2017 stock market predictions_ part i
Steve welcomes Annell Danczyk and Brian Lazorishak, senior portfolio managers for Stack Financial Management, to discuss their 2017 stock market predictions and analysis of the economy, global financial news, interest rates, and other factors affecting markets. Usd gbp exchange rate history Brian is a CMT (Chartered Market Technician) amongst other credentials, and both Brian and Annell are Chartered Financial Analysts. Usd in aud Given their backgrounds and their focus on “safety first” and “asset protection” investing strategies, it should come as no surprise that Brain and Annell approach portfolio management with a blend of valuation analysis, “growth at a reasonable price” stock picking, dividends analysis, and technical trading analysis.
Investing usd try Both of our guests utilize and contribute to InvesTech Research, a sister company to Stack Financial which compiles decade’s worth of market data and information on individual companies, executes a variety of analyses, and shares findings independently of the big Wall Street brokerages.
Because it might be useful for many of our readers, we offer here a simplified overview of terms and concepts describing the different strategies mentioned above:
Valuation analysis at its most basic involves the study of Price / Earnings ratios and companies’ internal financial health. Euro to usd calculator The goal is to find undervalued stocks and buy and hold them for the longer-term. Rm to usd chart The “growth at a reasonable price” framework looks for companies with competitive advantages and superior profitability, usually smaller cap stocks that trade with higher than average volatility (beta). Flower tattoos Dividends analysis identifies stocks with the best dividend yields or those with strong historical dividend growth. Put option and call option Technical trading uses charts and data to model and predict market movements and trends.
The conversation begins with an overview of the stock market’s performance in 2016, and its strong finish after a rocky start and relatively volatile pattern much of the year. Words in binary Markets seemed to shake off potentially disruptive news stories, in the form of the Brexit vote and Donald Trump’s surprise win, without much trouble. Us dollar to pound exchange rate history Annell notes that markets tend to dislike uncertainty, and, in both of the cases just mentioned, markets ticked up after a perception settled in that those events were resolved, at least for the short term.
Steve asks about rising P/E ratios—as reflected in the trusted Shiller PE index, among others—and what that might tell us about the ongoing bull market. Market futures bloomberg Brian agrees that valuations are historically high, noting that 90 years of S&P performance shows that P/E ratios are in the top 10% all-time and even higher (top 3%) if the late 90s tech bubble and 2008 financial crisis are excluded. Futures market definition This fact alone implies higher risk levels. Aud usd historical data He qualifies this unnerving data by claiming that high P/E ratios are not sufficient to stop a bull market.
Annell talks about how they pay attention to performance across a breadth of stocks, not just a basket of highly capitalized names that the well-known indexes favor—thanks to their being “capitalization weighted” which inflates the importance of large-cap stocks. Us dollar to uk pound conversion One key indicator of this breadth is the so-called “advance-decline line”, which as the name suggests, compares the number of stocks of all capitalization levels that have risen to the number that have declined on any given day. Binary puzzles This ratio demonstrates when a market rise or decline is broadly shared by a majority of stocks or if it is being led up or down by a small number of over-or-under-performing stocks. Binary quotes Brian notes that a pattern in the advance-decline line which shows the majority of stocks falling while capitalization weighted indexes like the DJIA and S&P 500 rise might indicate that a “market top” is being established. Rmb to usd history This would be a cautionary red flag for the mid-or-near term, one that suggests that taking a more defensive position would be prudent.
Based on this line of thinking, Brian describes the concerns he had earlier in 2016 when it seemed as if there was a disconnect, or divergence, between small cap stocks and the major indexes. Stock market index futures However, the advance-decline line and the performance of small cap stocks in the last two months of 2016 reached new highs, an improvement that seems to confirm further bullish moves ahead in the market for 2017.
Annell and Brian will be speaking together at the MoneyShow Orlando on February 9th: Is a Bear Market Looming in 2017: Where to Watch and February 10th: The Worst & The Best: Where to Survive & Thrive in the Next Bear Market.
