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Second Quarter 2020 Update
July 2020

Hamlin equity accounts increased significantly over the last three months as the S&P 500 had its strongest quarter since 1998, gaining 20.54%. Monetary and fiscal stimulus calmed credit and labor markets, and the global spread of coronavirus showed signs of containment. Our municipal bond portfolios increased in value, benefiting from lower rates and Fed-induced spread compression.

We are returning to a “question and answer” format for the summer-time newsletter. We have tried to answer the questions posed most frequently by our clients and business partners over the last few months.

First Quarter 2020 Update
April 2020

 Hamlin equity accounts declined 25.70% over the last three months. The stock market fell at an unprecedented rate as Coronavirus containment efforts brought much of the global economy to a standstill. The Hamlin Bond Composite declined 3.62% as wider municipal bond spreads more than offset consistent coupon income. The speed and magnitude of the stock market’s collapse, eclipsed those of past bear markets. The sharp increase in exchange traded fund ( “ETF ”) ownership and ubiquity of smartphones may have intensified retail investor response to virus-driven predictions of economic disaster. Quarantined in front of emotional CNBC anchors and guests, nervous investors found it historically easy to raise cash.

Fourth Quarter 2019 Update
January 2020

What a difference twelve months can make. A year ago, stocks traded at a reasonable 14x optimistic forward earnings estimates. The S&P 500 Index had just plummeted approximately 19% from its autumn high as the yield curve approached inversion and 82% of corporate CFOs anticipated a recession by 2020. Some of that pessimism proved prescient: Wall Street estimates for 2019 earnings dropped more than 13% during the course of the year and annual profits for the trailing twelve months will likely be flattish. A 30% jump in the forward PE explains almost all of the S&P 500 Index’s 30% advance in 2019. Today, stocks trade above 18x earnings estimates for 2020, which is elevated relative to history.

Third Quarter 2019 Update
October 2019

Investors remain justifiably on recession watch. Inverted yield curves have preceded economic contractions in part because banks have less of an incentive to offer credit. Lower longer term Treasury yields also leave equity portfolio managers with an eerie feeling: why would sophisticated asset allocators eagerly accept such a paltry multi-year return?

Sub-50 Purchasing Manager Indices at home and abroad seem to confirm the signal from the term structure of interest rates. These developments are particularly concerning as they follow five interest rate hikes and the end of quantitative easing by the Federal Reserve. Portfolio managers rightfully wonder if the Fed has classically engineered a downturn in an attempt to avoid anticipated inflation.

Second Quarter 2019 Update
July 2019

Hamlin equity accounts advanced over the last three months. The S&P 500 gained 4.30% during the second quarter as increasing odds of a Federal Reserve interest rate reduction trumped trade war concerns. Our municipal bond portfolios increased in value, benefiting from lower market interest rates and mild spread compression.

We are returning to a “question and answer” format for the summer-time newsletter. We have tried to answer the questions posed most frequently by our clients and business partners over the last few months.

First Quarter 2019 Update
May 2019
Hamlin equity accounts increased 9.08% in value over the last three months. The S&P 500 Index roared back from the Christmas Eve lows on the heels of Fed Chairman Powell’s abrupt policy reversal in early January. Hopes for trade détente with China also stirred animal spirits. The Hamlin Bond Composite gained 2.89% thanks to modest spread compression, lower market yields and generous coupons.
 
Fourth Quarter 2018 Update
January 2019

Hamlin equity accounts decreased in value during the fourth quarter. A long-overdue correction in highflying technology growth stocks spread across sectors as investors contemplated the combination of a hawkish Federal Reserve, decelerating global economic data, and plunging oil prices. Hamlin bond accounts fared well as lower Treasury and rated municipal yields offset a moderate widening of high yield spreads.

Third Quarter 2018 Update
October 2018

Hamlin’s equity accounts increased in value over the last three months. The S&P 500 Index returned 7.7% during the third quarter, shrugging off trade war concerns and tightening Federal Reserve monetary policy. Stocks set new records as strong domestic economic activity drove another double digit advance for corporate earnings. Although 10-year Treasury yields increased 20 basis points during the quarter,  Hamlin’s high-yield tax exempt bond account values advanced modestly.

Second Quarter 2018 Update
July 2018

Hamlin equity accounts advanced over the last three months. The S&P 500 gained 3.43% during the second quarter, defying skeptics. Stocks celebrated strong Q1 corporate earnings performance, digesting another Federal Reserve rate hike and trade policy uncertainty. We are returning to a “question and answer” format for the summer -time newsletter. We have tried to answer the questions posed most frequently by our clients and business partners over the last few months.

First Quarter 2018 Update
April 2018

Hamlin equity accounts decreased modestly in value over the last three months as value and income stocks underperformed the broader market for a fifth consecutive quarter. The S&P 500 Index swung from a 7.5% gain in late January to a 10% correction from the highs as inflation, global trade and technology stock jitters overwhelmed steady increases in earnings expectations.

Fourth Quarter 2017 Update
January 2018

Hamlin equity accounts increased in value over the last three months as the S&P 500 jumped 6.6% in the fourth quarter, celebrating the eventual lowering of corporate tax rates and improving global growth. Treasury yields backed up modestly as bond investors discounted pending fiscal stimulus and a well telegraphed December Federal Funds rate increase. Hamlin high-yield tax exempt municipal portfolios increased in value over the final quarter of 2018.

Third Quarter 2017 Update
September 2017
Hamlin’s equity accounts increased in value over the last three months. The S&P 500 Index jumped 4.5% during the third quarter, shrugging off North Korea’s nuclear antagonism, the wrath of hurricanes Harvey and Irma, and tightening Federal Reserve monetary policy. Stocks set new records in the wake of another double digit advance for corporate earnings, a painless increase in the national debt ceiling and, especially, the prospect of tax reform. Although 10-year Treasury yields increased during the quarter, Hamlin’s high-yield tax exempt bond accounts advanced modestly during the quarter.
Second Quarter 2017 Update
June 2017
Hamlin equity accounts advanced over the last three months. The S&P 500 gained 3.1% during the second quarter, defying skeptics. Stocks celebrated strong Q1 corporate earnings performance, shrugging off uneven economic data, obstruction of justice charges, and another delay in healthcare reform. Hamlin bond accounts also increased in value over the last three months. Our absolute yields and wider spreads delivered commendable relative performance as rated municipal and treasury yields declined modestly.  
First Quarter 2017 Update
March 2017
Hamlin equity accounts increased in value over the last three months as the S&P 500 Index confounded Trump sceptics with a meaningful first quarter gain. Better-than-expected global economic data and accelerating U.S. earnings growth overwhelmed allegations of Russian election tampering, controversy surrounding the Muslim immigration ban, and the embarrassing failure to repeal ObamaCare.