MARCH 6, 2018

Steel Thyself

Markets entered March on a low note as the Trump administration proposed levying sizable tariffs on steel and aluminum imports….

February 23, 2018

Weekly Strategic Insight

On Tuesday, within our equity model portfolios, we reduced our allocation to U.S. small companies and increased our allocation to emerging market companies…….

February 16, 2018

Memphis Daily News, David Waddell

Now that markets have stopped hyperventilating and resumed their rally, let’s take a look inside the sell off and recovery for clues on what’s to come…….

February 9, 2018

CNBC Japan, David S. Waddell

Sharp spikes in volatility this week strained the romance between investors and stocks. After nine years of gains, investors had grown accustomed to the warm baths, home cooked meals, and manicured lawns that the stock market so selflessly provided. The recent tantrum caught lovelorn investors by surprise, but is this more than a spat…

February 2, 2018

Memphis Business Journal, Table of Experts

Markets this week dropped by the largest amount in two years. Yikes! But, before you hyperventilate, we are still in the longest streak in history without a 5% decline. As I type, the S&P 500 has only fallen 3% over this period. This pullback coincides with surging corporate earnings and robust economic growth, so what gives?

January 26, 2018

The Revenge of the Alpha’s

So far in January, the S&P 500 stock market index has posted 13 record highs, just three short of the record of 16 closing highs set in June of 1955. In addition to this being the 2nd longest lasting bull market in history at 3,245 days, it has also had the lowest volatility. The market has now gone 110 trading days without a 1% decline and 447 days without a 3% pullback….

January 20, 2018

Earnings Melt Up

It might be a bit of a strange 4th quarter for earnings releases. On Tuesday, Citigroup reported a quarterly loss of $18.3 billion, and its stock went up. What gives? The loss was created by a one-time write down of its deferred tax asset due to the enactment of the Tax Cuts and Jobs Act (tax reform law)…..

January 12, 2018

Bear Hunting: Phase 1

As detailed in our missive last week, we can make a clear case for higher markets as the combination of synchronized global growth, historic tax relief, and frenetic animal spirits add lighter fluid to this persistently smoldering bull. Adhering to the script, the Dow tacked on another 500 points this week in anticipation of jubilant corporate guidance as Q4 earnings season begins……

January 5, 2018

Rally… or Repricing?

On November 16th, 2017 the House Republicans passed their version of the Tax Cuts & Jobs Act. At that time, FactSet forecasted S&P 500 earnings of $131.6 for 2017. On December 22nd, President Trump made the bill the law. According to a myriad of Wall Street analysts, the reduction in the corporate tax rate INSTANTLY lifted corporate earnings by 5-10%……

December 21, 2017

We Have a New Tax Bill for 2018

Now that the tax bill is on the way to President Trump’s desk, there are roughly five business days to complete any last-minute planning……

December 15, 2017

New boss…same as the old boss

On Wednesday, Federal Reserve Chairman Janet Yellen effectively concluded her reign as Fed Chair by raising overnight interest rates slightly to 1.5%. While technically a tightening, monetary conditions remain very accommodative and supportive for economic growth. One great advantage of the US monetary regime over the last decade has been its growth-centric continuity….

December 8, 2017

Inside Memphis Business

Long time clients of W&A should recognize the chart above as our trusted bull market roadmap. As we closed out 2016, we opined that Trump’s policy priorities would transition the market from the sideways “Caution” phase to the upmarket “Confidence” phase. Indeed, the returns in 2017 have well exceeded most (but not our) prognostications…..

December 1, 2017

Germantown Municipal Television: In the Money

Trump may have colluded with the Russians. Trump may not have colluded with the Russians. How will this impact how much Christmas shopping you will do? How will this impact how productive you will be at work? How will this impact how many Dasani water bottles consumers purchase in 2018?…..

November 17, 2017

Memphis Business Journal

This week the House Republicans passed their tax bill on a party line vote. The Republicans in the Senate Finance Committee also approved their tax bill on a party line vote, leaving the Senate poised for an open floor debate following Thanksgiving. Mitch McConnell will, therefore, be whipping more than potatoes over the holidays. The most adamant Republican holdouts include Senators Ron Johnson….

November 10, 2017

Taxpayers are a Migratory Specie

Republicans in the Senate revealed their tax plan yesterday, which differed from the House plan in subtext but not in substance. Once the bills harmonize, our tax code will be simpler and corporate tax rates will be lower. For those caught up in the individual tax rate media provocations, don’t be….

November 03, 2017

Taxpayers are a Migratory Specie

Easton (my 15 year old son) selected a high school 30 minutes away. This provides me ample opportunity to brainwash him on our commute. This morning as we rocked out to CNBC radio, he asked why there was such a raucous debate on the set. I explained that the Republicans had just released their tax plan and many Democrats hate it….

