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The Aptus Blog

Market notes, charts, investment concepts, and timely market updates, directly from our investment team.

2022-07-18 · Market UpdatesQ2 Recap and Chart BookThis is our biggie each quarter, pages of charts and the context to go with them. As always, we think the windshield view is far more relevant than the rearview. But it’s2022-07-15 · Market in PicturesThe Market in Pictures, July 15Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and why: JL: History would indicate that the end of Fed tightening is2022-07-12 · Market UpdatesThe “Idea in Real” MarketThe market is learning that the economic cure of last year is now quickly becoming the cause for something else. The ramifications of unprecedented fiscal and monetary re2022-07-12 · Market UpdatesWill the Fed Flip?Powell Pivot or Powell Plunge… Which is It? The Fed’s aggressive tightening over the last 3 months has been a vicious attempt to regain their credibility after insisting 2022-07-08 · Market in PicturesThe Market in Pictures, July 8Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and why: Dave: denominator a lot bigger but this bear is no joke, $142022-07-07 · Bonds & RatesCurve Inversions and Lots of MovementThe Yield Curve Inverted… Again The yield curve has inverted temporarily several times this year, but it’s only been for a day or two and then bounced back to a more norm2022-07-05 · Market UpdatesRearview to Windshield, July 2022Developments Over the Past Month The U.S. Officially Entered into a Bear Market: The S&P 500 has officially entered a bear market, marking the 27th bear market since 2022-07-01 · Market in PicturesThe Market in Pictures, July 1Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and why: Dave: there hasn’t been a single instance in 50 years of Fed2022-06-28 · Market UpdatesSoft or Hard Landing… Which is It?A Central Bank’s place in an economy is to be the behind-the-scenes moderator of financial conditions. Here in the US, they specifically have two jobs: price stability an2022-06-24 · Bonds & RatesA Busy Stretch for Bond Market ParticipantsFed Update Chairman Powell was before Congress this week and admitted several things: 1) rate hikes will not likely bring down cost of gas; 2) rate hikes will not likely 2022-06-24 · Market in PicturesThe Market in Pictures, June 24Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and why: John Luke: not hard to see what’s driving the equity market’2022-06-23 · Investment ConceptsA Plan Will Always Have Something UnexpectedA family member, a young boy yet to reach his 3rd birthday has inspired me and this piece. He went from a potential concussion to 3 weeks in the hospital, and today getti2022-06-17 · Market in PicturesThe Market in Pictures, June 17Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and why: JL: by any measure, the inflation picture is different than 2022-06-16 · Market UpdatesAptus Musings: Fed Up With InflationObviously, yesterday’s news regarding the market was all about the Fed. Just a few weeks ago, it seemed very unrealistic that the market would get a 75bp hike in June. Ye2022-06-14 · Bonds & RatesMay CPI Forcing the Fed’s HandPeak Inflation… Think Again! Source: Bianco Research. As of 6/10/22 CPI rose 1.0% MoM and 8.6% YoY (a new high) in May. The core CPI again surged 0.6% MoM and 6.0% YoY. I2022-06-10 · Market in PicturesThe Market in Pictures, June 10Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and why: 1) JD: this stayed on the “anti-correlation” side for a few 2022-06-10 · Market UpdatesValuations MatterThe returns witnessed by investors over the past few years have been an outlier. Entering the year, the 3-year annualized return for the S&P 500 was ~25% with the U.S2022-06-08 · Investment ConceptsPortfolio VeggiesA post I wrote when my kids were a bit younger…events change but the prescriptions remain intact: Every advisor wants the same from their clients…save more money, focus o2022-06-06 · Market UpdatesConvexity is KeyLet’s talk about the last couple weeks in the market and what we are doing about it. Not to provide homework, but if you haven’t read the following links, please do. The 2022-06-06 · Market UpdatesRearview to Windshield, June 2022Developments over the Past Month: The Beatings Will Continue Until Morale Improves: Markets wrapped up a volatile month of May exactly where it began. We started May at 42022-06-03 · Market in PicturesThe Market in Pictures, June 3Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and why: Dave: