Josean Fernandez, CAIA

Mkt Snap 📈 It’s July 4th and for those who live near the Long Island sound there are a thousand coves and inlets all dotted with festive boat-goers. Sloops, cutters, and schooners either lie moored in horseshoe shaped harbors or ply their way up and down the sound. Even the odd stink-pot powerboat zips across the water, but all have one commonality: they’re chock-full of Independence Day partiers with thumping JBL speakers pumping out Bruce Springsteen tunes. For those remaining on land the festivities really begin to crank up as yard games get underway. The potato sack relay race is the first to go, quickly followed by the egg toss contest. Later comes the game of musical chairs with unscrupulous youngsters nudging other rightful owners off their perch once the music stops. There’s the pie eating contest guaranteed to make all gorging participants puke, and last but certainly not least is the tug-of-war. Of course, all the while these festive bouts are taking place there’s a plethora of other revellers enjoying their day: youngsters screaming out “Marco… Polo” in the pool; puberty-stricken teenagers heaping ungodly amounts of hot dogs and macaroni salad onto their plates; mothers idling in lawn chairs, chit-chatting as they sip tumblers filled with rose; and other devilish grade schoolers either pounding their 29th Pixy Stix, or throwing firework poppers at unsuspecting elders. Perhaps the only thing more full throttle than a 4th of July bash is of course the stock market. Despite a quiet week on Wall Street, equities lit off fireworks of their own as the S&P garnered nearly a 2% pump and the Nasdaq powered 3.6% higher. Certainly, part of this week’s boost came in the form of seasonality. Investors pointed out that the 1st half of July has consistently proven to be a very strong period for the equities. The other reason of course lies in recent economic data, as a softer but not too soft climate continues to unfold. This was highlighted on Friday with the release of the US June jobs report. The report came in with a gain of 206k; ahead of the expected 190k, but still below the May report of 227k. The unemployment rate increased to 4.1%, just slightly ahead of the 4% expected, while wages came in line at 3.9% Y/Y and +0.3%M/M. Elsewhere, the ISM services number for June was viewed as very weak and the 48.8 reading was the lowest level we have seen in years. The JOLTS number was relatively neutral with the higher May numbers offset by the negative April revision, but the trend is definitely showing US labor conditions are easing. Outside of the macro numbers we also had Powell’s remarks at the Sintra conference which were viewed as dovish. All in, this slow retreat in economic activity continues to bode well for equities as rate cuts become more probable (85% now expect a Sept. cut and a total of ~48bps worth of cuts for the full year) but with economic and job activity still remaining well intact. #stockmarket #finance #economy

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All areas of commerce are benefitting from data analysis, and our industry is no different. And when it comes to hard data, Henry Schwartz is among the very best. Good, punchy interview here fresh from the OIC on many hot topics in the listed options space, including the rise of the "ProTail" customer using options strategically. #Options #OptionsStrategies #Cboe #SPX #VIX #XSP #OIC #0DTE

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MSO earnings season starts this week, with eight of the top ten US operators reporting. Consensus analyst expectations are for the top ten MSOs to show a Q/Q 2.62% contraction in revenue and adjusted EBITDA to decline 6.18%. (1/3) The top ten MSOs' Y/Y revenue is expected to grow by 3.20%, and AEBITDA is expected to expand by 17.30%. Analysts predict the highest Y/Y revenue growth for Ascend Wellness Holdings (CSE: AAWH.U / OTCQX:AAWH) at +22.40%, and Cresco Labs is predicted to have the best Y/Y improvement in AEBITDA at +62.00%. Finally, here are some of the companies reporting this week: May 7: Ascend Wellness Holdings (CSE: AAWH.U / OTCQX:AAWH) May 8: Green Thumb Industries (GTI), Verano, MariMed, Inc. May 9: Curaleaf, Trulieve, TerrAscend, Cannabist, Jushi Holdings Inc. Source: FactSet

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“There are valid concerns around the pursuit of large, multi-strategy firms and what they mean for client outcomes. Who is communicated to first in a larger organization? Which funds will get the best deals? Will a parent company encourage a short-term, profit-maximizing mindset, forcing investment teams to focus on asset-gathering rather than long-term returns? Can you really be a fiduciary if you also have shareholders?” Read more from Claire Sawyer on CAIA Association’s blog.

