The very big picture:

In the “decades” timeframe, the question of whether we are in a continuing Secular Bear Market that began in 2000 or in a new Secular Bull Market has been the subject of hot debate among economists and market watchers since 2013, when the Dow and S&P 500 exceeded their 2000 and 2007 highs. The Bear proponents point out that the long-term PE ratio (called “CAPE”, for Cyclically-Adjusted Price to Earnings ratio), which has done a historically great job of marking tops and bottoms of Secular Bulls and Secular Bears, did not get down to the single-digit range that has marked the end of Bear Markets for a hundred years, but the Bull proponents say that significantly higher new highs are de-facto evidence of a Secular Bull, regardless of the CAPE. Further confusing the question, the CAPE now has risen to levels that have marked the end of Bull Markets except for times of full-blown market manias. See Fig. 1 for the 100-year view of Secular Bulls and Bears.

Even if we are in a new Secular Bull Market, market history says future returns are likely to be modest at best. The CAPE is at 26.93, down from the prior week’s 27.07, and only a little lower than the level reached at the pre-crash high in October, 2007. Since 1881, the average annual return for all ten year periods that began with a CAPE around this level have been just 3%/yr (see Fig. 2).

This further means that above-average returns will be much more likely to come from the active management of portfolios than from passive buy-and-hold. Although a mania could come along and cause the CAPE to shoot upward from current levels (such as happened in the late 1920’s and the late 1990’s), in the absence of such a mania, buy-and-hold investors will likely have a long wait until the arrival of returns more typical of a rip-snorting Secular Bull Market.

In the big picture:

The “big picture” is the months-to-years timeframe – the timeframe in which Cyclical Bulls and Bears operate. The U.S. Bull-Bear Indicator (see Fig. 3) is in Cyclical Bull territory at 66.70, down from the prior week’s 69.62.

In the intermediate picture:

The Intermediate (weeks to months) Indicator (see Fig. 4) turned positive on June 29th. The indicator ended the week at 35, unchanged from the prior week. Separately, the Quarterly Trend Indicator – based on domestic and international stock trend status at the start of each quarter – gave a positive indication on the first day of July for the prospects for the third quarter of 2016.

Timeframe summary:

In the Secular (years to decades) timeframe (Figs. 1 & 2), whether we are in a new Secular Bull or still in the Secular Bear, the long-term valuation of the market is simply too high to sustain rip-roaring multi-year returns. The Bull-Bear Indicator (months to years) is positive (Fig. 3), indicating a potential uptrend in the longer timeframe. The Quarterly Trend Indicator (months to quarters) is positive for Q3, and the Intermediate (weeks to months) timeframe (Fig. 4) is also positive. Therefore, with all three indicators positive, the U.S. equity markets are rated as Very Positive.

In the markets:

Stocks ended mostly lower for the week after worries of an upcoming Federal Reserve rate hike erased earlier gains. The Dow Jones Industrial Average fell -157 points to 18,395, down -0.85%. The tech heavy NASDAQ composite fared slightly better, down -0.37% to 5,218. The LargeCap S&P 500 index fared the worst of the major indexes, falling -0.68%, while the S&P MidCap 400 index fell -0.2% and the SmallCap Russell 2000 managed to eke out a small gain of +0.1%. Utilities continued their recent bad stretch, down -2.36% for the week and down more than -5% for August, driven by the twin forces of a risk-on shift and rekindled fears of rising interest rates.

International markets were mixed for the week, with the majority down. Canada’s TSX fell -0.32%. In Europe, the United Kingdom’s FTSE, likewise was down -0.3%, but on Europe’s mainland most markets gained. Germany’s DAX rose +0.4%, France’s CAC 40 gained +0.94%, and Italy’s Milan FTSE surged +3.27% (retracing most of last week’s plunge). In Asia, major markets were all in the red. China’s Shanghai stock exchange was down -1.22%, Hong Kong’s Hang Seng was off a fractional -0.12%, and Japan’s Nikkei fell -1.12%. Overall, the developed world ETF EFA was off -0.71%, while the emerging market ETF EEM lost over -2.2%.

Precious metals continued to lose their shine with Gold down $20.30 to $1,325.90 an ounce, a loss of -1.5%. Silver, likewise, was down over -2.9% to $18.75 an ounce. The industrial metal copper, sometimes used as a leading indicator of overall global economic activity, fell over -3.8%. Oil had its first weekly loss in the last 4, declining -2.99% to $47.64 per barrel of West Texas Intermediate crude.

In U.S. economic news, the number of Americans who applied for unemployment benefits last week fell by 1000 to 261,000 and remained near post-recession lows. The data indicates a healthy labor market with relatively few people losing their jobs. The less volatile four-week average of new jobless claims fell by 1,250 to 264,000, according to the Labor Department. Claims have remained below the 300,000 threshold for 77 straight weeks, the longest streak since 1970. Continuing jobless claims, those already receiving benefits, fell by 30,000 to 2.15 million. All figures are seasonally adjusted.

In housing, new-home sales surged to the highest level in nearly 8 years on strong demand from buyers and an increase in building activity. On Tuesday, the Commerce Department reported that new home sales rose +12.4%, to a seasonally adjusted annual rate of 654,000 units last month. The rate was +31.3% higher than this time last year, and easily beat economists’ forecasts of 581,000. The median sales price of a new home last month stood at $294,600. At the current sales pace, there is a 4.3 month supply of homes on the market. As a caveat, the government’s new-home sales data can be quite volatile and comes with a large margin of error. However, Trulia Chief Economist Ralph McLaughlin released a note stating that last month’s figures “are a rare case where the year-over-year change is statistically significant, indicating the surge in sales can be taken with more than just a grain of salt.”

In contrast to the surge in new-home sales, sales of previously owned homes fell last month as tight inventory weighed on the market and pushed prices higher. Existing home sales declined -3.2% to a seasonally adjusted annual rate of 5.39 million, according to the National Association of Realtors (NAR). The rate was -1.6% lower than this time last year and missed economists’ forecasts of 5.48 million. NAR Chief Economist Lawrence Yun attributed the decline to leaner inventory and higher prices. Inventory was -5.8% lower than this time last year and the 14 consecutive month of year-over-year declines. The median home price was $244,100, +5.3% higher than a year ago. As housing prices rise at a faster rate than wages, it is much harder for renters to become owners, Yun stated.