October 20, 2017

Black Anniversary

October 19th marked the 30th anniversary of Black Monday which saw the Dow Jones Industrial Average (Dow) drop 508 points (the equivalent of 5,275 points today) or an astonishing 22.6%. What people may not remember is that Monday, October 19, 1987 was actually the culmination of a sell-off that had started in August and intensified the week prior. And the stock market had performed exceedingly well in the first half of the year, which allowed the Dow to finish the calendar year in positive territory….

October 14, 2017

The Reason for the (Earnings) Season

The 3rd quarter earnings season kicked off in earnest this week, highlighted by the big banks including JPMorgan (beat), Citigroup (beat), Bank of America (beat), and Wells Fargo (miss). We’ve written previously in this space about the importance of corporate earnings growth to further stock market growth…..

October 6, 2017

Banking on Trump

The government reported today that the US unemployment rate fell to a 16 year low of 4.2% in September. For an economist, low unemployment rates provoke recessionary fears. Here is why:….

September 29, 2017

The Tax Man Plan

Republicans hit the microphones this week to reveal their “framework” for tax reform. The 35 page Better Way plan that originated on Paul Ryan’s desk back in June of 2016 has been watered down into the 9 page Unified Framework for Fixing Our Broken Tax Code released on Wednesday. For those uninterested in reading the source material, here are the highlights….

September 22, 2017

Quantitative Tightening

The Federal Reserve’s Federal Open Market Committee (FOMC) concluded a two day meeting on Wednesday and released a statement addressing a couple of key monetary policy items. First, the committee decided to maintain the current federal funds rate of 1 – 1.25%, but projected a rate increase of 0.25% by year-end…..

September 15, 2017

The Possible vs. The Probable

This afternoon on CNBC’s Closing Bell Sara Eisen asked me about whether the recent North Korean missile launches threatened the continuation of this bull market advance. She might also have asked how the Equifax data breach might threaten the advance, how Trump’s potential impeachment might threaten the advance or how another hurricane might threaten the current advance……

September 9, 2017

Stock Hunters International

International stocks, as measured by the MSCI All Country World Ex USA Index, underperformed U.S. stocks, as measured by the MSCI USA Index, by an average of 9.7% per year between 2010 and 2016. On a calendar year basis, international stocks underperformed in 6 out of 7 years, only winning by 0.7% in 2012. Unless the applecart is upset, international stocks are poised to buck this 7 year trend and outperform U.S. stocks in 2017…..

September 1, 2017

Waddell & Associates In the News This Week

In economics, the term NAIRU stands for “Non-accelerating inflation rate of unemployment”. At this rate, lower unemployment levels mathematically generate higher inflation levels. Economic cycles tend to end when the well of available laborers runs dry, forcing labor costs higher which forces companies to pass price increases on to consumers……

August 25, 2017


Today, within our equity model portfolios we reduced our allocation to US energy companies and increased our allocation to emerging market companies…..

August 18, 2017

Waddell & Associates In the News This Week:

Markets pulled back this week on a series of jarring terrorist events and exacerbating political responses. Frankly, we see this pullback as overdue and do not believe it will metastasize into anything more. The fundamental underpinnings remain supportive and while risks have risen, they may not be the ones you expect….

August 11, 2017

Waddell & Associates In the News This Week:

An escalation of nuclear rhetoric between the U.S. and North Korea brought some volatility to docile stock markets this week. Thursday was just the 2nd day of 2017 to experience a decline of more than 1% in the S&P 500. Coincidentally, I penned our Weekly Strategic Insight that week (if you see me on the street, please don’t avoid me). A brief timeline to recap recent on goings:….

August 08, 2017

Record Trifecta

The investment gods have blessed investors with gifts of record economics, record earnings, and record market levels over the past week. This week…let’s simply celebrate our recent achievements!….

July 7, 2017

Recession Ready

Bond yields jumped worldwide this week, raising concerns among those often concerned. Greg IP at the Wall Street Journal contributed further angst on Wednesday with an article noting that the recessionary “pre-conditions” of low unemployment, high asset prices, high corporate debt, tightening central banks and investor complacency have all been met……

July 21, 2017

The Reason for the Season

Four times a year, US corporations release their earnings reports. When markets focus on more macro factors, the reports carry less weight. However, this late in the expansion with valuations elevated, we need solid corporate earnings releases to justify further gains. In evaluating an earnings season…..

July 21, 2017

Halftime Report

Thank you for joining us this morning for our State of the Union Halftime conference call! A replay of the call is available to you by clicking the “Time for a Recession” thought bubble icon above……

June 2, 2017

2017’s Battle Royale

The status of the Trump growth agenda has represented the most important market variable since Election Day 2016. Correlations among assets classes and sectors conveniently divide the current investment environment into two competing narratives…the “reflation trade” and the “secular stagnation trade”…

June 9, 2017

Now Rotate!

Last week, we detailed the dynamic relationship between the “reflation trade” and the “secular stagnation” trade. Between Election Day and Inauguration Day, the reflation trade constituent returns (US small cap value and financials) outperformed the secular stagnation trade constituent returns (technology and utilities) by 15%…..

