Coming off an unprecedented year in financial markets, domestic equities continued to move higher in the first quarter of 2021, with the S&P 500 Index rising 6.2% to finish at an all-time high. An improving labor market, a healthy rise in consumer spending, and a growing deployment of vaccines provided investors with greater clarity into the country’s ongoing economic revival and guided domestic equities’ quarterly performance. However, while the prior year’s performance was mainly defined by a relative outperformance in technology and growth-related names, the energy, financial, and industrial sectors were the primary contributors during the quarter. The rotation into these sectors was reflective of a larger pattern of value-oriented sectors outperforming their growth-based counterparts, bucking the long-standing trend of growth’s dominance. Additionally, the improving economic backdrop continued to support small-cap stocks, which are more sensitive to economic conditions but tend to fare better during recoveries. As such, small-caps led the way during the quarter, followed by mid-caps and then large-caps.Continue reading “Condor Capital Reviews 1st Quarter 2021”
Despite a year defined by a global pandemic and political uncertainties, financial markets proved resilient, with the major indices finishing the quarter, and the year, at or around all-time highs. The S&P 500 Index moved 12.14% higher in the fourth quarter, resulting in an overall gain of 18.39% for the index in 2020. The nationwide rollout of two COVID-19 vaccines, coupled with greater clarity regarding the country’s political backdrop, calmed market angst and set domestic equities up for a rally into the latter part of the quarter. Contributing most to the broader market’s rise were cyclically oriented sectors, led by energy and financials. On a market-cap basis, small-caps fared substantially better than large-caps in the fourth quarter and outperformed on the year. Finally, the long-standing trend of growth stocks outperforming their value counterparts reversed this quarter, with value exhibiting its best quarter since 2009.Continue reading “Condor Capital Reviews 4th Quarter 2020”
Coming off one the strongest quarters on record, the third quarter of 2020 saw the domestic equity market move higher once again. While the market did pull back a bit in September after five consecutive months of gains amid concerns about stretched equity valuations and trepidation over the upcoming presidential election, the S&P 500 Index still returned a very healthy 8.93% through quarter’s end. The consumer discretionary and basic materials sectors were the quarter’s top contributors, and large-cap names generally outpaced their mid- and small-cap peers. The growing bifurcation between growth and value continued to play out in the quarter, with growth stocks faring substantially better than their value counterparts across all market caps.Continue reading “Condor Capital Reviews 3rd Quarter 2020”
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”
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”
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”
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%.
On January 25th of this year, the Dow Jones Industrial Average (DJIA/Dow) passed the 20,000 milestone for the first time ever. Seemingly every media outlet began to host discussions regarding whether investors should get back into the marketplace, how much further stocks can go, and a multitude of other investing-related topics. Continue reading “DOW 20,000 — Does It Matter?”