This Week in the Market
With Scott McCaghren and Tony LaPorta
Both the audio and written portions of this week’s commentary are relatively brief. The reason for this is due to the lack of any significant movement or volatility. There was some news out of China that was interpreted as positive for the marketplace; however, we still sit scratching our heads as to why it matters. That is simply because the Chinese are obviously using delay tactics. At the end of the day, it doesn’t matter because the markets are where they are. The story of the boring bull has thrived ever since the Fed began reducing rates this year. Historically, equity markets perform favorably during low interest rate environments because it eliminates competition elsewhere for investment dollars.
As noted last week, we have eliminated half of our hedge position which created more upside potential for the portfolios. We are firm believers that some type of volatility up here makes a tremendous amount of sense. There is a massive amount of cash sitting on the sidelines from money managers across the globe, just waiting for that opportunity to put it to work at lower levels. That day will come, the obvious question is when and how deep. Do not forget how the last quarter of 2018 felt and how quickly it came. We will get an opportunity at some point and we will seize it.
As always, we continue to monitor all equity, treasury, commodity and currency conditions in order to efficiently deploy capital as well as protect invested assets.
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