blog

Aug 12, 2014 | Post by: modelcap Comments Off

How Strong is U.S. Employment

Last week’s initial jobless claims dropped to 293,500 (on a 4-week-average basis). In the past 40 years, jobless claims reached this low level only three times: in 1974, 1988, and 1999-2000 (see chart). This means that employment has not only recovered from the Great Recession of 2008-09, but it is

Read More
Aug 12, 2014 | Post by: modelcap Comments Off

Q2 Earnings Growth is Strong at 7.7%

According to Factset, the S&P 500 Q2 earnings grew at 7.7% YoY, significantly better than analyst estimates of 4.6% as recently as in July. Q2 growth was just shy of that experienced in Q4-2013, which was the highest since 2011 (see chart). Some tactical investment managers are concerned that equities

Read More
Aug 08, 2014 | Post by: modelcap Comments Off

Recent Mini-Correction Improved Outlook for U.S. Equities –

Geopolitical problems around the world that dominated media headlines triggered the recent mini-correction of 3.9% from the peak in the S&P 500. Many tactical investment managers sold equities and moved partially into cash – and got whipsawed by the rebound once again. As we know, equities are volatile, and 3-5% dips

Read More
Aug 05, 2014 | Post by: modelcap Comments Off

Bears Bite the Dust Again -

After strong U.S. equity market performance last year, many observers were puzzled by the equity market’s continued strength. The financial media and the web were filled with predictions of a correction early this year, with some permanently-bearish “experts” predicting a 30% downside, or more. Instead, other than minor volatility in

Read More
Aug 04, 2014 | Post by: modelcap Comments Off

Q&A with Model Capital’s CIO on BeyondAlpha –

In an introductory Q&A to BeyondAlpha’s community, Roman Chuyan, MCM’s president and CIO, discusses the firm’s unique approach to tactical management – fundamental-factor approach that tends to make its tactical asset allocation models accurate. He also discusses current market trends and expectations: All our strategies have consistently been in risk-on mode

Read More
Aug 04, 2014 | Post by: Jocelyn Gilson Comments Off

Four Biggest Mistakes Investors are Making Today –

According to CNN Money, the 4 biggest mistakes that investors are making today are: not investing in stocks, chasing yield by investing in risky bonds, short-term thinking, and forgetting about inflation. Ok, stocks offer the best expected return in the long run and conquer inflation, but they can also go down a lot,

Read More
Aug 04, 2014 | Post by: modelcap Comments Off

Fundamentals Drive Equities

Despite all the negative market predictions filling the financial media and the web, the S&P 500 continued to charge ahead, just reaching psychologically important 2000 level. What keeps driving the market to new all-time highs? At Model Capital, we believe that fundamentals drive markets, not geopolitics or technical indicators. Fundamental economic

Read More
Jul 20, 2014 | Post by: modelcap Comments Off

U.S. Equities To Continue to Rise -

Based on fundamentals, our tactical management models indicate that U.S. equity markets should continue to rise in the near-term. While data might change unexpectedly, the current trends look positive: The recovery in employment should boost consumption in the near term. Q2-2014 S&P 500 earnings grew 7.7%, which helps to mitigate the negative

Read More
Jul 16, 2014 | Post by: modelcap Comments Off

1H-2014: Consistent Risk-On Not Influenced by Geopolitics –

The first half of 2014 was characterized by a conflict between strong fundamentals and perceived risks. Many observers were puzzled by the equity market’s continued strength, and predicted negative outcomes this year. However, fundamental economic data that our tactical asset allocation model has determined to be important for equities, have been

Read More
Jul 10, 2014 | Post by: Jocelyn Gilson Comments Off

Liquidity Will Continue to Support Asset Prices

All major central banks – the Fed, ECB, and BoJ – bought bonds since 2008, creating tremendous liquidity (see chart). This keeps interest rates low, and in turn, creates real economic benefits – low borrowing costs help consumers, businesses, and the economy in aggregate. The ECB tried to sell the

Read More
Google+