Editorial Results (free)
1. National Economy Headlines Seminar
- Monday, May 20, 2013
The next installment of The Daily News’ ongoing seminar series will offer a comprehensive look at the state of the economy, with insight from a panel of thought leaders and a keynote from the chief economic strategist of Vining Sparks IBG LP.
2. How High Can We Go?
- Wednesday, May 15, 2013
Total stock market returns combine dividends with a change in earnings and a change in multiples. Right now, the dividend yield on the S&P 500 is 2 percent. The earnings estimate for the S&P 500, for year-end 2014 as projected by Standard and Poor’s, approximates $120, as trailing earnings equal $100 per share.
3. The No-Growth Rally
- Friday, May 03, 2013
Over 200 S&P 500 companies have now reported earnings. While 70 percent or so have beaten expectations, the blended earnings growth rate has basically flat lined. Using revenues as a purer gauge adds little encouragement. Revenues have also flat lined over the last year. Without an uptick in global economic activity or the ability to pass on price increases to customers, US earnings look winded. How can the rally persist without growth?
4. Rotten Golden Apples in a Can
- Thursday, April 25, 2013
It has been a particularly tough stretch for sage taxicab investors. My recent taxi tips have centered on three clear winners. Gold, Apple and Cash. Let’s evaluate.
Cab Tip #1: Central Bank Money Printing = Gold Prices Rising
5. Lofty Company
- Thursday, April 04, 2013
For creating the overnight package-delivery business four decades ago, and for everything his company has done since, FedEx Corp. founder Fred Smith has been placed among an elite group of chief executives by the business magazine Barron’s.
6. The Cyprus is Falling!
- Thursday, March 28, 2013
The Cyprus economy is $23 billion. (The Vermont economy is $26 billion.) Bank loans in Cyprus are eight times the size of GDP, compared with 3.5 times in the Eurozone and 1 times U.S. GDP. With leverage ratio’s that high, a small deterioration in loan performance can render the banking system insolvent.
7. Look at the Facts, Not Rhetoric
- Wednesday, March 20, 2013
CITE YOUR SOURCE. In human psychology, fear seems more legitimate than hope. Claims of “impending doom,” and “bursting bubbles” elicit fast emotional responses that seem impervious to critique. So many programs, speeches and advertisements prey on this phenomenon today.
8. Waddell Recaps 2012 at State of the Union Address
- Saturday, March 09, 2013
Once a year, Waddell & Associates president and CEO David Waddell presents a “State of the Union” address to clients.
9. Urbanization Equals Global Opportunities
- Tuesday, March 05, 2013
The worldwide adoption of competition and capitalistic principles has unlocked tremendous prosperity growth. At the core of this prosperity movement are the unique advantages created by urbanizing the world’s population. Urban populations are more productive, more innovative and more efficient than their rural peers.
10. Waddell Recaps 2012 at State of the Union Address
- Monday, March 04, 2013
Once a year, Waddell & Associates president and CEO David Waddell presents a “State of the Union” address to clients.
11. Waddell’s Ideals Centered on Consistency, Honesty
- Saturday, March 02, 2013
At a recent appearance in Nashville before an audience of 100 clients, friends and employees at the Country Music Hall of Fame, David Waddell of Waddell & Associates Inc. gave his company’s annual state of the union address.
12. Quiet Period Could Lead to Frisky Phase
- Wednesday, February 20, 2013
Buyer Intent Building By some analysis, the last two weeks have exhibited the lowest stock market volatility since 1986. While sideways markets are boring, they also reduce anxieties. On average, since 1980, the S&P 500 experienced intra-year declines of 15 percent.
13. Strong January Portends Positive Year
- Tuesday, February 12, 2013
As Goes January … Many market observers state that as goes January, so goes the rest of the year. Mathematically, 1/12th of the year has now passed and the S&P 500 has tacked on 5 percent. Fast-forwarding through the statistical modeling, a strong January predicts a strong annual return precisely because of the positive lead January passes to February. This head start advances the probability of positive returns. Furthermore, a sizable head start increases the odds of success even more. If January is slightly positive, the odds of a positive year are 67 percent. If January is up 5 percent, the odds jump to 79 percent. So a 5 percent positive January has a high probability of correlating with a year of positive equity returns. We cannot rest in that, however, as a 4 percent loss from this point still fulfills the criteria. Better check the vitals.
14. Memphis Investment Firm at Odds With Dell
- Tuesday, February 12, 2013
Following Memphis-based Southeastern Asset Management’s public opposition to Dell Inc.’s proposed $24.4 billion buyout, the Texas-based tech company is trying to reassure shareholders that the deal will be beneficial.
