As our valued client, you will receive a weekly email from us with commentary from our team members, which sometimes includes reports from others in the industry. We also send our Private Investment Management (PIM) account holders quarterly newsletters on the portfolios and the investment environment.

Here are our team’s thoughts on the latest market commentary, and you can also find an archive of these materials below.
In April of this year, a remarkably high percentage of individual stocks traded above their 200-day moving averages (Business Insider). We believe this ‘market breadth’ was a positive sign of strength and typically occurs in the early stages of a new economic cycle. As equity markets continue to march higher, we revisit the topic.

It has been a strong first half of the year for the S&P 500 and Russell 2000 indices, both up over 10% year-to-date (Reuters). Early in the year we saw the Russell 2000 index, a small-cap index, out-perform the large-cap S&P 500 index by a considerable margin, which is what we would expect given the economic rebound. Now, market breadth has begun to narrow as the early stages of rapid expansion decelerate.

For further detail on current breadth in the market, please read the attached report from the Wells Fargo Investment Institute.


The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. The material has been prepared or is distributed solely for information purposes.

All investing involves some degree of risk, whether it is associated with market volatility, purchasing power or a specific security, including the possible loss of principal.  Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments

Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly-owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.
Valuation metrics and multiples approached historic highs early this year (CNBC). As equity markets have rocketed higher from their March 2020 lows, these expanding multiples can cause worry for some investors. One multiple that we specifically watch is the P/E (Price/Earnings) multiple. When P/E levels near historic highs due to large overall price increases in the market, we pay extra attention to the denominator of the equation, earnings.

We feel it can be worrisome if prices continue to expand if earnings do not follow suit. This can cause P/E valuations to inflate beyond what is reasonable. Fortunately, forward P/E multiples have contracted thus far this year. We continue to watch other fundamentals as well, with expectations that they will continue to improve through the remainder of the year. 


The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. The material has been prepared or is distributed solely for information purposes.

All investing involves some degree of risk, whether it is associated with market volatility, purchasing power or a specific security, including the possible loss of principal.  Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments.

 
Equity markets began the week rebounding off last week’s declines. Inflation remains the hot topic as some of the most recent comments from the Federal Reserve have been received as slightly hawkish by market participants. Rates remained unchanged, but the Fed now expects to raise them sooner than previously expected.

We believe at this point that continued inflation is to be expected given the current backdrop of economic expansion and expectation of rising rates. For a more in-depth at what this could mean for equity performance, please read the attached Wells Fargo Investment Institute report. 



The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. The material has been prepared or is distributed solely for information purposes.

All investing involves some degree of risk, whether it is associated with market volatility, purchasing power or a specific security, including the possible loss of principal.  Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments

Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly-owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.
Markets remained fairly muted last week, though the S&P 500 Index did reach a new all-time high. It was the first new high since March (CNBC). It seems market participants are hesitant as we await the upcoming policy decision from the Federal Reserve. We expect rates to remain unchanged, but will be watching closely for any announcement on possible tapering of asset purchases.

The economy continues to provide both positive and negative data points, increasing the difficulty of forecasting any changes. Headlines focus on the Fed’s decision on interest rates, but often lack explanation of the yield curve. Changes in the yield curve can strongly impact how the fixed income portion of a portfolio is constructed. For a closer look at the current state of the yield curve, please see the attached report from the Wells Fargo Investment Institute.


The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. The material has been prepared or is distributed solely for information purposes.

All investing involves some degree of risk, whether it is associated with market volatility, purchasing power or a specific security, including the possible loss of principal.  Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments

Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly-owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.