June 17, 2017

Inflation Stagnation

The Chicago Federal Reserve Bank issues the chart above to help observers gauge the Fed’s progress on their two Congressional mandates. Per Congress, the Fed must both maximize employment and maintain general price stability. The Fed interprets maximizing employment as a 4.6% or better unemployment rate, and interprets price stability as a 2% inflation rate. As demonstrated in the chart above, the Fed has overachieved its employment goal while underachieving its inflation goal….

June 24, 2017

A Rude Crude

U.S. crude oil prices slipped into bear market territory this week, closing Friday at $43.17 a barrel, down from a high of $54.45 on February 23rd. Unlike oil’s massive fall from $100 a barrel in 2014, the U.S. dollar cannot be implicated in this slide. Oil prices and the U.S. dollar typically have an inverse relationship, which was never more apparent than…..

June 30, 2017

Happy Halftime!

Before the year began, we noted that Wall Street strategists projected very pedestrian gains for the S&P 500 in 2017. In fact, going back to the year 2000, the 4.05% average prognostication amounted to the third lowest yearly estimate of the timespan. The average miss rate on street estimates is about 5%, placing the expected range somewhere between -1% and 9%……

May 6, 2017

The Round Up

What a week of relentless news flow! Unfortunately, choosing to dive deep into one topic would crowd out the ability to comment on others. As such, we thought we might isolate the most important weekly news-bytes and comment succinctly on each…

May 15 2017


Earlier this week, Berkshire Hathaway held its annual shareholder hoedown. While sipping Cherry Cokes and eating See’s Candies, Warren Buffett and his investment life partner Charlie Munger opined on various topics before an audience of 30,000…

May 21, 2017

Trumper Tantrum

On Wednesday, the major stock indexes experienced their worst day of the year amid turmoil in Washington. The S&P 500’s loss of 1.82% was its largest daily decline since ..

May 26, 2017

Further to Rise

With the market once again climbing the wall of worry to new highs, talk of overvaluation has resumed. Investment simpletons cite that the current trailing P/E for the S&P 500 of 20 versus its long term historic average of 15-16 caps further upside. Those seeking to paint a more condemning picture cite the Shiller 10 year CAPE P/E ratio..

April 1, 2017

Quarter Past

Two competing narratives direct today’s market action, “Secular Stagnation” and “Reflation”. Each day, secuity markets tilt one way or another reflecting the sum of daily data and opinion. Since algorythms direct much of the daily activity, certain sectors and asset classes move in lockstep, like obedient squires, beneath their ruling narrative….

April 15, 2017

2017 State of the Union “Rise of the Machines!”

In order to avoid any accusations of prioritizing work over family, we will be forging our weekly money-missive this week. However, this does not fully release you from your weekend research obligations as the video link to our 2017 “State of the Union” address, recorded LIVE on February 23, is included below. Consider enjoying with the family over brunch…

April 22, 2017

Stone Touching

The trick to “effective market monitoring” is knowing what to look for. Without a framework for analysis, headlines can derail and distort decision-making, leading to higher portfolio turnover and lower investment returns. Studies on portfolio rebalancing indicate that, on average, investors should only consider structural recalibrations once…

April 28, 2017

Tax Reform

On Wednesday, Treasury Secretary Steven Mnuchin and director of the White House National Economic Council Gary Cohn released the Trump administration’s goals for tax reform along with an outline of primary provisions. It was by no means a detailed plan, but an opening salvo to Congress…

March 4, 2017

Nervous Rally

Equity markets continued their march upward this week, with the bulk of gains coming on Wednesday after resident Trump’s first address to a joint session of Congress. Reaction to the speech was generally positive as journalists and pundits alike regarded his message as more uplifting and unifying than his inaugural address and …..

March 18, 2017

Testing the Trump Trade

The Trump Trade relies on the following trinity: faster economic growth, faster earnings growth and faster inflation. Let’s see how each of these factors are faring. …..

March 25, 2017

Reading the Trumpometers

We received inquiries after last week’s email wondering which market indicators best handicap the odds of Trumponomics passage…..

February 4, 2017


Last week we discussed the friction between political pessimism and economic optimism.  We concluded that while Twitter Tantrums might stoke anxiety, ultimately markets will price on earnings and economic reality.  This week, markets sold down on the continued cavalcade of seemingly impulsive policy proclamations.  Protests raged nationwide (seems to be our new national pastime),

February 12, 2017


In lieu of a lengthy literary epistle this week (knowing I enjoy them much more than you), let’s dim the classroom lights and roll a movie.  It’s only about seven minutes, so catching a nap could prove difficult, but within this exchange is a concept worth edifying:

February 20, 2017

Presidents Day Special: Translating Trump

Perhaps no word in the English language has become more divisive than “Trump”.  Readers scanning any web page or any newspaper become berated with bias, either forcefully confirming their own, or insultingly asserting another’s.  Staged and organic protests challenge us all to recast our own views to validate the offended or receive a selfish

February 24, 2017


Thank You to all of you who joined us in Nashville and Memphis for our most well attended State of the Union season ever!  Thank you also, to those of you who joined us online for our video simulcast.  We will soon release a video replay for those of you unable to join us or tune in

January 20, 2017


The National Federation of Independent Business (NFIB) released their Small Business Economic Trends December report last week, which exhibited an upward spike in the Small Business Optimism Index to its highest level since December 2004. The index jump of 7.4 points represents the largest monthly change since the NFIB began reporting it on a monthly basis in 1986. Small

January 28, 2017


President Trump has taken office with the same playbook he used during the campaign. His bold, brash style filled the “Twittersphere” with boasts, slights, threats and applause. Will we go to war with China? Will we have a trade war with Mexico? Will he impose martial law on Chicago? Will foreigners stop buying Treasuries?