15. Let’s Start a Currency War
- Wednesday, February 06, 2013
Prior to Nixon’s closing of the gold window in 1971, world currencies traded in value relative to the U.S. dollar, which was tethered to gold at $35 an ounce. Following the divorce, currencies began trading relative to the dollar, but the dollar in turn began trading relative to other currencies.
16. New Executive Director Tapped for Economic Club
- Saturday, February 02, 2013
The Economic Club of Memphis has a new executive director.
Dr. Christine Jiang succeeds Dr. David Kemme as executive director of the club. She begins her duties immediately.
17. New Executive Director Tapped for Economic Club
- Monday, January 28, 2013
The Economic Club of Memphis has a new executive director.
Dr. Christine Jiang succeeds Dr. David Kemme as executive director of the club. She begins her duties immediately.
18. Three Components Will Determine 2013
- Wednesday, January 16, 2013
Forecasting 2013 The fiscal cliff episode proved bullish for stocks. Fearful asset owners facing tax code uncertainty pulled outsized income and capital gains into 2012. Sellers quickly became buyers to complete the tax arbitrage. For the week ended Jan. 9, investors poured $18.3 billion into stock mutual funds and ETFs, the largest combined inflow in five years. This capital re-commitment has propelled the S&P 500 3.25 percent higher in 2013. Does this mean that 2013 will continue to see fantastic equity returns? Domestic stock returns are driven by three primary components – earnings, dividends and valuations. Let’s consider each to arrive at our forecast.
19. Debt Drama
- Tuesday, January 15, 2013
One of the common refrains among money managers and economists in Memphis is that the nation’s political leaders spend too much time wrestling with crises and not enough actually solving problems.
Case in point: in a few weeks, the federal government will have reached the limit of its authorized borrowing capacity, the so-called “debt ceiling.” In truth, that moment already has come, but the U.S. Treasury Department has some procedural room to maneuver to keep things going for a few more weeks.
20. Cash In on Cashing Out
- Wednesday, December 19, 2012
While we may not know the details of next year’s tax increases, we do know that taxes will increase. This has created a rush of year-end tax planning to sell assets, issue dividends and claw compensation forward. In fact, hundreds of public companies have announced special dividends to pad investor’s pockets before year-end.
21. The ‘Fiscal Cliff’ Misdirection
- Wednesday, December 12, 2012
Please recognize that the “fiscal cliff” debate will not end with current compromise. This debate has just begun so get used to it. Our long-term fiscal situation is toxic and entirely a function of Medicare and Medicaid. Today, Medicare and Medicaid expenditures approximate 5 percent of U.S. GDP. According to the Congressional Budget Office, public health expenditures will rise to over 10 percent of U.S. GDP by 2037.
22. Fiscal Equality vs. Efficiency
- Wednesday, December 05, 2012
Beneath the “fiscal cliff” debate is a fundamental battle of philosophy. Liberal economics prioritizes equality, while conservative economics prioritizes efficiency. Migration toward either of these polls contains costs and benefits. Below is an excerpt from a tax study of developed nations commissioned by the Paris based OECD:
23. Economic East vs. West
- Tuesday, November 27, 2012
Yin and Yang Since Election Day, stock indices have fallen sharply, reflecting the Washington non-consensus. As we enter another legislative sausage session, investors can’t help but recall the 20 percent drawdown that marked the last high-stakes negotiation.
24. Memphis Chamber to Host New York Times’ Sanger
- Tuesday, November 06, 2012
Next week, the Greater Memphis Chamber is hosting a conversation in Memphis with the chief Washington correspondent for The New York Times.
David Sanger, who’s also the author of the new book “Confront and Conceal” and who has been at the vanguard of reporting on issues related to Iran for the Times, will be here as part of the chamber’s regular “A Conversation With …” series.
25. Desperately Seeking Dividends
- Wednesday, October 24, 2012
The 10-year Treasury bond, which historically yields 5 percent, yields 1.75 percent today. At these levels, the risk/reward features of low yielding bonds and higher yielding stocks favors stock dividends over bond interest payments. However, with dividend yields in hot pursuit, investors have driven valuations higher for U.S. dividend payers. In fact, high yielding U.S. stocks now carry higher valuations than the market on average, far above their normal 20 percent discount. This is the highest valuation premium they have commanded since the 1950s. This does not foretell an immediate valuation collapse, but it does beg the question, are there better alternatives?
26. The Great Big Empty Bandwagon
- Thursday, October 11, 2012
Year-to-date the MSCI World index has climbed 15 percent. The Dow Jones Industrial Average has climbed within 5 percent of its all-time high. The S&P 500 has returned 14.9 percent annualized over the last three years. Corporate earnings have reached a record high. Has any of this inspired investors?