Steve Pomeranz: My guests today are Annell Danczyk and Brian Lazorishak, both Senior Portfolio Managers for Stack Financial Management. Uk usd exchange rate By the way, they’ll be speaking at The Money Show in Orlando on February 9th. Usd to sar For those of you who may be unfamiliar with it, The Money Show Orlando features investing and trading experts and is held this year at the Omni Resort, February 8 through 11. Binary code I’ll be speaking at the show as well on February 10th. Gbp usd news I’d like to welcome my guests right now, Annell and Brian, welcome to the show.
Steve Pomeranz: Brian, let’s start with you. Gold price per ounce The U.S. Pound exchange rate to dollar stock market has risen considerably over the past few months and, actually, in 2016 as well. Usd to thb The Dow’s now skirting 20,000 points. Australian to us dollar exchange rate Few predicted that at the beginning of 2016 this was going to happen, especially considering the beginning of the year was so rocky. Funny quotes with pictures about life How are you seeing things today?
Brian Lazorishak.: It certainly is a different environment than we saw at this time last year. Aud usd investing Looking back at our own year, it was really a tumultuous year and one that involved a lot of different signals. Usd to nis We went from what looked like the beginnings of a bear market late last year was turned around by the Fed getting more accommodative. Usa today news It looks for four interest rate hikes in 2016, turned out to be only one and that really started to change things. Exchange rate usd to chf Then late in the year, of course, we had the rally that was based on renewed confidence and really the psychology of the market that led to where we are now. Euro exchange rate to canadian dollar It’s been an interesting time in the market.
Steve Pomeranz: Yeah, it really has. Commodity meaning in hindi It’s been a lot of volatility, a lot of uncertainty. Cad to usd conversion rate I mean it wasn’t too long ago that people were worried about Brexit. Us to euro exchange rate To my thinking Brexit was a really serious, serious event because you had the breaking apart of an economic system, so I thought, “Hey, if anything’s going to happen, it’s going to happen here in this instance.” Addressing you, Annell, we saw a rally after Brexit. Cnbc pre market futures Then, of course, with the election of Donald Trump, everybody thought that there was so much uncertainty that the market would really suffer, and it’s done the opposite. Gbp usd exchange rate forecast What do you think about that?
Annell Danczyk: We certainly did see a lot of tumultuous times that Brexit, and, as we looked at it, though, we see an event like that, it’s almost a confidence event or a one-time news item event. Gender roles in india In past history, whether if it’s even something of conflict and wars or other news items that can flash in the market and then go away, and that’s what happened with Brexit. Love quotes for husband Then the pressure of that unknown went away and the market was able to springboard up from that some. Exchange rate hkd usd Again, with the election, we have done a lot of studies on election year performance or returns and how the market might respond. Stock market terms and meanings We often say— and our studies show it—it doesn’t really matter which party ends up with control of Congress and the White House, it’s more getting past that point and having the certainty of who it will be. Gold prices today per ounce Then the market’s able to move forward some. Euro pound chart We see that reading into it. Hidden messages in songs We’ve certainly seen a huge rebound in confidence, several of our different confidence measures as well, which to us are one of the many indicators. Usd to can We see that the bull market probably is still not yet over.
Steve Pomeranz: Do you guys look at valuations? I mean everybody’s so worried that the S&P is selling at such a high price to earnings multiple. Market futures oil Even when you look at the well-regarded and oft-quoted Shiller Index, Shiller-Case Index, I mean, PE numbers, they look like they’re significantly high. Equity meaning in hindi How do you think about high-price earnings ratios today and the fact that the bull market seems like it’s going to continue for the foreseeable future?
