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Accepting Average: The Likelihood of Mediocre Future Returns
Over the last 10+ years, U.S. equity outperformance has been caused by increased profit margins, the accretive impact of share buybacks, dollar weakness, and most significantly, an outsized expansion in equity multiples. There are risks to all of these sources of outperformance, suggesting that a neutral long-term strategic allocation to U.S. equities is now likely warranted.
Despite Lackluster Growth, Equities Remain Attractive
by Bob Doll of Nuveen Asset Management,
There were a number of events for markets to react to last week, including decisions by the Bank of England and Bank of Japan to enact new stimulus programs, sharp polling shifts in the U.S. presidential election and further decent corporate earnings results. U.S. stocks rose last week, with the S&P 500 Index climbing 0.5%.1 The technology sector saw particularly impressive earnings results and climbed 1.5%. In contrast, most other markets around the world were flat or down.
Bright Signs for the Economy and Equity Markets
by Bob Doll of Nuveen Asset Management,
The macro backdrop last week was positive for the markets. As expected, the ECB cut interest rates, highlighting the favorable global monetary policy backdrop. Closer to home, solid vehicle sales and a good May labor market report gave investors additional reasons to bid up stock prices. The S&P 500 Index advanced 1.4%, marking a third straight week of gains above 1% the longest such streak since last September. Looking ahead, we believe the combination of an improving world economy, low levels of volatility and easy global monetary policy should continue to provide support for equ
Stocks Rise as Economic Backdrop Slowly Improves
by Bob Doll of Nuveen Asset Management,
U.S. equities finished higher last week, with the S&P 500 increasing 1.4%. Ukraine seemed to be receding in investors? minds. Despite the volatility and sharp increase in bond yields on Wednesday, the hawkish takeaways from the FOMC meeting were not a lingering overhang.
Positive Payroll Report Offsets Geopolitical Concerns
by Bob Doll of Nuveen Asset Management,
U.S. equities increased 1.1% last week after somewhat volatile trading due to heightened tension in Ukraine. Although the crisis dominated headlines, the market relegated the major geopolitical issue to the back burner. The broader macro narrative did not change, as concerns about dampened growth momentum continued to be pacified by the distortion from adverse weather.
Equities Rise Despite Mixed Fundamental News
by Bob Doll of Nuveen Asset Management,
U.S. equities increased 1.3% last week as the S&P surpassed the key 1850 level and pushed to new record highs. One favorable dynamic of the rally was the upside leadership from retail stocks, as earnings were largely ahead of expectations. Fed Chair Janet Yellen suggested concern about softerthan-expected spending in a number of recent data releases, but the bar for adjusting the tapering process has not been lowered.
Confusing Crosscurrents Result in Trendless Market
by Bob Doll of Nuveen Asset Management,
U.S. equities finished mixed after the shortened holiday week.1 The broad market narrative did not change, as additional disappointing economic data was largely attributed to the impact of adverse weather. Comfort that the recovery may be gaining traction was evidenced through Fed discussions and the January FOMC minutes, with consensus expectations for tapering to continue at a measured pace. Some renewed concerns about a growth slowdown in China surfaced but had little impact.
Global Growth Expectations Push Stocks Forward Despite Weather
by Bob Doll of Nuveen Asset Management,
U.S. equities finished sharply higher last week with the S&P 500 increasing 2.3% and all major U.S. averages up more than 2%.1 The rapid market recovery from the January pullback is a bigger surprise than the pullback that preceded it.
Growth and Policy Uncertainty Cause Choppy Markets
by Bob Doll of Nuveen Asset Management,
U.S. equities closed with modest gains last week, as the S&P 500 overcame Monday?s decline, the largest one-day percentage loss since June 2013. The weaker-than-expected ISM manufacturing and vehicle sales data drive the sell-off on Monday, exacerbating the focus on slowing momentum for the U.S. recovery. The impact of adverse weather complicates the picture. Also, although January non-farm payroll missed expectations, there were more upbeat indications for the household survey.
Emerging Market Turmoil Creates January Decline
by Bob Doll of Nuveen Asset Management,
U.S. equities finished lower last week, as the S&P 500 ended January with the first monthly loss since August 2013 and the largest monthly decline since May 2012. A global retreat from risk has been sparked by unrest around the world, sell-offs in emerging markets led by a 20% decline in the Argentine peso, weaker than expected economic reports from China, U.S. economic growth concerns in light of frigid temperatures and anxiety over Fed tapering.
