In The News

source // Business Wire
Published on // April 26, 2021

Archean Capital Closes Fund II Over $425 Million

Archean announced the close of Archean Capital Fund II, L.P. at over $425 million. “The Archean team has built something special,” said Tadd Wessel, the Founder and Managing Partner of Petrichor Healthcare Capital Management. “Archean has been a key partner in our success. The anchor commitment to our fund enabled immediate new investments and their strategic advice has been invaluable. I could not be more excited for the platform they are building and their future.”

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Veritable Notes

Published on // April 15, 2021

First Quarter 2021 Market Recap

I think that you will all agree that we are living in most interesting times.  I never remember myself a time in which our history was so full, in which day by day brought us new objects of interest, and, let me say also, new objects for anxiety. (Joseph Chamberlain, British statesman, 1898)

How was the quarter? : The rollout of COVID-19 vaccines, continuing large-scale fiscal stimulus, and central banks’ highly accommodative monetary policies have bolstered investors’ confidence in a rapid economic recovery and led to market gains. There was some rotation away from 2020 winners like tech into value and small cap stocks. As evidence of this new twist, the tech-heavy NASDAQ 100 only returned 1.8% while the Dow Jones Industrials, dividend stocks (Vanguard High Dividend Stock ETF) and small cap stocks (Russell 2000) earned 8.5%, 11.2% and 12.7%, respectively.

Objects of interest: SPACs, Reddit, Robinhood, GameStop, Bitcoin and Archegos all made for captivating headlines. Economically speaking, the March jobs report blew past expectations as payrolls rose by 916,000, while the latest report on U.S. manufacturing gave the highest reading since 1983. GDP is closing in on its pre-pandemic high and growth is expected to exceed 6% in 2021, while corporate profits are set to rise more than 20%. Consumers, who have been biding their time during the pandemic, have accumulated excess savings of an estimated $1.5 trillion that could release a wave of pent-up demand later this year. If air travel is any indication, in March 2021 the TSA screened the highest number of passengers in a single day since March 2020.

Objects of anxiety: One object of anxiety is not new – recent market exuberance. There are legitimate questions regarding whether it has been rational or irrational. The market’s recovery since last year is supported by the factors mentioned above. However, other metrics such as the cyclically adjusted PE ratio (CAPE) and the Buffett Indicator (market value to GDP) show the S&P 500 at levels equal to or exceeding those of the tech bubble. A second and newer object of anxiety is inflation. With massive government stimulus, easy monetary policies, and substantial economic growth, the prospect of higher inflation is rising. Unchecked inflation erodes purchasing power and leads to countermeasures that can be recessionary.

What to do?: Investors should gird for a more challenging year ahead, while acknowledging that asset price cycles are inevitable. In fixed income, investors should consider keeping duration at the low end of target ranges and holding some inflation-protected bonds. On the equity side, one should balance growth with value and consider commodity-based equities, liquid alternatives, and private equity to sidestep any potential short-term speed bumps.

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Past performance is not indicative of future results. An investor should not assume that the future performance of any specific investment or investment strategy would be profitable or equal to past performance levels. All investment strategies have the potential for volatile returns and loss of capital.

Veritable Notes

Published on // April 14, 2021

Fixed Income Monthly Commentary – March 2021

Intermediate and long-term interest rates continued to rise over the month with 5+ year Treasury yields increasing 21-34 basis points, further steepening the yield curve which saw the short-end virtually unchanged once again. March marked the second consecutive monthly increase of at least 25 basis points for the 2-year and 10-year Treasury yield spread, which now stands at 158 basis points, the largest since July 2015. The rate rise narrative was……

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Veritable Notes

Published on // March 15, 2021

Fixed Income Monthly Commentary – February 2021

The bear steepening of the Treasury yield curve, in which longer-term rates increase more than shorter-term, not only continued but accelerated in February as reopening efforts, vaccine distribution improvements, and prospects of additional fiscal stimulus buoyed optimism for economic growth. For the month, 5+ year Treasury rates increased 30-40 basis points with the 10-year yield reaching an intra-day high of 1.61% before ending February at 1.41%. By comparison, …

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Veritable Notes

Published on // February 11, 2021

Fixed Income Monthly Commentary – January 2021

For the second consecutive month, the Treasury curve bear steepened as intermediate and long-term yields increased due to economic recovery optimism and rising inflation expectations, while the short-end remained anchored by accommodative Federal Reserve (Fed) monetary policy. The Institute for Supply Management (ISM) surveys indicated that both the manufacturing and service sectors of the U.S. economy expanded for the seventh consecutive month in December and did so at a greater than expected pace.  However, the immediate…..

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