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June was a busy month in the news and in the markets - there was a lot to digest on many dimensions.   Donald Trump received enough delegates to become the presumptive Republican nominee on May 27th.   Hillary Clinton received enough delegates to become the presumptive Democrat nominee on June 6th.    The Federal Reserve, as a commentary in the Wall Street Jou

Much like in November 2015, May 2016 was mostly about backing and filling after the big run from the February 2016 lows.  And, like November 2015, May 2016 recovered early losses in the month with two dramatic up days.  The S&P 500 was up a modest +1.5% in May, finishing only 1.6% away from its all-time high and essentially even with its February 2015 close.  The S&P 500

In a much too familiar movie, the Fed is once again signaling that all is well and they will resume their tightening cycle at the June meeting; having watched this movie 4-6 times a year for the last several years, I think we have a pretty good idea what the ending will be.

Manager Commentary

With over 83% of the S&P 500 having reported earnings for fourth quarter 2015, it is clear that the bullish reversal to 2014 earnings levels has failed.   This post explores the earnings picture that continues to disappoint and some of the valuation issues that have developed. 

The failure of earnings to reverse course to the upside after peaking in 3Q14 puts the equity markets at fundamental risk.

The rolling corrections starting in the summer of 2015 have set up a trading pattern that has some analogies to the patterns seen in late 2007 and early 2008.

• A decade ago, the notion of Peak Oil had become everyday reading – Peak Oil, or Hubbert’s theory, was the point in time when the maximum rate of extraction of petroleum is reached after which it is expected to enter terminal decline.  Most of the older forecasts called for peak oil to occur somewhere in the 2000-2010 time-frame, forever creating a seller’s mar

Manager Commentary

Equity market conditions continued to be challenging with the S&P 500 falling (5.04%) in January after falling (1.78%) in December.

• Over the past seven years, there has been growing leadership by stocks whose companies were the most aggressive in reducing share counts by buying back their own stock.
• This became such a prevalent strategy that Standard and Poors started computing the effective tailwind to earnings per share from stock buybacks.
• According to Standard and Poors, in 4Q15, 77.6% of the

• There have been several questions regarding the eventual accuracy of the Atlanta Fed’s GDPNow forecast; it is important to note that GDPNow is computed based on the same data as is used for the official GDP calculation — it is simply recalculated in real-time as data is received.
• GDPNow right before the first estimate of 4Q15 GDP was 0.7%; the first estimate was 0.7