27. Self Reform Can’t Come Soon Enough
- Thursday, October 04, 2012
We Have Seen the Face of Reform In 2008, a prolonged lack of credit scrutiny led to a financial crisis. While the clean-up of the financial system continues, the bulk of the rationalization happened very quickly. Massive institutions failed, while remainder institutions began internal austerity programs to reconstruct rotten balance sheets.
28. It’s All Tied Up
- Thursday, September 27, 2012
The markets today must reconcile two primary opposing factors. On the one hand, global economic statistics and earnings pre-announcements describe a listless global economy – not recessionary per se – but not healthy enough to really drive revenues and confidence. On the other hand, the globe’s major central banks have all committed to indefinite and unlimited monetary stimulus.
29. Examining Unknowns, Certainties
- Wednesday, September 19, 2012
US Fed = Yes, ECB = Yes, US Government = Maybe, China = Unknown Last week’s announcement of “unlimited” easing from the U.S. Fed combined with the “unlimited” easing announcement by the European Central Bank extended the global rally in everything but Treasuries.
30. First Tennessee Unit to Move Downtown
- Friday, September 07, 2012
First Tennessee Bank is preparing its Downtown Memphis headquarters for occupancy of one of its units.
31. Senate 2013: Less Visible, More Important
- Wednesday, September 05, 2012
The 2012 presidential election has two widely contrasting visions, larger than life personalities, and plenty of high praise and low blows. Over the next three months, the contest for the Oval Office will dominate American discourse. However, while the big game for the country may be the presidential race, the big game for the markets will likely be the Senate race.
32. Facts, Feelings Go Hand in Hand
- Thursday, August 23, 2012
Investment Lesson: Sentiment Growth just as good as Earnings Growth Two factors move stock prices, earnings and sentiment. Earnings tend to be backward looking while sentiment tends to be forward looking. In market parlance, multiples or valuation ratios (price/earnings, price/book, price/sales) measure sentiment. Stocks prices increase when earnings increase, sentiment increases or both increase.
33. Economic Outcomes Remain Up in Air
- Wednesday, August 15, 2012
Fedcasting With the markets and the politicians currently co-dependent, vacation for one implies vacation for the other. Trading volumes have collapsed. For those who are manning their trading terminals, daily market activity amounts to position-squaring ahead of September’s central bank policy proclamations.
34. What’s On, What’s Off Economic Table?
- Wednesday, August 08, 2012
On the Table: Conversational Easing With the data stream lukewarm at the moment, markets needed policy support for handholding. Recent history demonstrates that when market anxieties rise, fiscal and monetary authorities intervene. We have described this as the “Punch/Counterpunch” market.
35. Small Businesses Create Big Economies
- Wednesday, August 01, 2012
While consumption expenditures account for 71 percent of our economy, investment activity (essentially delayed consumption) determines the magnitude of future consumption. When the economy generates a high level of investment activity, business productivity grows, innovations flourish and new employers create jobs. For these activities to occur, business owners must be willing to take risks. Within the U.S. economy, 65 percent of net new jobs created between 1992 and 2010 came from companies with fewer than 500 employees. In the U.S., as goes small business, so goes the economy.
36. Returns Equal Reality Minus Expectations
- Wednesday, July 18, 2012
At the beginning of the year, expectations ran high. Some economists forecasted U.S. GDP growth rates above 4 percent, European credit spreads indicated crisis containment, and China’s economy appeared to be on a government-conceived glide to slower, non-inflationary growth. As expectations ran high, the first quarter provided stock market investors with the best index returns in 14 years.
37. Market Yields Best June in 13 Years
- Wednesday, July 04, 2012
June: Boon & Lampoon After taking body blows in May, the stock market had its best June since 1999. This time, we can credit European politicians rather than American central bankers for the strong finish. That, my friends, is a welcome change.
38. World Economy Remains in Flux
- Wednesday, June 20, 2012
Big Fat Greek Vote On Sunday, the Greeks hit the polls to decide whether to remain in the euro or not. I wish it were that simple. The winner, Antonis Samaras, prefers that Greece remain in the euro, but wants to renegotiate bailout terms. That stance proved more appealing and pragmatic for the Greeks, who hate accountability but love the euro.
39. Punch And Counterpunch
- Wednesday, June 13, 2012
With baseline sentiment pessimistic, small changes can lead to outsized market movements. To best understand this schizophrenic environment, we must understand the forces at war. I call this the punch-counterpunch dynamic. The opponents are the economic gravitational pull of deleveraging in the developed world versus the helium provided by monetary and fiscal policy makers worldwide. Uncontested news on the deleveraging gravitational pull punches markets lower, riles pessimism, cues action from monetary and fiscal policy makers, who then counterpunch markets higher with programs and proclamations.
