Commentary

30 Oct 2014

By OFI Steelpath

 

Market Overview

For the third quarter of 2014, MLPs, as measured by the Alerian MLP Index (“AMZ”), provided a total return of 2.7% with price performance contributing 1.3% and the remainder earned from distributions or dividends paid.

30 Oct 2014

By Frank Mersch

Market Overview

Towards the end of the third quarter, markets hit a wall on the back of tighter monetary conditions, a glut of new issuances, a weakening Europe and Ebola.

29 Oct 2014

By Frank Mersch

Market Overview

Up until September, the S&P/TSX Composite Index was largely powered by the energy sector. Towards the end of the third quarter however, we saw significant declines in energy, base metals and gold indices.

15 Oct 2014

By Norm Lamarche & Craig Porter

Energy Overview

A number of factors led to the weakness in the energy group, as well as in the broader resources sectors. The geopolitically-charged year finally caught up with the world’s economies.

31 Jul 2014

By Rick Brown

Fixed Income Market Overview

During the month of July, rates were relatively stable, with the U.S. 10-year Treasury starting and ending the month in the mid 2.50% range. It hit a high of 2.639% on July 3rd, before breaking lower mid-month to 2.447%. However, the end of the month saw the U.S. 10-year jump 10 bps higher on the back of stronger than expected GDP numbers out of the U.S.

24 Jul 2014

By OFI Steelpath

Market Overview

For the second quarter of 2014, MLPs, as measured by the Alerian MLP Index (“AMZ”), provided a total return of 14.2% with price performance contributing 12.6% and the remainder earned from distributions or dividends. For context, the broader market, as measured by the S&P 500, provided a return of 5.2% with price performance contributing 4.7%. Notably, this represents the first time the AMZ has meaningfully outperformed the S&P 500 index, on both a price and total return basis, since the first quarter of 2013.

21 Jul 2014

By Norm Lamarche & Craig Porter

Energy Overview

Readers of our commentaries over the past five years have come to appreciate that North American energy has not only been a large theme at Front Street Capital, but also for very non-conventional reasons.

18 Jul 2014
Chemicals & Energy

In May, the Chemical Activity Barometer (CAB) reached its highest peak since February 2008. It also had its biggest gain year over year since September 2010. This is a leading economic indicator created by the American Chemistry Council (ACC) that has been shown to lead the National Bureau of Economic Research by four months on average, since 1919.

17 Jul 2014

By Frank Mersch

Equity Market Overview

The S&P/TSX Composite Index registered a +5.7% return for the quarter, with a +11.2% return year to date. The strongest returns were seen in the energy (+9.7%) and industrials (+9.0%) sectors, with the weakest sectors being utilities (+0.2%), telecom services (-0.3%) and health care (-6.6%).

17 Jul 2014

By Frank Mersch & Rick Brown

Equity Market Overview

The S&P/TSX Composite Index registered a +5.7% return for the quarter, with a +11.2% return year-to-date. The strongest returns were seen in the energy (+9.7%) and industrials (+9.0%) sectors, with the weakest sectors being utilities (+0.2%), telecom services (-0.3%) and health care (-6.6%).

17 Jul 2014

By Frank Mersch & Rick Brown

Equity Market Overview

At the end of the second quarter, the big picture is that the secular bull market is very much intact. U.S. corporate fundamentals, and moreover the U.S. recovery, remain the bellwether for the rest of the world.

15 Jul 2014

By Frank Mersch

Equity Market Overview

At the end of the second quarter, the big picture is that the secular bull market is very much intact. U.S. corporate fundamentals, and moreover the U.S. recovery, remain the bellwether for the rest of the world.

15 Jul 2014

By Rick Brown

Fixed Income Market Overview

To date, 2014 has been an ideal environment for high yield. Economic data continues to be good, but not spectacular. This has led to a very stable rate environment with extremely low volatility.

17 Apr 2014

By Rick Brown

Despite a weaker start to the year, the overall market performed reasonably well during Q1.  Demand for assets, as risk appetite returned to the market, helped push equity indices to all-time highs. With tensions in the emerging markets—particularly eastern Europe—giving the market reason to pause, investors seemed to shrug off concerns and view every pullback as a buying opportunity, pouring back into the market on any weakness.

17 Apr 2014

By Frank Mersch & Rick Brown

Equities Overview

The first quarter saw the re-emergence of the materials (+9.2%), and energy (+8.7%), sectors as big drivers, due to their overall weightings, of the performance in the S&P/TSX Composite Index in Q1. In absolute terms, auto components and pharmaceuticals performed the best, ranking one and two respectively. The weaker performers were telecommunications companies (+3.0%), financials (+1.9%), and industrials (+1.8%).

16 Apr 2014

Market Commentary

For the first quarter of 2014, MLPs, as measured by the Alerian MLP Index (“AMZ”) provided a total return of 1.9% with price performance contributing only 0.4% and the remainder earned from distributions or dividends. For context, the broader market, as measured by the S&P 500, provided a similar return of 1.8% with price performance contributing a more meaningful 1.3%.

15 Apr 2014

By Norm Lamarche

Global equity markets were challenged in the first 3 months of 2014 in what proved to be a headline-driven quarter. In the world’s largest economy, for example, economic activity was disrupted by the harsh ‘polar vortex’ weather. The world’s second largest economy, China, showed continued deceleration—beyond the Chinese government’s stated economic targets—leaving analysts to reset their growth expectations lower. The first quarter was also geopolitically charged, with tensions in Russia at the fore.

15 Apr 2014

The Front Street Value Class has been positioned to take advantage of 3 main themes that we see developing in the U.S. market.

15 Apr 2014

By Frank Mersch & Rick Brown

Equities Overview

The first quarter saw the re-emergence of the materials (+9.2%), and energy (+8.7%), sectors as big drivers, due to their overall weightings, of the performance in the S&P/TSX Composite Index in Q1. In absolute terms, auto components and pharmaceuticals performed the best, ranking one and two respectively. The weaker performers were telecommunications companies (+3.0%), financials (+1.9%), and industrials (+1.8%).

15 Apr 2014

By Norm Lamarche

Global equity markets were challenged in the first 3 months of 2014 in what proved to be a headline-driven quarter. In the world’s largest economy, for example, economic activity was disrupted by the harsh ‘polar vortex’ weather. The world’s second largest economy, China, showed continued deceleration—beyond the Chinese government’s stated economic targets—leaving analysts to reset their growth expectations lower. The first quarter was also geopolitically charged, with tensions in Russia at the fore.

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The opinions expressed herein reflect those of the individual portfolio manager. These opinions are subject to change at any time based on market or other conditions, and Front Street Capital disclaims any responsibility to update such views. These opinions may differ from those of other portfolio managers or of Front Street Capital as a whole.

These views are for informational purposes only and are not intended to be a forecast of future events, a guarantee of future results or investment advice. All data referenced herein are from sources deemed to be reliable but cannot be guaranteed.

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If specific securities are referenced, they have been selected by the portfolio manager on an objective basis to illustrate the views expressed herein. Such references do not include all material information about such securities, including risks, and are not intended to be recommendations to take any action with respect to such securities. Referenced securities may not be representative of the portfolio manager's current or future investments and are subject to change at any time.