RPg Asset Management Publications

March 2018

RPg Q-View Watch 3/9/2018: Increased tariffs may drive up inflation which would harm earnings and margins in select industries. While rising rates and escalating trade conflict may have ended the “Goldilocks” environment of 2017, earnings and revenue continue to see solid growth....(click here)

RPg Q-Tube Watch 3/2/2018: President Trump’s embrace of protectionism in the form of threatened tariffs on steel (25%) and aluminum (10%) imports caused distress among equity investors this week...(click here)

February 2018

TAG Weekly Monitor 2/23/2018: US economic news showed surges in both manufacturing and services. Within that data were continued signs of building price pressures...(click here)

RPg Q-Tube Watch 2/16/2018: Inflation data was clearly in focus at the start of the week as January core CPI grew 0.35% m-o-m. Looking beyond the recent data, macroeconomic data as well as sector specific factors are supportive to push core inflation meaningfully higher this year...(click here)

TAG Weekly Monitor 2/16/2018: The US had a plethora of economic news last week which again demonstrated a strong economy, now also including Housing. However, the inflation scare tantrum of the last two weeks was somewhat mollified by mixed readings in the news...(click here)

RPg Q-Tube Watch 2/9/2018: U.S. stocks bounced off intra-day lows on Friday but nevertheless finished another week sharply lower, with the S&P 500 down ~5% for the week. This looks to us like a largely technical-driven sell-off catalyzed by a fundamental event – last Friday’s surprising jump in wage inflation...(click here)

TAG Weekly Monitor 2/9/2018: US economic news showed an economy firing on all cylinders; manufacturing, services, employment and housing. The consumer remains the big risk; Consumer Credit expanded again in December on top of November's record one-month increase...(click here)

RPg Q-Tube Watch 2/2/2018: last week was the re-introduction of volatility. We haven’t seen volatility in over a year, so the feeling of being around it may be foreign. The S&P 500 began dropping on Tuesday and plummeted on Friday, closing with a single day loss of 2.12%. For the week, the S&P 500 was down 3.85%...(click here)

TAG Weekly Monitor 2/2/2018: A week of strong US economic news was capped off by Friday’s January Employment Report wherein Average Hourly Earnings rose 2.9% y-o-y on top of December's 2.7%. Treasury yields had been creeping up since the start of the year on concerns over an accelerating economy and the implications for inflation...(click here)

January 2018

RPg Monthly Commentary: January was a strong month for global equities. The gains came on the back of solid earnings with many companies reporting better results and guiding higher than expected profitability in the year ahead. The economy grew at a 2.6% pace in the fourth quarter supported by increased consumer and business spending...(click here)

RPg Q-Tube Watch 1/26/2018: The U.S. economy grew at a 2.6% pace in the fourth quarter supported by increased consumer and business spending. The International Monetary Fund (IMF) said they expect global growth to approach 4% in 2018...(click here)

TAG Weekly Monitor 1/26/2018: The pattern of economic activity which was accelerating into Dec. '17 continues in Jan. '18. US manufacturing is still strong, which is supporting strong employment and consumer spending; housing remains steady...(click here)

RPg Q-Tube Watch 1/19/2018: Consumer Staples and Health Care were two of the best performing sectors this week, suggesting that part of the YTD results may be taking on a bit more of a hedged tone as investors wade into more traditionally defensive sectors so far in 2018...(click here)

TAG Weekly Monitor 1/19/2018: Despite strong economic news on US Manufacturing and Housing, Foreign Equities outperformed US. The culprits were rising Treasury Bond yields and a falling Dollar. Treasury yields rose on conviction that the Fed would continue to raise rates in response to a strong economy and associated rising inflation...(click here)

RPg Q-Tube Watch 1/12/2018: The final inflation report of 2017 showed headline CPI up 2.1% year-over-year with core rising only 1.8% year-over-year. Throughout 2017 many were expecting more inflation with unemployment low, stronger economic data and a weakening US dollar. That did not happen as inflation has been persistently missing expectations...(click here)

RPg Q-Tube Watch 1/05/2018: The bond bull market has been in place for thirty seven years. And if you look at the current 10-year Treasury yield and price, it would equate to a price-to-earnings ratio of roughly 40. Can you imagine the volume of screaming from market pundits if the S&P 500 were priced at a P/E of 40? This isn’t a call for a bond bear market, but rather a call to be more tactical around your fixed income allocation...(click here)

December 2017

RPg Q-Tube Watch 12/29/2017: At the close of trading on December 29th, the S&P 500 is set to have posted a monthly gain in all 12 months of 2017. This marks the first time the S&P 500 has achieved that in 20 years without a pullback of more than 2.8%...(click here)

