At First Western Trust, our investment strategy has always focused on a long-term outlook, coupled with a commitment to protecting against downside risk. This investment philosophy still holds true today. Our experienced investment professionals are supported by a dedicated investment research team that produces weekly and quarterly market commentary discussing notable events taking place in our global and domestic economies. This knowledge and insight helps guide us in our decisions for today and the long-term.
Come back regularly for our most recent commentary and insights.
Our Chief Investment Officer and investment research team are frequently featured in such publications as CNBC, MarketWatch, and TheStreet. Additionally, we provide financial market commentary through our internally produced publications. Check out our most recent market commentary below:
Master Limited Partnerships (MLP) Update
June 7, 2017
Less than 18 months ago, investors were writing obituaries for midstream Master Limited Partnerships (MLPs), calling their business models “broken”. Since bottoming in early 2016, the Alerian MLP index has soared almost 50% as reality set in, oil prices recovered from their artificially low levels of February 2016 and investors realized that the industry fundamentals were generally healthy.
Despite the recovery, the Alerian MLP Index remains 44% below its highs of August 2014 and price to 2018 distributable cash flow valuation for Wells Fargo’s MLP universe is below its 5- and 10-year averages. We continue to recommend an allocation to MLPs within the Real Asset portion of portfolios…
Stock Market Commentary
With constant media attention focusing on interest rates, geopolitical concerns, global markets, and daily stock market changes, it can be hard to sort through the noise and find reputable financial market commentary. Our teams are committed to doing careful due diligence and providing relevant economic information to help you understand what is going on in the market and how it impacts your investment portfolio. Check out our most recent weekly and quarterly resources below.
Come back regularly for our most recent commentary and insights.
Week in Review
Stay on top of important changes taking place in the global economy with insights into key events and economic factors impacting global and domestic markets. Reach out to our team at firstname.lastname@example.org to receive the Week in Review publication.
Quarterly Economic Review
From valuations and volatility, to consumer sentiment and production, changes happen throughout every quarter that impact your portfolio. Our Quarterly Economic Review provides a timely look back at the marketplace and the key events that impacted quarter.
4Q 2017 Recap
Nothing is certain except death and taxes”, Benjamin Franklin once wrote. And while the passage of the Tax Cuts and Jobs Act in December did nothing to change that inevitability, it did help propel U.S. equity markets to new record highs.
Along with tax reform, equity markets were buoyed by generally upbeat economic data and continued corporate earnings growth. Similar to prior quarters, volatility was largely absent, with the S&P 500 failing to record a single +/- 1% move from the prior day. For the year, the market’s steady ascent and lack of volatility was captured by the fact that the S&P 500 recorded positive gains for every calendar month; a first in its long history dating back to 1926.
Rising interest rates, fueled by expectations of stronger economic growth resulting from tax reform led to muted fixed income returns. A further flattening of the yield curve led to some inevitable questions about the potential for its inversion– often seen as a harbinger of recession- something we do not anticipate.
U.S. monetary policy unfolded largely as expected. In December the Fed announced its third rate hike of 2017, bringing the Fed Funds rate to 1.25-1.50%. In November, President Trump nominated current Fed Governor Jerome “Jay” Powell as the next head of the Federal Reserve. Markets applauded the choice, as Powell is widely seen as a proponent of current monetary policy and therefore unlikely to propose any radical changes.
Globally, North Korean missile tests, UK Brexit negotiations, ECB policy announcements, German political uncertainty, and China’s ongoing efforts to curb its burgeoning debt, all made headlines at various points. None had a discernable effect on the markets. For the year, optimism about a synchronized global recovery, country-level idiosyncratic factors, and a weaker U.S. dollar helped international developed and emerging markets post their best returns since 2009.
Outlook– Perhaps the largest surprise of 2017 was the market’s indomitable determination to move higher despite concerns about valuations, rising interest rates, U.S. political drama, and geopolitical events. The near absence of volatility also confounded many market observers. Looking forward, we are relatively constructive on both the U.S. and global economy. With respect to the markets, we remain cautiously optimistic as improvements in corporate earnings growth resulting from U.S. tax reform should serve as a tailwind. So too should accelerating global growth. However, valuations remain extended and by historical standards, the markets are long-overdue for a 5-10% correction. Given that such a statement does not inform as to when one may occur, we continue to advocate that investors remain committed to a diversified portfolio and focused on their long-term financial goals as opposed to trying to time the markets.
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4Q 2017 S&P500 Chronology
The market continued to move higher supported by generally positive economic data, corporate earnings growth and, towards the end of the quarter, an almost singular focus on the increasing potential for tax reform
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Investment and insurance products and services are not a deposit, are not FDIC- insured, are not insured by any federal government agency, are not guaranteed by the bank and may go down in value. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice.
Indices are unmanaged and investors cannot invest directly in an index. Unless otherwise noted, performance of indices do not account for any fees, commissions or other expenses that would be incurred. Returns do not include reinvested dividends.
The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market value weighted index with each stock’s weight in the index proportionate to its market value.