Blog

U.S. Stock Prices Advanced as Investors Responded to Another Round of Positive Vaccine Announcements

Market Data as of Week Ending 11/27/2020 unless noted otherwise.

EQUITIES
U.S. stock prices advanced as investors responded to another round of positive vaccine announcements and more hurdles have been cleared for the transition to a new administration in the White House. Small and medium sized company stocks generally outperformed large company peers, while growth stocks lagged value counterparts. Cyclical sectors delivered the strongest gains led by the energy, financials, and materials sectors. Real estate was the only sector to decline for the week, while other defensive sectors such as utilities, consumer staples, and health care also lagged the S&P 500 Index. Developed foreign stocks in Europe and Asia lagged U.S stocks for the first time in several weeks, while Emerging Market stocks underperformed developed foreign markets.

BONDS
U.S. Treasury yields were mixed this past week as shorter term yields declined and longer term yields rose. Despite the news in the prior week that emergency Federal Reserve lending programs will not be renewed, high yield corporate bonds were once again the top performing asset class and government bonds lagged. Investment grade corporate bonds are yielding more than 1.8% and high yield corporate bonds are yielding approximately 4.8%.

MACROECONOMIC DATA
Economic data released during the week was mixed and continues to be overshadowed by coronavirus news. Weekly initial unemployment claims unexpectedly rose again for the second consecutive week to 778,000 and approximately 6.1 million Americans continue to claim ongoing unemployment benefits. Other disappointing reports included a 0.7% decline in the monthly personal income figure and consumer sentiment fell to the lowest level since August. Housing data remains robust as there were nearly 1 million new home sales in October. Coronavirus restrictions remain in place for much of Europe as Germany extended their restrictions through December 20 and Portugal declared a state of emergency for 15 days. European business activity declined as the services sector has suffered from recent coronavirus restrictions.

DOWNLOAD SUMMARY

Data Released During the Week was Mixed and Largely Overshadowed by Coronavirus News

Market Data as of Week Ending 11/20/2020 unless noted otherwise.

EQUITIES
U.S. stock prices were mixed as investors responded to positive vaccine announcements and rising coronavirus cases. Improving company fundamentals are being overshadowed by concerns about the economic recovery. JPMorgan Chase & Co. analysts are forecasting a 1% contraction in economic activity next quarter as several states impose new restrictions. Small and medium sized company stocks generally outperformed large company peers, while growth stocks lagged value counterparts. Cyclical sectors delivered the strongest gains led by the energy, industrials, and materials sectors. Health care was the worst performing sector, followed by defensive sectors such as utilities and consumer staples, which also lagged the S&P 500 Index. Developed foreign stocks in Europe and Asia outperformed U.S stocks while Emerging Market stocks underperformed developed foreign markets.

BONDS
U.S. Treasury yields declined this past week after reaching their highest levels since March in the previous week. Treasury Secretary Steven Mnuchin announced that several emergency Federal Reserve lending programs will not be renewed when they expire at the end of the year. Within intermediate term bonds, high yield corporate bonds were once again the top performing asset class and longer duration bonds generally outperformed shorter duration bonds. Investment grade corporate bonds are yielding more than 1.8% and high yield corporate bonds are yielding nearly 5%.

MACROECONOMIC DATA
Economic data released during the week was mixed and largely overshadowed by coronavirus news. Weekly initial unemployment claims rose for the first time in more than a month to 742,000 and approximately 6.4 million Americans continue to claim ongoing unemployment benefits. Monthly data for retail sales and industrial production rose, but both reports indicated concerns going forward. Housing data remains robust as new housing starts rose 5% and existing home sales rose 4%. European leaders are considering whether to extend lockdowns and restrictions as coronavirus infection rates have declined.

DOWNLOAD SUMMARY

Major Economic Sectors were Positive with the Most Notable Gains in the Energy and Financial Sectors

Market Data as of Week Ending 11/13/2020 unless noted otherwise.