U.S. durable goods orders posted their biggest gain since last fall, up +4.4% last month, according to the Commerce Department. Orders for commercial planes surged +90% last month after plunging -60% in June. Defense orders also contributed to the gain. After stripping out the volatile transportation sector, orders rose a smaller +1.5% (but still the biggest increase of the year). Another positive sign was the first rise in inventories in over six months. Orders for core capital goods had their second straight gain and their biggest increase since January, rising +1.6%. Core capital goods orders (durable goods minus aircraft and defense orders), are viewed as a proxy for future business investment.

Markit’s flash manufacturing Purchasing Managers Index (PMI) fell -0.8 to 52.1 in August after reaching a 9-month high in July. Chris Williamson, chief business economist at Markit stated “taking the July and August readings together suggests that manufacturing is enjoying its best growth so far this year in the third-quarter, and should help drive stronger GDP growth.” Output showed a solid increase this month, while slower growth in total new work and employment, and inventories weighed on the overall headline number. While remaining above 50 (indicating improving conditions), August’s reading was weaker than the post crisis average of the index.

Consumer sentiment slipped slightly in August as Americans views of their personal finances dimmed a bit. The University of Michigan’s consumer sentiment survey declined -0.2 point to 89.8 last month, -2.3% lower than year ago. Economists had expected a reading of 91. The current economic conditions sub-gauge fell -2 points to 107, while the index of consumer expectations rose +0.9 to 78.7.

On Friday, Federal Reserve Chairwoman Janet Yellen said that the case for another interest rate hike “is strengthening”, sending a signal that the US central bank could raise rates as soon as next month. “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,” Yellen remarked in a speech in Jackson Hole, Wyoming. Yellen reaffirmed that the Fed policy committee “continues to anticipate” that gradual increases in the fed-funds rate will be appropriate.

The U.S. economy grew at a rather weak +1.1% annualized rate in the second quarter on the heels of weaker business investment and government spending. The original estimate had been for a +1.2% gain. Personal consumption expenditures increased at an annual rate of +4.4% for the quarter with strong growth in durable goods purchases of 9.9% and solid growth in services, up 3.1%. In the details of the report, corporate profits decreased -$24.1 billion in the second quarter, following an increase of +$66 billion in the first. Adjusted pretax corporate earnings dropped -1.2% to mark the fifth earnings decline in the last six quarters. Unless profits turn up again, the economy is unlikely to grow much faster.

In Canada, the financial impact of wildfires in May that reduced total Canadian oil production and subsequent lower revenues are taking a toll, a provincial leader said. The provincial government of Alberta said it experienced a net fiscal impact of about $387 million from the wildfires. Alberta’s finance minister said the provincial economy is expected to run an $8.3 billion deficit, $400 million greater than previously estimated. “Our government continues to take a prudent approach, controlling spending, protecting critical public services, and taking action to create jobs and diversify our economy,” Finance Minister Joe Ceci said in a statement.

In the United Kingdom, economic growth during the second quarter remained relatively robust. The revised second-quarter GDP data registered +0.6% growth in the three month leading up to the Brexit vote, according to data released by the Office for National Statistics. Household expenditures increased +0.9% for the quarter, the strongest reading since fall of 2014. The strong readings indicate that the uncertainty over the outcome of the Brexit referendum did not have a major negative impact on second quarter investment.

Confidence has plunged in the German economy since Britain voted to leave the European Union. Business morale in Europe’s biggest economy tumbled in August at its fastest rate since the height of the Eurozone debt crisis in 2012, according to the economic institute IFO survey. The survey’s reading of 106.2 is now sitting at its lowest level since February. At the same time, another index measuring corporate expectations in the country fell to the lowest level since October 2014. IFO head Clemens Faust remarked “business confidence in Germany has clearly worsened.”

In France, new data suggests that the G-7 economy continues to struggle to find growth. The data shows that even before the recent wave of terror attacks, French GDP growth was nil in the second quarter, according to the national statistics agency. That is a sharp slowdown from the +0.7% rise in the first quarter.

Japanese manufacturing got a boost as Markit’s flash PMI reading for August came in at 49.6, versus 49.3 in July. The output sub-index rose into expansion at 50.6, a positive development for a sector that has been stuck in negative territory all year. IHS economist Annabel Fiddes stated “ Japan’s manufacturing sector edged closer to stabilization in August, but the latest batch of PMI data gave a mixed picture overall.” Japanese policymakers are reevaluating their stimulus efforts as the economy continues to struggle. Analysts are expecting a new stimulus drive the latter part of this year, based on a pre-election promise by Prime Minister Shinzo Abe.

Finally, last Sunday’s closing ceremony signaled the end of the 2016 Summer Olympics. Now that the party is over, the hangover has set in as organizers calculated the final cost of hosting the event. Online statistics portal Statista reported “The organizers have put in a huge amount of work and invested an impressive amount of cash to get to this point…Costs ran 51% over budget in Rio, ending up at $4.58 billion. Even though that may seem like a huge amount of money, it pales in comparison to the Winter Olympics in Sochi in 2014. Costs there quickly snowballed with many venues coming in catastrophically over budget…Hosting the Olympics is expensive with the people of Hamburg (Germany) voting to withdraw their city’s bid for the 2024 games in late 2015, primarily on funding grounds.”

The following graphic shows the costs of hosting each of the Olympics since 1992, and their staggering overruns. Note that not a single one came in at or under budget.

(sources: all index return data from Yahoo Finance; Reuters, Barron’s, Wall St Journal, Bloomberg.com, ft.com, guggenheimpartners.com, ritholtz.com, markit.com, financialpost.com, Eurostat, Statistics Canada, Yahoo! Finance, stocksandnews.com, marketwatch.com, wantchinatimes.com, BBC, 361capital.com, pensionpartners.com, cnbc.com, FactSet; Figs 1-5 source W E Sherman & Co, LLC)

The ranking relationship (shown in Fig. 5) between the defensive SHUT sectors (“S”=Staples [a.k.a. consumer non-cyclical], “H”=Healthcare, “U”=Utilities and “T”=Telecom) and the offensive DIME sectors (“D”=Discretionary [a.k.a. Consumer Cyclical], “I”=Industrial, “M”=Materials, “E”=Energy), is one way to gauge institutional investor sentiment in the market. The average ranking of Defensive SHUT sectors fell again to 23.5, down from the prior week’s 23.0, while the average ranking of Offensive DIME sectors was unchanged from the prior week at 14.3. The Offensive DIME sectors are now much higher in rank than the Defensive SHUT sectors. Note: these are “ranks”, not “scores”, so smaller numbers are higher ranks and larger numbers are lower ranks.

