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Eric Parnell, CFA

 
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  • The Black Cloud Still Looms Large
    Yesterday, 12:58 PM ACI, ANR, BBEP 10 Comments

    Summary

    • The oil market continues to search for any signs of life.
    • The trend for oil remains definitively down.
    • This bodes ill for capital markets in general and the high yield bond market in particular.
  • What U.S. Investors Can Expect From ECB QE
    Sun, Jan. 25 AGG, DXJ, EWJ 37 Comments

    Summary

    • The ECB is finally doing whatever it takes.
    • Investment markets immediately rejoiced on the news, but is this sustainable once the program actually gets underway starting in March?
    • Not all asset programs are created equal, and the ECB's QE program is not necessarily like the Fed's QE programs.
    • It is reasonable to consider exactly what U.S. investors can expect from the ECB’s QE program moving forward.
  • Will The ECB Kill The Gold Rally?
    Wed, Jan. 21 FXY, GLD, SLV 24 Comments

    Summary

    • The European Central Bank is expected to take the latest “extraordinary” step in global monetary policy by announcing its own quantitative easing program on Thursday.
    • Such aggressive monetary policy actions would presumably be positive for the gold price.
    • Recent history has shown that gold has performed very poorly in the wake of these extraordinarily accommodative monetary policy announcements.
  • Is The Market To Be Hanged In A Fortnight?
    Mon, Jan. 19 ACWX, DXJ, EWJ 22 Comments

    Summary

    • It is a fortnight filled with events that have the potential to meaningfully shape the future direction of the market.
    • Four separate episodes are set to play out that each have major implications on how capital markets are likely to perform in 2015 and beyond.
    • And unfortunately for investors, the risks associated with these events are currently tilted to the downside.
    • Investors should be prepared for increased volatility and proceed with caution as a result.
  • Expect The Unexpected
    Fri, Jan. 16 EWJ, FXE, FXF 32 Comments

    Summary

    • Global capital markets have become increasingly burdened by the capriciousness of human decision making by global policy makers and central bank leaders.
    • Despite its perceived benefit in recent years, such heavy management may ultimately serve as a great detriment to markets in the end.
    • Investors that not only expect the unexpected but anticipate it stand to benefit most as global capital market volatility continues to increase.
  • 2015 Outlook: Pain
    Editors' Pick • Dec. 31, 2014 ACWX, EDEN, EEM 375 Comments

    Summary

    • Market prediction for 2015: Pain.
    • U.S. stock market volatility is likely to increase notably with its relative outperformance over global stocks and other asset classes put to the test.
    • A variety of asset classes and strategies provide the opportunity for strong returns in the coming year.
  • Monitoring Global Market Hot Zones
    Dec. 28, 2014 EMB, GREK, NGE 2 Comments

    Summary

    • The world is not without risk as we enter 2015.
    • A growing number of countries are increasingly grappling with debt problems that have the potential to eventually lead to default.
    • It is worthwhile to monitor developments within these at risk countries to protect against both direct and indirect negative impacts from any future deterioration.
  • 2014's Trash Could Be 2015's Treasure
    Editors' Pick • Dec. 27, 2014 ACWX, DBB, EPP 141 Comments

    Summary

    • It has been another strong year for U.S. stocks in 2014.
    • But a number of more specialized asset classes and categories posted performance that notably outperformed the S&P 500 Index by a fairly wide margin this year.
    • In many cases, those categories that landed at the top of the leader board in 2014 were many of the same categories that languished at or near the bottom last
    • Thus, it is reasonable to consider those asset classes and categories that are limping to the finish line in 2014, for some might end up as winners in 2015.
  • Fires Still Burning In The Oil Patch
    Dec. 26, 2014 EOG, EXXI, HERO 41 Comments

    Summary

    • The massive decline in oil prices over the last several months has clogged the headlines with bullish and bearish views on how to proceed.
    • This can leave many investors feeling confused about what actions if any they should take in response going forward.
    • At times like these, it is often helpful to begin by taking the simplest approach, which is to look at what prices alone are telling us.
    • So far, they suggest that fires are still raging across the oil sector and that more challenges may lie ahead.
  • Can U.S. Stocks Four-Peat In 2015?
    Dec. 25, 2014 SPY, DIA, QQQ 33 Comments

    Summary

    • The U.S. stock market finds itself in rarefied territory as it enters 2015.
    • For only the sixth time in the past 150 years, the U.S. stock market has registered a double-digit annualized gain for three consecutive calendar years from 2012 to 2014.
    • Can the U.S. stock market score a four-peat in 2015 and register yet another year of double-digit annualized gains?
    • While the sample size is certainly limited, history suggests such a feat could be a tough one to pull off.
  • What Gift Will Santa Bring Stock Investors This Year?
    Dec. 24, 2014 SPY, DIA, QQQ 7 Comments