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In Pure Portfolios’ June 2024 Market Commentary, Chief Investment Officer, Nik Schuurmans, covers U.S. large cap extremes relative to small cap & value stocks, the massive influence of three companies on the S&P 500, and how difficult it is for companies to stay on top of the corporate mountain. Can the S&P 500, fueled by AI technology stocks, keep it going or are we due for a breather? Watch the video below…

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Putting July's Volatility into Perspective In today's video Observations and Expectations, Virtus Senior Managing Director and Chief Market Strategist, Joe Terranova, provides context on the elevated volatility in the month of July. #ObservationsandExpectations

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Zoom in on "repeatable #alpha" and it often looks less impressive up close. An analogy: Roger Federer gave a hell of a commencement address at Dartmouth College several months ago in which he walked through his career #statistics. In sum, he won - 82% of matches, but only - 76% of sets yet only - 58% of games and, shockingly, only - 54% of points. The idea that long term outperformance often is driven by a surprisingly modest positive win-loss ratio is not new. Traders with 55% win rates are heroes. Poker players with 55% win rates are banned from casinos. #quantitative #finance relies on small average wins. Even #fundamental investors get it. A journalist once asked #valueinvesting legend Howard Marks why all his funds were in the top quartile, and he reportedly replied "because we never leave the second quartile." #Replication of pre-fee #hedgefund returns is built on this same principal. Create a #statistical tailwind and watch it play out over time. Reach out if you want to discuss stats. 😎 https://lnkd.in/e3Z45Dnv

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77 WABC Radio: #1 Station in New York (and based on that data arguably the #1 in the U.S.) owned and operated by Red Apple Group. Below is a full-page announcement in New York Post highlighting the recent bipartisan Congressional committee decisively voting to safeguard the presence of AM radio in all automobiles across the United States. This commendable action upholds the vital role that AM radio plays in providing reliable news, public safety information, and community engagement—particularly during emergencies. This crucial decision comes despite efforts from automakers like General Motors to remove AM from future models. AM radio remains a vital resource for news, information, and community engagement, and this decision ensures that it continues to serve millions of listeners—both now and in the future. Founded in New York in 1968 by Chair/CEO John Catsimatidis, Red Apple Group is one of the largest private companies in North America and has leading operating businesses and interests in consumer, energy and refining, investments and insurance, infrastructure, logistics, media and sports, real estate, retail, and technology. With evergreen capital "we think and invest in decades, not quarters." DM or email with opportunities. #WABC770 #AMRadio #Media #NYC #RedAppleGroup #Broadcasting #Congress #BipartisanSupport #AutomotiveIndustry #GeneralMotors #Ford #BMW #Tesla #MercedesBenz #Toyota #Honda #Volkswagen #PublicService #Legislation #USCongress #Senate #HouseOfRepresentatives #johncatsimatidis