If you have any questions about the FBIAS™ Fact-Based Investment Allocation Strategy portfolios, feel free to give your Anthony Capital, LLC advisor a call at 303-734-7178 or by scheduling a private virtual meeting/conference call. We work with clients from all over the country and would be happy to help.

You can also open up an online account by clicking HERE at our preferred custodian, Folio Institutional, LLC.

Sincerely,

Dave Anthony, CFP®

The very big picture:

In the “decades” timeframe, the question of whether we are in a continuing Secular Bear Market that began in 2000 or in a new Secular Bull Market has been the subject of hot debate among economists and market watchers since 2013, when the Dow and S&P 500 exceeded their 2000 and 2007 highs. The Bear proponents point out that the long-term PE ratio (called “CAPE”, for Cyclically-Adjusted Price to Earnings ratio), which has done a historically great job of marking tops and bottoms of Secular Bulls and Secular Bears, did not get down to the single-digit range that has marked the end of Bear Markets for a hundred years, but the Bull proponents say that significantly higher new highs are de-facto evidence of a Secular Bull, regardless of the CAPE. Further confusing the question, the CAPE now has risen to levels that have marked the end of Bull Markets except for times of full-blown market manias. See Fig. 1 for the 100-year view of Secular Bulls and Bears.

Even if we are in a new Secular Bull Market, market history says future returns are likely to be modest at best. The CAPE is at 27.07, little changed from the prior week’s 27.08, and only a little lower than the level reached at the pre-crash high in October, 2007. Since 1881, the average annual return for all ten year periods that began with a CAPE around this level have been just 3%/yr (see Fig. 2).

This further means that above-average returns will be much more likely to come from the active management of portfolios than from passive buy-and-hold. Although a mania could come along and cause the CAPE to shoot upward from current levels (such as happened in the late 1920’s and the late 1990’s), in the absence of such a mania, buy-and-hold investors will likely have a long wait until the arrival of returns more typical of a rip-snorting Secular Bull Market.

In the big picture:

The “big picture” is the months-to-years timeframe – the timeframe in which Cyclical Bulls and Bears operate. The U.S. Bull-Bear Indicator (see Fig. 3) is in Cyclical Bull territory at 69.62, up from the prior week’s 67.41.

In the intermediate picture:

The Intermediate (weeks to months) Indicator (see Fig. 4) turned positive on June 29th. The indicator ended the week at 35, unchanged from the prior week. Separately, the Quarterly Trend Indicator – based on domestic and international stock trend status at the start of each quarter – gave a positive indication on the first day of July for the prospects for the third quarter of 2016.

Timeframe summary:

In the Secular (years to decades) timeframe (Figs. 1 & 2), whether we are in a new Secular Bull or still in the Secular Bear, the long-term valuation of the market is simply too high to sustain rip-roaring multi-year returns. The Bull-Bear Indicator (months to years) is positive (Fig. 3), indicating a potential uptrend in the longer timeframe. The Quarterly Trend Indicator (months to quarters) is positive for Q3, and the Intermediate (weeks to months) timeframe (Fig. 4) is also positive. Therefore, with all three indicators positive, the U.S. equity markets are rated as Very Positive.

In the markets:

Trading was mixed in U.S. markets last week as most segments were little changed to slightly lower. Trading volumes were also lackluster despite the Federal Reserve releasing the minutes from its July policy meeting. The Dow Jones Industrial Average barely moved, down -23 points to 18,552. The tech heavy NASDAQ composite rose only slightly, +5 points to 5,238. Transports moved the strongest on the continued strength in oil, rising +1.58%. This seems counterintuitive, since transport companies are oil consumers, but the rise in oil prices implies more rail traffic hauling oil as production comes back following price improvement. The Utilities sector gave up -1.29%. The LargeCap S&P 500 was essentially flat (-0.01%), while MidCaps and SmallCaps showed strength with the S&P 400 MidCap index rising +0.32% and the Russell 2000 SmallCap index adding +0.57%.

In international markets, Canada’s TSX fell -0.41%. Weakness was also fairly wide-spread in Europe where the United Kingdom’s FTSE fell -0.83%. On mainland Europe, Germany’s DAX ended down -1.58%, France’s CAC 40, declined -2.21%, and Italy’s Milan FTSE plunged -4.05%. In Asia markets were mixed. Japan’s Nikkei gave up ‑2.21%, but Hong Kong’s Hang Seng index rose +0.75% and China’s Shanghai stock exchange added +1.88%. Developed International markets as a group declined -0.03% (EFA), while Emerging International markets as a group rose +0.32% (EEM).

In commodities, precious metals were mixed with gold rising +0.22% or $3 to $1346.20 an ounce, while silver fell ‑1.96% to $19.32 an ounce. The industrial metal copper was up +1.26%. The big news was in oil, which surged +$4.62, or +10.38%, to $49.11 a barrel for West Texas Intermediate crude oil.

In U.S. economic news, first time filings for unemployment benefits remained below the 300,000 benchmark for a 76^th straight week. Jobless claims fell 4,000 to 262,000, a one month low, and a sign that the labor market remains healthy. Economists had forecasted 265,000. The smoothed 4-week average of claims rose 2,500 to 265,250 according to the Labor Department. Continuing claims, those already receiving benefits, rose 15,000 to 2.18 million.

The National Association of Home Builders reported that builder confidence in the market for new single-family homes rose more than expected in August. The Home Builders Index rose +2 points to 60, beating economists’ expectations of 59. In the details of the report, the sub-index for current sales conditions rose +2 points to 65 and the index of expected conditions over the coming six months increased +1 to 67. However, the index that tracks buyer traffic dropped -1 point to 44. Readings over 50 indicate expansion. The NAHB stated “New construction and new-home sales are on the rise in most areas of the country, and this is helping to boost builder sentiment.” A rebound in multifamily units lifted housing starts to the second highest rate since the recession began. Home builders broke ground on more units than expected in July on strong demand for housing and confidence in the economy. Housing starts ran at a seasonally adjusted 1.2 million annual rate, according to the Commerce Department, up +2.1% over June. Starts for single-family homes edged up only a slight +0.5% to a 770,000 annual pace. The big increase was in multifamily starts which surged +8.3% to a 433,000 annual rate. Overall, housing starts are up +5.6% compared to year ago. Giving an indication of future activity, building permits were at a 1.15 million annual rate last month, matching June’s reading.