40. Forum Gives Sober Economic Outlook
- Monday, June 11, 2012
Attendees of The Daily News’ recent “Money and Markets” seminar got a clear-eyed, sober assessment of what’s happening on the local, national and international level from an economic perspective.
And they could be forgiven for perhaps clutching their wallets a little tighter as they left, thinking about national and world events to come.
41. Look Closely at Entry Point Valuations
- Wednesday, May 30, 2012
Chase Vacuums not Bubbles Markets regained their composure last week as the threat of a Greek tragedy diminished. While there are a couple of mile markers before the Greek election on June 17, markets will remain anxious until the ballots are cast.
42. TDN Seminar to Address Range of Economic Topics
- Monday, May 28, 2012
In Shelby County Trustee David Lenoir’s opinion, too many people have been “ingrained” with the notion that government is always the solution to community problems.
43. Greek Drama Playing Out on World’s Stage
- Wednesday, May 23, 2012
Flashback-ish Welcome back to 2011. Global growth jitters have returned, the U.S. has re-engaged in fiscal brinkmanship and the fate of the euro is back in question. Will 2012 be any different than 2011? Perhaps. This time Greece is not fighting to remain in the euro, it’s fighting to withdraw.
44. TDN Seminar Examines US, World Economies
- Tuesday, May 22, 2012
Taken separately, they’re stories with big ramifications. Countries around the world, the U.S. included, are grappling with the yin and yang of austerity vs. stimulus.
This fall, the U.S. presidential election will help set the future direction of an economy that’s still hard to read and incredibly volatile. Tax cuts, a payroll tax extension and a few other things expire at the end of this year, and Congress is as gridlocked as ever.
45. Plenty of Sources For Economic Progress
- Wednesday, May 16, 2012
Something More Than Feelings A business mentor of mine would retort “cite your source” to qualify any argument I was making. A common argument today asserts that with the developed world economies fragile and global unemployment levels high, the anecdotal information suggests that global consumers live in a tent city.
46. Up and Down, Economy Sign Of Indecision
- Tuesday, May 08, 2012
The consequence of living in an economic and political environment that can’t seem to make up its mind is a market that also can’t make up its mind, both surging and sinking last week. Signs of indecision abound. In November, the U.S. must decide between the Romney and Obama policy portfolios. Polls approximate a tie. Our economic growth rate of 2-2.5 percent also amounts to a tie, as it’s the mid-point between recession and true expansion.
47. Market Party Going Strong
- Tuesday, May 01, 2012
Still Growing Last week offered testimonials from three key contributors to this market’s advance. We received preliminary U.S. GDP numbers, we passed the earnings season halfway point, and we obtained policy affirmations from key global central banks. When shaken and poured, these ingredients combined into a delightful cocktail that kept the stock market party going.
48. Avoid Too Many Apples in Your Portfolio Diet
- Tuesday, April 24, 2012
Apples to Oranges Investors and media have run out of superlatives to describe Apple Inc. Not only has Apple become the biggest investment story, it has also become the world’s most highly valued company. Today Apple represents 4.4 percent of the S&P 500 and 16 percent of the Nasdaq composite index.
49. Steering Through Muddied Waters
- Wednesday, April 18, 2012
The Flows Knows While rationality has returned to the markets, occasional bouts of volatility (as we have experienced over the last few trading days) can muddy the analytical waters. After a 30 percent advance in the S&P 500 from the October lows, a pullback seems appropriate, and the reaction to the recent pullback couldn’t be more telling.
50. Laffer Brings Economic Talk to Memphis
- Monday, April 09, 2012
Bankers, financial executives, businessmen and other professionals will gather at the Holiday Inn University of Memphis on Monday, April 9, to hear from Art Laffer, a prominent national economist who has advised multiple presidents and presidential candidates since the 1970s on tax policy.
51. Market Hinges On Pols’ Action
- Wednesday, April 04, 2012
Politics Returns Last week, politicians grabbed headlines and moved markets. First, stimulator-in-Chief Ben Bernanke goosed markets to multi-year highs by pledging his continued devotion to easy money. Thankfully, he has learned that “conversational easing,” simply talking about quantitative easing, achieves the desired result without the inflationary hangover of the act itself. Rates fell and equities rose as fears of premature rate hikes abated. The Fed has been using the microphone as effectively as the printing press lately … good Central Bankers!
