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Monthly Update

January 22, 2018

The month of December saw a strong finish to the year across most asset classes with tax reform taking center stage. Although it was late to begin this year, we did see the seasonable “Santa Claus Rally” through year end.

2017 was extraordinary in many ways; one of the most significant was the complete lack of volatility. Goldman Sachs illustrates below how rare it was to see the market climb so smoothly. Anyone waiting for that illusive ‘pull back’ last year learned a hard lesson about trying to time the market.

As with every new month, December brought about copious new concerns with markets at all-time highs, the emergence of cryptocurrencies, and geo political issues rampant. Many pointed to the action in bond yields as a possible sign of a correction to come. Below, Blackstone illustrates that while a yield curve inversion has historically been a bearish signal, the imminent worry may be overdone.

As with any of these ideas, please give us a call if you have any questions, we look forward to discussing these and any other thoughts with you.

Best,
Catamount Financial Advisors

Opinions expressed are not necessarily those of Raymond James & Associates. Information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. Past performance may not be indicative of future results. It is not possible to invest directly in an index. The S&P 500 is an unmanaged index of 500 widely held stocks. The NASDAQ 100 Index is an unmanaged index of 100 of the largest non-financial domestic companies listed on the NASDAQ Stock Market’s National Market. Raymond James is not responsible for the content of any web site or the collection or use of information regarding any web site's users and/or members.


Monthly Update

December 4, 2017

The month of November was an interesting one for the markets- speculation over potential tax reform, interest rate spreads and Bitcoin dominated the narrative. The beginning of the month spooked investors with sharp declines in the High Yield market, which some consider a strong economic indicator. However by the time investors sat down for Thanksgiving turkey High Yield had rallied and fears subsided.

Wall Street can be a skittish bunch and often times the risks that seem imminent today are distant memories but a month later. While investors are still enamored with the Fed policy, the perceived risk of North Korea took a backseat in November –

The discussion of a possible NASDAQ bubble has creeped up over the past few months with many investors seeing comparisons between todays Tech sector and the dot com era collapse. While it is always important to pay attention to valuations, many of today’s big tech companies continue to beat earnings estimates and produce strong quarterly results. One of the strongest examples of the last few years has been Apple, who continues to sell us more expensive phones every year while competitor’s prices fall–

While the Tech sector continues to grow, many long time blue chip companies are beginning to adapt their business plans to survive in the new world. Companies like GE have announced major overhauls to focus on divisions where they anticipate growth in the future. Unfortunately for many income investors this news came with a large cut to the company’s historically strong dividend. GE is just one example of a company changing its long standing business model to adapt; for example GM this month announced a new initiative that goes far beyond just selling cars, here is the plan from GM CFO Chuck Stevens–


https://twitter.com/PlanMaestro

With car ownership dwindling among millennials, many of the companies in the automotive industry will need to rethink their models. Further discouraging vehicle ownership in November, Crude prices hit a 2-year high. While many investors have been anxiously awaiting a Crude rebound for years now, many do not anticipate an acceleration of the recent breakout as drilling techniques and efficiencies continue to revolutionize the market.

Looking forward to December, much of the market focus will be on year end numbers. Often time’s money movement will occur as asset managers try to lock in gains or reposition for the New Year. Come mid-month, trading volume will probably begin to slow as investor focus shifts towards family, friends and the holidays. We hope all of you have a wonderful holiday and New Year with loved ones. As always, please reach out to discuss these or any other ideas, we look forward to hearing from you.

Catamount Financial Advisors

Opinions expressed are not necessarily those of Raymond James & Associates. Information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. Past performance may not be indicative of future results. It is not possible to invest directly in an index. The S&P 500 is an unmanaged index of 500 widely held stocks.The NASDAQ 100 Index is an unmanaged index of 100 of the largest non-financial domestic companies listed on the NASDAQ Stock Market’s National Market. The Nikkei index is an unmanaged index which is representative of the Japanese stock market. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed web sites or their respective sponsors. Raymond James is not responsible for the content of any web site or the collection or use of information regarding any web site's users and/or members. Companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification.


Monthly Update

November 27, 2017

The month of October saw the market continue it’s march to new all time highs. While previous months had seen the entirety of the market push higher, we finally saw some uncorrelation among sectors in October. Many of the names in Technology, Materials, Financials and Consumer Discretionary all appeared to cruise higher, while Pharmaceuticals, Biotech and Gold were laggards. In our opinion, October was a big month for quarterly earnings and a number of companies saw massive gains after beating earnings expectations- Amazon and Alphabet both rocketed after stronger than expected quarters. On the other side of the coin, companies that reported poor earnings or soft future projections were swiftly tossed out- Celgene fell nearly 20% in a single trading day after casting doubt about their prospects. (Thompson Reuters)

We have heard from many who recall the dot com bubble of the early 2000’s and are concerned about the recent run up in Technology. While it has seemed like an unsustainable ride at times, the chart below shows just how far we have had to climb to return to even. Between the strong earnings this month in the sector and the investor sentiment, we seem to be a far cry from the exuberance of the late 90’s.

For years many investors have stressed the importance of diversification away from domestic markets- and for years both Europe and Emerging Markets have lagged, frustrating those who heeded their advice. In the past few months we have finally seen signs that Europe could be on the verge of breaking out.

While we have seen international stocks begin to run recently, many believe this may be just the beginning of a longer term trend. The article below from the Wall Street Journal this week described the potential firepower if Japanese investor sentiment starts to increase-

Looking forward to November, the progress of Tax reform will take center stage. Many expect any notion of progress to be a positive for the market, while any reported delays could be a reason for a pullback.

Perhaps our favorite part of October was the markets return to reaction based mostly on earnings- instead of North Korea, Politics, Terrorists Attacks, etc. Earnings are quantifiable and while reactions are not always justified, we can comprehend why markets are moving one direction or another. We much prefer to discuss our favorite companies with you instead of the potential for nuclear war with North Korea- a subject where our guess is as good as yours. Hopefully in November we can continue having the discussions we enjoy.

As we approach the holiday season we want to wish all of you a safe and Happy Thanksgiving, as always please reach out with any questions or to discuss these topics further.

All the best,
Catamount Financial Advisors

Opinions expressed are not necessarily those of Raymond James & Associates. Information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. Past performance may not be indicative of future results. It is not possible to invest directly in an index. The S&P 500 is an unmanaged index of 500 widely held stocks. The NASDAQ 100 Index is an unmanaged index of 100 of the largest non-financial domestic companies listed on the NASDAQ Stock Market's National Market. The Nikkei index is an unmanaged index which is representative of the Japanese stock market.