U.S. manufacturing reports were mixed this week as two different Fed manufacturing reports were released. Manufacturing conditions in the New York region weakened in August as the Empire State Index reverted back to negative territory, according to the New York Fed. The index for August fell to -4.2 from 0.6 in July, missing forecasts. On a positive note, in the details of the report new orders were positive and shipments improved. Ian Shepherdson, chief economist at Pantheon Macroeconomics stated “Overall, we think manufacturing is now expanding slowly, but no boom is in prospect.” In the second report, the Philadelphia Fed reported that its manufacturing index returned to positive territory to 2.0 from -2.9. However, that positive number was influenced mostly on hope of a better future as the gauge for future general activity rose +12 points to 45.8, rather than actual current conditions. The new orders index plunged to -7.2 from 11.8 in July, and the employment index collapsed -18 points to -20. The Philly Fed report stated “The survey’s future indicators suggest that firms expect the current weakness to be temporary.”

The cost of consumer goods was unchanged in July, as inflation remained tame for almost everything Americans purchase. The Labor Department reported that the consumer price index (CPI) was unchanged in July, and up only +0.8% compared to a year ago. The index is at a five month low. Core CPI, which excludes food and energy increased +2.2% on an annualized basis down -0.1% from last month. This missed analyst forecasts, which forecasted a +0.2% increase. The cost of food was unchanged in July and has risen only +0.2% over the past year. Energy prices declined -1.6%, and are down over -10.9% for the year. Real hourly wages (wages adjusted for inflation) increased +0.4% in July and are now up +2.0% annualized. However, that lags the increases Americans are seeing in some nondiscretionary costs. For example, rent is up over +3.8% compared to a year ago, and medical care prices have risen over +4.1%.

This week, minutes from the Federal Reserve meeting in July revealed that Fed officials expressed relief that concerns over “Brexit” were overblown and that the job market remained healthy. However, there was division over the timeline to raise rates. Two Fed officials pushed for a rate hike at the July meeting, however the majority voted to wait for more information. Fed officials voted 9-1 to hold rates at their current levels. As usual, the minutes do not elaborate on the timing of a Fed move, using the keywords “open” and “flexible” to describe when they will act. Sal Guatieri, senior economist at BMO Capital Markets stated “The Fed is inching closer to a rate hike, but it likely isn’t there yet…It will take further evidence that the economy is picking up, including another strong jobs report in August, to spur a move as early as September.”

In Canada, the manufacturing sector received some much-needed good news as Statistics Canada reported that June’s factory sales came in at an unexpectedly strong +0.8%. Analysts had forecasted a rise of +0.7%. The gain followed a -1% drop the previous month. The difference amounts to about a $50.2 billion gain to the Canadian economy. Ontario was the main province driving the gains, which were led by machinery and transportation equipment. Overall, sales were up in 15 of the 21 industries tracked by the Canadian federal data agency.

In the United Kingdom, British retail sales last month smashed expectations and jumped +1.4% compared to the previous month. The result provided further evidence that mainstream economists from world-renowned institutions were (so far) completely wrong on the effect of the UK’s “Brexit” vote. Economists had expected only a paltry +0.1% rise. Trevor Charsley, senior markets adviser at London-based money transfer frim AFEX said: “The retail sales figures, coming hot on the heels of inflation and unemployment data, complete a hat-trick of U.K. data releases this week that paint a healthier-than-expected picture of the U.K. economy.”

In contrast, Germany’s ZEW think-tank reported economic sentiment missed expectations. The actual reading improved slightly in August, but remained below its long-term average. ZEW President Achim Wambach said that their indicator has “partly recovered from its Brexit shock.” The indicator rose to 0.5 from -6.8, while the long-term average stands at 24.2. Germany’s economy weakened in the second quarter after a very strong first quarter. The Federal Statistics Office reported that quarterly growth eased to 0.4% from 0.7% in the first quarter.

The French unemployment rate fell below 10% for the first time since 2012. French statistics agency Insee reported that unemployment on mainland France and its overseas territories fell to 9.9% last quarter, down from 10.2%. French President Francis Hollande has said that he would not stand for re-election in 2017 unless there was a sustained fall in unemployment this year. Unemployment was down in all age categories, with youth unemployment falling the most, down -0.4% to 24.3% – the lowest since 2014.

In Asia, Moody’s Investor Services raised its forecasts for China’s economic growth in the wake of “significant” fiscal and monetary stimulus policies. Moody’s raised its economic growth forecasts for the mainland to 6.6% for this year, from 6.3% previously. Madhavi Bokil, senior analyst at Moody’s stated “The slowdown and rebalancing of China’s economy is likely to be gradual, thus we do not expect China to exert a significant drag on global growth prospects over the rest of 2016 and 2017.” Analysts also expect that this slowing would likely spur additional stimulus measures from the People’s Bank of China.

Japanese manufacturing took a hit as the mood of manufacturers’ soured to its lowest level in 3 years, according to a Reuters poll. The Reuters economic survey (known in Japan as the Tankan) followed data that showed exports had tumbled in July the most since 2009 and that economic growth had stalled in the second quarter. Yuichiro Nagai, economist at Barclays Securities, laid out the fundamental problem: “The recent indicators confirm that external and domestic demand are both weak. With the yen’s rise and consumers tightening their belts, companies find it harder to justify raising prices. As such, a complete end of deflation remains out of sight.”

Finally, while the economic news of late has focused on the strong housing market and rising real estate prices there is a significant downside to the good news. According to a new study by Zillow, an amazing 86% of Americans who are renters no longer have a sufficient credit score or income to afford to buy a home in their local market.

Home ownership rates have been on a steady decline and are now near a 48-year low (see the chart below). Adding to the difficult situation is that real household incomes have dropped 9% while rents have increased 7% over the last 13 years. The poor home ownership situation will likely persist, since nearly half of today’s renters spend more than 30% of their pre-tax income on housing.

