Our investment professionals are often quoted in the financial press. Browse the posts below to see their perspectives.
The U.S. stock market just capped three days of gains totaling about 17 percent for the S&P 500. Amid concerns about the health and economic toll of the coronavirus outbreak, the S&P 500 remains in a bear market, defined as declines of at least 20 percent from recent highs.
“For those investors who are kicking themselves asking, ‘Why didn’t I get out in this time period?’” says Tom Stringfellow, the president and chief investment officer of Frost Investment Advisors. “The reason is simple: There was really nothing out there that said this could happen so quickly.”
If you do want to make changes to your portfolio, consider selling shares of those companies that are less attractive and investing more in those that are more attractive now, Stringfellow says. “There are so many different industries and stocks that are trading at 30%, 40%, or half off what they were a couple months ago. Investors who felt like those were good securities a few months ago, now have bargain prices.”
Excerpted from CNBC on March 26, 2020. To view full article, click here.
As the stock market has tumbled lower in recent weeks, the Federal Reserve has stepped up in various ways to help stabilize markets and the U.S. economy.
The details of all “the inner workings” of the various tools at the Fed’s disposal “shouldn’t be on the mind of everyday investors,” says Tom Stringfellow, the president and chief investment officer of Frost Investment Advisors. What’s important is to understand that the Fed is trying to boost the broader economy.
The Fed’s actions help to ensure that banks don’t fail and that you have easy, continuous access to your money, he says: “They’re trying to make sure we don’t have a circa-1929 run on the banks.”
“The Fed is trying to stabilize what was becoming a very frantic marketplace,” Stringfellow says.
Excerpted from CNBC on March 24, 2020. To view full article, click here.
Tom Stringfellow, president and chief investment officer of Frost Investment Advisors discussed how the coronavirus is impacting the markets on Yahoo Finance.
To watch interview, click here.
As the economy comes to a standstill to slow the spread of the coronavirus, investors have been looking central banks and governments around the world to support the economy until it can begin to reopen.
"While there is little doubt that countries with quarantines and markets operating under duress will recover, the immediate question faced by central banks, governments and markets alike is whether lowering interest rates and cutting taxes will jump-start the economy and spur consumer demand," Tom Stringfellow, president and chief investment officer at Frost Investment Advisors, said in a note.
"It seems clear that an 11-year plus bull market is now behind us and that the risks of a recession have increased considerably, given the economic slowdown progressing across the globe," Stringfellow said.
Excerpted from USA Today on March 19, 2020. To view full article, click here.
Most public companies based in the San Antonio area took a hit as fears about the growing coronavirus outbreak caused the stock market to plummet this week.
Tom Stringfellow, president and chief investment officer for San Antonio-based Frost Investment Advisors, wrote in a weekly message to stakeholders that investors are increasingly nervous about COVID-19 spilling into broader populations and bringing economic disruption along with it. He said investors are flocking to the safety of the fixed income and gold markets.
“In this environment, investors are punishing stocks, especially those that are directly or even theoretically tied to those economies, markets or supply channels most impacted by the virus. This activity has contributed to the sell-off in energy stocks, as crude prices have fallen in anticipation of a drop-off in oil demand.”
Excerpted from San Antonio Business Journal on February 25, 2020. To view full article, click here.
After most investors in passive, balanced portfolios ended 2019 with significant returns in both their equity and fixed-income allocations, they may be due for a return to more normal return patterns in 2020.
But 2020 will probably be trickier, said Jeffery Elswick, director of fixed income at Frost Investment Advisors.
“Our base forecast for 2020 is looking like a year of around 2% returns,” said Elswick. “Maybe 2.5%, give or take, but much lower than the returns of 2019. In 2019, everything in the U.S. bond market has essentially produced positive returns except one area -- high-yield credit in cyclical industries. Pretty much everything else has been up -- even the loan market.
“We don’t think that’s going to happen again this year.”
Elswick said that any further positive momentum on trade agreements could force yields upward and buoy riskier assets like equities, which would be a negative for rate-focused bond investors in Treasurys and other investment-grade sectors of fixed income.
Khanna and Elswick also expect the Fed to be on hold throughout 2020, barring any surprise policy moves.