TAG Weekly Monitor 12/29/2017: US economic news showed a manufacturing sector that continues to accelerate into the year end and a housing sector holding steady. This confirmation of increasing growth in the economy along with the previously passed Tax Reform made Fed rate hikes in '18 all but certain...(click here)

RPg Q-Tube Watch 12/22/2017: Congress passed its tax reform legislation this week and the President signed it into law Friday morning. The law will bring a myriad of changes that are not completely understood by the market yet, as some industries may benefit (Industrials) while others will be challenged (housing)...(click here)

RPg Q-Tube Watch 12/15/2017: US stocks finished the week strong as progress on tax reform resumed, markets digest an as-expected Fed Funds rate hike that had no impact on 10-year Treasury yields, and evidence that the US consumer is out shopping again...(click here)

TAG Weekly Monitor 12/15/2017: Last week saw the most bullish news for the US economy. Manufacturing data confirmed the acceleration of that sector into yearend; this is a continuation and confirmation of a rally that began in early summer. Retail Sales surged which is providing demand for manufacture goods. Consumer demand is supported by solid and consistent employment and very positive sentiment indicators...(click here)

RPg Q-Tube Watch 12/8/2017: US stocks traded modestly higher this week, getting a boost from a solid Payrolls report Friday that reconfirms a sustained reacceleration of the US economy amidst a background of pending tax reform. While there are differences between the two bills, the underlying philosophy seems to be largely the same, suggesting that Congress should be able to come to some sort of agreement in the coming weeks...(click here)

TAG Weekly Monitor 12/8/2017: US economic news showed a strong economy led by manufacturing and, in particular, Durable Goods (Capex) which continues its surge upwards. Capex had been the missing component in the US recovery; this has also been a key reason why wage growth has been so modest...(click here)

RPg Q-Tube Watch 12/1/2017: OPEC this week demonstrated a strong commitment to normalizing oil inventories and to remain data dependent, reducing the risk of both unexpected supply surprises and excess stock draws. Energy ETFs like XLE and AMJ rallied this week...(click here)

TAG Weekly Monitor 12/1/2017: US economic news was strong especially Manufacturing and Consumer Confidence, which hit a 17 year high. Yet the bigger news on Thursday was the Senate announcing they passed a tax reform bill; that drove a 200+ point rally in the DJI...(click here)

November 2017

RPg Monthly Commentary: Throughout the month of November, we continually heard about the complacency in the equity market. Moreover, if the market ends the month of December in the black, it will mark the first time since the late 1950s that the S&P 500 will have completed a calendar year without a single negative month. The global equity index has not suffered a setback above 2% during the past year, which also must be closing in on a record...(click here)

TAG Monthly Commentary: Manufacturing was the standout in November. The consistently bullish regional Fed manufacturing reports are finally translating into the hard government numbers. Industrial Production and Durable Goods are accelerating their uptrends. If these numbers weren’t bullish enough, the Senate passed their tax reform bill...(click here)

RPg Q-Tube Watch 11/24/2017: Total sales from Thanksgiving weekend (Thanksgiving, Black Friday and Cyber Monday) are expected to reach ~$15 billion. While that is an impressive amount, keep in mind that China’s Singles Day, the largest shopping event of the year, had total sales north of $25 billion. Globally the consumer is showing signs that they are alive and well...(click here)

TAG Weekly Monitor 11/24/2017:US economic data showed Manufacturing is still strong going into the last two months of the year. In particular, Capital Investment continues its uptrend providing an important and, heretofore, missing element in the recovery. Housing was strong for both Existing and New Home Sales while inventory levels remain very low; this suggests housing may continue as a steady contributor to the economy...(click here)

RPg Q-Tube Watch 11/17/2017: Economic data on retail and corporate bottom lines came in solid. The strong results from the retailers confirm the momentum the consumer sectors have experienced of late. Both Consumer Staples and Cyclicals posted positive returns this week...(click here)

TAG Weekly Monitor 11/17/2017: The US manufacturing sector reported at several levels and it was all positive; it confirmed the sector should remain strong through year end and likely through Q1 '18. Small Business Optimism remained at the elevated levels established post-election and Housing reported good monthly numbers, though year over year numbers remain weak for Permits...(click here)

RPg Q-Tube Watch 11/10/2017: With the yield curve the flattest it’s been in over a decade, market participants are processing whether this is pointing to a future slowdown, like it has in the past, or a function of supply and demand dynamics driven by central bank intervention. Weekly unemployment claims are at the lowest level in almost 45 years...(click here)

TAG Weekly Monitor 11/10/2017: Last week was rather quiet for US economic news. The one area reported was Consumer Credit which again showed sharp gains while, at the same time, a measure of Retail Sales reported the 5th consecutive week of decline which indicated a rather modest year over year gain of 2.6%...(click here)