(sources: all index return data from Yahoo Finance; Reuters, Barron’s, Wall St Journal, Bloomberg.com, ft.com, guggenheimpartners.com, ritholtz.com, markit.com, financialpost.com, Eurostat, Statistics Canada, Yahoo! Finance, stocksandnews.com, marketwatch.com, wantchinatimes.com, BBC, 361capital.com, pensionpartners.com, cnbc.com, FactSet; Figs 1-5 source W E Sherman & Co, LLC)

The ranking relationship (shown in Fig. 5) between the defensive SHUT sectors (“S”=Staples [a.k.a. consumer non-cyclical], “H”=Healthcare, “U”=Utilities and “T”=Telecom) and the offensive DIME sectors (“D”=Discretionary [a.k.a. Consumer Cyclical], “I”=Industrial, “M”=Materials, “E”=Energy), is one way to gauge institutional investor sentiment in the market. The average ranking of Defensive SHUT sectors fell again to 23.0, down from the prior week’s 19.8, while the average ranking of Offensive DIME sectors rose to 14.3 from the prior week’s 17.3. The Offensive DIME sectors are now much higher in rank than the Defensive SHUT sectors. Note: these are “ranks”, not “scores”, so smaller numbers are higher ranks and larger numbers are lower ranks.

If you have any questions about the FBIAS™ Fact-Based Investment Allocation Strategy portfolios, feel free to give your Anthony Capital, LLC advisor a call at 303-734-7178 or by scheduling a private virtual meeting/conference call. We work with clients from all over the country and would be happy to help.

You can also open up an online account by clicking HERE at our preferred custodian, Folio Institutional, LLC.

Sincerely,

Dave Anthony, CFP®

The very big picture:

In the “decades” timeframe, the question of whether we are in a continuing Secular Bear Market that began in 2000 or in a new Secular Bull Market has been the subject of hot debate among economists and market watchers since 2013, when the Dow and S&P 500 exceeded their 2000 and 2007 highs. The Bear proponents point out that the long-term PE ratio (called “CAPE”, for Cyclically-Adjusted Price to Earnings ratio), which has done a historically great job of marking tops and bottoms of Secular Bulls and Secular Bears, did not get down to the single-digit range that has marked the end of Bear Markets for a hundred years, but the Bull proponents say that significantly higher new highs are de-facto evidence of a Secular Bull, regardless of the CAPE. Further confusing the question, the CAPE now has risen to levels that have marked the end of Bull Markets except for times of full-blown market manias. See Fig. 1 for the 100-year view of Secular Bulls and Bears.

Even if we are in a new Secular Bull Market, market history says future returns are likely to be modest at best. The CAPE is at 27.08, little changed from the prior week’s 27.06, after having earlier reached the level also reached at the pre-crash high in October, 2007. Since 1881, the average annual return for all ten year periods that began with a CAPE around this level have been just 3%/yr (see Fig. 2).

This further means that above-average returns will be much more likely to come from the active management of portfolios than from passive buy-and-hold. Although a mania could come along and cause the CAPE to shoot upward from current levels (such as happened in the late 1920’s and the late 1990’s), in the absence of such a mania, buy-and-hold investors will likely have a long wait until the arrival of returns more typical of a rip-snorting Secular Bull Market.

In the big picture:

The “big picture” is the months-to-years timeframe – the timeframe in which Cyclical Bulls and Bears operate. The U.S. Bull-Bear Indicator (see Fig. 3) is in Cyclical Bull territory at 67.41, up from the prior week’s 65.11.

In the intermediate picture:

The Intermediate (weeks to months) Indicator (see Fig. 4) turned positive on June 29th. The indicator ended the week at 35, unchanged from the prior week. Separately, the Quarterly Trend Indicator – based on domestic and international stock trend status at the start of each quarter – gave a positive indication on the first day of July for the prospects for the third quarter of 2016.

Timeframe summary:

In the Secular (years to decades) timeframe (Figs. 1 & 2), whether we are in a new Secular Bull or still in the Secular Bear, the long-term valuation of the market is simply too high to sustain rip-roaring multi-year returns. The Bull-Bear Indicator (months to years) is positive (Fig. 3), indicating a potential uptrend in the longer timeframe. The Quarterly Trend Indicator (months to quarters) is positive for Q3, and the Intermediate (weeks to months) timeframe (Fig. 4) is also positive. Therefore, with all three indicators positive, the U.S. equity markets are rated as Very Positive.

In the markets:

U.S. stocks were mixed and little changed last week as the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all posted new all-time highs during the week, but MidCap and SmallCap indexes were slightly lower. For the week, the Dow Jones Industrial Average added a modest +32 points to end the week at 18,576. The LargeCap S&P 500 also finished with a very slight gain of +0.05%. The NASDAQ Composite rose +11 points to 5,232, up +0.23%. MidCaps and SmallCaps, which have been the biggest gainers year-to-date, finished slightly in the red. The S&P 400 MidCap index gave up -0.31% and the SmallCap Russell 2000 finished down a slight -0.12%.

International markets had a strong week compared to the U.S., as almost all major indexes finished in the green. Canada’s TSX rose +0.67%. In Europe, the United Kingdom’s FTSE rallied another +1.8%. The UK’s FTSE has risen 7 out of the past 8 weeks and is once again nearing all-time highs. Proving once again that predictions are futile, economists from major institutions and think tanks worldwide had predicted that the “Brexit” vote would plunge the United Kingdom into economic chaos and a certain depression. On Europe’s mainland, Germany’s DAX rallied +3.34%, France’s CAC 40 was up +2.03%, and Italy’s Milan FTSE added +2.23%. In Asia, China’s Shanghai Stock Exchange added +2.49%, ending 3 weeks of losses. Japan’s Nikkei was the big winner, up over +4% last week, and Hong Kong’s Hang Seng Index rose 2.8%. As a group, Developed International markets rose +1.8% (EFA), and Emerging Markets rose +2.4% (EEM).

In commodities, precious metals had a second down week with Gold giving up -$1.20 to close at $1,343.20 an ounce. Silver, almost always more volatile, was also down a second week, giving up -0.58% to end the week at $19.70 an ounce. The industrial metal copper was also negative, losing -0.65%. Energy had a strong week, adding to gains from the prior week as West Texas Intermediate crude oil rallied over +6.4% to $44.49 a barrel.

In U.S. economic news, the Labor Department’s Job Openings and Labor Turnover Survey (known by the amusing acronym “JOLTS”) indicated the job market remains resilient. Job openings and hiring increased as the JOLTS report showed there were 5.62 million job openings in June, up from 5.51 million in May. In addition, there were 5.13 million people hired during the month, up 80,000 from May. In the Labor Department’s Weekly Jobless Claims report, the number of people filing for unemployment benefits declined by -1,000 to a seasonally adjusted 266,000 for the first week of August. Initial claims have held below the key 300,000 threshold for 75 weeks in a row, the longest streak since 1970. Economists had forecasted a decline of- 2,000. The smoothed 4 week average of claims rose slightly to 262,750. Continuing claims, those people already receiving benefits rose by 14,000 to 2.16 million.

