IQbrief main

Our normal pattern is to issue a quarterly market commentary. In periods of heightened market volatility, however, we strive to communicate more frequently. For instance, amidst the onset of the pandemic from March 4th to April 2nd of 2020, we issued four market commentaries.

Given the equity market’s declines and the bond market’s historic losses, we want to offer some perspectives regarding the financial markets’ shifting landscape. Suffice it to say, while we seem to have moved beyond the health-related confines of the pandemic, higher interest rates and Russia’s war with Ukraine have quickly squashed investors’ appetite for risk assets. Consistent with our approach for more than two decades, we won’t pretend to know how markets will fare in the near-term. We will, however, reiterate our view that when asset prices go lower, the risks to investors are reduced not increased. Consequently, for investors with a long-term time horizon, we are more likely to buy versus sell stocks amidst the current volatility.

Continue reading


Ukraine

 

The Ukrainians’ incredible fortitude in the face of Russia’s invasion and merciless tactics has inspired the world. NATO has a renewed purpose, economic sanctions have been swift and arguably more severe than imagined just a few months ago, and the corporate exit from Russia has helped lift the information veil. After all, it’s one thing for an uninformed Russian citizen to make note of the volatility of the Russian Ruble, but quite another when the doors of prominent global retail outlets are literally closed overnight.

Continue reading

Depositphotos 28403469 S 

After an incredibly resilient 2020, most stock market prognosticators expected only modest gains in 2021. The conventional wisdom was that markets had raced ahead in anticipation of the 2021 COVID-19 earnings recovery thus already “pricing in” the good news.   The extent of the 2021 earnings recovery, however, has far exceeded even the most optimistic forecasts.  For instance, this time last year the consensus Wall Street forecast for 2021 S&P 500 earnings was $164.  While the Omicron surge could negatively affect fourth quarter reports, the current 2021 S&P 500 earnings estimate is for $207, a whopping 26% better than expected and 20% ahead of pre-pandemic 2019 earnings. (Source:  FactSet)  We’ve often remarked over the years how the consensus view is regularly the wrong one.  Yet the magnitude of this miss has surprised even the long-term skeptics of Wall Street forecasting.

Continue reading

MCQ3221 0

 

The third quarter proved an eventful one for investors. Interest rates ticked higher, the Delta variant reminded us that COVID-19 is still very much with us, and the supply chain disruptions of 2020 started coming home to roost. The confluence of events, and some profit taking given the strong first-half gains, contributed to September’s 4.8% and 4.1% declines for the S&P 500 and All-World equity indices. September’s losses wiped out the gains for the quarter, but considering the major equity indices are still up 14.8% and 11.6% thus far in 2021, it is tough to complain.

Continue reading