EQUITIES
U.S. stock prices advanced largely based on positive coronavirus vaccine news and better than expected earnings growth. According to FactSet, 84% of companies have reported beating earnings estimates for the third quarter. If the figure holds, it will tie last quarter as the highest percentage of S&P 500 companies reporting a positive earnings surprise since FactSet began tracking this metric in 2008. Small and medium sized company stocks generally outperformed large company peers, while growth stocks lagged value counterparts. Most major economic sectors were positive with the most notable gains in the energy and financial sectors. Growth oriented sectors such as information technology and health care lagged the S&P 500 Index. Developed foreign stocks in Europe and Asia outperformed U.S stocks while Emerging Market stocks underperformed developed foreign markets.

BONDS
U.S. Treasury yields rose this past week reaching their highest levels since March. High yield corporate bonds were once again the top performing asset class and shorter term bonds generally outperformed longer term bonds. Investment grade corporate bonds are yielding approximately 2% and high yield corporate bonds are yielding more than 5%.

MACROECONOMIC DATA
Economic data released during the week was mixed and largely overshadowed by political uncertainty and coronavirus news. Initial unemployment claims for the week were 709,000 and less than 7 million Americans continue to claim ongoing unemployment benefits. Sentiment data was less positive as the University of Michigan’s preliminary measure of consumer sentiment in November missed expectations and dropped to a three-month low. France, Portugal, and Germany have extended their partial lockdowns in an attempt to slow the spread of coronavirus. Japanese Prime Minister Yoshihide Suga asked his cabinet to provide a proposal for a third stimulus package as Japan attempts to support the economy through a resurgence in coronavirus infections.

DOWNLOAD SUMMARY

EdgeCo Holdings Announces Agreement with Goss Advisors

PITTSBURGH & NEW ORLEANS–(BUSINESS WIRE)– EdgeCo Holdings, L.P. (“EdgeCo”) announced today it has entered into a definitive agreement with GWM Advisors LLC (“Goss Advisors”). Goss Advisors, a leading New Orleans-based RIA supporting independent financial advisors nationwide, will join EdgeCo’s wealth division, which includes the wealth management operations of Mid Atlantic Capital Group, Inc. (“Mid Atlantic”). The transaction is expected to close prior to the end of the year, subject to customary closing conditions.

“We founded this organization to give successful advisors more time, margin, flexibility, and resources so they could grow their practices”

Goss Advisors, honored as a Financial Times Top 300 Financial Adviser four years running, provides a platform for independent advisors to thrive in their individual practices. The firm, founded by industry veterans Jerry Goss, Alex Goss and Neil Turner, serves over 100 independent advisors nationwide with approximately $8 billion in brokerage and advisory assets.

This agreement with Goss Advisors marks the 6th transaction for EdgeCo, a leading provider of technology-enabled solutions for financial intermediaries and their clients. It also greatly expands the firm’s footprint in the wealth management business and its support for independent financial advisors.

“We are pleased to partner with Goss Advisors. They are revolutionizing the industry by delivering a flexible yet robust service offering for the independent advisor market. We’re excited to help them expand the tools, resources, and retirement offerings for their current and future advisors as well as introduce Goss Advisors’ concepts to Mid Atlantic’s existing partner base,” said Timothy Friday, Institutional Services Group CEO of Mid Atlantic.

For Goss Advisors, this agreement reinforces the continuation of its mission. “We founded this organization to give successful advisors more time, margin, flexibility, and resources so they could grow their practices,” remarked Alex Goss, CEO & Founder of Goss Advisors. Mr. Goss continued, “As part of EdgeCo, our access to its industry-leading technology and deep resources will allow us to ramp up our advisor recruiting efforts while enhancing our service levels and value proposition for our existing advisors. We consider our advisors to be family and we couldn’t be more thrilled about what this means for them.”

Executives of Goss Advisors will maintain significant ownership in the newly combined company and will continue to lead Goss Advisors while driving the overall wealth management division to new levels. All employees and offices will be retained as part of the transaction, resulting in continuity for all financial advisor partners of Goss Advisors.

