A New Kind of Hedge

We continue to position portfolios at neutral levels of risk, believing that the substantial downside risks (Europe, the looming fiscal cliff, an economic slowdown, etc.) are balanced by the growing possibility that global central banks may soon inject more stimulus that could propel risk markets higher again — similar to what’s happened the past two…

Conflicting Messages

One of the interesting (and frustrating) aspects of the current environment is just how muddled the evidence is right now. While it’s true that there’s always a bullish or bearish case to be made, it’s struck us lately just how far the gulf between the two camps has grown. The independent analysts that we follow,…

Discretionary Stocks Continue to Impress

Since the stock market made its recent high on April 2nd (in the S&P 500), there has been a noticeable shift in sector performance. As they often do during periods of market indigestion, defensive sectors such as Health Care, Consumer Staples, and Utilities have been outperforming. Meanwhile, the cyclical sectors of the market that had…

Earnings Season Gets Underway…

Second quarter earnings season officially kicks off today, as companies report on their performance during the first quarter of 2012. Dow component Alcoa, an aluminum company, reports shortly after the market close. Earnings have been incredibly strong for the past few years coming out of the last recession, and have been one of the main…

The Return of the Euro Crisis

Some volatility has crept back into the markets in the past few days, largely driven by negative news flow out of Spain (the latest country to come under pressure as a result of the European debt crisis). This probably didn’t come as a surprise to most professional investors, but it might have to Europe’s esteemed…

Financial Stocks Join the Party

Financial stocks have been a controversial sector since suffering massive losses in 2007-08, much like Tech stocks were following the bursting of that bubble in 2000. Financials have also generally been out of favor during the recovery of the last few years. In 2011, they were the worst performing sector in the S&P 500, and…