Sentiment among small-business owners managed a slight gain according to the National Federation of Independent Business (NFIB). However, the NFIB confidence index still remains below its long-term average, despite rising for the fourth straight month. The NFIB optimism index rose +0.1 point to 94.6, beating analyst expectations of a flat reading. Last month, 4 of the 10 NFIB indexes rose, while 4 declined, and 2 were unchanged. In its statement, the NFIB stated that, “small businesses continue to be in maintenance mode– meaning owners won’t increase spending.”

Retail sales in the U.S. paused in July after three straight months of gains the Commerce Department reported. Sales were essentially flat after a gain of +0.8% in June. Economists had expected growth of +0.4% for July. Auto sales were up +1.1% in July, the strongest since April. However, removing auto sales, retail sales were actually down ‑0.3% – the weakest reading since January. Retail sales are a key element of consumer spending, which is the backbone of the U.S. economy. On an annualized basis, retail sales are up +2.3% over the past 12 months. Ian Shepherdson, Chief Economist at Pantheon Macroeconomics stated “retail sales were disappointing, but not disastrous”. Amazon and other Internet-only retailers saw a gain of +1.3%, while Macy’s announced the closing of 100 stores.

Productivity declined for the third straight quarter, according to data released by the Labor Department. In the second quarter, productivity fell -0.5%, well below expectations. Economists had forecast a +0.3% gain. Annualized, productivity is down -0.4% for the trailing year, the first year-over-year decline since mid-2013. Productivity measures how much an employee produces per hour of work. Higher productivity is linked to a rising standard of living for workers because it tends to lead to higher wages and larger profits for companies. The long-term rate of productivity increase has traditionally been +2.2% per year.

The Labor Department reported that the price of imports to the U.S. rose for a fifth straight month, up +0.1% in July. Higher costs of imported goods theoretically should support a rise in inflation, which has remained below the Federal Reserve’s targeted level for years. Even with July’s rise, however, the cost of imports is still -3.7% lower than a year ago. Export prices increased +0.2% last month, the fourth consecutive rise, but remain ‑3% lower than this time last year.

In Canada, a CIBC economist warned that intervention into two of Canada’s hottest housing markets could interfere with economic growth. Canada’s economy is facing difficult headwinds, but two bright spots remain the Vancouver and Toronto housing markets. In a research note, CIBC Chief Economist Avery Shenfeld said cracking down on the sector, which accounts for the largest portion of domestic GDP, could smother the little economic growth there is. “Interest rate hikes or much tougher mortgage policies could put a damper on house prices, but at the expense of economic growth,” he stated.

In the United Kingdom, fears of the consequences of the UK leaving the European Union appear to have been hugely overblown, as retail spending rebounded +1.9% in July. The increase was the biggest rise in 6 months and up sharply from the +0.2% increase in June.

In Germany, economic growth flattened in the second quarter of the year, sparking fears that Europe’s largest economy may be running out of steam. GDP grew by just +0.4% in the 2^nd quarter, down sharply from the 1^st quarter’s +0.7% gain. Investment in construction and machinery was particularly weak. The headline reading was supported by higher exports and strong state spending.

The latest Italian GDP readings show that the economy is also stagnant, with 0% growth in the 2^nd quarter following a +0.3% rise in the 1^st. Italian Prime Minister Mario Renzi is battling to reduce bad debt in Italy’s banking sector, which is currently carrying approximately 360 billion euro worth of bad loans. Alberto Bagnai, economic policy professor at the University of Chieti-Pescara said, “There is no way to solve the banking problem without economic growth. If the whole nation doesn’t start earning more it simply can’t pay back its debts—public or private.”

Fresh Chinese economic data added to a multitude of other metrics that suggests the world’s second largest economy is weakening. Both industrial output and retail sales fell short of expectations for the month of July. A spokesman for China’s National Statistics Bureau said that the country’s economy was still in a period of adjustment and is facing downward pressure.

Finally, the folklore of the markets has always been that complacency in the markets is bad news, as it is thought to precede substantial declines. One way to measure complacency is by measuring fear, on the theory that fear is the opposite of complacency. A widely followed “fear gauge” is the Chicago Board Options Exchange Volatility Index, known as “VIX”, which measures the activity of “put” and “call” option buying/selling. Nervous and fearful investors buy lots of puts for downside protection, which results in the VIX going higher – thus the moniker “fear gauge”.

As many of the market’s indexes hit new highs last week the VIX dropped to an extremely low 11.18, suggesting investors are very complacent. Many investors have become alarmed at the low VIX readings, believing that the absence of fear is a very bad sign. However, researchers at the National Bureau of Economic Research (reported by Mark Hulbert at marketwatch.com) decided to dig deeper into historical data to see if that interpretation was correct. What they found was that the stock market’s performance following low “complacent” VIX readings is no worse, on average, than it is after higher readings. Perhaps another piece of Wall Street folklore can be consigned to the crowded category of “sounds good, but isn’t true!”

(sources: all index return data from Yahoo Finance; Reuters, Barron’s, Wall St Journal, Bloomberg.com, ft.com, guggenheimpartners.com, ritholtz.com, markit.com, financialpost.com, Eurostat, Statistics Canada, Yahoo! Finance, stocksandnews.com, marketwatch.com, wantchinatimes.com, BBC, 361capital.com, pensionpartners.com, cnbc.com, FactSet; Figs 1-5 source W E Sherman & Co, LLC)

The ranking relationship (shown in Fig. 5) between the defensive SHUT sectors (“S”=Staples [a.k.a. consumer non-cyclical], “H”=Healthcare, “U”=Utilities and “T”=Telecom) and the offensive DIME sectors (“D”=Discretionary [a.k.a. Consumer Cyclical], “I”=Industrial, “M”=Materials, “E”=Energy), is one way to gauge institutional investor sentiment in the market. The average ranking of Defensive SHUT sectors fell sharply to 19.8, down from the prior week’s 14.8, while the average ranking of Offensive DIME sectors rose to 17.3 from the prior week’s 18.3. The Offensive DIME sectors are now higher in rank than the Defensive SHUT sectors. Note: these are “ranks”, not “scores”, so smaller numbers are higher ranks and larger numbers are lower ranks.