About EdgeCo

Through its subsidiaries, EdgeCo is a leading provider of best-in-class technology-enabled solutions for financial intermediaries and their clients. For over four decades, EdgeCo companies have provided a suite of technology and support services including full-service retirement plan administration, brokerage, advisory, and trust and custody services to a diverse national client base of financial intermediaries. This client base includes registered representatives, investment advisors, and other financial intermediaries including retirement plan recordkeepers, TPAs, bank trust departments, broker dealers, and insurance companies. The firm services approximately $130 billion in client assets under custody or administration and more than 15,000 financial advisors and 500 financial institutions.

About Goss Advisors

New Orleans-based Goss Advisors is a rapidly growing partnership RIA built by financial advisors and collectively shared with other successful advisors and teams. The firm, which embraces a transparent approach to educating advisors on the myths of independence, continues to attract top-performing advisors from across the country. For more information, please visit www.gossadvisors.com.

Media Contact
Marissa Comerford
Marissa@GregoryFCA.com
610-228-2104

Goss Advisors Press Release

U.S. Stock Prices Advanced Despite Election Uncertainty and Rising Coronavirus Cases

Market Data as of Week Ending 11/6/2020 unless noted otherwise.

EQUITIES
U.S. stock prices advanced despite election uncertainty and rising coronavirus cases throughout many parts of the country. Small and medium sized company stocks generally lagged large company peers, while growth stocks outperformed value. All major economic sectors were positive with the most notable gains in the information technology and health care sectors. Energy and defensive sectors such as utilities and real estate lagged the S&P 500 Index. Developed foreign stocks in Europe and Asia narrowly outperformed U.S stocks while Emerging Market stocks underperformed developed foreign markets.

BONDS
U.S. Treasury yields declined this past week as the Fed indicated that it could expand its purchases of long term government bonds. High yield corporate bonds were the top performing asset class and longer term bonds generally outperformed shorter term bonds. Investment grade corporate bonds are yielding approximately 2% and high yield corporate bonds are yielding more than 5%.

MACROECONOMIC DATA
Economic data released during the week was mostly positive and headlined by better than expected employment report. The U.S. reported an increase of 638,000 jobs in October and the unemployment rate declined to 6.9%, beating consensus expectations. Initial unemployment claims for the week were approximately 750,000 and less than 8 million Americans continue to claim ongoing unemployment benefits. Several indicators of economic activity have been trending higher. The Institute for Supply Management said its purchasing managers index (PMI) rose for the sixth consecutive month to 59.3 in October. IHS Markit reported that PMI for the eurozone advanced to 54.8 in October, the highest level in more than two years.

DOWNLOAD SUMMARY

European and Asian Stocks Narrowly Outperformed U.S. Stocks

Market Data as of Week Ending 10/30/2020 unless noted otherwise.

EQUITIES
U.S. stock prices declined as election uncertainty and the coronavirus weighed heavily on sentiment. Small and medium sized company stocks generally lagged large company peers, while value stocks narrowly outperformed growth. All major economic sectors fell with the most notable declines in the information technology, consumer discretionary, and industrials sectors. Defensive sectors such as communication services, utilities and real estate outperformed. Developed foreign stocks in Europe and Asia narrowly outperformed U.S stocks while Emerging Market stocks outperformed developed foreign markets.

BONDS
U.S. Treasury yields were mixed this past week as investors responded to better-than-expected economic data. Long term government bonds were the top performing asset class, whereas high yield corporate bonds declined. Investment grade corporate bonds are yielding approximately 2% and high yield corporate bonds are yielding more than 5.5%.

MACROECONOMIC DATA
Economic data released during the week was mostly positive and headlined by a better than expected third quarter gross domestic product (GDP) report. The U.S. reported an annualized 33.1% increase in third quarter GDP, beating consensus expectations. Initial unemployment claims for the week were 751,000 and less than 8 million Americans continue to claim ongoing unemployment benefits, both of which were new pandemic lows. European countries continue to establish new coronavirus restrictions such as a nationwide lockdown in France with limitations on outdoor movement and mandatory working from home. The Bank of Japan kept interest rates unchanged and lowered its growth outlook. Japan reported its seventh consecutive month of declining retail sales which dropped more than 8% compared to the same month last year.

