Trump administration. On the economic data side, the unemployment report confirmed the continued creation of new jobs. Stocks and bonds gained on the jobs report, as job growth without inflation helped support asset valuations.

Yield-Hungry Investors Facing a Conundrum

By James Faunce | February 2, 2017

Institutional yield buyers in the fixed income credit markets have been waiting a long time for Treasury rates and absolute yields to increase. Since rates hit lows last summer, it appeared that the move higher in yields was finally going to materialize, particularly following the election results in which 10- and 30-year Treasury rates rose almost 80 basis points (bps). However, the very strong tightening in credit spreads has flattened the industrial credit curve quite substantially. As a result, despite the back-up in long Treasury rates, the all-in yield for long industrial credit has been largely offset.

Central Banks Take Center Stage

By David O'Malley | January 30, 2017

Stocks made new highs last week as the Dow Jones Industrial Average broke above the 20,000 level on optimism for pro-growth policies from the Trump administration. The week ahead will provide the first significant update on several key central banks’ thinking for 2017.

U.S. High Yield: Is the Juice Worth the Squeeze?

By Scott Ellis | January 26, 2017

The U.S. High Yield market (USHY), as represented by the JP Morgan Domestic High Yield Index, quietly returned almost 19% in 2016, outpacing stocks in the S&P 500 Index, which are up approximately 12%, and the Dow Jones Industrial Average, up approximately 16.5%. There are many constantly changing variables that factor into market returns. However, I wonder if even without being able to identify and correctly forecast every variable, was there a way to predict the odds of an outsized return for the USHY market at the start of 2016?

Economic Data Will Drive the Markets in the Week Ahead

By David O'Malley | January 23, 2017

The inauguration stole the headlines last week, and I expect it will be no different in the week ahead. With the anticipated repeal of The Affordable Care Act, cabinet appointments and the planned meetings with world leaders, including U.K., Canada and Mexico, the activities in Washington will continue to keep the media’s attention. Amid this, I believe market participants will start to turn their attention back to the economy and earnings, both of which will be prominent in the week ahead.

Capital Market Outlook for 2017

By Mark Heppenstall | January 20, 2017

Nearly eight years into one of the most unloved bull markets ever for U.S. equities and credit, the rally now appears ready for “extra innings.” Despite increasingly full valuations and an earnings recession for U.S. companies during a recent five-quarter stretch, proposed economic policies under the Trump administration will be supportive of domestic economic growth and corporate profits.

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