Emerging Market Issues Weigh on U.S. Equities
by Bob Doll of Nuveen Asset Management,
U.S. equities finished lower last week as the S&P 500 declined 2.6% and suffered the largest weekly pullback since June of 2012. U.S. stocks are down approximately 3.0% both year to date and from all-time highs. In 2014, lack of direction in the market has been a focus, and the waning influence of macroeconomic news caused a notable shift late last week.
Crosscurrents Buffet Markets
by Bob Doll of Nuveen Asset Management,
U.S. equity performance was mixed last week, as the S&P 500 recovered from Mondays sell-off that was the largest one-day decline since early November. Economic data was mostly in line or slightly better than expected, following the disappointing December unemployment report. Corporate earnings drove much of the price action. Bank earnings were fairly well received but did not always translate to good performance since the stocks ran up earlier. Negative guidance trends remain an overhang, particularly for retail.
Stocks Rise Modestly in First Full Week of Trading
by Bob Doll of Nuveen Asset Management,
U.S. equities finished mostly higher for the first full week of the year, with the S&P 500 gaining approximately 0.6%. There were no meaningful directional drivers behind the price action, which is a dynamic that has been prevalent so far in 2014.
A Strong Finish for 2013
by Bob Doll of Nuveen Asset Management,
For our weekly subscribers, we wanted to take an opportunity to look back on the year. We began 2013 with an outlook for the prospect of improvement for the global economy and risk assets. We thought global policymakers unprecedented attempts to reflate global growth would show some signs of bearing fruit, especially in the United States and China. In our forecast, equity markets would continue to be choppy in light of the fiscal cliff issues, but an inevitable political compromise would reduce the economic drag.
2014 Investment Outlook: Economic Growth Should Broaden
by Bob Doll of Nuveen Asset Management,
For the first time in several years, we approach the new year without big clouds on the horizon. In the United States, accommodative monetary policy has healed many of the wounds from the 2008-2009 crisis.
Improving Economic Data Imply Further Global Recovery
by Bob Doll of Nuveen Asset Management,
U.S. equities finished last week in barely negative territory, ending the positive streak for the market. Economic data concerning the post-government shutdown climate has improved. Employment data beat estimates and increased by 203,000 jobs in November, and the unemployment rate fell to 7.0%, also surpassing expectations.
Looking Out on the Horizon for Equities
by Bob Doll of Nuveen Asset Management,
U.S. equities finished higher for an eighth consecutive week as the S&P 500 increased 0.1%, representing the longest positive streak since 2004. Inertia may have carried markets forward in a relatively quiet trading week without major headlines. Retail news appeared fairly positive in anticipation of a strong start to the Thanksgiving shopping weekend. Economic data was mixed.
Equities Extend Gains for the Seventh Consecutive Week
by Bob Doll of Nuveen Asset Management,
U.S. equities finished higher again last week as the S&P 500 increased 0.4%. The Fed continued to dominate headlines, with heightened emphasis on the distinction between tapering and tightening. Bubble speculation continued to receive attention in the press, while many articles refuted such concerns. The financial sector performed well, led by banks.
The Muddle-Through Economy and Grind-Higher Equity Market Continue
by Bob Doll of Nuveen Asset Management,
U.S. equities finished higher last week as the S&P 500 and Dow Jones Industrial Average closed at record highs, marking the sixth straight week of advances.1 Several macroeconomic themes are important as third quarter earnings season comes to an end. Fed Chairman nominee Janet Yellen spoke before the Senate in support of current monetary policy and suggested a similar path under her leadership. Economic data was mixed for the week, and any economic weakness continues to be perceived as supporting a delay in tapering. In turn, this can be seen as positive for equities.
Markets Vacillate Between Stronger Economy and Fed Accommodation
by Bob Doll of Nuveen Asset Management,
U.S. equities finished mostly higher last week as the S&P 500 increased 0.6%, ending higher for the fifth straight week. The return of central bank action was a primary concern. The European Central Bank (ECB) surprised investors with a 0.25% rate cut, while the debate over the Federal Reserves impending tapering decision continued in earnest.