DOWNLOAD SUMMARY

U.S. Stock Prices were Mixed as the S&P 500 Index Declined

Market Data as of Week Ending 10/23/2020 unless noted otherwise

EQUITIES
U.S. stock prices were mixed as the S&P 500 Index declined, ending a streak of gains. Small and medium sized company stocks generally outperformed large company peers, while value stocks rotated into a leadership position and outperformed growth. Performance diverged across sectors as prices advanced in the communication services, utilities, energy, and financials sectors. However, those gains were more than offset by losses in the real estate, information technology, consumer staples, consumer discretionary, industrials, and materials sectors. Developed foreign stocks in Europe and Asia outperformed U.S stocks while Emerging Market stocks outperformed developed foreign markets.

BONDS
U.S. Treasury yields rose this past week as the 10-year Treasury note reached its highest level since early June. High yield corporate bonds were the top performing asset class, whereas investment grade corporate bonds declined. Investment grade corporate bonds are yielding approximately 2% and high yield corporate bonds are yielding more than 5%.

MACROECONOMIC DATA
Economic data released during the week was mostly positive and headlined by encouraging housing data. Existing home sales were up more than 9% in September and reached their highest level since May 2006. Initial unemployment claims for the week, coming in at 787,000, were lower than expected and the lowest level since March. More than 8 million Americans continue to claim ongoing unemployment benefits. In Europe, coronavirus restrictions have slowed their economic recovery as IHS Markit’s Flash Composite Purchasing Managers’ Index (PMI) fell to 49.4 in October. Export data in Japan was better than expected as exports to the U.S. increased for the first time in 14 months and shipments to China, Japan’s largest trading partner, advanced 14%.

DOWNLOAD SUMMARY

401(k) Balances Returned to Positive Territory for 2020

 

After a rollercoaster performance across the 1st half of 2020, the Mid Atlantic Trust Company 401(k) Benchmark delivers a second straight positive quarterly return, which means the hypothetical 401(k) investor now has a positive YTD return for 2020.

Following up on a return of over 15% in the second quarter of 2020, the Mid Atlantic Trust Company 401(k) Benchmark continued its momentum in the third quarter and tipped the year-to-date return for the hypothetical 401(k) participant* into positive territory. The benchmark, which reflects the portfolio performance across 401(k) plans serviced by the company, finished the second quarter up 6.05% for the three months ending September 30, 2020, and now stands at a 2.72% year-to-date return for 2020.

Just like the ups and downs we have experienced in all aspects of our lives throughout 2020, the performance for the 401(k) Benchmark in 2020 has been like a rollercoaster. Out of the gate for the year, the Benchmark saw a 16% dip in the first quarter, and even after an over 15% return in the second quarter, the hypothetical investor was still starring at a negative balance halfway through the year. Even with a market pullback during the month of September, the third quarter delivered enough of a return for the hypothetical investor to see a positive year-to-date return in their accounts — a true testament as to why experts recommend 401(k) participants “stay the course” even during the most turbulent markets.

3Q20 Year-to-Date
Nasdaq Composite (Principal Return) 11.02 24.46
S&P 500 8.93 5.57
Mid Atlantic Trust Co. 401(k) Benchmark 6.05 2.72
Dow Jones Industrial Average 7.63 ‑2.65

In terms of asset allocation within the Mid Atlantic Trust Company 401(k) Benchmark, U.S. Stock holdings continued to climb, down from a low of 52% of holdings at the end of the first quarter, up to 54% at the end of the third quarter. This is still below where U.S. Stocks stood coming into the year when they represented 57% of holdings. That allocation shift towards U.S. Stocks has continued to come from U.S. bond market holdings, which stood at 18% at the end of the third quarter, down from 20% at the end of the first quarter.

