Week Two of Economic Improvement: Market Commentary from Cabana’s CEO – October 28, 2019

7 months ago

  • Share this:

Last week, we noted overall improvement in underlying economic conditions. That trend has continued.

Earnings here in the U.S. have been better than expected, with a number of upside sales surprises. This data suggests that the ongoing trade dispute with China is having a muted impact on companies’ ability to make money. The 10-year Treasury yield continues to rise in response to improving growth prospects, and the yield curve is steepening. Today, the S&P 500 broke out to an all-time high – this is a big positive going forward. We are currently seeing a rotation into risk assets and out of safe havens. Technology, energy, financials, basic materials and industrials are beginning to outperform. Utilities, gold, real estate and bonds are falling back. These defensive sectors have been leaders for months and it is nice to see some rotation into growth assets. I mentioned last Monday that we should watch for new highs in our equity markets, coupled with strength in energy, commodities and transportation. As soon as we wished for it, we got it. Last week saw big moves in all three of those areas. Finally, it is notable that after more than two years of weakness, foreign equity markets are starting to pick up. Developed markets like Germany and Japan are improving and China looks like it may be as well. As a result, the all world index ACWX (that does not include the U.S.) is nearing a new high. I have belabored this point for more than two years, but it is worth saying again – the U.S. economy benefits when it has strong partners abroad.

A PDF of this week’s commentary is available at the following link:


This material is prepared by Cabana, LLC(d/b/a “Cabana Asset Management” & “Cabana Retirement Solutions”) and/or its affiliates (together “Cabana”) for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed reflect the judgement of the author, are as of the date of its publication and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Cabana to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Cabana, its officers, employees or agents.

This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy. All investment strategies have the potential for profit or loss. All strategies have different degrees of risk. There is no guarantee that any specific investment or strategy will be suitable or profitable for a particular client. The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. Investment involves risk including possible loss of principal.

Cabana LLC, dba Cabana Asset Management (“Cabana”), is an SEC registered investment adviser with offices in Arkansas, Texas and Colorado. Cabana only transacts business in states where it is properly registered or is exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. Additional information regarding Cabana, including its fees, can be found in Cabana’s Form ADV, Part 2. A copy of which is available upon request or online at https://www.adviserinfo.sec.gov/.

Financial Advisor magazine is a monthly financial services publication that delivers market information, strategies and trends to help advisors better serve their clients. Registered Investment Advisers founded in 2015 or before with minimum AUM of $300 million were ranked based on number of clients in 2018, percentage growth in total percentage assets under management from year end 2017 to 2018, and growth in percentage growth in assets per client during the same time period. The Financial Advisor Magazine 2019 Top 50 Fastest-Growing Firms ranking is not indicative of Cabana’s future performance and may not be representative of actual client experiences. Cabana did not pay a fee to participate in the ranking and survey and is not affiliated with Financial Advisor Magazine. Working with a highly-rated advisor also does not ensure that a client or prospective client will experience a higher level of performance. These ratings should not be viewed as an endorsement of the advisor by any client and do not represent any specific client’s evaluation. Visit www.fa-mag.com or https://thecabanagroup.com/disclaimers/ for more information regarding the ranking.