Brian Lazorishak.: The bull market, being that at this late stage, is how we get to such lofty valuations in the first place. Call and put options examples We were just looking back at a study of nearly 90 years of historical data on the S&P, and we’re in a range at a trailing price earnings ratio of about 25 times. Eur usd chart live We’ve only been above 24 times about 10% of the time in that history. Gender theory If you take out the tech bubble and the distortion from the 2008 financial crisis, we’ve only been at these levels 3% of the time, so we’re in a very lofty valuation range. Call option vs put option That certainly entails some higher risk, however, one of the things we often talk about is that valuation alone tends not to be the thing that ends a bull market. 500 kroner to usd It takes more than just high valuation levels to bring about the final end.
Steve Pomeranz: What, therefore, does lead … Sorry, you set me up for this, but what, therefore, does lead us to this bogeyman, the bear market? What are some of the flags?
Annell Danczyk: We do look at a breadth of information to come up with our decision on when risks could be rising, both technical and economic indicators. How to convert inr to usd One of our very tried and true indicators is we’re watching the breadth in the market. Funny jokes and riddles How much participation across the board are we seeing? As the market continues to go to new highs is all of the market participating or does it start to narrow? We watch that by just a simple measure of the advance-decline line. Convert fraction to mixed number calculator We’ve seen it have market tops where the advance-decline line, or the number of stocks that are actually declining versus advancing, will overtake that ratio. Aud usd chart That will start to move downward even as the market goes up and that tells us there’s not a full market participation supporting the new highs.
Steve Pomeranz: There’s a real confusing aspect to this because you can have most of the stocks in the market going down but the indexes can be going up because the indexes themselves are weighted by the size of the companies. Fundamentals of futures and options markets pdf free download It’s called capitalization weighted. Usa today crossword You could have ten growth stocks—maybe the famous ones like Apple, Amazon, and Facebook—they could be going up, I’ll say the S&P 500, and 490, I’m being extreme here, but 490 of the stocks could be going down. Oil meaning You could have a bear market but you’re still hitting higher and higher points. Cnn futures pre market Is that what you’re talking about?
Brian Lazorishak.: Yeah, that’s exactly the type of situation we’re talking about. Future trends in marketing It is very common to see as the market is putting in a top. British pound to us dollar rate You saw it back in the late ’90s as the tech bubble was developing that you got to ’98 into 1999 and early 2000, nothing was going up anymore, except a very small group of tech and internet stocks, and we know how that turned out. Dow jones stock futures live That type of behavior is very common and it’s the nice thing that as investors you get a little bit of advance warning that things are about to be heading in the other direction.
Steve Pomeranz: My guests today are Annell Danczyk and Brian Lazorishak, both Senior Portfolio Managers for Stack Financial Management. Binary file editor All right, what are you seeing today in the market? Are you seeing this advance-decline line acting strange or is it looking pretty healthy?
Annell Danczyk: It’s looking very healthy to us right now. Eur usd live It has hit new highs. Stock outperform Along with that, other technical indicators would be looking at different indexes that are measuring the market. Usd rmb conversion Everyone’s familiar with the Dow that has 30 large companies in the U.S, as you say, as hitting new high, looking to hit 20,000. Texas baseball The S&P 500 and even the index that houses the smaller companies in the U.S. Binary chart have hit new highs. Binary search algorithm We’re seeing a confirmation across different measurements there and that’s another item we look for to see health in the bull market.
Brian Lazorishak.: Steve, one of our concerns last year had been, as some of the indexes like the Dow and the S&P were hitting new highs, some of the secondary indexes like the small caps and the transports were not confirming that behavior. Love quotes for him They were lagging and not hitting highs at the same time, which was a concern, but in the rally that we had in November and December, both of those hit new all-time highs as well giving us a little more confidence in the forward outlook.
Steve Pomeranz: We’re going to be talking more about this in our next segments, so stay tuned. Convert usd to rupees I’m going to come back with Annell Danczyk and Brian Lazorishak from Stack Financial Management. Usd euro rate We’re going to talk about inflation and other aspects of the market for you to look onto. Usd to We will be right back.