market selloffs of the past decade have repriced equit2022-06-03 · Market UpdatesWell, QT is Finally Upon UsWe are beginning a new regime as the Fed moves to reduce the size of its balance sheet which has grown to nearly $9 Trillion. Since March 2020, the Fed has made more than2022-06-01 · Market UpdatesOil Market Update – Products EditionIn prior posts, we have written about the continued tightness in oil markets driven by (among other things) structural underinvestment in productive supply over the past 2022-05-31 · Market UpdatesThe Strength of the ConsumerRight now, the consumer’s money in their wallet doesn’t jiggle jiggle, it folds. Everyone reading this has probably heard us continually state that the stock market is di2022-05-27 · Market in PicturesThe Market in Pictures, May 27Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and why: 1) JL: hard to believe Fed Funds rate is still only 1% given2022-05-26 · Bonds & RatesMunicipal Bonds Looking More AttractiveMunicipal bonds have been thrown out with the bathwater since the beginning of the year as the Fed gets serious about taming inflation and in turn the market pushing inte2022-05-20 · Market UpdatesEquities in a Tightening RegimeWe continue to understand that emotions are heightened in this current market – the volatility is real. Thus, we know that a lot of y’all are focusing on how to help your2022-05-20 · Bonds & RatesThe Fed Getting Squeezed* Fed Expected to Hike 50bps at Next Two Meetings. As you can see below, the odds on both are at 100%. Given the persistence of inflation, the Fed has been put into defen2022-05-20 · Market UpdatesThe Second Leg to DropFirst, I really wanted to touch base after yesterday’s price decline across indices – it was the worst day since June 2020. I know that I have been saying for quite some 2022-05-13 · Market UpdatesThe Affordability Problem in HousingStrong demand for housing may give some flashbacks to 2007/2008, but this is not necessarily a bubble. We believe the work-from-home has shifted the demand fundamentals o2022-05-11 · Market UpdatesAptus Musings: Current Market Gyrations are Not Normal, But This Intra-Year Drawdown IsI’ll start off by reposting JD’s message from the most recent monthly note – it’s a must read on how to mentally handle the current volatility – Thinking Well. Two Parts 2022-05-06 · Bonds & RatesDid the Fed Ease Policy?May 5th, 2022 – Bond Market Week Over Week Update * Fed Hikes 50bps and Starts QT, albeit more Slowly than Expected. The Fed hiked rates 50 bps (instead of 75) and basica2022-05-03 · Market UpdatesMay 2022 Aptus Musings: How Should One Look At the Market?For today’s musing, I’m just going to throw some thoughts out there regarding the current market – so my rants may be all over the place. The end of each day feels as if 2022-05-02 · Market UpdatesRearview to Windshield, May 2022Developments Over the Last Month April showers doused bullish sentiment last week as the SPX wrapped up April with an 8.8% decline. This was the worst April return for th2022-05-02 · Market UpdatesThinking WellThinking well is a superpower. It’s not a character trait that receives much attention, but I’d argue, it’s what matters. All other qualities take a back seat to the abil2022-04-29 · Bonds & RatesMortgage Bond (MBS) UpdateDecomposing Bond Yields Let’s first think about the components of a bond’s yield. At the simplest level, Treasury yields are simply the average expected Fed funds rate ov2022-04-25 · Investment ConceptsHelping Clients Tackle Sequence of Returns RiskAs discussed in a prior post, the order in which returns accrue can be the difference between a comfortable retirement and one facing some tough budgeting decisions. The 2022-04-25 · Bonds & RatesMuni UpdateThis bond bear market has taken down Munis hard. Yields on Munis (measured by MUB) are around 2.45%, which is ~3.5% tax-free on a 4.25yr duration. Higher Yield Muni funds2022-04-22 · Bonds & RatesBond Market Week Over Week Update* Why Are Yields Rising: Rising yields are a consequence of falling bond prices, which occurs when investors sell bonds. This is an obvious point, but it’s important to r2022-04-20 · Market UpdatesAptus Musings: Q1 2022 Earnings ExpectationsQ1 2022 Earnings Preview Earnings season started last week with JP Morgan (“JPM”) and a slew of other banks, and given the early tone, this earnings season could be under2022-04-15 · Bonds & RatesIt’s All the Same, Only the Rates Have ChangedFlashing back a year, when bonds felt a bit more alive than dead. Originally posted in our Content Hub