December 30, 2016

Bye Bye Bi-Polar 2016

2016 frustrated many investors and money managers alike. For the majority of the year, the persistent slow growth economy attacked confidence, leading investors to value yield over growth potential. By the BREXIT vote, the 10 year US Treasury Bond yielded an historic low of 1.3%…

December 10, 2016

Year end + Post Election Market Musings

The markets have broken free of the three year malaise that began in December of 2013. The new highs recently reached are justified if Trump’s pro-growth policies break the economic malaise as well. Currently the US economy is about 3 trillion dollars behind where it should be at this point in the economic recovery.

December 3, 2016

Currency Concerns

As the great economic sage, Adam Smith, taught us, an “invisible hand” ever guides economic events. In our interconnected global environment, nothing reveals the presence of the “invisible hand” more than currency movements. A national economy that gains economic advantage over its rivals, quickly yields under the pressure of a rising currency.

November 19, 2016

Reagan Gazing

For fans of Ronald Reagan, a Donald Trump comparison might seem offensive. However, from a policy perspective, Trump and Reagan share economic DNA. The starter pistol of the Reagan revolution was the Economic Recovery Tax Act of 1981, described by the media as a “grandiose” and “irresponsible” tax scheme. In effect, the ERTA cut personal rates by 25% and dramatically changed and lowered the capital gains and corporate tax burdens.

November 12, 2016

The Inflation Inauguration

We have recently written about the inflation uptick worldwide. While we view this development positively, higher inflation creates higher interest rates. Higher interest rates equate to lower prices for interest rate sensitive bonds and stocks. As you can see in this week’s graphic, a rising inflation/rate environment historically favors small cap value stocks concentrated in more cyclical industries like financials, energy and industrials.

November 4, 2016

Freaky Friday

While the losses have been modest, the S&P 500 extended its losing streak this week to eight days in a row. Absent recessions, what drives markets lower is uncertainty. Assessing current uncertainties, we have an upcoming election, an upcoming Fed meeting, ongoing OPEC disputes, Brexit back peddling and even creepy clown sightings! LORDY…Should you sell?

October 29, 2016

Stop Chasing Yields and Start Chasing Earnings

As mentioned in last week’s Weekly Strategic Insight and in the CNBC clip attached, inflation breezes have blown interest rate expectations higher, changing the personality of this market.

October 24, 2016


 David S. Waddell to appear LIVE on…

October 22, 2016

Rising Inflation Could Revive Selectivity

In recent market chatrooms, deflation fears have turned to inflation fears. One would think a middle point might placate the fearful, but fear generates chat…and these are chatrooms after all. Ironically, it was the uptick in Chinese producer price inflation that instigated the concern.

October 14, 2016

How to Grow USA, Inc.

Election fears dragged markets lower on the week. While the markets had already conceded the White House to Hillary, it had not contemplated handing her Congress as well. Trump’s latest political spasm and resultant conflict with Paul Ryan led to legislative “what if” trading on Wall Street.

October 8, 2016

An Earnings Aperitif

overview paragraph: With the third quarter of 2016 officially in the books, let’s look ahead to corporate earnings season and what to expect. Analysts’ consensus earnings estimates for the quarter recently turned negative.

October 1, 2016

Investors Keep Calm and Carry On

Since March of 2009, headlines have tested investor resilience leading to bouts of uncertainty and volatility. The intrepid have ignored plenty of Armageddon calls stemming from Brexit, Grexit, the Chinese property bubble, the US Treasury downgrade, the flash crash, Deutsche Bank contagion fears, election anguish etc.


September 24, 2016

Less Control for a Few Doesn’t Mean Less Return for the Many

I spent the first two days of last week in New York for manager and media interviews. In conversation, I found that the typical Wall Street “groupthink” had become atypical “group confusion”. Fears around politics, central bank policy, terrorism, computerization, secular economic stagnation and various black swan sightings, permeated dialogues.


