The Family Firm Blog

Audio from our February 28, 2018 Investment Conference Call

Posted by Nate Gendelman on 3/2/18 11:25 AM

 

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Trade Deficit Increased in 2017

Posted by Nate Gendelman on 1/24/18 3:41 PM

The trade deficit rose quite significantly during the first year of the Trump administration. This despite the campaign's focus on this issue (regardless of its true economic importance).

Recently we have seen signs that the administration is turning its focus to this issue on several fronts.

Today's news is that there will be more of a concerted effort to talk the value of the dollar down. (thus making exports cheaper and imports more expensive).

The dollar which had already been fairly weak over the past six months had another sizable drop today to the lowest levels since early 2015.

Of course as we've seen over these past months, equity investors don't mind this at all. And not just US stocks. For instance emerging market stocks rose today for the 9th straight day.

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4th Quarter of 2017 in Review

Posted by Nate Gendelman on 1/16/18 6:01 PM

Stock markets continued their remarkable rise during the fourth quarter. Stocks rose every month, and, in fact, have risen for 14 straight months through year-end. Volatility remains eerily low. Virtually every sector and geographic region had positive results. Bonds gained value in December and ended the period with a small positive return. The global economic recovery gained strength and the Fed raised short-term rates again. A large corporate tax cut was signed in late December, and this provided further impetus to the stock market rally.

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Global Economic Growth

Posted by Stephen Daly on 1/11/18 1:05 PM

For the first time since the onset of the Great Recession, all 45 countries tracked by the Organization for Economic Co-operation and Development (OECD) showed positive annual GDP growth in 2017. 

This synchronized global growth is certainly good news for the global economy but will it be good for equity returns?  Economic growth doesn't always result in good stock market returns, but over longer periods of time the two are positively correlated. 

You can read more about the OECD's report by clicking here.

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US Factory Growth Highest Since 2015

Posted by Stephen Daly on 1/4/18 2:50 PM

The output of US manufacturers increased at a substantial pace in December of 2017 with growth reaching an 11 month high.

Manufacturers attributed the increased demand to both new and existing domestic customoers with realtively flat demand on export sales.

US based manufactures also noted that the cost of their inputs had increased and that they had been adding to their firm's payrolls.

It is still to early to see if this is part of a longer term trend and if the increased cost of inputs and additional staff finally lead to a pick up in the overall llevel of inflation.
  

 

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German Manufacturing

Posted by Nate Gendelman on 12/6/17 2:37 PM

Germany still remains the key to European economic progress. Manufacturing in that nation continues to impress. A measure of manufacturing strength is at heights last seen over 6 years ago.

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The Family Firm Co-Sponsors Taste of Bethesda

Posted by Stephen Daly on 10/17/17 12:38 PM

The Family Firm co-sponsored the 2017 Taste of Bethesda festival which drew over 30,000 attendees to Woodmont Triangle in Bethesda.

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Small Increase in Social Security Cola for 2018

Posted by Nate Gendelman on 10/14/17 4:36 PM

The 1 in 5 Americans receiving benefits from Social Security will see a 2% boost in their payments next year.

Whether this is viewed as good news or bad is a matter of perspective and playing with numbers. Viewed as glass half full: 2% is better than the miniscule increase for 2017, which in itself was better than the 0% raise for 2016.

Glass half empty: 2% is far below historical levels and is reflective of the lack of inflation in the overall economy. For instance, the average increase in the 80s and 90s was over 4%.

Anyone tempted to pop the cork on their Dom Perignon in celebration should also remember that, just as inflation has worked to increase the SS benefit, that same inflation will work to increase the Medicare Part B premium. Sigh

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Quality, Quantity and Performance of IPOs

Posted by Nate Gendelman on 10/13/17 4:34 PM

One way to measure the strength of the stock market is the vitality of Initial Public Offerings (IPOs). Quality, quantity, performance.

Quantity: although the 3rd quarter was a quiet one, 2017 overall has seen more action than 2016. Several big names such as Spotify and Dropbox may go public later this year, which would give the IPO market a lift.

Quality/Performance: the average IPO in the 3rd quarter of 2017 gained 36%. This was entirely due to strong results from biotechs.

Overall, the IPO market will never be like it was twenty years ago. The markets have changed and companies have other routes for funding than the heavily regulated public markets.

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Strong Industrial Production Across Europe

Posted by Nate Gendelman on 10/13/17 10:30 AM

Strong industrial production across Europe confirms the robust expansion taking hold across the region.

Particularly strong production results were recorded in Germany, Italy and Spain.

Should we be expecting more strength from the euro?

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