Weekly Update

Weekly Update

for Week Ending December 11th, 2020
WEEKLY MARKET SUMMARY

Global Equities: Another week of failed negotiations for a new round of fiscal relief has caused major US equity indices to pull back from all-time highs. Politics has remained front-and-center with COVID relief not the only sticking point, as Congress was only able to pass a one-week extension on a new funding agreement in order to avoid a government shutdown. The disfunction facilitated around a -1% pull-back for S&P 500, while similarly “across the pond”, the UK and the EU are dancing with the deadline of a hard Brexit – adding additional risks to global markets. International developed markets fared slightly better than their US counterpart, though were still in the red by -0.5% despite the announcement of additional stimulus efforts from the European Central Bank. Broad emerging markets side-stepped many risks felt in the developed world and outperformed by ending the week down around a quarter of a percent.

Fixed Income: The heightened anxiety felt in risk assets also manifested itself in US interest rates, which retreated from recent highs during the week. Additionally, the expanded quantitative easing in Europe perhaps foreshadows expanded measures back in the US, as the yield on the 10-Year US Treasury Note retreated below 0.9% after beginning the week close to 1.0%. This obviously benefitted Treasury bond prices and to a lesser-extent, investment grade corporate bonds. Broad high yield bond indices were slightly negative on the week, while Refinitiv Lipper reported relatively negligible inflows into high yield funds during the week ended 12/9 and $2.9 billion of inflows into investment grade.

Commodities: Measures of road travel and freight transportation indicated increased global demand for oil, boosting oil prices despite the soft week for risk assets. Global demand remains considerably below pre-pandemic levels, however, but the signs of improvement are welcome to remaining producers as supply experiences continued suppression from OPEC members. The West Texas Intermediate crude oil benchmark finished the week higher by 1.0%, ending near $46.65 per barrel, while the International Brent Crude benchmark performed similarly while climbing above $50 per barrel. Gold prices were choppy in weekly trading, with the front contract changing only slightly from $1,840 per ounce.

WEEKLY ECONOMIC SUMMARY

Initial Jobless Jump: Initial Jobless Claims spiked back above 800k, to 853k, during the week ended 12/5 according to the US Department of Labor. This, the highest reading since mid-September, was significantly higher than the 730k that had been expected and the upwardly-revised 716k from the prior week. Continuing claims also increased for the first time since August as several locations begin renewed restrictions on economic activity to try and alleviate strains on hospital capacity which also normally tend to rise in winter months. Expanded federal unemployment benefits are set to expire near year-end and exacerbate the so-called K-shaped recovery, which describes the disparity amongst Americans who are most and least affected by the pandemic.

Consumer Sentiment High: The US Producer Price Index (PPI) was in line with consensus estimates in November, rising 0.1% for the month and 0.8% from the same period one year ago. The nationwide rise in COVID19 cases and subsequent restrictions is believed to have kept a lid on prices during the month, restraining labor productivity and business demand for services. The prices of goods were responsible for the modest climb in headline PPI, as the segment rose by 0.4% compared to the no change in the measure for services.

Producer Prices Subdued: Census Bureau estimates for construction spending increased by 1.3% in October versus September, and a full 3.7% higher than a year ago. Both, public and private construction were on the rise by roughly the same amount, with the latter making up ¾ of the total estimated $1.094 trillion during the period. The growth is reassuring considering the pandemic, however, continued growth in the residential sector is needed for the market with tight supply. Potential home buyers are still out in force, according to the Mortgage Bankers’ Association, who reported 9% week-on-week growth in purchase mortgage applications.

CHART OF THE WEEK

The Chart of the Week is a 6-month chart of the iShares 20+ Year Treasury Bond ETF (TLT), which represents performance of long-term Treasury bonds and moves inversely of long-term interest rates. TLT has risen back to, and may again experience resistance at, its 50-day moving average (blue line) if interest rates resume their trend since early-August. We currently have no tactical exposure to TLT, though remain appropriately invested in long-term Treasuries within buy-and-hold strategic portions of Hanlon All-Weather Models.

Chart data provided by stockcharts.com. Commentary and opinions are those of Hanlon Investment Management.




HANLON MANAGED ACCOUNT PLATFORM

The Hanlon Managed Account Platform offers access to Hanlon proprietary models along with models from some of the best asset managers available in a unified managed account program. We provide you with all the tools you need to be successful and deliver a world-class client experience.

Features of the Hanlon Managed Account Platform

  • Intuitive, easy to use Advisor Workstation
  • Model Manager Marketplace with 100 model solutions consisting of Strategic, Dynamic, and Tactical models
  • New Account and Service Account ease
  • Advisor Fee flexibility
  • Billing calculation, collection, and advisor pay
  • Complete Unified Managed Account with unlimited flexibility
  • Proposal generation
  • Keep Non-managed assets in the account, not included in account risk profile
  • Keep Non-model assets in the account, included in account risk profile
  • Designate Reserved Cash in the account
  • Periodic Cash Contributions and Distributions Management
  • Performance and other Reporting
  • Client Portal
HANLON MODEL MANAGER MARKETPLACE

Hanlon’s proprietary screening process which includes longevity, performance and an extensive due diligence process has led us to some of the finest asset managers in the world, shown below.

BlackRock Logo
Dorsey Wright Logo
Hanlon Logo

NorthernTrust
Russell Investment Logo
Wilshire Logo

The information contained herein should not be construed as personalized investment advice and are not intended as buy or sell recommendations of any securities. Past performance is not a guarantee of future results. There is no guarantee that the views and opinions expressed in this Quarterly Report will come to pass. Investing in the equity and fixed income markets involves the risk of gains and losses. An investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses, or sales charges. The use of a Financial Advisor does not eliminate risks associated with investing. Consider the investment objectives, risks, charges, and expenses carefully before investing. Information presented herein is subject to change without notice. Hanlon has experienced periods of underperformance in the past and may also in the future. Hanlon is an SEC registered investment adviser with its principal place of business in the State of New Jersey. Being a registered investment advisor does not imply any level of skill or training. Hanlon is in compliance with the current federal and state registration requirements imposed upon registered investment advisers. Hanlon may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. This Quarterly Report is limited to the dissemination of general information pertaining to its investment advisory services and is not suitable for everyone. Any subsequent, direct communication by Hanlon with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For additional information about Hanlon, including fees, services, and registration status, send for our disclosure document as set forth on Form ADV using the “disclosures & privacy” link at www.hanlon.com or visit www.adviserinfo.sec.gov. Please read the disclosure statement carefully before you invest or send money.


Request A Demo


    First Name (Required)

    Last Name (Required)

    Email (Required)

    Phone (Required)

    Firm Name (Required)

    Job Title (Required)

    State (Required)

    How did you hear about us?



    What is a good time to get in touch with you?



    What Would You Like To Learn About?


    [honeypot c_accnum2 move-inline-css:true]

    Contact our Sales Team at (609) 601-1200 or Sales@Hanlon.com