September 20, 2016

David S. Waddell interview

he Street with Rhonda Schaffler, “Forget about the Fed, Markets are Going Higher and the Risk Trade is On”…September 20, 2016


September 19, 2016

Don’t Call it a Comeback

On Friday, September 9, the S&P 500 lost 2.45%, marking the first daily move of 1% or more since July 8 of this year. At that time, the market was still bouncing back from a shocking Brexit vote. A remarkably calm “summer doldrums” period followed, lasting more than two months. Since then, and through this Friday, four out the last six


September 19, 2016

CNBC’s Closing Bell

MEDIA ALERT:David S. Waddell to appear LIVE from the NYSE…”CNBC’s Closing Bell”…with anchors Kelly Evens and Bill Grifffeth, TODAY, September 19, 2016 2 pm CST/ 3 pm EST approx.


September 17, 2016

Don’t Call it a Comeback!

On Friday, September 9, the S&P 500 lost 2.45%, marking the first daily move of 1% or more since July 8 of this year. At that time, the market was still bouncing back from a shocking Brexit vote. A remarkably calm “summer doldrums” period followed, lasting more than two months. Since then, and through this Friday, four out the last six trading days have resulted in 1%+ market swings…Read more…


September 10, 2016

What’s Spooking the Fed?

Last week, we branded Fed vice-chair Stanley Fischer as “Flat Stanley” for flattening the stock markets and the yield curve (a bad economic signal) by proposing a September rate hike. Today, Boston Fed chief Eric Rosengren also earned a nickname (still working on that) for single handedly talking 250 points off of the Dow with his like-minded suggestion of a September rate hike. Read on…


September 2, 2016

The Lay of the Labor Market

The Bureau of Labor Statistics reported that the US economy created 151,000 jobs in the month of August lowering the headline unemployment rate to 4.9%. According to US economic textbooks, once the unemployment rate dips below 5%, the Federal Reserve should raise interest rates. Read more…


August 27, 2016

The FED Threads the Needle…

On Friday, Janet Yellen hit the podium at Jackson Hole with markets on tender hooks. Should Janet profess imminent rate increases, interest rates and the dollar could spike and the stock market could fall. Should Janet commit to leaving rates lower for longer, interest rates and the dollar could fall and the stock market could rise. Read more…


August 20, 2016

A Jackson Hole Appeal & Sector Strategy Guide

The summer doldrums settled in this week with equity markets essentially unchanged. In the background, we heard some conflicting views from Fed voting members, but the minutes from the last meeting indicated continued caution, leaving interest rates essentially unchanged as well. We will hear a lot more about monetary theory next week as the Fed holds its annual Jackson Hole retreat. I will be listening intently for any hints of policy inversion. Allow me to explain. Read more…


August 13, 2016

Higher Despite the Policies

Markets climbed into record territory this week as the Dow, S&P 500 and NASDAQ all summited simultaneously on Thursday. Retail sales and productivity releases disappointed economy watchers but pleased Fed watchers as interest rates idled, supporting valuations. The Fed may have another meeting scheduled in September, but a rate hikes seem unlikely. More likely, the Fed will reiterate that the job market appears healthier than the rest of the economy and that weak conditions could persist as a consequence of limited corporate investment and productivity gains. Read more…


August 7, 2016

Media Mention and Factoring In

There is a sea change taking place in the markets. The markets have become less fundamental and more systematic. What makes fundamental investing profitable is the first mover advantage. In a marketplace driven by fundamental analysis, an investor who locates a hidden gem profits as subsequent analysts confirm the discovery and allocate follow-on capital. Unfortunately, today’s marketplace relies less and less on traditional fundamental analysis. As a consequence, the first mover advantage weakens as less follow-on capital flows. Said plainly, it doesn’t matter if your fundamental thesis on an individual stock is correct if buying traffic doesn’t follow. Read more…


July 30, 2016

Popping the Bubble Theory

Despite convention shenanigans, terrorist attacks, EU fragmentation and negative earnings, asset markets worldwide continue to rise, confounding market bears. July closed with global equity markets up over 3%, gold up 2%, and bonds up .3%. Yes, sentiment was very low heading into the month which primed markets for rallies, but something more fundamental has been goading markets higher. Read more…


July 16, 2016

Long-term Conerns

The events of the past week demonstrate the loose short term affiliation between politics and economics. Turmoil in Britain, Dallas, France, and Turkey stimulates our financial flight reflexes on the notion that markets cannot rise while civil society is falling. Fortunately, the reconciliation of politics and economics takes time, which engenders corrective measures. Read more…


July 9, 2016

Summer Jobs

The June jobs report surprised to the upside on Friday as the U.S. Bureau of Labor Statistics reported total nonfarm payroll employment increased by 287,000, beating market economists’ expectations of 175,000. The surprise feels even better on the heels of a May jobs increase of a scant 11,000. The numbers were impacted somewhat by a Verizon strike, but adjusting for those 35,000 jobs lost in May and added back in June, the numbers still look good. Read more…

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July 3, 2016

State of the Union “Halftime Report”


June 25, 2016

Un-Occupy Europe

Much to the market’s surprise (and ours as well), a slight majority of British voters braved the rain and mandated the decoupling of Britain from the EU. Britain was always a loose EU affiliate as it joined reluctantly and has always maintained its own currency. Truth told, in many ways, the defiant Brits made strange bedfellows within the EU. Imagine the United States as an EU member. Read more…


