Clear Harbor Asset Management - New York, NY

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2016 Clear Harbor Quarterly Market Outlook

Clear Harbor's Outlook for 2017

December 23, 2016

As we peered ahead one year ago, our general view was that:

  • earnings would underperform relative to Bloomberg consensus analyst estimates;
  • the Federal Reserve would remain more dovish than even its own board anticipated, ultimately delivering just one rate hike (rather than the three they had predicted);
  • global growth would prove lackluster; and
  • structural impediments to growth would continue to weigh on investor sentiment, consumer confidence and returns across major asset classes.

While these core views were validated, the presidential election in the U.S. forced a marked shift in investor sentiment, sending equity prices significantly higher into year-end. To put this in context, the S&P 500 gained 6.6% in the 11 months leading up to Election Day—then rallied another 6% in the weeks following Donald Trump’s surprise victory.


Clear Harbor Outlook: Q4 2016

October 3, 2016

The sun has set on another quarter devoid of a Federal Reserve rate increase, helping both U.S. equities and fixed income product remain well bid. The S&P 500 rose 3.8% in the period ended Sept. 30, while the primary domestic bond benchmark, the Barclays Aggregate Bond Index, gained 0.38%.

The United Kingdom’s decision to depart the European Union rattled markets earlier in the quarter, and on the day of this historic vote we mourned that such a strong American ally would abdicate an important diplomatic and economic alliance. But we also articulated that their economy and the world growth rate would not shutter as a result. Market participants have since adopted this view.


Clear Harbor Outlook: Q3 2016

June 30, 2016

As I wrote last week, the U.K. vote to leave the European Union (“Brexit”) took complacent investors by storm. It shook global equities: even U.S. stocks stalled their run toward the high water mark struck in May 2015, while a flight to safety boosted sovereign and investment-grade bond prices. Currency volatility was pronounced both before and after the historic event, as pound sterling plunged and the euro edged lower; the dollar and yen rose.


Clear Harbor Outlook: Q2 2016- Still Pushing on a String

March 29, 2016

As we’ve seen before, flat headline results from some benchmark indexes for the first quarter through March 29th mask significant day-to-day volatility, concerns about the underpinnings of economic growth, and the creeping limits of monetary stimulus. Indeed, years after the “Big Bang” events of March 2009, a combination of low, zero, and now even negative interest rates remain the primary nudge to risk-taking—in effect, pushing on a string in hopes of stirring global growth.

As we indicated in our 2016 Outlook, monetary policy alone is hardly cause to expect the market gains of recent years to continue in the face of widespread structural headwinds to earnings growth. With that said, opportunities exist, and we remain committed to exploiting them on behalf of our clients while keeping a steady focus on risk management, asset allocation, and the attainment of carefully defined financial objectives.


Clear Harbor's Outlook for 2016

December 23, 2015

Slow global growth will likely remain a theme next year even as the U.S. economy continues to advance. The strong dollar, low oil prices (see below), and considerable slack in employment markets, capacity and demand are all set to weigh on developed and emerging economies alike.

Beyond these cyclical factors, 2016 may be the year when investors come to grips with structural challenges to economic growth. These challenges include declines in population growth in general, and the cohort of working-age people in particular; waning productivity; and persistent high levels of debt.