Following a less-than-rosy start to the year, the second quarter of 2020 was marked by a strong rebound across financial markets. While the ongoing coronavirus pandemic, or COVID-19, was still present, certain parts of the country experienced a steady decline in positive case counts and began the early stages of their re-opening phases. This, along with society adjusting to the new normal under quarantine more generally, has led to the start of a reversal in the unemployment rate and a rise in U.S. retail sales. Domestic equities responded positively to this news, with the S&P 500 Index gaining 20.54% during the quarter – the best quarterly return on record since 1998.Continue reading “Condor Capital Reviews 2nd Quarter 2020”
We hope that you and your loved ones are continuing to stay safe and well.
As the quarantine continues and some restrictions are beginning to ease, we wanted to give our clients an update on Condor’s current work-from-home set up, our office plans for going forward, and our thoughts on the market.Continue reading “Condor Capital Update”
The first quarter of 2020 was a difficult time for financial markets and the world more broadly. In addition to the medical toll, the sweeping pandemic known as the novel coronavirus, or COVID-19, and the shutdown it created shuttered small businesses, disrupted global supply chains, stunted demand for goods, and caused unemployment to spike. For the stock market, the result was a decline of 19.6% as measured by the S&P 500 Index. While the market did rally and rebound sharply in the quarter’s final two weeks, the first three months of 2020 still ended as the worst on record since 1987. Meanwhile, the CBOE Volatility Index, a common measure of market volatility informally known as the VIX, tripled before calming during the late-quarter rally. While no area of the stock market was immune from this broader selloff, healthcare, technology, and the most defensive sectors like utilities and consumer staples held up relatively better. On the other hand, the energy sector was by far the worst hit, as a March falling out between major oil producers Saudi Arabia and Russia sent oil prices plunging as low as $20 per barrel. Frustrated by Russia’s unwillingness to agree to production cuts, the Saudis vowed to price the Russians out of the market, leading oil markets to post their largest one-day decline since the Gulf War.Continue reading “Condor Capital Reviews 1st Quarter 2020”
Updated February 24, 2020
Originally Posted on February 10, 2020
The current Novel Coronavirus, with over 75,000 cases and 2,600 deaths, has grown into a major health issue with a greater scope than the SARS outbreak of 2002 & 2003. Beyond the obviously tragic human toll, the virus’s spread has caused significant anxiety for financial markets as well.Continue reading “What the Coronavirus Means for Markets”
Financial markets finished the year near all-time highs, wrapping up a decade marked almost exclusively by bull markets. The S&P 500 Index gained another 9.06% in the fourth quarter, resulting in an overall gain of 31.48% for the U.S. benchmark in 2019. While it should be noted that this stellar year came off a low base thanks to a relatively large market downturn in December 2018, it still proved to be a year of strong economic growth and multiple expansion, with markets resilient against trade and political uncertainties. As was often the case in 2019, growth stocks outperformed their value counterparts in the fourth quarter, though the gap between the two did narrow in the second half of the year. Healthcare and technology stocks significantly outpaced many other sectors, while real estate and utilities lagged notably. Small-caps finished the quarter as the top performers, followed by large-caps and then mid-caps.Continue reading “Condor Capital Reviews 4th Quarter 2019”
From time to time, we publish our thoughts on current market events to provide clients with insights into these events and how they relate to our investment outlook and their portfolio, but we thought this would be a good time to provide our thoughts on volatility in the equity market in general. Over the years we have received questions on a wide range of topics, but at the end of the day the question most people are asking is – I think something bad is about to happen, should I sell my stocks? The answer, if you are positioned properly heading into any market volatility, is no.Continue reading “General Thoughts on Equity Market Volatility”
Much noise has been made about the U.S. yield curve’s inversion with 3-month Treasury yields trading roughly around the same price as 10-year Treasuries. Pundits have been quick to declare that a recession is imminent, citing similar situations where the yield curve has inverted before recessions in the last 60 years. While it is true that the yield curve has inverted before past recessions, it must also be noted that there were moments of inversion that were not followed by a recession over the last 60 years as well. There is also no accurate way of timing when a recession might occur even after a yield curve inversion. The chart below highlights this:Continue reading “Inversion of the Yield Curve”
I wanted to reach out to address the recent stock market volatility. For the past few months, it seems as if every news headline has been negative and while there are certainly causes for concern, there are some reasons for optimism. Before touching on this, I wanted to reiterate some of my comments from our last letter and discuss our approach to portfolio construction.
I wanted to take a minute to address the most recent bout of volatility in the market. Before addressing the causes for the recent downturn and providing our thoughts, it’s important to remind investors of the benefits of having a diversified portfolio. Different areas of the market will outperform at different times and it can be tempting to wonder, why bother holding asset classes that are not performing as well as others at any given time? The reason is that changes in the market happen quickly, much more quickly than changes in the economy and much more often. In fact, since 1980 the average annual intra-year drop for the S&P 500 is 13.8%, yet the Index has rebounded to finish the year positive in 29 of the 38 years analyzed and averaged an annual gain of 8.8%.
Today’s relatively sharp market sell-off is generating a lot of discussion around the impact of rising interest rates on financial markets. Although there are legitimate concerns that the Federal Reserve’s interest rate increases could reduce demand for relatively riskier asset classes like stocks and slow the economy more than expected, it is our view that these concerns are outweighed by other, more positive factors. Our outlook is rooted in the continuing underlying corporate and economic strength domestically, as well as a longer-term contextual view of why interest rates are rising in the first place.