If you have any questions about the FBIAS™ Fact-Based Investment Allocation Strategy portfolios, feel free to give your Anthony Capital, LLC advisor a call at 303-734-7178 or by scheduling a private virtual meeting/conference call. We work with clients from all over the country and would be happy to help.

You can also open up an online account by clicking HERE at our preferred custodian, Folio Institutional, LLC.

Sincerely,

Dave Anthony, CFP®

The very big picture:

In the “decades” timeframe, the question of whether we are in a continuing Secular Bear Market that began in 2000 or in a new Secular Bull Market has been the subject of hot debate among economists and market watchers since 2013, when the Dow and S&P 500 exceeded their 2000 and 2007 highs. The Bear proponents point out that the long-term PE ratio (called “CAPE”, for Cyclically-Adjusted Price to Earnings ratio), which has done a historically great job of marking tops and bottoms of Secular Bulls and Secular Bears, did not get down to the single-digit range that has marked the end of Bear Markets for a hundred years, but the Bull proponents say that significantly higher new highs are de-facto evidence of a Secular Bull, regardless of the CAPE. Further confusing the question, the CAPE now has risen to levels that have marked the end of Bull Markets except for times of full-blown market manias. See Fig. 1 for the 100-year view of Secular Bulls and Bears.

Even if we are in a new Secular Bull Market, market history says future returns are likely to be modest at best. The CAPE is at 27.06, up from the prior week’s 26.95, after having earlier reached the level also reached at the pre-crash high in October, 2007. Since 1881, the average annual return for all ten year periods that began with a CAPE around this level have been just 3%/yr (see Fig. 2).

This further means that above-average returns will be much more likely to come from the active management of portfolios than from passive buy-and-hold. Although a mania could come along and cause the CAPE to shoot upward from current levels (such as happened in the late 1920’s and the late 1990’s), in the absence of such a mania, buy-and-hold investors will likely have a long wait until the arrival of returns more typical of a rip-snorting Secular Bull Market.

In the big picture:

The “big picture” is the months-to-years timeframe – the timeframe in which Cyclical Bulls and Bears operate. The U.S. Bull-Bear Indicator (see Fig. 3) is in Cyclical Bull territory at 65.11, up from the prior week’s 62.72.

In the intermediate picture:

The Intermediate (weeks to months) Indicator (see Fig. 4) turned positive on June 29th. The indicator ended the week at 35, down 1from the prior week. Separately, the Quarterly Trend Indicator – based on domestic and international stock trend status at the start of each quarter – gave a positive indication on the first day of July for the prospects for the third quarter of 2016.

Timeframe summary:

In the Secular (years to decades) timeframe (Figs. 1 & 2), whether we are in a new Secular Bull or still in the Secular Bear, the long-term valuation of the market is simply too high to sustain rip-roaring multi-year returns. The Bull-Bear Indicator (months to years) is positive (Fig. 3), indicating a potential uptrend in the longer timeframe. The Quarterly Trend Indicator (months to quarters) is positive for Q3, and the Intermediate (weeks to months) timeframe (Fig. 4) is also positive. Therefore, with all three indicators positive, the U.S. equity markets are rated as Very Positive.

In the markets:

A 1% rally on Friday rescued a theretofore losing week, pushing U.S. markets into positive territory for the week. The gains pushed the Nasdaq Composite into record territory, joining the Dow Jones Industrial Average, the LargeCap S&P 500, and the MidCap S&P 400 index. The SmallCap Russell 2000 reached a new high for 2016, but remains below a peak set in the middle of 2015. The Dow Jones Industrial Average added 111 points last week to end at 18,543, up +0.6%. All other indices were positive, with the LargeCap S&P 500 rising +0.43%, the MidCap S&P 400 index adding +0.2%, while the SmallCap Russell 2000 and the NASDAQ Composite pulled away from the others, gaining +0.93% and +1.14% respectively.

In international markets, Canada’s TSX added an additional +0.45% last week supported by a modest rebound in the price of oil. In Europe, the United Kingdom’s FTSE gained over +1%, France’s CAC40 fell -0.66%, while Germany’s DAX added +0.29%. Italy’s MIB fell -1.3% as concern remains among analysts about the financial stability of several of Italy’s largest banks. Asian markets were also mixed as Japan’s Nikkei gave up more than ‑1.9%, but Hong Kong’s Hang Seng rose +1.1%. China’s Shanghai Stock exchange was basically flat, down -0.09%.

In commodities, defensive investments like precious metals had a difficult week, with Gold settling down -$13.50 to $1,344.40 an ounce, down -0.99%. Silver likewise fell below the $20 handle, ending at $19.82 an ounce down ‑2.6%. Oil rebounded slightly, as West Texas Intermediate crude oil closed at $41.80/bbl, up +0.48%. Copper continued its volatile up and down swings of late, losing over -3%.

In U.S. economic news, the labor department reported that the U.S. economy added 255,000 jobs in July, well above the expected 180,000. The unemployment rate remained unchanged at 4.9 percent. “The jobs report was incredibly impressive,” said JJ Kinahan, chief strategist at TD Ameritrade. “What I think it did, is it took the May report and made it into an anomaly.” May’s jobs report, you may recall, was a shockingly low 38,000.

Payroll processor ADP reported that private-sector hiring remained robust as employers added 179,000 jobs last month. Economists had expected a gain of only a 165,000. ADP’s reports have shown steady job growth while the Labor Department’s employment report has been more volatile. Mark Zandi, chief economist at Moody’s Analytics, stated that with underlying job growth of about 150,000 to 200,000, the labor market remains strong.

Growth in manufacturing slowed slightly in July but still remained in expansion according to the Institute for Supply Management’s (ISM) latest survey. The ISM manufacturing index declined 0.6 point to 52.6. Readings over 50 indicate more companies are expanding rather than shrinking. The index has been positive for the fifth straight month following negative readings from last fall into February. Most executives reported that business remains solid and felt little to no impact from the Brexit vote. ISM’s new orders index remained strong at 56.9, production also gained coming in at 55.4. On a negative note, the employment sub-index fell back into negative territory, losing a point to 49.4. Manufacturers have cut roughly 30,000 jobs in the past year, according to both ADP and the Labor Department.