RPg Q-Tube Watch 11/03/2017: Tailwinds for growth appear to be securely in place – US 3Q GDP was not the only “growth” thing in focus this week with its upside surprise report on Friday of 3.0% growth in 3Q. Growth stocks, namely technology, also delivered a solid week for performance and earnings rising 2.87% for the week...(click here)

TAG Weekly Monitor 11/03/2017: The abundance of US Manufacturing data last week confirmed the sector's summer resurgence is continuing into the year end. Of particular interest was the increase in Productivity which was driven by increasing investment in capital equipment; "cap ex" has been the missing component throughout the recovery, thereby holding down growth and wages...(click here)

October 2017

RPg Monthly Commentary: During the month of October, the market recognized the 30th anniversary of Black Monday, an event which shook the global financial system dropping more than 20% in ONE DAY. Fast forward to October of 2017 and the S&P hit a fresh high the 27th of the month at 2,581. While the 2000 – 2002 period and the Global Financial Crisis suffered greater peak to trough losses neither contained a single-day drop in the neighborhood of 20%. Thus the month that owns the spooky holiday of Halloween always seems to generate spooky headlines about the potential of a recurrence due to the time of the year...(click here)

TAG Monthly Commentary: Although hurricane effects were distorting some economic data, Manufacturing remained strong; in particular, Durable Goods continued its positive uptrend. Durable Goods represents capital expenditures, investment in equipment, technology, etc. This investment has been the missing component throughout the 8-year recovery, which in turn held down wage gains....(click here)

TAG Weekly Monitor 10/20/2017: US economic news was mixed. While Manufacturing continued solid, there are some cautionary subcomponents to the headline numbers. Industrial Production went on "Watch" for a possible downgrade to Neutral; Regional Fed Reports were hitting decades old highs with lagging indicators and some degree of Hurricane distortion; and forward looking components, although still in good territory, were showing some deterioration. Housing news was mixed with solid numbers for single family "Permits", yet Existing Home Sales were -1.5% year over year...(click here)

TAG Weekly Monitor 10/13/2017: Hurricane data distortion was a key theme last week. CPI headline looked strong, but ex energy/food, it was only +0.1% m-o-m and +1.7% y-o-y; the spike in energy prices artificially raised the headline number. PPI was likewise distorted. Retail Sales reported a very strong +1.6% m-o-m versus -0.1% the prior month; ex autos/gas it was +0.5% m-o-m; huge auto replacement demand from the hurricane destruction and a spike in energy prices from supply interruptions distorted the headline number; y-o-y ex autos/gas (preferred TAG measure) was up 3.8% which represented a continuation of the gradual decline in retail sales growth. Perhaps the market picked up on this theme and, despite the talking heads’ hype, discounted the buoyant outlook on the economy...(click here)

TAG Weekly Monitor 10/6/2017: US economic news continued the run of resurgent manufacturing growth; ISM Manufacturing hit 60.8, its highest level since 2004, while Durable Goods and Weekly Unemployment Claims were better than expected. This gave greater credence to a Fed rate hike in December ’17. That, coupled with the earlier rally from the proposed income tax reform, sent the Dollar higher again. This led to the S&P 500 outperforming Foreign Equities, hedged and unhedged, and US Small Caps outperforming Large Caps...(click here)

September 2017

RPg Monthly Commentary: As we close the calendar on September, it marks the end of the 3rd quarter of 2017 and the beginning of the 4th quarter and the U.S. economy continues to plough through the field with solid corporate earnings, increasing wages, and stable commodity prices. The Fed announced the unwinding of its balance sheet in a measured pace over time and there is now a high probability of a rate increase in December. We have written that we are in a Goldilocks scenario in the past, and at the end of September, we remain solidly in that scenario, which we hope sticks around for a long time...(click here)

TAG Monthly Commentary: US economic data displayed an economy caught in cross winds. On the positive, manufacturing continued its summer rally which supported steady jobs growth. These are supporting strong sentiment readings, particularly among small business. Yet, housing has been unsteady and drifting lower, retail sales have been drifting lower and auto sales are negative year over year. Bank lending standards have been improving, yet consumer debt is at new record levels. The debacle of health care reform failure in July and August gave way to renewed confidence in government with the Trump/Dems deal to extend the debt and Trump’s rollout of the proposed income tax reform...(click here)

TAG Weekly Commentary 9/29/2017: The presentation of Trump's proposed tax reform was the primary driver of the market rally this week. This added to the optimism created earlier in the month by the Trump/Democrat collaboration of the debt extension. U.S. manufacturing economic news was very strong and sentiment indicators remained strong. Although Personal Income, Spending, Inflation and Housing numbers were weak, they were offset by the foregoing factors. Energy rallied on price increases from the hurricane supply disruption. As a result of the renewed political optimism, the Trump trade resumed with Value outperforming Growth and small caps outperforming large caps...(click here)