52. Rates Down, Money Up Across Globe
- Tuesday, March 06, 2012
Money Money Money Money To address declines in economic activity and stimulate marketplace liquidity, central banks across the globe have taken rates down and the quantity of money up. In fact, the leading global central bank balance sheets are approaching an unprecedented $9 trillion, or nearly 15 percent of global GDP.
53. The Economic View From Above
- Wednesday, February 29, 2012
Reframing the Global Economy This week I will summarize my 30,000-foot view on the global economy. While the news flow may revolve around Europe, the global economy no longer looks to the Old World for leadership. To understand and accurately forecast the future economy, we must redirect our gaze from the Old World to the New World.
54. Waddell Turns Page on ‘Funky’ Year
- Monday, February 27, 2012
The parting remark David Waddell left with the audience at his company’s yearly “State of the Union” presentation this time last year was that he wanted them all to be optimistic in 2011.
55. Here We Go Again
- Wednesday, February 22, 2012
Good news continues to exceed bad news, and the markets stand at multi-year highs. Political tensions that whipped the markets about last year have taken a secondary role, as stronger economic data and low market valuations have taken a primary role. With the Dow Jones Industrial Average kissing 13,000, a level unseen since May 2008, let’s compare the fundamentals now and then.
56. Invest Like It’s 2013
- Tuesday, February 14, 2012
The January Effect As each year closes, tax-savvy money managers purge their investment losers to harvest tax losses and window-dress year-end statements. With the turn of the calendar year, unloved names get repurchased, making last year’s losers suddenly this year’s winners.
57. Economic Coordinates Mark Spot
- Wednesday, February 08, 2012
Economic advances contain fits and starts. Our “spider senses” lead us to believe that the data received up to this point correlate more with a mid-cycle slowdown than with a late-cycle contraction. To help us with orientation, let’s examine a few economic markers to vector in on our location.
58. Keep Close Eye On Indicators
- Tuesday, January 24, 2012
European Tailwind Markets continued their upward surge over the past week as more participants began trusting in the European crisis containment campaign. The reason we haven’t dedicated much copy to Europe recently is twofold.
59. Quality Check Of 2012 Rally
- Wednesday, January 18, 2012
Rally Quality Check So far, 2012 has struck a bullish tone. However, we should look beyond the pop indices and examine the supporting evidence to determine the quality of the current rally. This column should make you more qualified to translate the “Market Data” page of the WSJ’s Money and Investing section. Let’s take a quick tour and highlight the quality indicators with context. Once you have completed this, you will have earned your rally inspector merit badge.
60. Trading Hands
- Monday, January 16, 2012
It’s been something of a roller coaster ride for a little more than six months in the drawn-out process by Regions Financial Corp. to sell Morgan Keegan & Co. Inc., its Memphis-based investment unit.
61. Is Bull Market in Store For New Year?
- Tuesday, January 10, 2012
Predicting 2012 According to Wall Street strategists, the S&P 500 will close somewhere between 1167, for a loss of 7 percent, and 1500, for a gain of 19 percent. Assuming earnings approximate $100 for the S&P 500, then applying a simple market P/E multiple tells you where we should be by year-end. If we feel no different than we did at the end of 2011, then the S&P 500 should finish at 1272 for a 1 percent gain.
62. Golden Oldies Drown Out Euro Pop
- Tuesday, December 20, 2011
The pendulum swings regarding Europe’s fate continue to relentlessly influence daily market direction. With the European debate drowning out all other market news, relevant economic releases and corporate earnings results have gone unheard. This week, let’s turn off the European pop and listen to some golden oldies.
63. Compliance Brings More Accountability
- Tuesday, December 13, 2011
EuroZone 2.0 Rather than bore you this week with the details of the most recent EU rescue flare, let’s take a look back at the bigger picture. After a 30-year global credit binge, credit is no longer flowing to the irresponsible or over-indebted. Based upon the rules defined in the Maastricht Treaty, entrants into the euro must have a debt-to-GDP ratio below 60 percent and budget deficits below 3 percent of GDP.
64. Europe’s Unappealing Options: Print or Perish
- Wednesday, November 16, 2011
Call The European crisis tour stopped in Italy last week. Bond yields climbed above the feared 7 percent, triggering immediate hysteria worldwide. Compounding the issue, Italy and Greece both had “help-wanted” ads out for prime ministers and received no applicants.
65. The Realities of October
- Tuesday, November 01, 2011
Bear Scalping October has long been regarded as the “Bear Killer” month. While there have been many jarring declines in October (1929, 1987 and 2008, to name a few), there have also been 11 bear market bottoms. Markets entered October 2011 pretty petrified.