Excerpted from Financial Advisor on January 17, 2020. To view full article, click here.
If returns on global equities flatten out over the next 12 months, investors shouldn’t look to the bond universe to juice their portfolio returns. Jeffrey Elswick, director of fixed income at Frost Investment Advisors, was asked to comment on what fixed income is designed to do.
Elswick agrees that recession is not likely in the near future but warns that the global economy is likely to encounter challenges in the year ahead.
“We started saying this to clients quite a few years ago, but we feel like this macro cycle has several more years to go – at least, that’s the scenario with the highest probability,” said Elswick. “The probability of recession goes up every single year, we’re 11 years into this bull market, and we also have some near-term challenges.”
Such events are difficult, if not impossible, to predict, but there seems to be some consensus around a GDP growth rate near 2% for 2020, just barely beating inflation. Elswick said that muted economic growth probably means 2% to 2.5% returns from fixed-income investing, but more positive economic news could cause the bond universe to go negative.
Excerpted from Financial Advisor on January 21, 2020. To view full article, click here.
U.S. stocks rose Thursday, hitting new intraday highs, as investors shifted focus to corporate earnings for cues on the health of the economy after an initial U.S.-China trade deal was sealed.
The robust results reported by some of America's biggest banks are a positive sign for the markets, said Tom Stringfellow, president and chief investment officer at Frost Investment Advisors.
Excerpted from MorningStar on January 16, 2020. To view full article, click here.
Historically, December has been a strong month that has typically delivered most of its gains late in the month, market experts say. The first half of December tends to be weaker because of tax-loss selling, a practice where investors try to reduce their tax bills by selling underperforming shares.
“There’s less economic angst than this time last year,” says Tom Stringfellow, chief investment officer at Frost Investment Advisors. “That carries us into the new year.”
Excerpted from USA Today on December 23, 2019. To view full article, click here.
Yields on U.S. government bonds have rebounded from near-historic lows hit just two months ago, sending one of the clearest signals yet that investors' recent recession fears have waned.
Still, yields in France and Belgium rose above zero last week for the first time in months, lifted by the European Central Bank's September move to cut interest rates and resume bond purchases. Progress toward a trade deal between the U.S. and China could also provide a boost to government debt yields in Europe, because export-driven economies such as Germany's have been hard-hit by slowing growth in China stemming from rising tariffs, said Jeffrey Elswick, director of fixed income at Frost Investment Advisors.
"The data's going to get better in the U.S. and globally," which could push the 10-year Treasury yield as high as 2.5% next year, he said.
Excerpted from MorningStar on November 14, 2019. To view full article, click here.
The Dow Jones Industrial Average returned to a record on Monday, joining other market gauges at all-time highs, as the stock market’s rally carried into a fifth week. Tom Stringfellow, chief investment officer at Frost Investment Advisors, commented on investor sentiment.
“Investors are doing what we’re theoretically supposed to be doing: We’re looking out at the next 12 to 18 months and investing on the basis of where it’s going, not on where we’re at today,” Stringfellow said. “We are investing on expectations that whatever the worst is, we’re there now.”
Of course, all that optimism could wash away quickly if U.S.-China trade talks take yet another turn for the worse, Stringfellow said. But investors likely need to see only incremental improvements, rather than comprehensive deals, to keep the momentum going, he said.
Excerpted from Associated Press on November 4, 2019. To view full article, click here.
To view full article, click here.
(Bloomberg) -- Below its sleepy surface, a breakdown in momentum trades rattled the floor of the U.S. equity market this week. But before getting too worked up about damage to the math whizzes who bore the brunt, it’s worth considering some of the episode’s happier implications.
Then something unexpected happened. Treasury rates reversed course, jumping faster than any time since Donald Trump was elected president. Whether it was improving economic data, signs inflation was back or a relatively quiet week on Trump Twitter, suddenly the rationale for defense was under siege. In a market that didn’t go far, both Ball and American Tower plunged more than 7%.
“The size of the move in the bond market over the last week has been breathtaking,” said Alan Adelman, a senior fund manager at Frost Investment Advisors, which oversees $4.7 billion. “That indicates to us that the risk appetite perhaps is increasing. It’s definitely a bit more of a risk-on type of scenario.”