TAG Weekly Commentary 9/8/2017: Last week again displayed this teeter/totter economy. Key leading indicators for ISM NonMfg and Capacity Utilization were strong with a positive rating; yet, coincident indicator Vehicle Sales came in negative for y-o-y, for the second consecutive month: we don’t believe hurricane Harvey is a major factor in the declining sales. But Harvey and the approaching Irma weighed on the markets as did the ongoing tensions with NOKO ( North Korea)... (click here)

TAG Weekly Commentary 9/1/2017:US economic data was very strong. Manufacturing is continuing its comeback; Employment remains solid and reinforced the outlook on Manufacturing with that sector adding 36,000 jobs in August and the prior two months were revised upward by a combined 19,000 jobs added; these factors led to a very strong Consumer Confidence report which had its second highest reading since 2000. Of some concern was the continuing weak wage growth which is languishing at 2.5% y-o-y; also, Housing is ending signals that it may get weaker in the second half of the year... (click here)

August 2017

RPg Monthly Commentary:It’s been more than a week since Harvey made landfall in Texas as a Category 4 hurricane, bringing catastrophic flooding and unprecedented damage to the Houston area and leaving hundreds of thousands of people displaced. Our hearts go out to the people of Texas who have lost so much and will struggle with the aftermath of Harvey for months and years to come. At RPg we are humbled by and proud of our colleagues who are actively participating in rescue and rebuild efforts. Harvey is predicted to be one of the costliest natural disasters in U.S. history. And with Hurricane Irma churning in the Atlantic, Florida has already declared a state of emergency. We continue to find hope in the strength, resiliency and generosity of the American people in the face of these challenging natural disasters... (click here)

TAG Weekly Commentary 8/25/2017:US economic news was mixed but overall still positive. In particular, Manufacturing continued to build strength with a positive Durable Goods Report and strong regional Fed reports from Richmond and KC; consistent with those, Unemployment Claims continue to stay near their historic lows. Housing displayed some weakness with a second consecutive month over month negative for New Home and Existing Home Sales, although year over year rates are still in positive to neutral territory. The ignition for last week’s rally was a solid speech from Trump on Afghanistan and positive outlooks for tax reform this year... (click here)

TAG Weekly Commentary 8/18/2017:Last week saw continued upward momentum in the manufacturing sector. At the same time, Retail Sales had a very good month of July and Weekly Jobless Claims continue to hold at historic lows. These solid economics renewed a positive outlook for the Fed’s intent to raise rates one more time this year and, perhaps more importantly, reaffirmed their intent to start unwinding their balance sheet of all the Treasuries they bought during years of QE. So, while the S&P 500 was slightly negative in response to the latest Trump controversy, the Dollar continued a rally which began last week. This left US Growth outperforming Value and Large Cap outperforming Small Cap... (click here)

TAG Weekly Commentary 8/11/2017:Dominated by North Korea (NOKO). The potential disruption to the US and global economies from a military confrontation could be substantial. When we add this negative to the frustration with Trump’s policies, the market moved to a stance consistent with a serious slowdown in the economy. This led to Growth and Core Equities outperforming the more economically sensitive Value; and Large Cap over Small Cap by a wide margin... (click here)

TAG Weekly Commentary 8/4/2017:The US Bond market was up marginally with Interest Bonds substantially outperforming Credit and Blend. This is bearish bond action and seemingly at odds with the Dollar rally in expectation of a more certain Fed rate hike. Global Bonds stopped their outperformance in the face of the Dollar rally.... (click here)

July 2017

TAG Monthly Commentary:The only consistent message in July was that inflation is weak across a broad measure of indicators: CPI, PPI, PCE (Personal Consumption Expenditures, the Fed’s favorite measure) and globally with Import/Export Prices, all trending in the 1.5% range. While there was positive news with Durable Goods (Cap Ex), there was more on the negative side: Consumer Credit (at record highs), Retail Sales and Existing Home Sales... (click here)

RPg Monthly Commentary:Like a strong horse pulling a plow through a muddy field, the U.S. economy continued its growth momentum through 2Q 2017 at a slow and steady pace. At the end of July we received data on 2Q 2017 growth which came in a little faster than recent average growth rates, but did not display an economy that was in full gallop around the track. While the revisions were essentially uneventful, the best news in the 2Q report was that all three major parts of business fixed investment grew in both quarters so far this year. Investment in equipment, intellectual property and commercial construction all grew in 1Q and 2Q 2017... (click here)

