Market Insight

Recent economic analysis from RiverPoint Capital Management.

April 2017: Latest Sound Bites on the Market and Economy

After a fantastic start to the year in which the market advanced more than 7% in January and February, the S&P 500 stalled a bit in the March/April time period—no great swoon; it just seems like those oft cited “animal spirits” are a bit less animalistic in nature for the moment. That’s probably very healthy from our perspective. As of this writing in late April, the S&P 500 has taken a breather and is off a modest 2 % from the March 1st peak. In this month’s Sound Bites, we’ll address our thoughts about the likelihood of a market correction of more normal magnitude--something larger than 2%--and whether or not such an occurrence might change our positive view on stocks for 2017. We’ll also discuss two other items that more pessimistic investors are focusing on and how we view these “wall of worry” issues…namely: 1. Stock market valuation that some say is too expensive at this juncture; and 2. The latest trends in policy out of Washington and relevancy to the direction of the market. 

Read The Report


February 2017: Latest Sound Bites on the Market and Economy

Wow, what a totally different and far better start to 2017 versus 2016 for investors. This is more like it! The S&P is up over 5 percent YTD, and economic data releases continue to signal accelerating growth. This time last year, the market was down roughly 11 percent, and we were off to the worst start to a new year in HISTORY. For 2017 we do expect another fertile year for returns, based not on hope about legislative and policy reform in Washington and the associated “animal spirits” emanating therefrom, but based on good old healthy fundamentals, valuation levels and technical price trends.

Read The Report



December 2016: Latest Sound Bites on the Market and Economy

Well, we made it through several key headline challenges this year, including Brexit and the US election, and here we are, once again at Holiday time, in the midst of a traditional “Santa Clause” rally. Many investors are pleasantly surprised about the positive market results in 2016 and this strong close to the year, fearing Santa might not show up in Q4 this time around. Surprise! Based on our forecasts and communications through the year, we are not. Soon we will turn attention to 2017 and what’s to come. In that vein, what is on people’s minds as we approach the New Year?

Read The Report



Election Night Update – Surprise, Surprise

Yes, we can’t help but be surprised by President Trump’s victory last night but also by the results in the Senate race as the Republicans kept control of the Senate which was a major surprise. Because of this, some in the media are characterizing this as a Republican “sweep.” We don’t see it this way as the majority in the Senate remains narrow and leadership in the House doesn’t necessarily see eye to eye with President elect Trump. Appropriate checks and balances in government appear to be in place from our perspective. The key to President Trump’s victory was his wins in states like Pennsylvania, Michigan and Wisconsin along with key battleground states, Ohio, Florida and North Carolina.

Read The Report



November 2016: Latest Sound Bites on the Market and Economy

This month’s sound bites on the market and economy focus on three trends we saw shift in the third quarter of 2016 and expect to continue through year end. A shift in market leadership away from defense and yield sectors to more growth driven areas of the market took place in the third quarter. We are also seeing the beginning of the end of the earnings recession which has caused many people to question the merits of the latest rally in the market. Finally, volatility is back as talk about our election, Brexit and Federal Reserve rate hikes start to make headlines again after a summer off.

Read The Report



September 2016: Latest Sound Bites on the Market and Economy

In an effort to continue to provide details on the current economic and market environment, we are providing our thoughts on multiple topics in a different format. This is a shift from our previous newsletter format which was longer and focused on a single topic. This will allow us to keep our clients more broadly informed and allow them to follow up with their Wealth Advisor Team should they want to discuss a given subject in more details. We will continue to produce the longer, thematic newsletter on a quarterly basis. We hope you enjoy.

Read The Report



August 2016: Slow Growth – Starting the Second Half of the Year on a High Note

The S&P 500 index recently made a new, all-time high. It had struggled to break through the 2130 level, which was originally reached a year ago. Since that time, the S&P 500 index has been in a broad trading range, bounded by 1810 on the downside and 2130 on the top end. The U.S. stock market has been trading in this range over the last two years. As of July 20, the S&P 500 set a new all-time high at 2173, an upside breakout from the previous trading range.

Read The Report




May 2016: Slow Growth – The New Normal or Just a Lull?

The U.S. economy has entered a new environment, where 2 percent real economic growth, as measured by real GDP, is considered “normal.” For reference purposes, our economy has grown by 3.2 percent, on average, per year – including recessions – since the end of World War II. Despite the “new normal” of slower growth, we don’t have to accept this fact that the U.S. can’t reasonably expect to grow much faster than 2 percent on an annual basis. Our economy has proven to be resilient in the past and gotten out of moments in time where economic growth looked bleak at best. We believe slower growth is not a pre-determined destiny, and that with a few changes we can get back to growth rates seen pre-2000.

Read The Report



April 2016: Complacency- Not on Our Watch

History books tell us, and our own observations back up the fact, that stocks on balance have risen in value 3.5 years for every year of decline. Since 1925, over any rolling 12-month period of time, the stock market has generated a positive return 73 percent of the time (S&P earnings data herein from spindices.com). Over any rolling 5-year period of time, the stock market has generated a positive return 86 percent of the time. This we know. That said, this rather rosy data cannot be used to rationalize a buy and hold forever mentality. Tactical adjustments must be made and a more defensive posture embraced when signs of an extended bear market appear. After all, these periods of decline can last a year or more. We do not see such negative signals present; this is why we remain positive on the U.S. equity market and maintain the midpoint of targeted allocation to stocks in our client portfolios. It is the data, not complacency, which leads us to this conclusion. When the facts change, we will change our view.

Read The Report



March 2016: A Political Season To Remember

Our purpose in this piece is to provide an interesting perspective on the 2016 election. Many seem to be of the belief that contested conventions are unprecedented and fear that we are in absolutely uncharted territory…a quick glance at history suggests otherwise. Second, we’ll address how we view all of this in the context of economic impact and relevance to managing your portfolios. We conclude that this, like many periods, is an interesting paradigm but not new or uncharted.

Read The Report



February 2016: Assessing the Risks of a Recession

Benjamin Franklin coined the phrase, “In this world, nothing can be certain except death and taxes.” We might modify this line of thinking with regard to the stock market for 2016 and recognize an additional given called volatility. Oil prices, the Fed and China continue to be in the headlines and are big contributors to the volatility and investor angst.

Read The Report