Excerpted from Yahoo! Finance on September 13, 2019. To view full article, click here.
Money losing unicorns are falling out of favor with investors. The dismal performances of Uber, Lyft and Slack after they debuted on Wall Street earlier this year could be a sign that the appetite for unprofitable companies is waning.
Many of the money-losing companies looking to go public now could struggle because investors are more discerning and are looking for profits, noted Alan Adelman, senior fund manager with Frost Investment Advisors.
"There has been a shift from growth stocks to more value stocks," Adelman said. "Some of the recipients of the go-go growth trade have had the wind taken out of their sails."
Excerpted from CNN Business, September 13, 2019. To view full article, click here.
(Bloomberg) -- U.S. stocks finished the week mixed as Treasury yields jumped to six-week highs and the dollar slipped.
All three major U.S. indexes still closed higher for a third consecutive week after being whipsawed by a rotation from growth to value shares by some investors. Apple weighed on the Nasdaq Friday. Equity indexes in Europe and Asia finished the week in the green thanks to easing trade fears and a new round of central bank stimulus.
“We’re going to see volatility in the market,” said Alan Adelman, a senior fund manager at Frost Investment Advisors, which oversees $4.7 billion. “We’ve seen it this week -- it may not come in absolute price moves -- but we’re going to see volatility.”
Excerpted from Yahoo! Finance on September 13, 2019. To view full article, click here.
Frost Investment Advisors Tom Stringfellow discusses market outlook for September amid escalating volatility.
“The one area that I was really interested, and one of the few that stock is green, is Amazon,” said Stringfellow. “You look at how that’s transforming and that’s not a new topic here, we’ve been talking about it for a few years now, but just in my own house the number of boxes I get from Amazon every day is absolutely staggering. It says there is a transformation in what’s happening in the retail sector.”
“To those consumers who are really nervous about the market, the catch-all is good sustainable yield and yield growth,” said Stringfellow. “I really like companies that fit the growth metrics but have a better than market yield and have a history of raising dividends over a consistent period of time.”
To watch interview, click here.
David Lyon, JPMorgan Private Bank global investment specialist, Tom Stringfellow, Frost Investment Advisors president and chief investment officer, and Brian Nick, Nuveen chief investment strategist, discuss what to expect from the U.S.-China trade talks and how to invest around Brexit uncertainty in the U.K.
“It is interesting looking at the recent trade data,” said Stringfellow. “So much of the manufacturing inside the supply chain has already been pushed forward so we already see a lot of the tech companies getting their products in line for the Christmas rush. That is already in the numbers so what we may see is an earnings surge in some of the technology providers and supply chain early on, but it flattens out a bit later in the year. A lot is baked in already but there could be some surprises so, I’m bullish.”
“I think this is probably one of the first times that I can recall in recent history where international global markets have factored into the decision, at least in public commentary,” said Stringfellow. “The latest fed notes talked about global growth, global economy and global manufacturing. There wasn’t near as much concern on the U.S. economy, but everything that will happen overseas is what could dampen the U.S. economy.”
To watch interview, click here.
Tom Stringfellow, president and chief investment officer of Frost Investment Advisors spoke with Paul Sweeney and Lisa Abramowicz from Bloomberg Radio about volatility in the markets, the current economic environment, what sectors he is buying and if he is selling any assets.
“It’s so difficult to trade in an environment like this because the news and volatility ebbs and flows,” said Stringfellow. “So, when we look at how the markets have done year to date, we are still positive across every major benchmark and throughout most sectors. We are really cautious on making any extreme moves in this market, but we are constantly looking for growth opportunities in companies and more limited volatility.”
“As I’ve read many times, markets don’t die of old age. They die because of an overly aggressive fed heightening, a sector bubble or that unexplained unforeseen risk,” said Stringfellow. “We have an accommodating central bank globally and we have no real sectors that I would consider bubble territory.”
To listen, click here.
Alan Adelman, senior fund manager and senior research analyst at Frost Investment Advisors, provides commentary on market outlook and what’s expected for Fed rate cuts.
Amid signs of slower economic growth, both in the U.S. and globally, “lower interest rates are the trend” that’s likely to continue for the next several months, says Alan Adelman, a senior fund manager and senior research analyst at Frost Investment Advisors. Traders expect central bankers to cut interest rates in the hopes of stimulating economic activity by making it cheaper for consumers and businesses to borrow money.