Skepticism Still Abounds
by Bob Doll of Nuveen Asset Management,
U.S. equities were mixed last week as the markets were broadly unchanged. The October FOMC statement was a bit more hawkish than expected, causing concern that the recent delay in tapering may have been too aggressive. Other worries appear to be tail risks surrounding a possible Fed liquidity trap and accompanying asset bubbles. Economic data were mixed as markets struggle with the trade-offs between recovery and policy normalization.
Equities Reach All-Time HighsYet Again!
by Bob Doll of Nuveen Asset Management,
U.S. equities marked another all-time high last week as the S&P 500 increased 0.9%. (1) Global equities reached new cycle highs for the second week in a row. Many investors have concerns that the gains will not last since the world economy remains lackluster and the liquidity driving the current rally will eventually stop.
Fourth Quarter Investment Outlook
by Bob Doll of Nuveen Asset Management,
The macro theme of the fourth quarter and early 2014 is monetary reflation and global growth resynchronization. The Feds surprising decision to postpone tapering its QE program will likely encourage further risk-taking. In the meantime, we observe increasing signs of a synchronized improvement among the four important economies - the United States, Europe, Japan and China.
Can Markets Remain Resilient in Light of Political Dysfunction?
by Bob Doll of Nuveen Asset Management,
Equities were mixed again last week, and the markets remain focused on the budget impasse in Washington, D.C., after the second week of the partial government shutdown. The S&P 500 closed the week in positive territory, increasing 0.8%.1 It is hard to ignore headlines and market volatility, but the real issues for markets are the debt ceiling debate and third quarter corporate earnings announcements.
Government Shutdown Masks Pending Debt Ceiling and Third Quarter Earnings
by Bob Doll of Nuveen Asset Management,
Equities were mixed last week as the markets were focused on the budget impasse in Washington, D.C., that forced the federal government into a partial shutdown. As with the 17 prior shutdowns, we do not anticipate a lasting impact on the economy or markets. While the shutdown makes headlines, the issues that will likely have the most impact are the debt ceiling debate and third quarter corporate earnings announcements, which could mean a bumpy ride for investors.
Congress Holds Equities Hostage
by Bob Doll of Nuveen Asset Management,
U.S. equity advances ended last week and the S&P 500 declined -1.0%.1 Markets appeared concerned about overbought conditions from a strong run up over the past three weeks and uneasy about Federal Reserve (Fed) monetary policy normalization as well as the credibility of its communication strategy. Other widespread reasons for the downturn included increased focus on the fiscal battles in Washington, D.C., heightened worries about a possible near-term government shutdown and the contentious debt ceiling debate.
Fed Inaction Lengthens Reflationary Economy
by Bob Doll of Nuveen Asset Management,
U.S. equities advanced last week as the S&P 500 increased 1.32%.1 The Federal Reserve (Fed) delivered a big surprise by leaving intact the current $85 billion monthly purchase program. The Committee appears nervous about the resiliency of the economy. Chairman Bernanke pointed to three factors for postponing tapering: 1) the need for more labor market data to be confident in the outlook, 2) a desire to assess the degree to which tighter financial conditions, particularly mortgage rates, are affecting the real economy and 3) an interest in gaining clarity on upcoming fiscal debates.̶
“Risk-On” Resumes as Uncertainty Subsides
by Bob Doll of Nuveen Asset Management,
Equity markets rallied last week with the hope of a diplomatic solution to the crisis between Syria and the United States. The S&P 500 advanced 2.03% for the week.1 Broadly, the S&P 500 is in a churning phase after witnessing an all-time high of 1709 on August 2 and then stalling.1 We believe the market has been on hold while waiting for lower oil prices, progress on Syria, further global growth and successful Federal Reserve tapering.
Equities Advance Despite Concerns Over Weak Employment and Growth
by Bob Doll of Nuveen Asset Management,
U.S. equities moved higher last week, with the S&P 500 advancing 1.40%.1 In the face of another disappointing employment report, positive recovery expectations provided tailwinds. Key manufacturing and service sector data surprised to the upside, and improved corporate confidence was highlighted by merger and acquisition activity. Developments outside the U.S. supported recovery and reform, and emerging market fears lessened. A potential U.S. military strike on Syria was an overhang as President Obamas decision to seek congressional approval raised concerns about other looming battles.