ABOUT THE MID ATLANTIC 401(k) BENCHMARK

Mid Atlantic Capital Group is a leading financial services organization that provides a wide array of brokerage, advisory, and trust services to a diverse national client base of financial advisors and institutions, asset managers, and benefits administrators through its various subsidiary companies. Because we provide these services, Mid Atlantic Trust Company has plan investment data on approximately 95,000 401(k) plans representing approximately $100 billion in assets. Data used for this benchmark uses approximately 31,000 of those plans (see fact sheet for further information on actual sample).  In response to requests from our institutional clients, we have created the Mid Atlantic Trust Company 401(k) Composite Benchmark which is designed to reflect the portfolio performance across 401(k) plans serviced, in any capacity, by Mid Atlantic.

For a copy of the full report of the Mid Atlantic Trust Company 401(k) Composite Benchmark, click here.

Contact Mr. Scott Hervoyavich of Mid Atlantic Trust Company at 800-693-7800 or by emailing him at shervoyavich@macg.com

 

 

* For the hypothetical participant balances, we used a starting balance based on the average 401(k) participant balance provided by the Investment Company Institute for the year of the starting balance. In our calculation, we assumed a starting annual salary of $50,000, a combined employee/employer 9% annual contribution rate, and a 3% annual salary increase and applied the monthly rate of return of the benchmark.

Investment Grade Corporate Bonds were the Top Performing Asset Class

Market Data as of Week Ending 10/16/2020 unless noted otherwise.

EQUITIES
U.S. stock prices were mixed and the S&P 500 Index advanced for the third consecutive week. Small and medium sized company stocks generally lagged large company peers, while growth stocks maintained their leadership position and outperformed value. Performance diverged across sectors as prices declined in the energy, financials, and real estate sectors. However, those losses were more than offset by gains in the industrials, communication services, utilities, information technology, and consumer staples sectors. Developed foreign stocks in Europe and Asia lagged U.S stocks while Emerging Market stocks outperformed developed foreign markets.

BONDS
U.S. Treasury yields declined this past week as investors and the Fed continue to support demand for high quality bonds. Investment grade corporate bonds were the top performing asset class, followed by gains from U.S. government bonds. High yield corporate bonds also delivered positive gains, but lagged investment grade peers. Investment grade corporate bonds are yielding approximately 2% and high yield corporate bonds are yielding more than 5%.

MACROECONOMIC DATA
Initial unemployment claims for the week unexpectedly rose from 840,000 to 898,000 and approximately 10 million Americans continue to claim ongoing unemployment benefits. Economic data released during the week was headlined by encouraging retail sales that reported an increase of 1.9% for the month of September and more than 5% compared to September 2019. Some of the largest cities in Europe, such as Berlin and Paris, implemented stricter and more targeted measures to contain the spread of the coronavirus.

DOWNLOAD SUMMARY

Approximately 11 Million Americans Continue to Claim Ongoing Unemployment Benefits

Market Data as of Week Ending 10/09/2020 unless noted otherwise.

EQUITIES
U.S. stock prices advanced again last week as investors embraced risk assets. Small and medium sized company stocks generally outperformed large company peers, while growth stocks moved back to a leadership position and outperformed value. All major economic sectors delivered positive returns with notable gains in the energy, materials, information technology, and utilities sectors. Developed foreign stocks in Europe and Asia narrowly lagged U.S stocks while Emerging Market stocks outperformed developed foreign markets.

BONDS
U.S. Treasury yields rose this past week as investors demonstrated a strong preference for yield over quality. High yield corporate bonds were the top performing asset class. Investment grade corporate bonds also delivered positive gains, whereas U.S. government bonds lagged across the curve. Investment grade corporate bonds are yielding approximately 2% and high yield corporate bonds are yielding more than 5%.

MACROECONOMIC DATA
Initial unemployment claims for the week were little changed at 840,000 and approximately 11 million Americans continue to claim ongoing unemployment benefits. Economic data released during the week was sparse, headlined by PMI numbers that show the global economy is continuing to recover as the global composite PMI index came in at 52.1 for last month. Coronavirus cases rose in Spain, Italy, France, and the UK despite measures to reduce virus transmission. China reported strong PMI data for the services sector that rose from 54.0 in August to 54.8 in September. That was the fifth consecutive monthly improvement for the services sector and the latest evidence of China’s post-COVID-19 recovery.

DOWNLOAD SUMMARY