If the Fed cuts interest rates again this month, as Wall Street expects, it may make sense to refinance your loans. That’s because rates set by the Fed affect how much interest you pay on debt, as well as how much you can earn on your savings.
The stock market likely will experience more bumpiness amid any signs the U.S. economy has slowed further. But don’t let Wall Street’s recession worries upend your long-term investment strategy. Just make sure your portfolio is well diversified, with a mix of assets (like stocks and bonds) that cut across industries, Adelman says. Stock dividends are earning more for investors than many Treasury bonds, a dynamic that makes stocks more attractive, he adds.
Excerpted from Grow, September 3, 2019. To view full article, click here.
BEIJING — Stocks swerved up and down Thursday before ending with a modest gain after China sent conflicting signals about how it would respond to President Donald Trump’s threats of new tariffs and investors took some solace in upbeat economic and earnings data.
“There were a handful of catalysts adding to the markets’ roller-coaster ride, including continuing civil unrest in Hong Kong and escalating fears that trade relations with China are becoming even more derailed,” Tom Stringfellow, chief investment officer at Frost Investment Advisors, said in an emailed note, referring to Wednesday’s slump.
Excerpted from The Seattle Times, August 15, 2019. To view full article, click here.
The new round of tariffs President Donald Trump plans to impose on goods imported from China—and those already in place—are intended to protect American jobs and intellectual property. The problem is that the consequences are difficult to control.
“A quick check of [earnings call transcripts] shows that trade and tariffs come up on 90% of the calls,” Alan Adelman, senior fund manager at Frost Investment Advisors told Barron’s. “It isn’t as negative as one might expect. Companies have become very sophisticated at managing their supply chains.”
Corporations have mitigated cost inflation by moving production out of China to other locations. That’s a good thing.
The problem is the business isn’t coming back to the U.S. “[Companies] are able to shift production to other South Asian locales,” Adelman said.
Excerpted from Barron’s, August 2, 2019. To view full article, click here.
Corporate profits are proving to be more resilient than expected in the second quarter, nudging the stock market higher this month and distracting from anxieties about trade and economic growth.
Alan Adelman, a senior fund manager at Frost Investment Advisors LLC, says current valuations include interest rates coming down and expectations of a trade resolution between the U.S. and China. If either of those don't pan out, stock prices will need to be readjusted, he said. There is also some pricing in of a fourth-quarter bounceback in corporate profits, with earnings projected to climb 4.8% from a year earlier after declining nearly 2% in the third quarter, according to FactSet.
"We're in the late stages of an economic expansion. Things can only go on for so long," said Mr. Adelman, who has been focusing on investing in high-quality stocks that have relatively stable earnings and offer hefty dividends that exceed U.S. Treasury yields. "We have to be realistic. A lot of the positive news in the market is already baked in."
Excerpted from Morningstar, July 29, 2019. To view full article, click here.
Major U.S. stock indexes rose Thursday afternoon, on pace for their first gain in three days, as shares of energy companies climbed. Despite the gains, some money managers note the attacks add another major geopolitical concern for investors to consider on top of trade tensions between the U.S. and China and fears of slowing economic growth.
“There’s a lot of ‘risk-on’ in the market, but this is going to be confusing for investors” over the longer term, said Tom Stringfellow, president and chief investment officer of Frost Investment Advisors. “There’s going to be questions if this leads to bigger things or accelerates tensions.”
Excerpted from Morningstar, June 13, 2019. To view full article, click here.
Guests Tom Stringfellow, Frost Investment Advisors, and Andrew Slimmon, Morgan Stanley Investment Management, discuss the fears of a global growth slowdown.
Tom Stringfellow commented, “I think everything is priced right for a perfect recession, and I don’t see a recession in the cards. I suspect that fourth quarter earnings are trending down because of in-put costs or lack of supply. I do think they are going to look at consumption demand, it’s still rising, wage growth is rising, employment is still stable. That’s going to set the stage for a, I wouldn’t say robust, but a strong enough economy next year to provide that underlying support for the market.”
To watch interview, click here.