June 17, 2016

FED Crow Feast

For years, the Fed’s economic and interest rate forecasts have well exceeded those made by Wall Street economists. The Street’s economists have weighed the feedback from slower foreign economic growth rates and foreign central bank actions more heavily as a suppressant on US growth forecasts. As such, the Street estimates have been far lower and less disposed to rate hikes. The run up debates before each Fed meeting highlight the disagreement between the Street and the Fed, filling airwaves with anxiety and goosing asset volatility. This cycle repeated once more this week as the Fed preheated the market for a rate hike only to lower their economic projections once again, forgoing another rate increase. Read more…


June 11, 2016


I am excited to be writing this morning from The Focus Financial Partners CIO summit with over 40 chief investment officer peers, representing over $100 billion in client assets, engaging in debate and deliberation over the current state of play. With markets in a prolonged sideways trend, I am expecting the conversation to revolve around creative alternative solutions, risk/reward concerns and psychological framing. Read more…


June 4, 2016

The Shanghai Surmise

Between 1980 and 1985, the US dollar surged 50% against our largest trading partners. This surge in US prices led to a painful lack of competitiveness for US exporters and corresponded with two recessions in the early 1980s. To remedy the situation, global leaders met at the Plaza in New York City and agreed to intervene in currency markets to weaken the US dollar. Read more…


May 21, 2016

Lower Yields and Higher Commodity Prices Conflict

This week marked the anniversary of the most recent record high for the stock markets. Commentators have focused on the sluggish economic and earnings environment to explain the decline. We agree and forecasted as much. However, rather than opine about market movements, let’s take a look at the winners and losers over past intervals and fit the narrative to the results, rather than the other way around. Read more…


May 14, 2016

Rise of the Machines

Stocks thrashed about again this week as algorithms debated trading levels. Increasingly, market movements occur in reaction to each other rather than as a consequence of analytical rigor. According to a study on the topic published by Morton Glantz and Robert Kissell, the total daily trade volume generated by traditional asset managers (mutual funds, pension funds, etc.) fell from 40% in 2002 to about 20% in 2012, while daily trade volume of algorithmic traders rose from 1% to 30%. Read more…


May 7, 2016

You’ve been Trumped!

Stock markets retreated again this week seemingly fulfilling the “Sell in May” prophecy. Mixed earnings, weak job growth and continued manufacturing weakness provided the narrative negativity. Additionally, the market has once again collided with a trading threshold it hasn’t been able to cross for more than a year. Read more…


April 23, 2016

Why Are Markets Going Up When Earnings are Going Down?

Written by David S. Waddell, CEO/Chief Investment Strategist. On April 9th, just prior to the kick off of earnings season, we made the comment, “with expectations entering the season so low, and the markets timid, we may find a relief rally coinciding with better than expected releases over the next couple weeks.” Read more…

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April 16, 2016

Let’s Compare The Tax Plans

Written by W&A Wealth Strategist, Mark Sorgenfrei, Jr. Last week, we opined about the Pfizer/Allergan deal that was scrapped, in conjunction with overall U.S. tax policy. With the presidential primary season entering the home stretch and with taxes fresh on many of our readers’ minds as April 18 approaches, we will build on last week’s discussion with an overview of the individual tax plans laid out by the four remaining contenders for the White House. Read more…


April 9, 2016

Markets Await Earnings While Policy Makers Build a Wall

Markets thrashed about this week awaiting Q1 earnings releases that begin with Alcoa’s release this Monday. In recent experience, markets move either before or during earnings season. With expectations entering the season so low, and the markets timid, we may find a relief rally coinciding with better than expected releases over the next couple weeks. Read more…


April 2, 2016

Yellen Speaks, The Dollar Listens

Heading into the end of the first quarter, this week proved again that Janet Yellen and the Federal Reserve (the Fed) have tremendous influence over the short-term gyrations in the financial markets. Read more…


March 19, 2016

The Fed Leaves Rates Unchanged but Raises Corporate Earnings Guidance

As widely forecasted, the Fed decided not to raise interest rates on Wednesday. However, fears over what might be said kept buyers away on Monday and Tuesday, leading to a flat tape and the lowest trading volumes on the year. Read more…


March 12, 2016

Resistance or Support?

Markets found more reasons to rise this week toward significant levels as economic data and central bank measures lured buyers. As we have indicated for weeks, market action has been encouraging given the profile of winners. Positive trends across energy, emerging markets and small capitalization US stocks imply rising confidence in economics and inflation. Financials, vital to rally credibility, have also thankfully gathered themselves. Read more…

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March 5, 2016

Good news is good news

Many markets hit their low (to this point) on 2/11/16, and have since trended upward. Here are some returns thru yesterday (March 3) across various markets…Read more…


February 27, 2016

Presentation Distillation

Written by CEO and Chief Investment Strategist, David S. Waddell The markets have essentially flat lined since December of 2013, and this has created frustration and anxiety among investors counting on portfolio growth to achieve their financial goals. Fortunately, even in flat markets, astute investors can find ways to generate returns.


