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The "Our Blog" section of this site is a historical catalogue of our personally written weekly client emails. Clients might find this database to be a useful reference, while visitors and potential clients might like to review the consistency and depth of our general messaging. Weekly updates from December 2018 forward to present day are currently available. Older vintages will be added as we're able.
Europe is approximately 2 to 4 weeks ahead of the U.S. in its own resurgent wave of Covid-19. While current U.S. economic data remains robust, European PMI data has re-entered contractionary territory. Also, thoughts on the upcoming U.S. election.
With new daily highs being reported in many regions of the developed world. Since the weather is only now taking a true turn for the worse, this does not bode well for the weeks and months ahead.
… with the takeaway message being that portfolios maintain a near-neutral equity weighting.
2020 has been a year of drama. This foreseeable "bombshell" development just adds to the mix. But how this plays out is very uncertain with a number of legitimate scenarios possible.
Scholte Wealth Management uses technical analysis as a supporting consideration when making equity allocation decisions. While not the primary determinant, its utility is especially important when key portfolio adjustments loom. Now is such a time.
The recent decline in U.S. cases appears to have ended. The country enters autumn with a worryingly high level of community spread. Also, the 1/2 position of Apple sold owing to frothy speculation on August 20th has now been bought back.
But any overweight commitments must await clarity on covid transmission rates in light of back to school and cooler autumn temperatures. Such clarity is unlikely before October, or possibly November.
Clients will know that despite being great companies, I felt that the share prices of these tech giants were expensive. This motivated me to take profit on half of client positioning in Apple two weeks ago. Yet economic data improves...
By targeting "average inflation", the Fed signals that rates will remain low for an extended period; meanwhile, the "7-day delta" might be signaling an imminent move higher in U.S. covid cases - probably the result of U.S. college re-openings.
... and worrisome. For example, today alone, Apple added the equivalent valuation of the entire Royal Bank of Canada ( the 23rd biggest bank in the world by the way). It's a great company and deserved market leader - but prudence must be exercised.