TAG Weekly Commentary 7/21/17:Last week brought some disconcerting news on inflation as the Export/Import Prices were negative changes for the second consecutive month; y-o-y also weakened considerably down in the 1.5% range; this challenges Yellen’s contention that the decline in CPI last month was “transitory”; this is standard Fed speak when facts don’t materialize as they had forecasted... (click here)

TAG Weekly Commentary 7/14/17:Last week was marked by generally weak economic data; Retail Sales were surprisingly slow and Consumer Credit continued to explode to record highs which is likely dampening the ability for more consumer spending. Perhaps more disconcerting was the very weak inflation data; CPI for June was 1.6% year over year, down from 1.9% in May; in fact, this is one of the very weakest 4- month stretch in 60 years of records!... (click here)

TAG Weekly Commentary 7/7/17:Short holiday week; Fed and ECB sending message about reducing QE(ECB) and raising rates(FED- no matter what!). So, everything negative except Dollar and S&P; Interest Bonds down the most, but Credit down also EXCEPT, SRLN, VRP= rate adjustment mechanisms... (click here)

June 2017

RPg Monthly Commentary:Broad-based trend-like growth continued to be supportive to risk assets in June. The U.S. economy continues to progress late into the cycle, and recently we have witnessed a divergence between bond yields and equity markets which is causing concern from market participants. As we reflect on our portfolios in June, the globally diversified portfolios provided the best risk-adjusted returns as positions in Japan, EM and Europe experienced a relatively smooth upward path... (click here)

TAG Monthly Commentary:June was buffeted by cross currents of US economic data. Housing was expected to be a main driver of the economy for 2017; however, the news has been very mixed with April Pending Home Sales negative for the second consecutive month and year over year, May Permits and Starts declining for the month yet Existing and New Home sales for May were good and are running positive year over year. While manufacturing remained generally weak, Durable Goods Orders, core, are holding their uptrend from the 2016 lows. What is puzzlingly and worrisome is the persistent low inflation readings across a broad spectrum of measurements generally running in the +1.4% to +1.9% range; we believe it is consistent with the similar levels of annual GDP and, as such, is not pointing to any significant breakout in economic growth... (click here)

TAG Weekly Commentary 6/30/17:Key leading indicators improved with Durable Goods (CapEx) rerated up to Positive; other regional data was mixed. Perhaps most disconcerting was continued evidence of stubbornly low inflation. The Fed’s primary measure, PCE Price Deflator - both headline and core, came in at +1.4% y-o-y; the previous month of April they were +1.7% and +1.5%. This absence of inflation has been at the core of the month long rally in Interest Bonds. Foreign economic news continued the pattern in place all year, with Japan showing particularly strong numbers... (click here)

TAG Weekly Commentary 6/23/17:US economic news was predominantly related to Housing and it was good; New Home Sales were up 8.9% yoy after a strong month of May and Existing Home Sales up 2.7% yoy; Mortgage Applications continue to run in mid-single digits increases yoy. Eurozone data was strong while Emerging Markets were quiet... (click here)

TAG Weekly Commentary 6/16/17:Last week’s US economic news was disappointing across the board. Manufacturing remains weak; Inflation remains stubbornly subdued below the Fed’s 2% target; the Consumer remains restrained with Retail Sales –0.30% month over month which continues a slow grinding down; Housing was of particular concern with both Permits and Starts down -4.9% and -5.5%, respectively year over year. In the face of this news, the Fed raised rates again by 0.25% raising concerns that they will continue to hike into a slowing economy, possibly triggering a recession. TAG’s macro work does not indicate a recession in ’17, though we repeat our position that it is a race between a recession setting in before the Trump stimulus plans are put into law. Given their greater domestic focus, Small Caps were significantly negative for the week... (click here)

TAG Weekly Commentary 6/09/17:Last week continued the pattern of mixed US economic news. On the positive side, ISM Non-Mfg continues with solid expansionary performance and weekly Jobless Claims continue at their cycle lows. However, US manufacturing continues to be weak; Factory Orders were negative with weakness for most readings; Productivity is flat for Q1 which goes to the heart of this cycle’s low growth trend. Overseas, the trends remain much the same: solid economics for the Eurozone, UK and Japan with mixed results for Emerging... (click here)

TAG Weekly Commentary 6/02/17:US economic data was mixed last week. Manufacturing was a bit softer for May and employment was disappointing with the Payroll Report showing a much lower than expected 138,000 jobs added in May and the prior two months revised down 66,000; the subcomponents for Participation Rate, Average Hourly Earnings and Average Workweek were also disappointing. While Personal Income & Outlays had a solid rebound from March, the inflation indicators remained very subdued. Of greater concern was disappointing numbers on housing; Pending Home Sales were negative for the second consecutive month and -3.3% yoy. Despite these numbers, the S&P,DJI and NSDQ set new highs last week. Foreign Developed Markets continued their string of good economic news and their equity markets continued to move higher.... (click here)

