February 2016 Market Commentary

Market Overview

Economic data has improved, especially in the jobs market

The year will likely continue to frustrate both the bulls and the bears

Reductions in oil production should help put a floor in oil price and help stabilize the world economy

Corporate weakness remains concentrated in energy companies. The issues plaguing them have NOT been spilling over into the broader economy (we see improvements in consumer spending, broader credit growth and the jobs picture)

Near term fiscal stimulus/tax reform is unlikely


Equity Analysis

We’ve seen a rally in cyclical stocks, suggesting improvement in the global economy

Equities saw an 8% rise in S&P500 from Feb 11 lows!*

Disparity between Market Capitalization continues. February was positive for Mid-caps, while both Large and Small caps underperformed, relatively. Disparity between Value and Growth still exists, but with almost negligible differences


Fixed Income Analysis

Both high quality (Investment Grade) and low quality (high yield) debt performed well on the month

Higher performance among Investment Grade as investment professionals were still desirous of safety.

*(Bloomberg: Feb 11 S&P low 1810.1; Feb 29 S&P 1958.27)