66. Finding Beauty in the Bold
- Tuesday, October 18, 2011
Something for Everybody Last week extended the market’s winning streak following “turnaround Tuesday.”
The Europeans contributed by passing the European Financial Stability Fund. Global economic releases contributed with better than expected numbers overall. Asia lent a hand by starting to loosen monetary policies. U.S. earnings’ season assisted with key reports hitting their marks, and even the political rhetoric contributed as the “9-9-9” train gathered speed.
67. Movement In The Logjam
- Tuesday, October 11, 2011
I’ll admit that the pessimism over-ran me last Monday as the market slashed through its August lows after a brutal third quarter. My contrarian instincts insisted that a market turnaround couldn’t be far. To set the stage, the average U.S. stock mutual fund lost 17 percent in the third quarter, while the average international fund shed 21 percent.
68. Debt Spreading Equally Across Entire World
- Tuesday, October 04, 2011
The Big Game Rolling passage of the $595 billion European Financial Stability Facility (EFSF) last week emboldened the markets Monday and Tuesday, only to leave them second-guessing the efficacy of the device, its timing and the underlying economic environment. By the end of the week, the early enthusiasm waned as skepticism rose, leaving the S&P five percent lower than its Tuesday high.
69. Comparatively, US Shows Promise
- Tuesday, September 27, 2011
Global Indicators Weak Last Week Global economic indicators deteriorated further last week, causing us to further fortify our defenses.
The week began with the Federal Reserve performing the “Twist” by committing to sell $400 billion of short maturity Treasuries and purchase $400 billion of long-dated maturities between now and mid-2012. Additionally, the Fed announced that it would begin reinvesting maturing mortgage-backed security proceeds into other mortgages, attempting to lower mortgage rates to support housing prices. By lowering long-term interest rates without printing new money the Fed artfully concocted “free” stimulus. However, adding justification, the statement also added that there are “significant downside risks to the economic outlook.” The psychological depressant of that assertion overpowered the downward pressure on interest rates resulting in a Bronx cheer from the markets. With the Fed’s cupboard bare, the politicians have lost their backstop. Washington has simulative tools available but gridlock seems the current objective. Surprisingly, in comparison to other nations, the U.S. condition looks promising.
70. Sometimes Survival Feels Like a Rally
- Tuesday, September 20, 2011
What Goes Down Pessimism gets old. After running from shadows for the last few weeks, markets turned last week and faced their fears. The news wasn’t good, but it was good enough to cheer a market suffering from “Armageddon hypochondria.” At this point of pessimism, survival can spark a rally. For a ringside seat to this shadowboxing match, observe the movements in the European Financial ETF.
71. A Primer on Recessionary Market Behavior
- Tuesday, August 30, 2011
Counterpoint A few positive countertrend economic data points, a big Buffet Bank of America buy and a Bernanke bounce inspired markets last week, moving the S&P 500 higher by over 4 percent. The durability of the move warrants skepticism, but the rally appeared amidst oppressive pessimism. Who’s buying?
72. Allie Prescott to Head U of M Alumni Association
- Wednesday, August 24, 2011
Allie Prescott has been elected president of the University of Memphis Alumni Association national executive board of directors.
Prescott holds his bachelor’s and law degrees from the U of M, and he is a life member of the University of Memphis Alumni Association. As a former adviser to the executive director and former vice president for membership, Prescott is serving his fifth year on the national board.
73. The ‘Why’ of Global GDP Dynamics
- Tuesday, August 23, 2011
The New Malaise While debt and policy uncertainties stoke volatility, the declines in the markets stem from declines in global economic growth rates. Growth estimates worldwide have fallen precipitously over the past couple weeks. As baseline estimates fall, the right question to ask is, “Why?”
74. Sanon Joins Agape As Director of Operations
- Wednesday, August 17, 2011
Julie Sanon has joined Agape Child & Family Services as director of operations.
Hometown: Leesburg, Fla.
Education: Psychology major from Oklahoma Christian University of Science and Arts
75. So, What Year Is This?
- Tuesday, August 16, 2011
Back to the Future As investors, we view volatility as a distraction. Successful defensive strategies engage prior to drawdowns, and successful offensive strategies engage into them. Before we can settle on the right strategy, however, we must determine which game we are playing.
76. The More Things Change …
- Tuesday, August 09, 2011
Change of Plans Like a car requires gas, forecasts require data. Two weeks ago, the data stack indicated that we had continued global growth, providing ample revenue opportunities for global corporations. Low earnings multiples paired with global growth indicated defensible value within the S&P 500. With current earnings trending toward $100, applying a simple conservative P/E of 13 presented 1300 as a stable base. The S&P 500 fumbled near this level frequently but seemed to find footing. On Friday of last week, however, the data stack changed.
