Yesterday CVS provided its initial 2018 guidance, which came as a surprise as the management team had previously announced that its guidance would be provided along 4Q17 earnings call. We believe this move is to reassure the investment community on its business growing in line with their expectations (ex-acquisition). Clarity on growth is driving a relief rally in the stock this morning. Continue reading “CVS 2018 Initial Guidance”
Month: January 2018
JP Morgan Guide to the Markets
Good Morning,
Attached is the most recent Guide to the Markets provided by JP Morgan.
2017 Tax Cuts and Jobs Act
Good Afternoon,
Attached is another summary perspective on tax reform put together by Fidelity. This piece addresses the positive short and long term implications of the tax reform and discusses how the multiplier effect changes the magnitude of increases to U.S. GDP growth.
Thank You,
Pete
A Look at the Low Volatility Environment
Market volatility is the rate at which prices increase or decrease over a certain period of time. One way to measure the implied volatility of the S&P 500 is the VIX.
The VIX is a volatility index comprised of options, with the price of each option reflecting the market’s expectation of future volatility. Increased put prices will indicate an expectation for greater volatility. It is important to note that the VIX measures 30-day implied volatility so this is not a tool used to predict long term market movements. Below is a link that breaks down the equation used to measure the VIX:
https://www.cboe.com/micro/vix/vixwhite.pdf
In this piece, the goal is to get a perspective on the low volatility levels experienced in 2017 and set expectations for what may occur as volatility begins to tick upward. While we are not predicting a major market correction in 2018, we want clients to be aware that it makes sense to expect increased volatility. In turn, we want to emphasize that maintaining a diversified portfolio provides downward protection during periods of equity selloff.