The Smart Beta Channel

Copper Well Positioned to Lead the Next Resource Cycle

Global copper capacity could be short some 41,000 tons by as early as 2021, says one commodities research firm. Meaning: We could be looking at another commodities super-cycle, with the red metal leading the way.

The Big Four Economic Indicators: April Nonfarm Employment

This commentary has been updated to include this morning's release of Nonfarm Employment. April's 263K increase in total nonfarm payrolls had revisions that resulted in 16K more jobs than previously reported. The consensus was for 181K new jobs and the unemployment rate to remain at 3.8%.

Light Vehicle Sales Per Capita: Our Latest Look at the Long-Term Trend

The moving average for the per-capita Light Vehicle Sales series peaked in 1986. Thirty-plus years later, it is now down 30.2% from that 1986 peak.

S&P 500 ETFs

The S&P 500 ETFs tracked include State Street Global Advisors’ SPDR (SPY), iShares Core S&P 500 ETF (IVV), and Vanguard’s S&P 500 ETF (VOO).

Fed Evaluates Policy and Portfolio Strategy

A quiet and unsurprising FOMC statement belies the important policy discussions and decisions ongoing at the Fed.

Eurozone Debt Disputes Make an Unhappy Union

Once upon a time, bonds backed by a government’s full faith and credit pledge were generally considered less risky than corporate bonds. Times have changed. In today’s political climate, not all governments inspire us with the same confidence.

Emerging Market Stocks Underperform When the US Dollar Strengthens…Here’s Why

The relationship between the performance of emerging market stocks and the US dollar is one of the tightest macro relationships that exists in investing.

Five Key Ways Advisors Deliver Value in 2019

What is the value of a financial advisor in 2019? We break down the full value of an advisor’s services in this easy-to-follow equation.

Addicted to Oil?

Apart from the 2014-15 supply shock, oil prices have proven to be extremely elastic more recently with only modest changes to either supply or demand having an outsized impact on oil prices. We look into the implications of that and find that oil prices could possibly rise a fair bit further this year even if they are already up 40% year-to-date.

Growth Prospects and Challenges Ahead for the U.S., U.K., Eurozone, China, and Japan

The economic slowdown that began in late 2018 has started to stabilize. Trade tensions and policy uncertainty took a toll on confidence and financial markets late last year, but both seem less threatening today. Financial conditions have eased as major central banks maintain a fairly accommodative stance amid a subdued inflation outlook.

Monthly Market Commentary: April 2019

All of the “signals” we’ve been focusing on in the past several months remain solidly “in the green”. So why are we apprehensive? Perhaps we shouldn’t be, and simply are falling prey to our inner “Chicken Little” who always thinks the sky is falling. We’ve been guilty of that before.

ISM Non-Manufacturing: Slower, But Continued Growth in April

The Institute of Supply Management (ISM) has now released the April Non-Manufacturing Purchasing Managers' Index (PMI), also known as the ISM Services PMI. The headline Composite Index is at 55.5 percent, down 0.6 from 56.1 last month. Today's number came in below the forecast of 57.2 percent.

ECRI Weekly Leading Index Update: WLI YoY 24 Weeks Negative

This morning's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 146.4, down 0.5 from the previous week. Year-over-year the four-week moving average of the indicator is now at -0.87%, down from last week. The WLI Growth indicator is now at 1.12, also down from the previous week.

Quarterly Letter

What a difference three months make. For the full year 2018, every primary asset class was negative: the S&P 500 lost 4.6%, commodities were down 13.9%, long-dated US Treasury bonds were down 1.6%, and gold gave up 1.9%. Contrast that with the first quarter of 2019 – every one of those assets was up!

Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator

With the latest April close data and Q1 GDP Advance Estimate, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 124.5%, up from 123.7% the previous quarter.