CI Outlook - Archives

July 2011

July 5, 2011

For the month of June the Dow lost 153 points, or 1.2%.  From beginning to end we endured a sickening 6% slide only to regain most of the lost ground and rally 5% in the last week.  Several factors appeared responsible for this roller coaster performance.  First, was worry over a potential loss of liquidity in the markets.  Led by falling prices in mortgage backed securities and rising rates in the treasury market the news media reminded us daily that QEII would end in June.  Not surprisingly the world did not end and treasury rates peaked on June 30th.  The second factor was lower corporate revenue guidance started in early in June.  This updated guidance caused many analysts to ratchet down earnings forecasts for the second half of the year, and stock prices fell accordingly.  The last and probably most publicized uncertainty was Greece.  It was resolved when the Greek government accepted the austerity measures imposed by the IMF.  For the time being the European situation is off the front page. 

Now that these uncertainties appear resolved, the big question remains, “how well will these solutions hold up going into the end of the year?”  We would answer that question as follows.  Liquidity will remain sufficient.  We believe that the end of QEII does not signal the end of Fed accommodation.  The Fed will roll over debt and do whatever is necessary to maintain liquidity in the capital markets.  Additionally, revenue will be sufficient to support corporate earnings.  Lower revenue guidance is logical given the continuing slow growth environment we are in.  It may well prove a positive influence as earnings estimates now reflect lowered expectations.  This will make it much easier for companies to meet or exceed those expectations.  As far as the Greek/EU situation is concerned we expect further turbulence.  That is because the current IMF fix is no more than a band aid on a much bigger problem in Europe.  With that in mind we think the summer market will remain volatile. 

Throughout the summer the continuing instability of Europe, combined with our own government’s inability to reach a debt limit and budget compromise agreement, will continue to roil the investment markets.  With that thought in mind we continue to view high cash levels as appropriate.  However this is becoming a momentum driven market.  For short periods of time strong momentum markets are capable of ignoring the worst news imaginable.  Therefore, if it appears the current rally will continue, we will commit cash reserves with a shorter than normal investment horizon in mind.  Most likely we will utilize ETF’s for these short term commitments.  With their high liquidity and market driven returns they should be the most preferable instrument for coping with that situation.

We hope this gives you some insight into our current thinking.  Please call us with any questions or comments.  Thank you again for your patronage.


CJ Brott                      Karen Burns


July 2014
JUNE 2014
May 2014
April 2014
March 2014
Feburary 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
aPRIL 2013
March 2013
February 2013
January 2013
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
Yead End 2007
December 2007
November 2007
Third Quarter 2007
September 2007
Second Quarter 2007
June 2007
May 2007
First Quarter 2007
March 2007
February 2007
Year End 2006
December 2006
November 2006
Third Quarter 2006
September 2006
Second Quarter 2006
First Quarter 2006
Fourth Quarter 2005
Third Quarter 2005
Second Quarter 2005
First Quarter 2005
Newsletter Year End 2004
Client Newsletter 2nd Quarter 2004
First Quarter 2004
Newsletter - Year End 2003
It Ain't Over 'Till It's Over
Newsletter - 2nd Quarter 2003
Newsletter - 1st Quarter 2003
Newsletter - Year End 2002
Newsletter - 3rd Quarter 2002
Newsletter - 2nd Quarter 2002
Newsletter - 1st Quarter 2002
Newsletter - 4th Quarter 2001
Newsletter - 3rd Quarter 2001
Newsletter - 2nd Quarter 2001
Newsletter - 1st Quarter 2001
Newsletter - Year End 2000
Newsletter - 3rd Quarter 2000
Newsletter - 2nd Quarter 2000
Newsletter - 1st Quarter 2000