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Market Commentary

Resources and Information for Today's Modern Investor

August 2021 | Market Commentary

Monthly Commentary Report

Friday, 06 August 2021

August 2021 | Market Commentary
Takeaways from Jackson Hole: 

Late last week, Federal Reserve chairman Jerome Powell delivered his speech on monetary policy at the Jackson Hole Symposium which was held virtually this year due to the surge in Delta related Covid cases. In his speech, Powell commented that the economy has made “substantial further progress” in the past month given the strong July jobs report, but he acknowledged that the Delta variant has muddled the economic outlook. He also suggested that it may be appropriate to start tapering later this year and emphasized that the timing of the reduction in bond purchases should not be taken as a signal for a “rate liftoff.” Regarding inflation, Powell stressed that such high levels shouldn’t cause excessive concern given his defense that it is transitory. As a result of the Fed’s dovish tone, investors appear to have increased their desire for risk assets, pushing the S&P 500 index to record highs.

July 2021 | Market Commentary

Monthly Commentary Report

Friday, 06 August 2021

July 2021 | Market Commentary
Rising Covid Cases? 

The Delta variant, originally discovered in India towards the end of last year, has recently caused an uptick in Covid cases around the world. Although the strain does not make people sicker, scientists are concerned because it is more contagious and can infect those who are fully vaccinated. According to the CDC, the Delta variant accounted for 83% of Covid cases in the US as of July 20th. As seen in the chart below, the total number of cases is still low relative to peak levels. However, many are still worried that mask mandates, social distancing requirements, and even quarantine measures may return, effectively slowing and endangering the economic resurgence.

June 2021 | Market Commentary

Monthly Commentary Report

Wednesday, 30 June 2021

June 2021 | Market Commentary
 Fed Turns Hawkish: Despite its pledge to avoid tightening financial conditions until the economy reaches maximum employment, the Federal Reserve signaled rate hikes may come sooner than previously expected in the June FOMC meeting. Fed Chair Powell acknowledged that inflation may come faster and last longer than anticipated. According to the updated dot plot projections, 7 of 18 committee members predict a possible rate increase in 2022. More notably, the forecast also indicated all but 5 committee members suggest the Fed will hike rates twice in 2023. 

 

May 2021 | Market Commentary

Monthly Commentary Report

Friday, 11 June 2021

May 2021 | Market Commentary

Biden's Infrastructure Plan: Last week, President Biden unveiled his $6 trillion budget for 2022 in reference to his agenda and aspirations for the next decade. In addition to his $4 trillion American Jobs Plan and American Families Plan, Biden aims to reinvest in research and development, education, public health, clean energy, and the social safety net. The budget will also be used to enhance and improve infrastructure through updating highways, ports, bridges, and airports. 

April 2021 | Market Commentary

Monthly Commentary Report

Monday, 10 May 2021

April 2021 | Market Commentary
April Performance: The S&P 500 Index was up 5% in April, driven by strong earnings and improving macro-economic data. Enthusiasm for stocks remains quite high with individual investors holding more equities than ever before, fueled by a blowout earnings season, the prospect of a strong economic recovery, and government stimulus. According to data from JP Morgan and the Federal Reserve, stock ownership among US households rose to 41% of their total financial assets in April, the highest level on record.

GameStop Saga

Our Takeaways from this Fascinating Saga

Tuesday, 02 February 2021

GameStop Saga

With all the hype around the recent GameStop saga and some of the questions we have already incurred, we wanted to address what happened and our thoughts and takeaways regarding this fascinating topic.  While it may not have meaningful impacts on the broad economy for now, it is an example of the potential excesses brewing under the hood.  Investors need to be aware of this risk and prepare rather than predict when it will end.

Q3 2020 | Investment Outlook

Friday, 16 October 2020

Q3 2020 | Investment Outlook

Q3 2020 Market Commentary

As the summer pulls to a close, a global reopening amidst the COVID-19 pandemic has led to a resurgence in case growth and fatalities. The final quarter of the year will witness economies fighting for the growth as the winter challenges the pandemic response, as well as the most contentious US election in recent memory. 

2019 Market Outlook

For the first time in almost 3 years, our Risk Odometer turned Defensive! This is a substantial change and does not happen often.

Monday, 14 January 2019

Summary

  • Risk Odometer’s outlook downgraded to defensive for the first time in 3 years
  • Making sense of a very challenging investment environment in 2018
  • Our outlook for 2019 and where we see opportunities

Screen Shot 2019 01 14 at 2.15.30 PM

We recommend investors use caution in these environments and carefully review their risk.  The timing of our downgrade occurred mid-month, providing us the opportunity to allocate away from risk assets such as equities and increase our position in Treasuries and cash.  The timing of our Odometer proved valuable as December 2018 became the worst December since the Great Depression!

The causes of this downgrade are the result of negative changes in technical indicators (Technical Price Action, Breadth and Volatility). Fundamental indicators (Leading Economic Indicators and Earnings) remain positive. Although there is currently a disconnect between the two, we still advise taking caution in these environments. Technical indicators are better timing tools than fundamentals. They give more false signals but are also early warning signs for changes in fundamental signals.  

Elastic Snapped

We take a deeper dive into the volatility that sent markets tumbling in early February.

Friday, 09 February 2018

Elastic Snapped

The elastic snapped as it always does when it gets stretched too far. Only hindsight will tell us where the bottom lie. Picking short-term bottoms remains the search for the holy grail. Instead, we review the economic data prior to the correction, which shows a strong foundation. Given the underlying strength, we do not expect this foundation to sustainably deteriorate through 2018.

2018 Q1 Review - A Resurgence of Volatility

The first quarter of 2018 saw a resurgence in volatility. We review what caused this, our opinions regarding it and how we are planning to manage through it.

Thursday, 18 January 2018

2018 Q1 Review - A Resurgence of Volatility

Reviewing the Quarter – Our Opinions Regarding the Recent Volatility

Prior to the first quarter of 2018, the market had one of the most remarkable runs in history. Following the election of Donald Trump in November 2016, the S&P 500 began an amazing streak of 15 consecutive months of positive returns and gaining nearly 40%!

2017 Performance Review

We are extremely optimistic for how our strategies are positioned to manage 2018.

Friday, 29 December 2017

Their competitive advantage over many traditional investment options are their disciplined, tactical nature. We describe them as an alternative to the traditional buy and hold approach. The traditional buy and hold style manages a portfolio with a static risk approach.

2018 Outlook and Investment Preferences

2017 will go down as an unprecedented year in the financial markets and 2018’s outlook looks good but not without risks.

Friday, 01 December 2017

2018 Outlook and Investment Preferences

There are plenty of risks that worry us. We think investors should monitor these risks going forward because investing will not be as easy as it was in 2017. We also have some sectors we like overweighting for 2018 which could help investors navigate a more challenging environment.

2017 Outlook - “Animal Spirits” on Simmer

Tuesday, 03 January 2017

2017 Outlook - “Animal Spirits” on Simmer

After stumbling out of the gate this year, global equity markets have put in relatively consistent gains since the February lows. U.S., U.K. and emerging market equities have provided much of the leadership, while markets in the Eurozone and Japan lagged.

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