The S&P 500 index rose again this week (+1.7%), bringing the return up to +4.6% for the first three weeks of the year. After suffering sharp losses in 2011, financial stocks have led the rally with many of last year’s worst performing stocks enjoying big gains. Bank of America, which lost 58% last year, is up over 24% to start the year. Financial stocks have moved higher as economic data continues to point to moderate economic growth and the situation in Europe potentially stabilizes. A number of S&P 500 companies have begun announcing fourth quarter earnings and the results have been mixed so far. Most of the large U.S. banks reported positive earnings this past week, which helped boost stock returns.
Stocks in Europe have also rallied to start the New Year and hit a five month high this week. The Stoxx Europe 600 Index is up +5.6% already in 2012, its best start since 1987. Greek and European officials met with private creditors this week in order to negotiate the terms of a debt swap, which would effectively exchange the existing bonds for new securities and include a significant write-down in value. Greek officials have threatened to default on a March bond payment if an agreement is not reached in the near-term. European leaders involved in the negotiations expect a deal to be reached in the next few days. In addition to the Greek talks, economic data remains weak, leading to speculation that the ECB may reduce interest rates even further. Expectations of additional stimulus in the U.S. and possibly China have also helped fuel the rally in global stocks.
To read the full Global Financials Update, click here.
About Matthew
Matthew Lettinga is senior analyst in the firm’s Investment Strategies Group, which focuses on developing the firm’s investment strategy and oversees ongoing manager sourcing, due diligence, portfolio construction, and risk management for the firm’s investment activities. In his role, Matthew is responsible for investment research and due diligence across a variety of traditional and alternative credit-based strategies including hedge funds and private equity. Additionally, he serves as an investment consultant for several Convergent clients, assisting in portfolio construction and manager selection activities.
Prior to joining Convergent in 2008, Matthew was a senior associate at Ernst & Young in Washington D.C., where he analyzed client portfolios, provided investment manager recommendations and advised on tax planning strategies for the firm’s high net worth and corporate clients.
Matthew earned a Bachelor of Science degree in Finance from Taylor University, is a Chartered Financial Analyst® and holds the Financial Industry Regulatory Authority (FINRA) Series 65 license.
Global Financials Update: January 20, 2012
The S&P 500 index rose again this week (+1.7%), bringing the return up to +4.6% for the first three weeks of the year. After suffering sharp losses in 2011, financial stocks have led the rally with many of last year’s worst performing stocks enjoying big gains. Bank of America, which lost 58% last year, is up over 24% to start the year. Financial stocks have moved higher as economic data continues to point to moderate economic growth and the situation in Europe potentially stabilizes. A number of S&P 500 companies have begun announcing fourth quarter earnings and the results have been mixed so far. Most of the large U.S. banks reported positive earnings this past week, which helped boost stock returns.
Stocks in Europe have also rallied to start the New Year and hit a five month high this week. The Stoxx Europe 600 Index is up +5.6% already in 2012, its best start since 1987. Greek and European officials met with private creditors this week in order to negotiate the terms of a debt swap, which would effectively exchange the existing bonds for new securities and include a significant write-down in value. Greek officials have threatened to default on a March bond payment if an agreement is not reached in the near-term. European leaders involved in the negotiations expect a deal to be reached in the next few days. In addition to the Greek talks, economic data remains weak, leading to speculation that the ECB may reduce interest rates even further. Expectations of additional stimulus in the U.S. and possibly China have also helped fuel the rally in global stocks.
To read the full Global Financials Update, click here.
About Matthew
Matthew Lettinga is senior analyst in the firm’s Investment Strategies Group, which focuses on developing the firm’s investment strategy and oversees ongoing manager sourcing, due diligence, portfolio construction, and risk management for the firm’s investment activities. In his role, Matthew is responsible for investment research and due diligence across a variety of traditional and alternative credit-based strategies including hedge funds and private equity. Additionally, he serves as an investment consultant for several Convergent clients, assisting in portfolio construction and manager selection activities. Prior to joining Convergent in 2008, Matthew was a senior associate at Ernst & Young in Washington D.C., where he analyzed client portfolios, provided investment manager recommendations and advised on tax planning strategies for the firm’s high net worth and corporate clients. Matthew earned a Bachelor of Science degree in Finance from Taylor University, is a Chartered Financial Analyst® and holds the Financial Industry Regulatory Authority (FINRA) Series 65 license.