Investment Insights Podcast – Markets Rally in Anticipation of G20 Summit

miller_podcast_graphicBill Miller, Chief Investment Officer

On this week’s podcast (recorded February 26, 2016), Bill discusses the recent string of positive news, the hopeful outcome following the G20 Summit, and what still remains as cause for concern:

What we like: G20 Summit underway to discuss new policies intended to help support economic growth around the world; Communist party in China soon to meet to discuss five-year plan; stock markets have rallied a bit recently

What we don’t like: Economic data continues to be mixed; need a steadier drumbeat of good data to gain more confidence

What we’re doing about it: Tactically speaking, we are leaning towards a more bullish stance; monitoring the stabilization of oil prices

Click here to listen to the audio recording

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a Registered Investment Advisor.

Investment Insights Podcast – What Indicators Are Indicating

miller_podcast_graphicBill Miller, Chief Investment Officer

On this week’s podcast (recorded February 18, 2016), Bill comments on what the leading indicators are showing in terms of the stability of the economy and if a recession is likely:

What we like: Leading indicators, published by Department of Commerce, are out and are important in understanding chances of recession; so far, indicators are showing a healthy economy with no recession likely at least in the next six months; stability in oil prices helping to calm the markets; China is actively supporting their economy

What we don’t like: We still need to hear about the ECB exposure to bad loans in China; need more clarity if the Fed will raise rates in March; there’s enough global trauma out there to make raising rates seem unwise

What we’re doing about it: Monitoring this rally period between now and the spring as economic activity is decent; may look to take longer tactical positions

Click here to listen to the audio recording

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a Registered Investment Advisor.

News Out of Japan

Andy RosenbergerAndrew Rosenberger, CFA, Senior Investment Manager, Brinker Capital

The recent sell-off in Japan has many investors concerned that “Abenomics” may be little more than smoke and mirrors than the start of a cyclical, or even more importantly secular, rally. While the Japanese equity market can be volatile, especially given the monstrous 80%+ rally since November of last year, continuing macroeconomic evidence does suggest that the economy is improving. ISI Research has done a nice job tracking the macro data out of Japan. In one of their recent pieces, they make the argument that during the last week of May, 14 out of 17 data points showed signs of the economy improving. See chart below.

Signs of Strength Signs of Weakness
1. Construction Orders 1. DPI Per Household
2. Employment 2. Household Expenditures
3. Housing Starts 3. Dept. Store Sales
4. Industrial Production
5. Insured Employees
6. Job Ratio
7. Job Offers Ratio
8. Mffg PMI
9. Public Works Starts
10. Retail Sales
11. Retail Stores
12. Small Business Confidence
13. Vehicle Exports
14. Vehicle Production  Source: ISI Research

Moreover, their proprietary Economic Diffusion Index has climbed to record territory. The recent pullback in the market can be a hard pill to swallow for those just waking up to the Japanese story. Yet, we must also consider that a 15% pullback in the context of a nearly 85% run in the equity market still leaves markets up 57% from where it was just six months ago.