Frost Investment Advisors in the Media

Our investment professionals are often quoted in the financial press. Browse the posts below to see their perspectives.

MorningStar: “Rising Treasury Yields Quiet Investors' Concerns”

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.

Associated Press: “Dow hits record as stock market rally extends into 5th week”

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.

PR Newswire: “Frost Investment Advisors Announces Launch Of Global Bond Fund”

To view full article, click here.

Yahoo! Finance: “Souring Bets on Apocalypse Were at Center of Quant Stock Storm”

(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.

CNN Business: “The IPO market is heating up but investors are shunning unprofitable companies”

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.

Yahoo! Finance: “U.S. Stocks End Mixed as Dollar, Bonds Decline: Markets Wrap”

(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.

Yahoo! Finance “The Final Round”: “September is historically a bad month for stocks. Here's where one investor is buying.”

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.

Bloomberg TV “The Open”: “U.S., China Struggle Over Trade Talks”

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.

Bloomberg Market Radio: “Stringfellow on Markets and Investing”

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.

Grow: “A possible rate cut and US-China trade talks: What to watch in September”

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.

The Seattle Times: “Stocks whipsaw as traders face conflicting trade war signals”

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.

Barron’s: “The Trouble With Tariffs Is Unintended Consequences”

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.

Morningstar: “Strong Earnings Allay Fears Over Trade and Growth — for Now”

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.

Morningstar: “Energy Stocks Lead U.S. Benchmarks Higher”

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.

CNBC: “Rhetoric in DC might be driving global growth slowdown" says, Frost Investment Advisor’s Tom Stringfellow

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.