77. New World Follows US Debt Downgrade
- Tuesday, August 09, 2011
Here we go again. Markets opened Monday, Aug. 8, with the world irreversibly changed, thanks to last week’s downgrade of U.S. debt by Standard & Poor’s from AAA to AA+. It follows last week’s wild ride for the stock market, which included stomach-churning swings for investors up through Friday, the day S&P issued the press release heard round the world after markets closed.
78. So It Comes to This
- Wednesday, August 03, 2011
It appears that agreement on substance has arrived in Washington. That will forestall default, but may not be enough to forestall downgrade. Should you fear a downgrade U.S. Treasury debt?
The Mechanics of Downgrade
79. These Three Things
- Wednesday, July 27, 2011
Thing 1: Earnings As we entered earnings season, anxiety centered primarily on the financial sector given the feeble U.S. economy, stagnant housing markets and low financial market activity. The tapestry of earnings information provided by financials to date has well exceeded these low expectations. Certain surprises, such as American Express members’ record card usage, merit applause. Within more traditional lending institutions, loss provisions have ebbed. Commercial loan growth contributed to earnings in the quarter, and volumes have now grown for eight straight months. Beyond financials, high concerns around tech earnings have also abated, with 21 of 22 reports to date ahead of estimates. Overall, of the 121 S&P 500 companies that have reported, 101 have beaten estimates. Revenues have also surprised skeptics, climbing more than 10 percent overall.
80. Debt Debate Will Soon Pass
- Wednesday, July 20, 2011
Welcome Back, Ben. All hail the Bernanke put! Markets rallied strongly Wednesday, July 13, as Fed Chairman Ben Bernanke hinted at the potential for additional monetary easing should high unemployment and deflation threats persist. Since the greatest achievement of QE2 was the rapid rise in equity prices, talk of additional easing elated Wall Street. Gold rallied to a new nominal high, and oil seems determined to reclaim $100. Whether the Fed resumes sizable asset purchases or not, by indicating their willingness to do so, they have underpinned asset prices.
81. Global, US Economies Show Paradox
- Tuesday, July 12, 2011
Hooray Hooray! Earnings season is under way. Macro season turned into a nail-biter with double dip talk, riots in Greece, debt limit brinkmanship in the U.S., Chinese bubble banter and oil supply disruptions in the Middle East. Good riddance.
82. The Grecian Formula
- Tuesday, June 21, 2011
To use a well-worn analogy, the perceived risks of a Greek default resemble the risks of a Lehman default. When Lehman imploded, marketplace confidence collapsed, interbank lending froze, bank balance sheets shrank, violating capital covenants, leading to the rapid insolvency of a number of large-scale financial institutions.
83. Desperately Seeking Heroes
- Tuesday, June 14, 2011
Hero Searching Markets have fallen significantly since April. A value-induced rally last week failed during Fed Chairman Bernanke’s presentation at a banking conference in Atlanta. As expected, his comments acknowledged general economic softening. However, he also made no mention of further “rescue” policies, thereby implying that investors must learn to walk again on their own. With the effectiveness of QE2 unclear, the political pathway for QE3 is blocked.
84. IronHorse Capital Finds Niche Within Complex Economy
- Monday, June 13, 2011
David Waddell, Kerr Tigrett and Chad Cunningham recognized opportunity amid the Great Recession two years ago.
85. Simmer Down Now
- Tuesday, May 24, 2011
Rational behavior reintroduced itself in the markets last week as the commodities market came off spin cycle. With the dust settling, we find oil back at $100, copper at $4, gold at $1,500 and the S&P 500 at 1340 – not far from where we were a month or so ago.
86. A Tale Of Two Seasons
- Tuesday, May 10, 2011
With another successful earnings season now largely behind us, last week ushered in expectations season with plenty of crosscurrents to fret over. Higher retail sales clashed with lower GDP growth, falling commodity prices accompanied a sell-off in stocks, Treasury yields fell while the Fed inflates and the best monthly job report in years accompanied an uptick in the unemployment rate.
87. Extra Innings
- Tuesday, May 03, 2011
Fed Chairman Ben Bernanke presented a bull market extension plan on Wednesday at the Federal Reserve’s first press conference. While the $600 billion QE2 treasury purchase program winds down in June, asset purchases will continue as current holdings mature. By maintaining this supply and committing to keep interest rates near zero “for an extended period,” Bernanke refilled the punch bowl. Markets reacted to this posture immediately as asset prices surged and the dollar plummeted.
