While companies strive to meet market expectations, it’s often the unexpected changes in markets that can create opportunities for active managers.
Despite the recovering economy, capital spending by U.S. businesses has yet to pick up in a meaningful way. Businesses still have record amounts of cash on their balance sheets, but rather than investing for future growth, many are choosing to return cash to shareholders, either in the form of dividends or stock buybacks. And investors
Financials and consumer discretionary stocks performed well in the risk-on environment of the third quarter. Also among cyclical stocks, we saw basic materials advance in the quarter. I believe this is due in large part to economic stimulus from the Federal Reserve, which announced a third round of quantitative easing that was well received by
We are getting more signs that there may be earnings disappointments on the horizon, but I believe investors are prepared for this. In fact, expectations were low coming into the third quarter, but I believe the market acknowledged that even if earnings were weak, valuations still weren’t stretched. Also worth noting is the fact that