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This space has often posited that from 1982 thru 2021 capital market returns were distorted to the upside by the persistent presence of a 40-year tailwind artificially supplied by an accommodative Federal Reserve that engineered a 2,000 basis point decline in interest rates. Hence, since the Reagan Administration asset owners and their consultants/advisors grew accustomed to an abundant supply of "wind aided" investment returns. This multi-decade phenomenon of easy money impacted all facets of the asset management industry - both in the Public & Private Markets and both active & passive. For instance, underpeforming one's minimum required funding hurdle (spending plus CPI) was a rarity and an oddity - even as active management chronically underperformed its passive market index. Hence, what was considered "consensus thinking" went unquestioned, and various assumptions calcified as gospel. But now, three years into the post-ZIRP era, we're starting to observe tensions and pressure points that challenge doctrinaire thinking. The Bloomberg story below is an indictment of the historical return profile of Private Equity. A profile where the preponderance of the return was seemingly supplied by financial alchemy and leverage - rather than operating skill. Most poignantly expressed in the paragraph quoted below: ​***BEGIN*** "For decades the private equity model seemed unassailable, transforming the industry’s image from Barbarians at the Gate to crucial pillar of capitalism. Funds raised money, bought businesses, loaded them with debt, exited at a profit and convinced happy investors to do it all over again — at ever greater scale. Surging borrowing costs have stalled that engine.” ***END*** Now absent the Fed’s tailwind, there is anxiety amongst investment industry practitioners that foreseeable returns from status quo approaches to Public and Private Equity investing may generate inadequate and insufficient funding results. Given the changed capital market reality, a new perspective and fresh ideas are warranted. We suggest asset owners consider unlevered, outcome-driven, absolute return-oriented, concentrated, public equity strategies with daily liquidity and full transparency that ignore some relative return conventions, and strive for satisfactory, above-spending results in service to adequately funding the asset owners’ stated mission or purpose.

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Portable alpha overlays with low correlations to traditional asset class exposures can help provide diversifying, additive returns, particularly during drawdowns in risky assets that typically occur at the end of economic expansions. Is now the time to consider an overlay? Read the new white paper from PGIM Quantitative Solutions: https://on.pru/3WkGOAU

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All eyes are on Big Tech as earnings hit a fever pitch. In this edition of the Weekly Brief, the Office of the CIO at Rockefeller Global Family Office helps prepare you for the week ahead. • Robust economic data and more hawkish commentary from policy makers pushed stocks lower again last week, with many companies falling despite solid earnings reports reflecting the weight of elevated expectations. • China's first quarter GDP came in better than expected though continued softness among domestic consumers raised questions about the stability of the nation's growth trajectory and posed challenges for European luxury retailers, which posted lackluster sales numbers for the region. • Looking ahead to a heavy earnings week, the biggest focus for the market will likely be on several mega cap tech names, specifically whether they can continue to defy optimistic forecasts and carry the market through a difficult period once again. For access to the full Macroeconomic and Financial Market Indicators report and other unique market insights, reach out to me to learn more.

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Great panel about growth strategies with recently promoted Robert Karofsky (Co- President Americas - UBS) recently promoted Michael Camacho (Head of WM US), and John S. Mathews (Head of PWM - UBS)! Few insights from the private wealth briefing: 1) ~$18T of assets will pass between generations from now to 2030 based on a recent Ernst & Young survey. 2) ~$30T of assets will pass to women between now to 2030 based on a recent McKinsey survey. 3) UBS ARC (Analytical Research Community) is a competitive advantage: connecting tech founders, venture capitalists with high quality sector research. 4) Recently created Unified Global Banking, led by Jennifer Gabrielli aims to bring 'one bank' to the next level with wrap around solutions for private clients and their companies. Thanks for spending time together! Team: Chuck Korasick / Robert Gach / Jen Lechman / Samantha Bloom / Jon Schechter, CFP® / Lizzie / Susan Mgmt: Lauren Gorsche #ubsglobalwealthmanagemnt #pwmconference2024

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Cambridge Associates' Chief Investment Strategist shares that by focusing on diversification that includes value added opportunities, liquidity management, and strategic asset allocation, investors can build resilient portfolios capable of weathering economic storms and achieving long-term success. Read more of her investment advice in our latest VantagePoint: https://ow.ly/fYCU50TGFKs

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It was great to be back in Boston last week, reconnecting with returning Institute members and meeting new market and investment leaders! We are excited for the events and research areas we have coming up in the next few months! #ocio #investmentsolutions #investmentmanagement #investmentconsulting

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Looking for insights that could sharpen your investment strategy heading into 2025? Join PIMCO experts Libby Cantrill, Head of Public Policy and David Hammer, Head of Municipal Bond Portfolio Management at #SchwabIMPACT®️ on November 20 for an in-depth analysis of how U.S. presidential election results may affect policy, taxes, and municipal bonds.

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