|By Fisher Investments Editorial Staff, 04/28/2017|
In this podcast, Fisher Investments' US Private Client Services Vice President K.C. Ellis discusses our clients’ common questions from around the country, including retirement planning, homegrown dividends and dollar cost averaging.
|By Fisher Investments Editorial Staff, 01/19/2017|
In this podcast, we talk to Content Group Manager Todd Bliman on how investors can navigate the modern financial news media.
|By Fisher Investments Editorial Staff, 12/12/2016|
MarketMinder’s editorial staff sits down with Fisher Investments Capital Markets Analyst Brad Pyles. (Recorded 11/17/2016)
|By Fisher Investments Editorial Staff, 12/12/2016|
MarketMinder’s editorial staff sits down with Fisher Investments Capital Markets Analyst Brad Rotolo. (Recorded 11/3/2016)
From Brexit and Trump to Italy, Brazil and the Philippines, 2016 has been a year of political upheaval and theatrics. And it isn’t over yet. South Korean President Park Geun-hye is embroiled in an influence peddling scandal that has outraged the country and likely numbered her days in office. She has offered to step down from office in April 2017—10 months before her term is slated to end—but lawmakers in the National Assembly instead introduced an impeachment bill, which gets a vote Friday December 9. While Park’s political fall looks inevitable, Korea’s political issues needn’t derail its other positive drivers. For global investors, whether or not you own any Emerging Markets stocks, this is another lesson in the importance of thinking long-term and not getting hung up on short-term events.
The movement against Park appears more about her actions (which you can read all about here), not a broader distaste with the government or the state of society. After decades of chaebol (Korea’s huge, family-run mega conglomerates/corporate fiefdoms) dominating political decisions and the economy, corruption has emerged as the societal cause du jour (see this summer’s draconian corruption bill), and Park appears a victim of the times. The scandal also coincides with some economic softness, as a slowdown in global trade hit export-oriented businesses hard. In response, the country’s largest sectors—which account for a fifth of GDP and employ nearly 15% of the workforce—have undergone significant corporate restructuring. More recently, scandals at several chaebol only further weighed on sentiment.
South Korea has also faced some geopolitical uncertainty in recent months. Besides long-running issues with North Korea, which has made progress in its nuclear program, new tensions with China have arisen as South Korea recently deployed an advanced US missile system. In addition, Donald Trump’s victory made many call into question the future of Asia’s trade relationship with the US given his campaign rhetoric and dismissal of the Trans-Pacific Partnership. There is also a potential domestic political headwind, as the legislature’s opposition party favors tax hikes, with eight different proposals put in the supplementary budget bills. With one of the world’s stronger fiscal positions (40% debt to GDP), such a move makes little economic sense, but the negative fallout is likely short term.
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|By Ana Swanson and Max Ehrenfreund, The Washington Post, 04/28/2017|
MarketMinder's View: Not the best read ever, but: “The weaker growth was partly due to management issues, which have caused the government to underestimate growth in the first quarter for many years.” They tried to fix it a while back but weren’t terribly successful. Also, under the hood, there were some bright spots. Business investment grew a whopping 9.4%, while the biggest single detractors were inventories (open to interpretation) and imports (a sign of domestic demand). And though it isn’t readily apparent from the article, exports grew 5.8%. Plus, all of this is in the past—of no use to forward-looking stocks—and has no predictive powers. We suggest taking note and then moving on, as markets did long ago.
|By Scott Hamilton and Jill Ward, Bloomberg, 04/28/2017|
MarketMinder's View: UK GDP grew just 0.3% q/q (1.2% annualized) in Q1, slowing and missing estimates. There really isn’t a lot to say about any of this, considering the estimate is based on just 44% of the eventual full dataset—making it subject to significant revision—and doesn’t include an expenditure breakdown. We do have rough estimates for services, industrial and construction output, and it seems the UK media finally got its wish for “balanced” growth: Services and industrial output each grew 0.3% q/q, while construction grew 0.5%. Of course no one is actually happy about that, given the slowdown, and many fear this is the start of something worse as higher inflation pinches spending. We guess it’s possible, but inflation and spending don’t have an intrinsic relationship for good or ill. Plus, recent inflation is probably temporary, as oil prices have largely stabilized. People overestimate its impact on broad consumer prices, but even so, the pound has actually risen a bit lately. In a few months, the year-over-year inflation calculations should look quite tame. Moreover, inflation is pretty close to the BoE’s 2% target. Q1’s growth tally just seems like normal data variability to us.
|By Jeremy Warner, The Telegraph, 04/28/2017|
MarketMinder's View: The general message here is basically correct: At some point, perhaps years from now, investors will become too euphoric, this bull market will end, and a bear market will form. Boom and bust will never end. However, there are few signs of this euphoria brewing today, and we don’t see much evidence this latest rally is Trump-inspired. If he were responsible, the US would probably be outperforming continental Europe—but instead, eurozone stocks are leading the developed world. As for sentiment, valuations are up, but the rise is modest and gradual, typical of rising optimism in a maturing bull market. A sudden spike would be more consistent with euphoria, and we aren’t seeing that now. Stocks’ rise also has plenty of fundamental support, like a growing global economy and accelerating corporate earnings. It’s premature to say whether or how President Trump’s tax plan alters the landscape, as it isn’t even fully fleshed out yet—and once detailed, it will still be subject to Congressional rewriting. One day, stocks’ party will end, but we see no reasons the end must come any time soon.
|By Barry Ritholtz, Bloomberg, 04/28/2017|
MarketMinder's View: It’s always refreshing to see a discussion of market valuations that is chock full of sensible points, so here are some Friday refreshments for you: “By just about any valuation metric you care to use, U.S. stocks are not cheap; however, too many investors are overly concerned about valuations. Why? Fair value is a theoretical point that stocks careen past on their way to becoming wildly expensive or extremely cheap; it isn’t the point where equities gently come to rest. Recent history informs us that this matters a great deal to investors. As we have noted before, overvalued stocks can and do stay overvalued for long periods of time. In the mid-1990s, pricey stocks became even pricier, with the S&P 500 notching high double-digit gains for five consecutive years (1995 = 34 percent; 1996 = 20 percent; 1997 = 31 percent; 1998 = 27 percent; and 1999 = 20 percent). If you avoided stocks because they were expensive, you missed a lot of gains. Similarly, in the 1970s, cheap stocks got even cheaper. By the time that decade ended, price-to-earnings ratios were in the single digits -- but you had little or nothing to show for buying cheap equities during the prior 15 years.”
Market Wrap-Up, Thursday, April 27, 2017
Below is a market summary as of market close Thursday, April 27, 2017:
- Global Equities: MSCI World (-0.0%)
- US Equities: S&P 500 (+0.1%)
- UK Equities: MSCI UK (-0.3%)
- Best Country: Denmark (+1.0%)
- Worst Country: Canada (-1.7%)
- Best Sector: Information Technology (+0.6%)
- Worst Sector: Energy (-1.3%)
Bond Yields: 10-year US Treasury yields fell 0.01 percentage point to 2.30%.
Editors' Note: Tracking Stock and Bond Indexes
Source: FactSet. Unless otherwise specified, all country returns are based on the MSCI index in US dollars for the country or region and include net dividends. S&P 500 returns are presented including gross dividends. Sector returns are the MSCI World constituent sectors in USD including net dividends.