As Uncertainty Abounds in September, Sideways Consolidation Continues
by Bob Doll of Nuveen Asset Management,
Global equities struggled last week, with the S&P 500 declining -1.39%.1 Volatility rose from geopolitical uncertainty over the military strike in Syria.2 Oil prices spiked with concerns about escalation and tension but retreated due to dampened international support and expectations that a military campaign would be short-lived. The U.S. Treasury announced its borrowing capacity will be exhausted by mid-October, exposing contentious fiscal battles. Reports mentioned former Treasury Secretary Larry Summers may be leading the succession race for Fed Chairman.
Equities Relatively Flat as Crosscurrents Remain
by Bob Doll of Nuveen Asset Management,
U.S. equities finished mostly higher last week, and the S&P 500 advanced 0.50%.1 The Dow Jones Industrial Average was the only the only major U.S. index to falter last week.1 Market sentiment was dominated by the notion that the market had become too bearish in the wake of the prior weeks sell-off in equities and credit. Continued improvement in global recovery sentiment seemed to provide a notable tailwind. The Fed dominated headlines markets appear obsessed with policy normalization and succession issues.
Equity Fatigue Continues with Headwinds from Bond Sell-off
by Bob Doll of Nuveen Asset Management,
U.S. equities finished lower for the second straight week as the S&P 500 declined 2.04%, narrowly escaping its worst week of the year. A specific catalyst behind the pullback was not identified by us or market analysts.
Equities Grind Higher as the Economy Continues to Muddle Through
by Bob Doll of Nuveen Asset Management,
U.S. equities advanced last week, with the S&P 500 increasing 1.10%.1 For the month of July, the S&P gained 5.09%, and equities have increased 21.33% year to date. Second quarter earnings season is nearly complete, and there has not been a material change in estimated earnings for the balance of the year or 2014. Revenues were slightly ahead of expectations, and earnings per share were approximately 3% higher than expected, annualizing at about $110 per S&P 500 share.
Conflicting Crosscurrents Move Equities Sideways
by Bob Doll of Nuveen Asset Management,
U.S. equities finished last week narrowly mixed, with the S&P 500 falling -0.02%.1 While the second quarter earnings per share growth continues to move higher, revenue growth remains below trend. The economic calendar is focused on this weeks release of the July employment report. Global macro headlines generated more uncertainty than direction for the markets.
Earnings Acceleration Likely Needed for Next Upturn in Stocks
by Bob Doll of Nuveen Asset Management,
U.S. equities finished mostly higher last week. For a fourth straight week, the S&P 500 and Dow Jones Industrials were up (returning 0.73% and 0.57% respectively for the week), while the NASDAQ underperformed at -0.34%. It was a busy start for second quarter earnings. More than 70% of the 100 S&P 500 companies that have reported earnings have beaten consensus earnings per share expectations by approximately 3% in aggregate.
A Mid-Year Ten Predictions Assessment
by Bob Doll of Nuveen Asset Management,
As we reach the halfway point in the year, we want to track our progress against the predictions made in January. Equities had a strong six-month period, although a correction occurred in May and June, primarily due to a very difficult bond market. Perhaps the great rotation started late in the second quarter as investors moved from bonds and bond-like equities, with measured progress for cyclical and growth equities. Anxiety remains over the Fed ending its quantitative easing experiment, and there are also financial issues in China that are cause for concern.
The Fed Unintentionally Lays an Egg
by Bob Doll of Nuveen Asset Management,
U.S. equities declined last week as the S&P 500 ended down 2.09%.1 The S&P suffered the first back-to-back one-day declines of more than 1% since last November. Global equities and bonds were also hit hard, with large sell-offs in emerging market assets, commodities and commodity currencies. Concerns about the fallout from dampened Fed policy accommodation are driving the weakness.
Sloppy Markets Continue
by Bob Doll of Nuveen Asset Management,
Last week the S&P 500 declined 0.97%,1 while many global equity averages fell for the fourth week in a row. Early in the week, discussion of tapering by the Federal Reserve was a big headwind, as discomfort over a slower pace of policy accommodation rippled through global markets. Thursdays rally was driven by thoughts that tapering fears may be overdone. Markets were also helped by better employment and consumption data.
Results 1–50
of 196 found.
