INSIGHTS FROM FIRST FOUNDATION

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The Week Ahead – Still Thankful

Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

What a difference 365 days makes. Last year we gave thanks to the broad markets as both equities and fixed income prices soared. This year has been a much bleaker harvest. Let’s take a look at the numbers.

2017: returns through November 15, 2017
S&P 500:                +16.58%
MSCI ACWI ex-US:        +22.63%
Barclays Aggregate:     +3.26%

2017: data points through November 15, 2017
U.S. GDP 1Q17:           1.8%
U.S. GDP 2Q17:          3.0%
U.S. GDP 3Q17:          2.8%
Unemployment Rate:       4.1%
10-year U.S. Treasury:  2.33%
2-year U.S. Treasury:    1.68%

2018: returns through November 15, 2018
S&P 500:                +3.87%
MSCI ACWI ex-US:        -10.16%
Barclays Aggregate:     -2.23%

2018: data points through November 15, 2018
U.S. GDP 1Q18:           2.2%
U.S. GDP 2Q18:          4.2%
U.S. GDP 3Q18:          3.5%
Unemployment Rate:       3.7%
10-year U.S. Treasury:  3.11%
2-year U.S. Treasury:    2.86% 

As my colleague Lou Abel noted in his piece "Naked and Afraid", a slew of risks have left investors feeling vulnerable: interest rates, global trade wars, and China. Sifting through the data from even just a year ago shows that the U.S. economy is in much better shape than it was in 2017. The market is a pricing mechanism pricing in future expectations, and it definitely feels like 2017 pulled forward 2018 returns. The turkey may be smaller this year than last year, but there are still many things to be thankful for: continued economic growth, low inflation, and robust employment.

The week ahead will be quiet with updates on the housing market and leading indicators as the main highlights. Wishing you and yours a wonderful Thanksgiving!

Data deck for November 17 – November 23:

Date

Indicator

Period

November 19

NAHB Housing Market Index

November

November 20

Housing Starts

October

November 20

Building Permits

October

November 21

Initial Jobless Claims

----

November 21

Durable Goods Orders (preliminary)

October

November 21

University of Michigan Consumer Sentiment

November

November 21

Leading Indicators

October

November 21

Existing Home Sales

October

 

IMPORTANT DISCLOSURE INFORMATION    

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by First Foundation Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from First Foundation Advisors. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. First Foundation Advisors is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the First Foundation Advisors’ current written disclosure statement discussing our advisory services and fees is available for review upon request. Please Note: First Foundation Advisors does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to First Foundation Advisors’ web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Andrew Chan, CAIA, Portfolio Strategist
About the Author
Andrew Chan, CAIA, Portfolio Strategist
Mr. Chan serves on the investment team and is responsible for conducting investment manager research and portfolio construction. As a member of the investment committee, he provides market commentary and investment insights. Mr. Chan’s responsibilities include overseeing client portfolios, calculating risk metrics, conducting the rebalancing of client portfolios, and evaluating the selection of new investment managers. With over 10 years of wealth management experience, Mr. Chan has played key roles across various aspects of investment and wealth management. Prior to joining First Foundation Advisors, Mr. Chan was most recently a portfolio manager at U.S. Trust where, in addition to his daily responsibilities, he served on numerous internal committees including the investment manager committee, the portfolio model committee, and the strategic technology committee. He also served on the in-house strategic consultant committee reporting directly to the President of U.S. Trust. Mr. Chan is a graduate of the Wharton School Executive Program on Investment Management and holds a Bachelor of Arts degree in Business Administration from the University of California, Riverside. He is a Chartered Alternative Investment Analyst (CAIA). Mr. Chan serves on the executive board for CAIA Los Angeles and is the Interim President for the association. Read more
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