    Summary

    • The time for the Santa Claus Rally is upon us.
    • Stocks have historically performed famously well during the period between Christmas and New Year’s Day.
    • But exactly how well have stocks performed?
    • And what can we reasonably expect Santa to bring to stocks investors in terms of performance in 2014?
  • The Global Defenders
    Dec. 24, 2014 ACWX, AZN, BUD 8 Comments

    Summary

    • Investors may be wondering whether we may be approaching a juncture starting in 2015 when stock markets from other parts of the globe are ready to take the lead.
    • Many may also worry about assuming too much cyclical risk exposure in their developed international allocations given the current state of the global economy.
    • The global defenders are those that have trailed the U.S. in relative performance and have a more defensive sector bias in the composition of their domestic stock market.
  • Has QE3 Really Come To An End?
    Dec. 20, 2014 HYG, SPY 117 Comments

    Summary

    • In October, the U.S. Federal Reserve carried out its final asset purchases as part of its latest asset purchase plan designed to help stimulate economic growth.
    • Yet the Fed's balance sheet has continued to expand in the weeks since, increasing by more than $15 billion through mid-December.
    • As a result, it is reasonable to explore whether QE3 has really come to an end and if the Fed is still engaged in outright asset purchases.
  • This Is How A Bear Market Starts
    Dec. 18, 2014 GLD, XLB, XLE 57 Comments

    Summary

    • At this advanced stage of the six year bull market, some investors are understandably concerned about how much higher stocks can go from here.
    • How can investors know when the bull market in U.S. stocks has finally ended and a new bear market has gotten underway?
    • Fortunately, today’s stock market is providing a live and active case study right now that is demonstrating exactly what it looks like when a bear market is just getting started.
  • The Black Bear Is Unleashed
    Dec. 14, 2014 CVX, GLD, OIL 169 Comments

    Summary

    • A black bear has been unleashed on capital markets.
    • A number of characteristics make the sharp decline in oil and energy shares notably different from what so many have grown accustomed over the last six years.
    • The recent struggles in the energy sector may go on much longer than many are anticipating and may eventually spread to the broader market.
    • Fundamentals, policy and sentiment are all working against oil moving forward.
  • A Growing Black Cloud Over The Market
    Dec. 12, 2014 ACI, ANR, APA 43 Comments

    Summary

    • A storm is brewing over the high yield bonds in particular and capital markets in general.
    • The primary culprit has been the precipitous decline in oil prices.
    • Exactly how great is the direct exposure?
    • What are the specific companies that are worth monitoring?
    • What are the implications, if any, for the stock market?
  • The Black Friday Massacre
    Nov. 30, 2014 APA, APC, CHK 70 Comments

    Summary

    • Friday was a massacre for energy investors.
    • Following the announcement by OPEC on Thursday that it would keep its production target unchanged, the price of oil cratered lower by more than 10%.
    • The stocks of various U.S. oil companies were also completely mauled once U.S. markets reopened after the Thanksgiving holiday for a shortened trading session on Friday.
    • After the pullback, it is worthwhile to explore whether attractive buying opportunities are now presenting themselves in the energy space or if investors are better served to wait.
  • Feasting On The Stock Market Harvest
    Nov. 28, 2014 AMZN, APA, BHP 26 Comments

    Summary

    • Many investors are engaging in tax loss harvesting as the calendar year draws to a close.
    • Tax loss harvesting also can provide spillover benefits for value oriented investors that are standing at the ready with cash to snap up potential bargains.
    • Such a strategy can bring good fortune in the coming year for those that are busy acquiring bargains that others have cast aside from their own portfolio basket.
  • Stocks: Clear Sailing Into 2015
    Nov. 23, 2014 HYG, IWM, SPY 77 Comments

    Summary

    • Bullish investors are once again firmly in charge.
    • Stocks have successfully navigated some recently challenging stretches to achieve new highs.
    • It appears to be setting up as smooth sailing for stock investors as they move toward the end of 2014.
  • Playing Defense All Around The World
    Nov. 20, 2014 AZN, BTI, BUD 15 Comments

    Summary

    • Many investors today are feeling conflicted.
    • In one respect, they see a U.S. stock market that appears completely unyielding in its persistence to the upside.
    • On the other hand, they see a stock market that may soon be left exposed to the downside without the crutch of more QE from the Fed.
    • Playing defense all around the world may provide a way to participate in further stock upside while also protecting against the downside.
  • Impossible Germany
    Nov. 16, 2014 EWG, DBGR, DXGE 19 Comments