May 2017

RPg Tactical Commentary:Economic data in the US was a focal point in May as a number of data points overshadowed political uncertainty in the US. The Philly Fed survey registered its second highest reading ever with a 38.8 reading in May, while a strong payrolls report erased concerns about the jobs market coming out of April. Steady growth and a patient Fed represent a Goldilocks environment for US equites and have “trumped” political uncertainty in the US and around the globe... (click here)

TAG Tactical Commentary:The month was bounced around from mixed US economic news. While there was good news suggesting a strong April rebound, Manufacturing and Capital Expenditures indicators slowed later in the month. Employment disappointed with only 138,000 new jobs yet, Personal Income & Spending were solid. Housing data is a bit weak in light of still steady job growth which is raising some concern as to its contribution to the economy for the remainder of the year. However, the key undercurrent was an increasing concern over the likelihood of the Trump fiscal proposals actually becoming law. This culminated with a one day sell-off in the DJI of -373 points from the speculation about “impeachment” put out in the media. Concerns over the domestic agenda hit Small Cap Stocks particularly hard as they were negative for the month. Likewise, Growth outperformed Value... (click here)

April 2017

RPg Tactical Commentary: Europe was a major focus in April as the first round of French Presidential Elections favored political upstart Emmanuel Macron. Macron supports expanded free trade, a lower corporate tax rate, a lower payroll tax rate, limits on France’s wealth tax, and more labor deregulation. The early indications of the French election was validation of the French people voting for a shift from France’s historically left-leaning policies, was supportive of the Euro, and was one of the reasons volatility fell to a multi-year low in April.... (click here)

TAG Tactical Commentary: A lot of focus was on the incredibly weak Q1 ’17 GDP of 0.07% annual growth rate which was announced on Friday. This was not enough to undo the rally that started with the Monday, April 24th 250 point gain following good news on the French election over the weekend. Also, Manufacturing data for April suggested a strong start to Q2 economic activity; this was supported by generally favorable Housing data. The Eurozone produced solid data as did Japan and Emerging Markets. As a result, Foreign Developed and Emerging Market Equities outperformed the S&P500. Within the US, Growth outperformed Value which reflects continuing concerns over sustainability of economic growth without the stimulus of Trump’s proposed fiscal policies.... (click here)

March 2017

RPg Tactical Commentary: Despite benign results for US stocks and bonds in the month of March, performance of the S&P 500 in 1Q 2017 notched its best risk-adjusted return (return/realized volatility) since 2013. Despite the march higher in risk assets, many popular “Trump trades” tired suggesting the possibility of waning investor policy optimism. We had more record highs, more growth, and more uncertainty making the theme of March – “More Everything”. Clearly the US equity market has priced in the reflation trade, but while there may not be an obvious reason for the start of a bear market, there are plenty of risks out there, including protectionism, exchange rates, high levels of corporate and consumer debt and policy uncertainty which helped spur the current momentum in risk assets. If the new tax policy, the expected infrastructure spending and some relaxation of the regulatory environment are delayed, volatility may be reintroduced to the menu... (click here)

TAG Tactical Commentary: Buy on the expectation; sell on the reality has been the story of financial market gyrations during March. It began with a final rally blow off March 1st following bullish sentiment after President Trump’s address to Congress near the end of February. Then the S&P 500 drifted lower in anticipation of a Fed rate hike along with deepening political partisan battles. After a slight post-hike rebound, the S&P 500 was hit hard following the failure of the Obama Care repeal bill which was the first hard evidence of risk to the Trump fiscal stimulus agenda. The month ended with renewed optimism following Trump’s meetings with corporate executives and Paul Ryan stating they continue to work on a solution for health care. But, at the end of the day, March reflected doubts on Trump’s initiatives coupled with the risk of further Fed rate hikes... (click here)

February 2017

RPg Tactical Commentary: Animal spirits. That’s how many market pundits are explaining or rationalizing the momentum in risk assets in the face of what most agree to be pretty fairly valued stocks. February saw a continuation of the momentum created by what has been referred to as the Trump trade. As a data dependent asset management firm, it’s hard for us to understand animal spirits and what that means, but we can, and do look at data we know to be true to help us think in the abstract about what the future might hold. Before a single component of the new administration’s policies is in place, and in the face of rising interest rates, the equity market has been extremely resilient. Some may call it animal spirits… we look at tangible things like growth, rates and other hard data like inflation which help drive outputs within our model and to help us draw conclusions to talk about around the water bubbler... (click here)