February 20, 2016

Bargain Shoppers Shopping

Written by CEO and Chief Investment Strategist, David S. Waddell Markets regained their composure last week as economic data reduced recession fears and ex-central bank policy makers lent a hand. Echoing our comments last week, in our opinion, the central bankers have become less capable of pushing the economy, shifting responsibility to policy makers and the private sector.


February 13, 2016

Central Banks Fire Blanks

Written by CEO and Chief Investment Strategist, David S. Waddell The developed world (US, Europe) triggered the global financial crisis in 2008 by hitting debt capacity limits. While the US Fed and the European Central Bank quickly enacted emergency fiscal and monetary stimulus measures, China’s massive “shovel ready” stimulus and doubling of national indebtedness really pulled the global economy out of the ditch.


February 6, 2016

Foggy Windshields

Written by W&A Wealth Strategist, Mark Sorgenfrei, Jr. The title of last week’s musings in this space was, “What if the Dollar Doesn’t Rise?” Following the rapid rise in the dollar over the past few years and with the long-dollar trade being perhaps the most crowded trade on the planet, the conditions are ripe for a downside surprise on the greenback. Right on cue, earlier this week, the dollar posted its largest two-day drop since March of last year, basically washing away any gains made so far this year in the currency. Read more…


January 30, 2016

What if the Dollar Doesn’t Rise?

Written by CEO and Chief Investment Strategist, David S. Waddell As we discussed over the last two weeks, investors have found next to nothing to smile about in 2016. The relentless rise in the dollar from tight Fed policy has led to lower US growth, lower US earnings, and credit concerns across high yield, emerging market and Chinese debt markets. How do you fight a Fed that’s now fighting against every asset class? Cash. Read more…


January 23, 2016

A Fed-spiracy???

Written by CEO and Chief Investment Strategist, David S. Waddell As we discussed last week, market sentiment and technical indicators foretold a near term recovery rally. What ignited this week’s rally was supportive commentary from the Central Bank. Unfortunately, the commentary came from the European Central Bank, which plays for team Europe.


January 16, 2016

Crisis & Recession or….Acquisition?

Written by CEO and Chief Investment Strategist, David S. Waddell After seven years of positive returns, the most recent market sell-off has investors guessing how low and how long the market will fall. The range of outcomes varies widely but pop predictions skew heavily to the downside. Read more…


January 9, 2016

Happy Last Year!

Written by CEO and Chief Investment Strategist, David S. Waddell Sadly, most New Years’ revelers returned to their day jobs greeted by a worldwide market rout. While it hasn’t been as jarring as the “flash crash” of last August, the refrain remains the same…Blame China! Read more…


“Beware Thyself” by David Waddell

Dec. 5, 2015

Over the last 13 months, or 262 trading days, the S&P 500 has produced a 0% return while the Barclays total bond market index has produced an enviable 1%. Over the last several weeks I have received several calls and emails from clients, fatigued by sideways markets that want to “do something” about it. This emotion, while understandable, can often lead to mistakes. One of our roles as investment advisors is to help clients widen their field of view and mitigate the risk of trading mistakes. Read more…


“The Case for Crude” by David Waddell

Dec. 12, 2015

Oil prices traded near $110 a barrel in June of 2014, supported by escalating demand and a stable US dollar. Advances in drilling technology in the US led to a tremendous surge in oilfield investments and productivity. Astoundingly, US energy production rose from 5 million barrels per day in 2011 to nearly 10 million barrels by the end of 2014. The good times ended when the European Central Bank announced their massive quantitative easing program, swiftly devaluing the euro and revaluing the US dollar. Read more…


Dec. 19, 2015


“When is the Fed going to raise rates?” “When the Fed raises rates, xyz will occur.” “The Fed can’t stay at zero forever, can they?” “Isn’t the Fed caught between a rock and a hard place?” “How will financial markets react when/if the Fed raises?” Read more…


Nov. 21, 2015, David S. Waddell

Rate Hike: Keep Calm and Invest On

Psychologically, the stock market appears to have come to terms with a .25% rate hike on December 16th. As of today, the futures markets price in a 75% probability that the Fed will move. Given the rally this week in the stock market, even after the horrendous terrorist attacks in France, the Fed has little marketplace disincentive to defer. With a new rate cycle afoot, let’s take a look this week at market impacts from previous tightening cycles. Read more…

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Nov. 14, 2015

Economic Mixed Bag, Earnings Mixed Bag

As the S&P 500 seems poised to finish the week in the red (the large cap index is down over 3% for the week as I write), it is worth examining some economic and corporate data points that paint a muddled picture of the current landscape. Last week in this space, we examined how the robust returns of a few big tech companies (Facebook, Amazon, etc.) have somewhat artificially propped up the domestic market, as the majority of the S&P 500 companies have produced less favorable results this year. Divergence among individual company stock returns continues to manifest, and divergence is revealing itself in different areas of the economy, as evidenced by the October ISM surveys…Read more…


