February 2025 Update

February 2, 2025 — The DeepSeek blip notwithstanding (our initial take on the news is here), January 2025 was a good month for financial markets. The S&P 500 was up a robust 2.7%, though Nasdaq lagged (largely due to DeepSeek, in our opinion) with “only” a 1.7% monthly return. Leading the charge were gold and […]
The Mother of All Bubbles?

January 18, 2025 — In his recent FT piece “How ‘the mother of all bubbles’ will pop,” Ruchir Sharma lays out the case for why U.S. stock market outperformance relative to the rest of the world is unlikely to continue. Our view has been that the substantial outperformance of U.S. versus international markets has been […]
January 2025 Update

January 5, 2025 — After a strong November 2024, markets were generally down in December. The S&P 500 index was down 2.3%, while energy, small caps, value stocks, and REITs performed considerably worse. Nasdaq was a bright spot, up 0.5% in the month, as was the dollar and, despite dollar strength, commodities rallied as well. […]
Does High CAPE Predict Low Market Returns?

December 16, 2024 — The cyclically adjusted price-to-earnings ratio is now elevated. But should that lead you to exit the stock market? Perhaps not. The predictive power of CAPE has waned meaningfully in recent years. CAPE, or the cyclically adjusted price-to-earnings ratio, introduced in 1988 by economists John Campbell and Robert Shiller, is arguably the […]
December 2024 Update

December 3, 2024 — We launched QuantStreet a little over three years ago, and our first accounts went live as of December 2021. In this piece, we take a bit of a look back, and discuss lessons learned and how our business has evolved. But first, a quick peak at the market action of this […]
November 2024 Update

November 3, 2024 — October’s market activity can be neatly summarized in a single chart: the dollar (BBDXY) was strong and U.S. stocks (the VOO ETF tracks the S&P 500 index) meaningfully outperformed international stocks (VXUS). QuantStreet’s portfolios were down on the month, though they moved in line with the overall market. Our performance relative […]
U.S. vs International Stock Performance

October 14, 2024 — Over the last 20 years U.S. stocks and bonds have meaningfully outperformed their global peers, both in absolute terms, and on a risk-adjusted basis. The next chart shows the average annualized excess returns [1] of different asset classes, plotted against their annualized volatility. The returns of international asset classes, highlighted in […]
October 2024 Update

October 2, 2024 — The major market event in September was the Fed’s 50 basis point rate cut following the September 18th Federal Open Market Committee meeting. There was broad consensus the Fed would cut rates, though the 50 basis points (as opposed to 25) and perhaps the tone of Jay Powell’s press conference surprised […]
September 2024 Update

September 2, 2024 — After a bit of an early-August swoon, the stock market came roaring back in the last few weeks of the month. The S&P 500 finished up 2.4%, though certainly in the early days of August, that did not feel like a particularly likely outcome. In client conversations a few days into […]
August 2024 Update

August 1, 2024 — Despite a partial reversal on the final trading day of the month, July saw a large momentum crash with past winners (tech, MTUM) underperforming and past underperformers (small caps, value stocks, REITs) having a stellar month. More broadly, much of what’s been out of favor for the last year had a […]