TAG Tactical Commentary: Consumer Confidence and other sentiment indicators such as the Regional Fed Reports continued to show strong optimism over the prospects for the future US economy. Follow through showed up in a strong Retail Sales report and key Manufacturing and Service Economy indicators. While leading industrial and capital expenditures indicators remain negative, they appear to be on the cusp of an upturn. Housing remains mixed and is not the major driver of the economy that it once was. However, there is a warning sign on the horizon; despite record lows in Weekly Jobless Claims, delinquencies are rising on auto loans, motorcycles loans, and credit cards while overall Consumer Debt is back to the record highs in ’07... (click here)

January 2017

RPg Tactical Commentary: January saw a continuation of the momentum created by the election, however sectors that were the focus of potential policy shifts out of the Trump administration that dominated post-election did not materially contribute to the positive performance of January. Specifically, Financials and Industrials, which were seen as sectors that would benefit from policy shifts like less regulation (Financials) and infrastructure spending (Industrials) were two of the laggards in January. The greatest contributors to performance were the more cyclical sectors like Materials, Technology and Consumer Discretionary. While this supports the cyclical bias of our U.S. equity exposure, we believe our models are suggesting that over a longer period of time Financials and Industrials will re-join the cyclical rally... (click here)

TAG Tactical Commentary: January was a sobering up from the highs of the Holidays and Trump post-election rally. In the US, growth stocks far outperformed value as there was a pullback in extended expectations for cyclically sensitive stocks. Economic news showed continued weakness in “capital expenditures” and “manufacturing” while “housing” remained uneven. “Retail Sales” weakness during the holidays raised new concerns about the consumer. Overseas equity markets also outperformed; attractive valuations and continued Central Bank stimulus were drivers for the Eurozone and Japan; a weakening dollar and signs of China stabilization led to even stronger performance in Emerging Markets... (click here)

2/10/2017

December TAG Tactical Commentary:December continued the post-election Trump rally. U.S. cyclical sectors outperformed growth sectors such as healthcare and technology. While U.S. economic news was generally positive, current economic news will take a back seat to expectations and excitement about Trump’s fiscal stimulus plans. A laggard since the Brexit vote, Foreign Developed Stocks were solid outperformers in the month. Performance was supported by continued solid economic news. The Euro, Pound and Yen have declined against the dollar, giving those exporters an advantage; also, since these countries are not proposing trade tariffs, their exporters would not be subject to retaliatory tariffs like U.S. multinationals. Perhaps investors are beginning to recognize this added earnings potential... (click here)

1/12/2017

December RPg Tactical Commentary:Donald Trump is inheriting one of the strongest economies that has been handed to a new President in recent history (based on 3Q GDP and December economic data in manufacturing, jobs and the consumer). Since the 1970’s, only George H.W. Bush and Jimmy Carter assumed the office with higher GDP growth rates. As well, investors have been cheered by Trump’s anticipated business-friendly ambitions on taxes, trade and regulations and have driven stocks to record highs. The S&P 500 Index gained 1.97% for the month of December and 12% for the year. The bond market did not fare as well, especially post-election.... (click here)

12/09/2016

November TAG Tactical Commentary:US economic data continued its mixed economic news pattern. Leading economic indicators in manufacturing, industrial production, and construction remain weak; coincidence indicators in jobs and retail sales remain strong. Housing, a previous sector of strength, has shown uneven results; and, despite seven years and $4 trillion of Fed-printed money (quantitative easing, or “QE”), there remain few signs of inflation... (click here)

12/07/2016

November RPg Tactical Commentary: American writer Mark Twain wrote, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Much to the surprise of most of the investment community, Donald J. Trump will take the oath of office to become the 45th President of the United States. As well, the GOP’s wave of winning the House of Representatives and Senate was a surprise to most. More surprising to the investment team at RPg Asset Management was how fast the investment community came out to communicate the news and get it wrong once again!... (click here)

11/21/2016

October RPg Tactical Commentary:Donald Trump is bad for the stock market and Hillary Clinton is good for the stock market. October’s market influences would lead an investor to believe that is what the market believed. We’re referring to the news that the FBI was taking a second look at Hillary Clinton’s emails, apparently due to messages uncovered in its investigation of Anthony Weiner. In the two hours after the FBI news hit, the S&P 500 dropped a grand total of 1%, finishing the day down just 0.3% compared to its close on Thursday October 27th... (click here)

11/21/2016

October TAG Tactical Commentary: October lived up to its reputation as a difficult time for financial markets with both domestic and all foreign equity markets negative and US and foreign bonds negative. Economic data globally was benign with China showing some stabilization and the US third quarter economics showing some improvement from earlier this year... (click here)