last March but the concepts remain important… Rates Are Moving Inte2022-04-13 · Market UpdatesDid We Witness Peak Inflation? Let’s Hope.U.S. consumer prices rose in March by the most since late 1981. The consumer price index increased 8.5% (2.2% of the headline number can be attributed to energy) from a y2022-04-13 · Market UpdatesQ1 Recap and Chart BookThis is our biggie each quarter, pages of charts and the context to go with them. As always, we think the windshield view is far more relevant than the rearview. But it’s2022-04-08 · Bonds & RatesBond Market Week Over Week Update* Bonds… The Rough Stretch Continues: The Bloomberg US Aggregate Index continues the largest drawdown in its history. Since August 6th, 2020 – the end of the most recent 2022-04-06 · Market UpdatesWhat is “Notional Protection”?Last month we focused on the Delta of an option and how that relates to our portfolios and strategies. It was a simplified explanation of answering the questions around h2022-04-04 · Market UpdatesRearview to Windshield, April 2022Developments over the Past Month Monthly Recap: March was a tale of two different periods (see below). The first quarter was one of the worst on record for the collective2022-03-31 · Market UpdatesMarket Performance After a Yield Curve InversionThis Aptus Musing will piggy-back John Luke’s take on the yield curve inversion. As we all know, it’s one thing to know what is going on in the market, but another to kno2022-03-29 · Bonds & RatesElephant in the Room: Yield Curve InversionThe spread between the 10-year Treasury and the 2-year Treasury has compressed materially over the first three months of 2022 (~80bps of tightening), and inverted yesterd2022-03-28 · Market UpdatesAptus Musings: Stock of the Month – Copart, Inc. (CPRT)Ride Wit Me – Copart, Inc. As fundamental analysts, we need to do the work – we need to roll up our sleeves and get our hands dirty. We don’t solely rely on sell-side ana2022-03-25 · Market UpdatesETF Mechanics and Tax EfficiencyMost people hate taxes – that’s why they should love ETFs. As in past years, capital gains distributions from ETFs in 2021 were a tiny fraction of those distributed by th2022-03-24 · Bonds & RatesBond Market Update March 24, 2022* Bonds… A Rough Stretch: The Bloomberg Global Aggregate Index, a benchmark for government and corporate debt, has fallen 11% from a high in early 2021. That’s the bigges2022-03-23 · Market UpdatesMarch Madness, Wealth Management versionMore fun on the hardwood…Wealth Management ran a piece on guys who played major college hoops. As you may know, 6 Aptus team members played Division 1 ball, so there migh2022-03-17 · Market UpdatesFOMC March 16th, 2022And…We Have Lift Off As expected, the Fed raised the overnight target rate 25 bps to 0.25% – 0.50%. The market had priced seven hikes this year prior to the meeting, and 2022-03-15 · Market UpdatesAptus Musings: Will the FOMC Invert the Yield Curve?Let the March Madness begin! As you may know, Aptus has six (6) employees that played D-1 College Basketball at UNC Wilmington, UA-Huntsville, and Wright State. The latte2022-03-11 · Market UpdatesA Generational Inflation Print, Until Next Month…The U.S. CPI surged +0.8% m/m and 7.9% y/y in February. Core CPI, which is a measure that takes out food and energy, rose +0.5% m/m and 6.4% y/y in Feb. Given the recent 2022-03-09 · Market UpdatesAptus Musings: The “R” WordIt’s no secret that the underlying market dynamics have changed over the past month due to geopolitical forces potentially causing a slowdown in global growth. In our 2022022-03-03 · Market UpdatesBond Market Summary: March 3, 2022Current Rates & the Curve: The Ukraine-Russia War captured investors’ attention as the 10-year US Treasury traded in a ~30 bps range since last week. The yield of 2.02022-03-02 · Market UpdatesHow and When Can Hedges Be Effective?Our experience in the options market is what underpins our investment process. Options are the vehicle to inject ownership of volatility, and it’s this ownership that all2022-03-02 · Investment ConceptsStrategies to Address Sequence of Returns Risk“The most important job is to strike the appropriate balance between offense and defense” Howard Marks We recently wrote a piece outlining sequence of returns risk and th2022-03-01 · Market UpdatesRearview to Windshield, March 2022The market, measured by the S&P 500, officially entered a “correction” phase, as investors continue to disseminate the latest news on the Russia/Ukraine front. Market

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