Nov. 7, 2015, David S. Waddell

Below the Waterline, Big Jobs = Small Earnings

As of the end of October, the S&P 500 index had gained 2.59%. Unfortunately, for diversified investors, there is more to the story. The S&P 500 is a market capitalization weighted index, meaning the largest of the 500 companies have the largest influence over index performance. After years of captivating product cycles and revenue gains that have bloated market capitalizations, large U.S. technology companies dominate the top spots in the S&P 500. Read more…


October 24, 2015, David S. Waddell

Rally Tally, China Delivers

Having promoted the necessity of a solid GDP report from China to secure recent gains, I am happy to assert that, according to the data, the Chinese economy remains aloft…which was all the market needed to hear. Combined with the frozen Fed and better than expected earnings reports, the China news helped elevate the status of the October bounce into a year-end rally. Read more…


October 17, 2015, David S. Waddell

The Bounce in Search of a Rally, The Fed: Frozen, Q3 Earnings: Surprise, China: Unknown

While we do not hold ourselves out as market timers, there are moments when macro-market indicators strongly signal upcoming direction. The lugubrious sentiment that we described in our October 2nd commentary, coupled with the collapse in earnings and economic expectations, coiled the market for a well broadcasted bounce. Read more…


October 10, 2015, Timothy W. Ellis, Jr., CPA, PFS, CFP®

Double Bottom, A Global Perspective, A Reading From the Fed

The recent correction pens a classic “Double Bottom” technical pattern. The S&P fell to its YTD low of 1867.61 on August 25 before mounting a modest recovery effort over the next month, peaking on September 16 at 1995.31, then reversing course and descending to a second low of 1881.77 on September 28. Although the recovery from the first trough to peak was moderate, the chart above shows the classic “W” shape of a double bottom. A double bottom would be bullish for investors looking for a Q4 rally as bottom support has been tested twice in the last two months. However, if the support line is breached, investors will need to prepare themselves for a worrisome ending to 2015. Read more…


October 3, 2015, David S. Waddell

A September to Forget, Investors singing the Blues

September often delivers negative performance, and this September was no exception. September’s poor performance punctuated a dismal third quarter for all investors, save those that own long-dated US Treasuries. Tallying the numbers, the MSCI USA index fell 7% for the quarter, while Europe fell 9% and the emerging markets fell 18% in sympathy with the continued collapse in commodities. Feeling down? You are not alone… Read more…

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Sep. 26, 2015

3rd Quarter Volatility Revisited

As we opined in this space previously, the Fed’s inaction last week gave investors pause. The positive aspects of no rate increases were overshadowed by the receding growth forecasts. After a brief reprieve on Monday, equity markets continued their downward move from Tuesday-Thursday of this week before Janet Yellen brought the Fed back into the spotlight with a speech last night, hinting that a rate increase might still be on the table before year-end. Read more…


Sep. 19, 2015 David S. Waddell

The World’s Central Bank

On Thursday, the US Federal Reserve announced that it would not raise interest rates. With any luck, those readers who have endured my pleading for the Fed to do nothing will recognize this as an indication that the Fed does think beyond our borders. Yes, the unemployment rate has hit 5.1% and will continue to fall, but the unintended consequences of a rate hike could destabilize global markets and reduce low inflation levels even further. The Fed acknowledged this circulatory risk, chose not to act, and chose wisely (see image above). So why did markets fall? Read more…


Sep. 11, 2015 David S. Waddell

Partying like it’s 1998

The US Federal Reserve will meet next Wednesday and Thursday to deliberate, debate and announce a decision on short-term US interest rates. As we described last week, the US domestic situation argues for a rate hike, while the international situation argues against it. Read more…


Sep. 5, 2015 David S. Waddell

The End of the Fed’s Up-Market Guarantee Program

On Thursday, European Central Bank chief Mario Draghi committed to do even more of “whatever it takes” to combat sluggish growth and rising deflation fears in Europe. Within a turn of the money press, the euro sank 1%, and European stocks gained 2.5%. Read more…


August 28, 2015, David S. Waddell

Loss of Confidence or Loss of Overconfidence?

As you already know, markets have gyrated wildly over the last 8 trading days. While suspicions of crisis have developed, the market has behaved as if crisis were already upon us.



August 21, 2015, David S. Waddell

Playing the Pullback

For those who pay close attention to our body language, we have been patiently awaiting a market pullback for some time. The record-breaking sideways action in the S&P 500 needed interruption.


August 15, 2015, David S. Waddell

Clarity at Higher Altitudes

Markets bounced wildly this week while they tried to reconcile a surprise (but not surprising) devaluation of the yuan in China, new lows in oil prices and better than expected US economic data.


August 8, 2015, David S. Waddell

What the Fed Says Will Matter More than What It Does

At her first press conference in March of 2014, Fed Chair Janet Yellen timestamped the first interest rate hike as “something in the order of around six months” post the Fed’s bond buying QE campaign.



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