88. Panel: Globalization Will Shape Economic Future
- Monday, May 02, 2011
Dexter Muller, senior vice president of community development with the Greater Memphis Chamber, has a tongue-in-cheek quip at the ready to describe the manufacturing plant of the future.
89. Government’s Role at Center of Pension Debate
- Friday, April 22, 2011
Government cannot and should not be run like a business.
Even those political leaders who in the 1980s believed government should be run like a business no longer try to fly that tattered banner.
90. Day of Reckoning
- Friday, April 22, 2011
Memphis and Shelby County governments are in the process of taking a hard look at the benefits they’ve promised to start paying their several thousand employees once they retire – payments the employees will then get for the rest of their lives.
91. Seminar to Tackle Globalization’s Impact
- Friday, April 22, 2011
“The world is flat” is more than just a catchphrase that illustrates the increasing connectivity of the globe’s consumers, markets and economies.
The concept – brought to the forefront by Thomas Friedman’s 2005 book of the same name – is a foundational element of what Memphis’ economic development game plan needs to be if it’s going to remain competitive in the months and years ahead.
92. Next Stop: The Debt Ceiling Debate
- Wednesday, April 20, 2011
The Great Debate Debased My optimism last week over a sober and measured debate on deficits and budget reform has tarnished. The Republican approach and the Democratic approach have few interlocking parts.
93. Budget Battle
- Tuesday, April 19, 2011
They may not agree on what medicine to administer to the still ailing economy or how to shrink the nation’s budget deficit.
But area legislators and financial service professionals agree on at least one thing: a major battle is coming down the pike in a matter of weeks, one whose outcome could affect everything from interest rates to the unemployment rate to whether the nation plunges into another recession.
94. The Great Debate
- Wednesday, April 13, 2011
At our W&A State of the Union in February, we discussed that, in our opinion, the primary threat to America’s national supremacy was not China or an emerging competitor, but our rapidly deteriorating Federal fiscal position. We postulated that the national consciousness on the issue had moved beyond the denial and anger phases and entered into the acceptance phase, with several detailed proposals circling Capitol Hill, and that eventually one would land, forcing debate.
95. Energizing Markets: What’s Next?
- Tuesday, April 05, 2011
Q1 Markets Energizing!
After a first quarter of Black Swan attacks reminiscent of Alfred Hitchcock’s “The Birds,” the S&P 500 put together its best first quarter return in more than a decade. It took a lot of energy to beat the market in Q1 as only the energy and industrial sectors outperformed. The eight other sector classifications underperformed. So, Q1 provided a demonstration of market resilience in the face of adversity, with U.S. energy companies parlaying $100 oil into outsized returns for all. Now what?
96. The Rise And Fall of Bulls And Bears
- Tuesday, March 15, 2011
The Upside of Down
Investors must perform cost/benefit analysis every day.
Periodically, aggregate perceptions of benefit eclipse aggregate perceptions of cost and vice versa. When benefits headline, stock multiples rise, stock prices rise and volatility falls but the probability of disappointment, and therefore aggregate selling, rises as well. Battle worn investors develop contrarian sensibilities. High expectations engender fear, and low expectations engender greed. Frankly, living life against the grain creates some dissonance. For instance, while instructing our clients and friends to “Be Optimistic” about 2011, we have been “de-risking” the portfolio as well. I have not turned bearish, just less bullish after a 100 percent gain, the resumption of stock appetites among retail investors and historically high sentiment measures. Nonetheless, I find the reaction of the market this week to a terrible news cycle encouraging.
97. Oil Spike: Comparing Yesterday to Today
- Tuesday, March 08, 2011
OIL THREATENS - Political strife in the Middle East interrupted our market rally. Increasing oil prices, in anticipation of supply disruptions, have increased corporate input cost assumptions and decreased consumer spending assumptions.
98. Waddell: 2011 is Time for Financial Optimism
- Monday, February 28, 2011
It wouldn’t have seemed out of place if David Waddell had reminded the audience at his company’s yearly “State of the Union” presentation that the only thing they have to fear is fear itself.
99. Waddell & Associates Begins Employee Stock Ownership Plan
- Wednesday, February 23, 2011
David Waddell, the chief executive officer of Memphis-based financial planning firm Waddell & Associates, will be on a plane later this month bound for Florida.
100. 2011’s ‘Feast Or Famine’ Environment
- Tuesday, February 15, 2011
Below the Waterline
Last year, nearly every asset class advanced as loose monetary and fiscal policies penalized cash and rewarded risk. Gold rallied 30 percent, emerging markets 19, oil 15, U.S. stocks 15, and even bonds rallied 7 percent.