Investing with Insight
At Appleton, we value active engagement and interaction with financial advisors and clients. Investing with insight helps us meet client objectives. And by sharing our economic and market perspectives, we foster deeper relationships. Here’s what we’re talking about this month.
Review and Outlook
"June was bookended with two labor reports that received very similar, and we believe incorrect, market reactions. Both May’s 139k (revised to 144k) and June’s 147k job gains were objectively weak releases, below the long-term trendline. But the markets treated both as strong due to beating even worse expectations (126k and 106k, respectively)..."
"There seems to be a “Groundhog Day” element to writing economic commentary lately. At the start of June, we are still concerned about tariff uncertainty, as well as the scope of federal layoffs, and unless you look at the details, it is entirely possible to miss the fact that another month has passed..."
"The whipsawing of President Trump’s trade war that intensified on April 2nd will have many unintended consequences. One will be that incoming economic data will be extremely hard to interpret for at least the next several months. Before discussing specific releases, we’d like to pause and think about the various ways we expect data to be distorted..."
Economic and Market Commentary
"The high-grade tax-exempt markets are typically characterized by relative price stability, particularly when contrasted with lower grade credits, let alone equities. But it’s been anything but the case so far in April, as extreme volatility has driven up municipal yields at an unusual pace. Advisors and investors are understandably looking for answers, and we aim to provide some below. The primary driver of this turbulence is a liquidity crunch, which has been exacerbated by the factors noted below..."
"Cutting through the “noise” during times of high market volatility can be challenging but this piece attempts to do so by offering our perspective concerning recent market events, some historical context, and a few forward thoughts. Appleton’s Wealth Managers are available to discuss your personal circumstances, so please reach out..."
Quarterly Perspectives
Q2
"As Harry Markowitz, the father of Modern Portfolio Theory, put it, “The only free lunch is diversification.” This quote underscores one of the most fundamental principles of investing: managing risk and reducing volatility by spreading investments across assets and asset classes with distinct risk exposures..."
Q1
"Making sense of the economy and markets can be challenging in any era, although today’s environment is proving to be particularly perplexing to many. Context and perspective are critical, as it is all too easy to get lost in the day’s headlines and varying predictions. With apologies to the long running staple of David Letterman’s former “Late Night” show, here is an Appleton “Top 10 List..."
Q4
"Economic developments rarely have isolated impact as one factor affects another. A pandemic-influenced spike in inflation was followed in 2022 by rapid Fed Funds rate increases and an inversion of the US Treasury and AAA Municipal yield curves..."
Limited Bond Market Impact Expected From US Debt Downgrade