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Sep 18, 2014 | Post by: modelcap Comments Off

Don’t Fret the Fed: Policy Changes Are Priced-In

In the statement of the latest meeting on Wednesday, the Fed kept its commitment to keep short-term interest rate target for “considerable time.” It also continued to taper its monthly bond buying to $15 billion in its seventh consecutive $10-billion cut, staying on course to end the QE program in

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Sep 04, 2014 | Post by: modelcap Comments Off

Why U.S. Stocks are Hitting All-Time Highs –

Despite all geopolitical problems around the world, the recent dip in stocks ended up being minor – just 3.9% from peak to trough. Equities recovered strongly in August, with the S&P 500 up 3.95% in the month (a total return of 9.9% YTD), reaching new all-time highs and crossing above the psychologically-important

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Aug 16, 2014 | Post by: modelcap Comments Off

Fed Creates Financial Stability Committee –

Vice Chairman Stanley Fischer, the Fed’s #2 official, leads the new committee that will monitor financial stability. It is understood that the Fed’s goal is to avoid the emergence of asset-price bubbles after six years of near-zero interest rates and abundant liquidity. We at Model Capital Management applaud the Fed’s research and efforts to

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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

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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

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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

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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

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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

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Aug 04, 2014 | Post by: modelcap 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,

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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

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