    Summary

    • The economic and market outlook appears impossible for Germany over the next few years.
    • The world's fourth-largest, heavily export-dependent economy is facing a fundamental problem.
    • With future growth prospects increasingly fading, this bodes ill for the future performance of the German equity market.
  • 2 Countries For Old Bulls
    Nov. 13, 2014 DXJ, EEM, EWJ 14 Comments

    Summary

    • The bulls are off and running once again in the U.S.
    • But what about stocks across the rest of the world?
    • While the bulls are stampeding in the U.S., the bears are out of hibernation and on the hunt across most other parts of the globe.
  • Oh No Canada
    Nov. 10, 2014 SPY, UUP, EWC 14 Comments

    Summary

    • I have long favored owning Canadian stocks when attractive opportunities present themselves.
    • The country is well positioned in several industries that are key to long-term global economic growth.
    • It is reasonable to consider whether an investment in Canadian stocks is a worthwhile strategy at the present time.
  • The Best Offense Is A Good Defense
    Nov. 8, 2014 BBY, BDX, DAL 44 Comments

    Summary

    • Stocks are once again in rally mode and bullishness is back on the street.
    • But the details behind this rally suggest that all may not be entirely copasetic with the markets as we move toward the end of the year.
    • The best offense for your stock portfolio may continue to be a good defense.
  • Stocks: Considering Life Without The Fed 'Put'
    Nov. 6, 2014 BIL, IWM, SPY 21 Comments

    Summary

    • It is a belief that has been firmly ingrained in the minds of investors for nearly three decades.
    • It is the Fed ‘Put’, which is the expectation that the U.S. Federal Reserve will intervene aggressively to support stock prices during any sustained correction or market crisis.
    • But following nearly three decades of pursuing this monetary policy approach, it is reasonable to question whether the days of the Fed ‘Put’ may now be over.
    • If this is indeed the case, it is worthwhile to consider the potential implications for the stock market going forward.
  • Japan Stimulus: Not My Cup Of Sake
    Nov. 1, 2014 ACWI, EMB, EWJ 119 Comments

    Summary

    • Bank of Japan announced that it was raising the stakes on its already unprecedented monetary stimulus program.
    • The stakes are high with this move, as the long run stability of the global financial system may ultimately hang in the balance.
    • In the meantime, it is worthwhile to consider the sustained near-term impact on global financial markets, including both U.S. and Japanese stocks.
  • A Once In A Generation Change For Stocks
    Oct. 30, 2014 GLD, HYG, LQD 409 Comments

    Summary

    • The Federal Reserve is currently undergoing a monumental change in its monetary policy priorities.
    • This shift marks a major departure from the focus that has defined the Fed’s work for more than a generation.
    • This transition will have dramatic implications for years if not decades to come on financial markets that have become so heavily dependent on the persistently generous support of monetary policy.
    • Stock investors will almost certainly be required to work much harder to generate consistently positive returns than has been required over the past few decades.
  • Stocks And Seasonality: Caveat Emptor
    Oct. 29, 2014 SPY, DIA, QQQ 19 Comments

    Summary

    • November and December are regarded as some of the best times of the year for stock investors.
    • It is has been the prospects of this seasonality that has helped assuage investor concerns following the recent correction.
    • But November and December should not be ignored for its potential risks as we move into the final two months of 2014.
  • Victory For The Bears
    Oct. 25, 2014 EFA, IWM, SPY 74 Comments

    Summary

    • The last two weeks has provided a pivotal and decisive victory for long suffering stock market bears.
    • A series of fireworks took place over the past two weeks that continued through the close of Friday’s trading.
    • It has become increasingly likely that the end of the nearly six-year long bull market may soon be upon us.
  • Beware Columbus
    Oct. 13, 2014 SPY, SH, SSO 5 Comments

    Summary

    • If the upcoming week was not already interesting enough, investors face an added risk factor as the markets reopen for trading.
    • Monday is the Columbus Day holiday, which results in some unusual trading conditions and the potential for greater than normal price volatility.
    • As a result, investors should take caution in reading too much into what comes out of Monday’s trading.
  • Stocks: The Most Important Week In 6 Years
    Oct. 12, 2014 EFA, HYG, IJH 37 Comments

    Summary

    • The time for the stock market to bounce is now.
    • At last, after two long years the S&P 500 Index and its 200-day moving average have finally met once again.
    • And this time, the fate of the third longest bull market in history hangs in the balance.
    • The week ahead is the most decisive for investment markets in years.
  • Finding The Bull Market Peak
    Oct. 10, 2014 IJH, IWM, SPY 41 Comments

    Summary

    • The stock market has suddenly encountered an identity crisis.
    • Violent swings have frayed the nerves of many investors that had become accustomed to a market that existed for so long with little volatility.
    • Recent history offers some clues as to what a bull market peak actually looks like and whether we are currently in the midst of one today.