November Private Client Letter - A Complicated and Shifting Environment

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November Private Client Letter - A Complicated and Shifting Environment

We have long promised our clients that when the facts change, our outlook would change. This said, our base case has shifted to a less constructive view of the economy over the next 12 to 18 months. We now expect that economic growth to disappoint and a recession to occur 2023. This said, we are not expecting the recession to be particularly long or deep. By mid-2023 the worst may be behind us, and risk assets could begin a sustained move higher.

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July Private Client Letter

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July Private Client Letter

The S&P 500 suffered its worst half since 1970 after inflation and recession concerns sparked a 21% sell-off. This year’s first half performance was strikingly similar to that of 1970 (also down -21%) and in both periods, high inflation was the issue. It is interesting to note that the second half of 1970 saw the S&P up 27%. Of course, that does not mean that's how it will go for the back half of 2022; however, we believe it is likely the market will move higher if inflationary pressures subside.

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February Private Client Letter

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February Private Client Letter

After a strong 2021, stock market volatility returned in dramatic fashion in January. The S&P 500 has had an intraday trading range of at least 2.25% in January’s final week (Bespoke). The average stock is down a little more than 9% so far in 2022, but stocks with the highest valuations are down closer to 20%.

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Economic Growth, Booming Profits, and Loose Monetary Policy

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Economic Growth, Booming Profits, and Loose Monetary Policy

As the year comes to an end, Clearwater Capital’s CEO and Chief Investment Strategist, John Chapman, offers an extended point of view on the U.S. economy and equity markets in this final Private Client Letter for 2021. Our Outlook 2022 report is scheduled for publication in January.

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Outlook 2021 - Mid Year Update

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Outlook 2021 - Mid Year Update

Hard to believe it, but we have reached the midpoint of 2021 already and have finished one of the best first-half starts in years. In fact, with a gain of 14.4% it was the S&P's second best first-half performance since 1998. For the record, the Dow ended the first-half with a 12.7% gain, the Nasdaq with a 12.5% gain, and the small-cap Russell 2000 with a 17.0% gain!

The S&P has now advanced more than 5% in five consecutive quarters - for only the second time in history (1953-1954). Back then, stocks added another 26.4% over the next four quarters, so perhaps we should be open to the possibility for continued strength in the second half of the year and into 2022.

Everything about the past year-and-a-half has been unique and it is as important as ever to maintain an intelligent framework for decision making. To this end, we are pleased to present our Outlook 2021 Mid-Year Update. Here you will find our latest forecasts for what may be coming our way.

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Outlook 2020 - Mid Year Update

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Outlook 2020 - Mid Year Update

The COVID-19 pandemic continues to dominate our lives, the economy and capital markets. Our base case for the economy and markets presented in our Outlook 2020 report, published just last January, has been wiped out by the COVID outbreak. We must now reconstruct our expectations for the balance of the year – while assessing a recovery that will likely stretch into 2021 and 2022.

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May We Live in Interesting Times - Private Client Letter

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May We Live in Interesting Times - Private Client Letter

To say that we are living in “interesting times” would not do justice to what we all have experienced since the COVID-19 outbreak made headlines in February. What began as a serious health crisis quickly turned into an economic collapse as government leaders issued lockdown orders and essentially brought large parts of our economy to a standstill. Never before has the United States shut off its economy by proclamation. Interesting times indeed!!

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