Market Commentary – Lowenhaupt Global Advisors Australia

Why Investors Are Concerned

By Donna Gilding

Everywhere you look these days, investors are concerned about market risk. Some of the biggest risks facing investors today are fears about the impact of changes to US monetary policy, the resilience of the Eurozone, the strength of the US equity markets, the lack of potential in the global fixed-income markets and the strength of China’s stock market.

The heightened market uncertainty, and the perceived lack of opportunity in the US equity and fixed-income markets, has encouraged investors to funnel vast sums of money to alternative assets. This surge of money into private equity, hedge funds and infrastructure funds has raised questions about the ability of alternative managers to deliver the exceptional returns that many investors are seeking.Read More

Second Quarter 2015 Market Review

By Donna Gilding

The month of June was a pretty lousy month across the board. Equities and fixed income posted negative returns. The quarter was lackluster, especially for interest-rate sensitive securities such as REITs and MLPs. On a year-to-date basis, US and emerging markets small cap stocks have been the best performers. The Russell Microcap, for example, is up 2.80% and emerging markets small cap is up 8.25%.Read More

Will Consumers Spend the Oil Dividend?

By Donna Gilding

In the latter half of last year, the price of crude oil dropped by over 50%. This was soon followed by a significant decline in the price of gasoline for motorists. It was assumed that this drop in price would have freed up money to spend elsewhere. The markets bet on this. The run-up in the US stocks last year reflected the belief that cheaper oil would act as a stimulus to the economy. This, in turn, would allow the Fed to increase rates, attract funds to the US, and push up the dollar.Read More

What Will 2015 Bring: Three Economic Scenarios to Consider

By Donna Gilding

2014 turned out to be a notable year for a number of reasons even excluding geopolitical risks and global financial crises:

- - Small cap stocks had a great December and fourth quarter – up 2.97% and 10.06% respectively
  - REITS and long Treasuries were the best performers for the quarter – up 14.35% and 8.62%
  - REITS and long Treasuries led the markets for the twelve-month period – up 30.26% and 25.07%
  - We did not see a lot of folks betting on either REITS or long bonds of any flavor.

2014 is the sixth year with positive returns, the third year of double-digit returns and the 4^th longest bull market in post-war history.Read More

A Surprising Period of Unwavering Confidence

By Donna Gilding

Even as the headlines include wars in the Middle East and Eastern Europe, and as the European Central Bank announced further rate cuts, the consensus of our managers is that complacency and confidence continue to exist in the US. For example, none of the following events was greeted with apprehension about overheating or an imminent correction!

In the four years ending in August 2014, the S&P 500 gained more than 80% and crossed 2000 mark for the first time
The new jobs numbers for August were disappointing and showed that the US failed to create at least 200,000 new jobs for the first time in seven months.

Last year, even the suggestion of ending of quantitative easing, created a spasm in the global markets. However, once the tapering started, the stock market took it in its stride.Read More