Confirming the ISM survey was Markit’s manufacturing Purchasing Managers Index (PMI), which also came in at an 8-month high of 52.9. The PMI report showed that manufacturing had a strong start to the 3^rd quarter. Foreign markets were the source of increased demand that helped push export sales to the fastest pace since September 2014. Chris Williamson, Markit chief economist, noted that the stronger PMI in July “suggests that manufacturers and exporters have helped lift the economy at the start of the third quarter.”

Switching to services, ISM’s service index reports most U.S. companies are growing. Companies that offer services such as healthcare, retail goods and entertainment continued to grow, but at a slightly slower pace, according to a survey of senior executives. The ISM’s nonmanufacturing index fell to 55.5 last month, still firmly in expansion territory (above 50). A healthy 15 of the 18 service sectors tracked by the ISM report showed growth. The new orders index rose to a very strong 60.3, a positive sign for the broader economy. The only soft spot in an otherwise great report was the employment sub-index, which fell ‑1.3 to 51.4.

Backing up the services report, the government reported that consumer spending rose +0.4% in June, the third consecutive month of solid increases. On a quarterly basis, spending in the second quarter of this year marked the biggest quarterly gain since the recovery began in 2009. Most of the increase in spending was on services such as housing, healthcare, entertainment and utilities. Income growth, however, did not match the increase in spending. Incomes rose only +0.2% in June, slightly less than expected.

In International economic news, the Canadian economy is now growing at the slowest pace in 60 years and the housing market is about the only thing keeping it in expansion, according to economists. Friday’s GDP report revealed that in the two years since oil prices began their decline, Canada’s economy has become almost completely reliant on bank lending and the hot housing markets of Vancouver and Toronto. Real estate and financial services now account for approximately 20% of the Canadian economy, levels not seen since the early 1960’s. Since May of 2014, Canada’s economy has expanded just 1.2% – the slowest 2-year pace outside of recession in the last 6 decades, according to Statistics Canada.

Markit’s European manufacturing PMI for July was revised up to 52, slightly better than the original print, but containing very mixed results. Markit said that most of the growth was seen in Germany, but growth had almost stalled in both Italy and Spain, and France and Greece were both in contraction.

In the United Kingdom, the Bank of England dropped its key benchmark interest rate a quarter point to 0.25%, the lowest level ever, and telegraphed that the rate could go even lower in the months ahead. The bank also started a new funding program that offers lenders cheap 4-year loans in order to lend to households and businesses. Overall the measures were much larger than markets anticipated, driving the British pound down and the 10-year UK government bond yield down to a record low.

Despite being the bright spot in the European PMI report (above), Germany, Europe’s largest exporter of manufactured goods, reported that its factory orders fell -0.4% in June, widely missing estimates that they would rise +0.5%. The sharp drop was due to a lack of orders from within the Eurozone. On a positive note, domestic orders rose +0.7% and orders from non-Eurozone states rose +3.8%.

Japanese Prime Minister Shinzo Abe approved an economic stimulus package totaling 28.1 trillion yen (approximately $275 billion) in a further effort to stimulate the Japanese economy and spur inflation. The measures include substantial infrastructure spending and enhancements to welfare services. According to Kyodo news, Abe told party leaders, “We want to not only stimulate immediate demand, we aim to pursue sustainable economic growth…and ensure the creation of a society in which all people can play active roles.” The effects on Japan’s already-staggering debt load were not discussed.

China’s National Development and Reform Commission (NDRC), the research arm of China’s top economic planning agency, called for a cut in interest rates and the reserve requirement for banks. The NDRC’s comments were noted by analysts as important since the commission does not generally comment on monetary policy, which officially falls under the domain of the People’s Bank of China. Some analysts feel the statement signals a possible rift among Chinese policymakers, especially since it follows a front-page article in the government run People’s Daily newspaper quoting an “authoritative person” who warned of the dangers of too much stimulus to the economy.

Finally, “jobs” are a constant topic on the campaign trail this year. The Republicans decry what they view as Obama’s dismal job-creation record, while Democrats counter with claims that jobs created during Obama’s term are actually stellar. Here (below) is a chart of jobs created since the start of each recent President’s term, going back to Jimmy Carter. Both sides can take some comfort: Obama comes in well below Clinton and Reagan, but better than George W. Bush (who was saddled with both the 2000-2002 recession and the 2007 employment turndown).

One thing missing in this (and most) analyses is a good scale of comparison. Since the population was much lower 20 and 30 years ago, it is reasonable to conjecture each million new jobs would have a larger economic impact in prior years with lower populations. Dividing the total jobs created by the starting population for each President reveals a slightly different scale of results than shown by the chart. Jobs created per million of population were 69,726, 87,098, and 33,713 for Reagan, Clinton and Obama, respectively. By that measurement, jobs created during Obama’s term have been less than half per million of population than his predecessors Reagan and Clinton, but much better than the 8,731 jobs created per million of population under George W. Bush.

(sources: all index return data from Yahoo Finance; Reuters, Barron’s, Wall St Journal, Bloomberg.com, ft.com, guggenheimpartners.com, ritholtz.com, markit.com, financialpost.com, Eurostat, Statistics Canada, Yahoo! Finance, stocksandnews.com, marketwatch.com, wantchinatimes.com, BBC, 361capital.com, pensionpartners.com, cnbc.com, FactSet; Figs 1-5 source W E Sherman & Co, LLC)

The ranking relationship (shown in Fig. 5) between the defensive SHUT sectors (“S”=Staples [a.k.a. consumer non-cyclical], “H”=Healthcare, “U”=Utilities and “T”=Telecom) and the offensive DIME sectors (“D”=Discretionary [a.k.a. Consumer Cyclical], “I”=Industrial, “M”=Materials, “E”=Energy), is one way to gauge institutional investor sentiment in the market. The average ranking of Defensive SHUT sectors fell to 14.8, down from the prior week’s 13.5, while the average ranking of Offensive DIME sectors fell to 18.3 from the prior week’s 16.8. The Offensive DIME sectors remained lower in ranking than the Defensive SHUT sectors. Note: these are “ranks”, not “scores”, so smaller numbers are higher ranks and larger numbers are lower ranks.

If you have any questions about the FBIAS™ Fact-Based Investment Allocation Strategy portfolios, feel free to give your Anthony Capital, LLC advisor a call at 303-734-7178 or by scheduling a private virtual meeting/conference call. We work with clients from all over the country and would be happy to help.

You can also open up an online account by clicking HERE at our preferred custodian, Folio Institutional, LLC.

Sincerely,

Dave Anthony, CFP®