August 2017

A Note from the Team

Sabre rattling between North Korea and the U.S. is sending investors scrambling. Yesterday’s selloff broke various support levels. Most notably was the S&P 500 and NASDAQ breaking below their respective 50-day moving average. Weakness in the broader market has been forecasting that a 5-6% correction could be in the cards.

There are many uncertainties when it comes to volatility, heightening the instability investors face. While the average investor does not understand volatility and its effects, they can rely on the CBOE Volatility Index (VIX) or market pundits for information on the performance of the marketplace. These sources often exacerbate the up-and-down swings investors see.

For all the recent headline risk, global equities continue to crawl slowly higher as economic data generally remains robust. In the U.S., for example, new job growth in July was stronger than expected. In addition, earnings season in the U.S. is showing generally strong results. Of the firms in the Russell 1000 index that have reported second-quarter financial results so far:

67% have beaten their revenue estimates

75% have posted better-than-expected earnings

Although we have maintained smaller cash positions and significant positions in growth stocks and international equities, we are carefully monitoring the increased volatility and may look to reduce exposure, as market conditions dictate.

More next month…

Commentary

Please take a look at our in-depth newsletter here:

• Macro-Economic Overview
• Equity Overview
• Fixed Income Update
• International Update
• Market Notes