BCM 3Q20 Market Commentary: Damn the Pandemic! Batten Down the Economy and Full Steam Ahead!

The S&P 500® Index’s 8.5% third-quarter gain was a welcome response to the first half of the year’s histrionics. The quarter had its own volatility as the markets flirted with a 10% correction, but then resolutely continued climbing the proverbial wall of worry. Ultimately, the trends that were in place at the beginning of the quarter continued and little changed.

Fireside Charts
The Growing Need for Stimulus, U.S. Net Equity Supply Grows, and What Lies Ahead for the Bond Market?

The Growing Need for Stimulus, U.S. Net Equity Supply Grows, and What Lies Ahead for the Bond Market?

The battle over stimulus continues in Washington as many Americans grow increasingly reliant on savings and other non-paycheck measures to cover expenses amid the accelerating shift from temporary to permanent layoffs and the expiration of the Paycheck Protection Program. Over in the equities market, new offerings are outnumbering buybacks for the first time in a decade and the U.S. Net Equity Supply is growing—thanks in large part to the recent IPO boom. And though the yield curve is inching toward “normal,” the situation is complicated by uncertainties around stimulus measures and the Fed’s capacity to cope, given that their ownership of the Treasury market is already at record highs.

Economics and Investing
How Should Investors Think About the Upcoming Election’s Impact on the Stock Market?

How Should Investors Think About the Upcoming Election’s Impact on the Stock Market?

The top question we are being asked from advisors right now: “is there data that can help me anticipate stock market returns in an election year?” While we have outlined some key data worth examining, our takeaway is we would caution against making any significant investment decisions based on these trends.

Economics and Investing
LISTEN: PM Brendan Ryan on ‘Behind the Markets’

LISTEN: PM Brendan Ryan on ‘Behind the Markets’

BCM Portfolio Manager Brendan Ryan, CFA® joined Jeremy Schwartz and Jeremy Siegel of Wharton Business Radio's Behind the Markets podcast to discuss why traditional asset allocation methods are no longer sufficient, emerging short- and long-term market trends, and how to use machine learning to pursue prudent risk taking in an era where it's becoming more necessary than ever.

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Fireside Charts
Inflation Remains Tepid, Credit Risk (and Others) Climb, and When Will Bankruptcies Hit Their Peak?

Inflation Remains Tepid, Credit Risk (and Others) Climb, and When Will Bankruptcies Hit Their Peak?

U.S. CPI grew 0.2% in September—its slowest pace in four months—to 1.4%, directly in line with expectations but again short of the Fed’s 2% target. Still, it’s a rosier picture here than in Europe, where core inflation looks to be cruising downward toward zero. And we’ll say it again: the bond market is under threat. As corporate debt soars, credit risk is climbing, and net issuance is poised to approach record highs. What’s more, bankruptcy filings don’t typically peak until 5-6 quarters after a recession, so these struggles aren’t likely to disappear as quickly as we might hope. Do you have a plan to meet return goals if yields continue to disappoint?

Commentary
BCM 3Q20 Market Commentary: Damn the Pandemic! Batten Down the Economy and Full Steam Ahead!

BCM 3Q20 Market Commentary: Damn the Pandemic! Batten Down the Economy and Full Steam Ahead!

The S&P 500® Index’s 8.5% third-quarter gain was a welcome response to the first half of the year’s histrionics. The quarter had its own volatility as the markets flirted with a 10% correction, but then resolutely continued climbing the proverbial wall of worry. Ultimately, the trends that were in place at the beginning of the quarter continued and little changed.

Fireside Charts
SMID-Cap Gains, Growing Risk Appetite, and Emerging Trends in Yields

SMID-Cap Gains, Growing Risk Appetite, and Emerging Trends in Yields

As we move off the S&P 500® Index’s best week since July, small and mid-caps remain down year-to-date but have gained significant ground in recent weeks. Risk appetite appears to be growing among investors—perhaps unsurprising in a historically low interest rate environment—and we’re noticing a couple of potential trends in yields, but time will tell if they’ll bear out and/or how long they’ll last. Finally, the USD’s recent weakness—it just fell to a 17-month low against the yuan—is giving a boost to commodities. Could it be enough for them to break out from a nearly decade-long downward trendline?