10/25/2016

September TAG Tactical Commentary: September witnessed a see-saw battle between solid US economic data – hence, a more likely Fed rate hike – and weak US economic data – hence, a less likely Fed rate hike. The result was flattish returns in both stocks (S&P 500 -0.12%) and bonds (Barclays US Aggregate Bonds -0.13%). This repeated the action seen in August (S&P 500 -0.12%, Barclays US Aggregate Bonds -0.40%)... (click here)

10/11/2016

September RPg Tactical Commentary: Despite a rally following the FOMC’s vote to leave interest rates unchanged in September, US equities ended the month mixed with the S&P 500 flat and the DJIA index with a moderate decline. Energy, Technology and Utilities were the only three sectors to post gains in September... (click here)

8/26/2016

July TAG Tactical Commentary: The S&P 500 rallied based upon a strong June Employment Report showing 287,000 new jobs, thus relieving the fears from May's very poor report of only 38,000 new jobs (plus -59,000 jobs revision downward for prior two months)... (click here)

8/26/2016

July RPg Tactical Commentary: In July, global equity markets dismissed worries related to the surprising results of June's Brexit referendum, and U.S. equities posted healthy gains. The S&P 500® increased over 3% on a total return basis. Not surprisingly, volatility declined substantially. (click here)

7/19/2016

Monthly RPg Tactical Commentary:Although markets around the world reeled from the unexpected results of the June 23rd “Brexit” referendum, U.S. equity markets posted another positive month as the S&P 500 ended June up 0.26% on a total return basis. (click here)

6/07/2016

Monthly RPg Tactical Commentary:U.S. equity markets posted another positive month as the S&P 500 ended May up 1.79% on a total return basis despite growing expectations that the Fed will raise interest rates sooner than previously anticipated. (click here)

5/10/2016

Monthly RPg Tactical Commentary:U.S. equity markets were up slightly in April following strong performance in March as the S&P 500 ended the month up marginally. Energy was the strongest sector on the heels of increasing oil prices, while the Technology sector struggled from lackluster earnings and entered negative territory year to date. (click here)

4/08/2016

Monthly RPg Tactical Commentary:Following some early struggles, US equities rebounded in March to end the first quarter in positive territory. The S&P 500 closed the month of March at a YTD high, and is only around 3% below its all-time high set last May. (click here)

3/10/2016

Monthly RPg Tactical Commentary: Following a selloff in the first half of the month, U.S equity markets staged a rally that mostly offset previous losses, ending February in slightly negative territory. This market recovery coincided with the release of January retail sales showing that the US consumer is still spending. (click here)

2/2/2016

Monthly RPg Tactical Commentary: Even with the Bank of Japan introducing negative interest rates the last day of January, the swift correction in asset prices year to date has investors focused on the potential for a recession in 2016. (click here)

1/7/2016

Monthly RPg Tactical Commentary: The S&P 500 traded lower in December continuing the whipsaw trend of 2015. The mystery surrounding the Fed has finally been resolved, at least until the next meeting in 2016. But even with liftoff in the rearview mirror, US equities continue to struggle with a familiar litany of issues: lack of organic earnings growth, mixed economic data and deteriorating conditions in the credit markets. In addition, market breadth continues to diminish. (click here)

12/17/2015

Monthly RPg Tactical Commentary:The S&P 500 traded slightly higher in November with significant dispersion at the sector level coming off of the strongest month since 2011. The US looks to be a little better than the rest of the world, and most agree that the Fed will look to tighten by increasing the Federal Funds rate at the December 15-16 meeting. Economic data has become more of a focus as the December 2015 interest rate decision approaches. (click here)

11/19/2015

Monthly RPg Tactical Commentary:Leading the way for October were previously beaten-down sectors such as Energy and Materials. Economic data is expected become more important next month as the data dependent Fed is seen as focusing in on the current trends for its December 2015 interest rate decision. As a data dependent firm who is also seeking trends, a September/October combination of risk off/risk on makes for a difficult environment. (click here)

10/9/2015

Monthly RPg Tactical Commentary: September’s market dynamics echoed August’s: China, US interest rates and energy prices dominated the news flow as volatility escalated globally. High correlations persisted in Europe and EM and other international developed markets. The frustrating market environment for momentum based strategies continues given choppy sector performance, but we’re not alone in our frustration. (click here)

9/17/2015

Expanded Monthly Commentary RPg Tactical Global Balanced: Given the escalation and sustained levels of volatility in the markets that begun mid-August, RPg Asset Management wanted to outline the shifts made in our strategies beyond our normal monthly update to help provide what we believe is valuable insight into our tactical methodology. (click here)

9/17/2015

Expanded Monthly Commentary RPg Tactical US Equity: Given the escalation and sustained levels of volatility in the markets that begun mid-August, RPg Asset Management wanted to outline the shifts made in our strategies beyond our normal monthly update to help provide what we believe is valuable insight into our tactical methodology. (click here)