MRM Commentary


Monthly Investment Commentary



    It wouldn’t be a market commentary without news on trade. Last month, after gaining some positive momentum, the trade narrative took a step backward as news broke that it was unlikely a “phase-one” deal would be signed in 2019. Stocks dipped following the news and remained unstable through some parts of the month. On the positive side, data from the housing sector showed signs that the Federal Reserve’s rate cuts are perhaps filtering through the broader economy. And, in the final earnings report before the holiday shopping season, retailers reported mixed results — but that’s not necessarily a sign of consumer weakness.

    This month, we also received another solid read on consumer confidence and spending, which are important metrics as consumers have driven growth while other sectors of the economy have slowed.

    MRM Group claims compliance with the Global Investment Performance Standards (GIPS®).
    Please contact MRM Group to obtain a Compliant Presentation and/or MRM's list of Composite descriptions.

    MRM Portfolio

    Wall Street Wrap
    Trade talks stall, deal could slide into 2020: News broke that completion of a “phase-one” trade deal between the United States and China could drift into 2020, at least according to trade experts and sources close to the White House. China wants to see broader rollbacks of tariffs, while President Trump wants to address intellectual property issues and push China to purchase more agricultural products. Trump, while touring an Apple manufacturing plant in Texas, was asked why he hasn’t inked a deal yet. “I haven’t wanted to do it yet because I don’t think they’re stepping up to the level I want,” he replied.

    Home Builders Upbeat
    We’re seeing signs that the Federal Reserve’s easing is starting to trickle through the broader economy, given positive housing. Homebuilding bounced back in October and permits for future construction exceeded a 12-year high. Housing starts also jumped 3.8 percent (8.5 percent year over year), with single-family construction rising for the fifth month in a row. These factors pushed builder confidence higher. Collectively, these are all signs of strength in the housing market and could be driven by lower mortgage rates, which are tied to the key interest rate that the Fed cut three times this year.

    Mixed Signals From Retailers
    Retailers this month posted a mixed bag of earnings results, but that may not be indicative of overall consumer health. Instead, the gap widens between retailers that are adapting to rapid shifts in the industry and those that aren’t. Case in point: Kohl’s earnings were lower than expected and the retailer reduced its profit guidance, while Target handily exceeded earnings expectations and raised its profit outlook for the year. In other words, the consumer is strong, but their spending behaviors are shifting.

    Business Activity Perks Up
    The IHS Markit Manufacturing Purchasing Managers’ Index rose to 52.2 in November, up from 51.3 in October (anything above 50 indicates expansion), which is the sharpest acceleration since April. It’s a sign that, as trade fears fade a bit, the economy looks to emerge from a rough patch that persisted for much of 2019.


    At MRM we feel “A better course of action, when faced with market volatility, is to treat the media narrative with skepticism and run some simple tests on fundamentals, valuation and positioning to decide on what action, if any, should be taken.” We are bullish on the course of the market.

    Source: Northwestern

    MRM model holdings as of September 30, 2019



    MRM Group, Inc. ("MRM") is an SEC registered investment advisor and an independent management firm that is not affiliated with any parent organization. Using quantitative selection methods, each MRM strategy searches within a well-defined universe of securities, using consistent investment criteria to identify attractive investments and create diversified portfolios. MRM seeks to provide long-term capital growth by generating above-market returns, protecting principal and managing volatility.


    The portfolios do NOT use inverse or leveraged ETFs. Universe vehicles may change, from time to time, when approved by the principal of MRM Group at its sole discretion.


    The S&P 500 Index with dividends is an unmanaged composite of 500 large-capitalization companies whose data is obtained from the Standard & Poor's website. S&P 500 is a registered trademark of McGraw-Hill, Inc. The MSCI EAFE Gross Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada, with data from the MSCI website using price with reinvestment of dividends. The performance of blended benchmarks is shown for comparison because MRM uses securities which track indices related to these products. An investment cannot be made directly into an index.


    MRM Group claims compliance with the Global Investment Performance Standards (GIPS®). MRM has been independently verified for the periods January 1, 2008 through present. The verification report is available upon request. Verification assesses whether (1) MRM has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) MRM's policies and procedures are designed to calculate the present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

    Technical trading models are mathematically driven based upon historical data and trends of domestic and foreign market trading activity, including various industry and sector trading statistics within such markets. Technical trading models, through mathematical algorithms, attempts to identify when markets are likely to increase or decrease and identify appropriate entry and exit points. The primary risk of technical trading models is that historical trends and past performance cannot predict future trends and there is no assurance that the mathematical algorithms employed are designed properly, updated with new data, or can accurately predict future market, industry, and sector performance.

    Valuations are computed and performance is reported in U.S. dollars. Client performance may differ based upon the structure of a particular investment program. For example, some programs are structured as wrap fee programs in which trading costs and brokerage commissions are included in one all-inclusive wrapped fee. As such, these costs may be higher than if the client were to pay trading costs and brokerage commissions separately. The standard management fee is 2.0%. Deviation from the model's diversified structure may result in different risk, return, and diversification characteristics and would therefore not be representative of the models.

    All information contained herein is for informational purposes only. This is not a solicitation to offer investment advice in any state where it would be unlawful. There is no assurance that this platform will produce profitable returns or that any account will have results similar to those of the platform. Past performance is not a guarantee of future results. You may lose money. Factors impacting client returns include individual client risk tolerance, restrictions client may place on the account, investment objectives, choice of broker/dealer or custodians, as well as other factors. Any particular client's account performance may vary substantially from the program results due to, among other things, commission, timing of order entry, or the manner in which the trades are executed. The investment return and principal value of an investment will fluctuate dramatically, and an investor's equity, when liquidated, may be worth more or less than the original cost. Investors should consider the investment objective, risks, charges, and expenses carefully prior to investing.

    Investors should not rely on charts and graphs alone when making investing decisions. Investments in securities of non-US issuers involve investment risks different from those of U.S. issuers, including currency risks, political, social, and economic risks.

    Net-of-fees returns are presented after advisor, management, custodial and trading expenses. The net of fee returns are calculated using actual management fees. The actual fees charged vary and range from .5% to 2.2%, depending on the size of the account and the custodian.

    All MRM platforms are suitable for long term investing.

    Please read the fact sheets and disclosures for each platform carefully before investing.

MRM's website provides in certain places information obtained from outside sources or other website addresses or links. The outside information, or any other website information or links, including market and price information, and any other information from outside sources, contains information maintained or provided by institutions or organizations that are independent from the MRM and MRM Entities. MRM does not approve, recommend or have any control over these unaffiliated entities. MRM cannot guarantee or assume any responsibility for the accuracy or completeness of any information provided by any outside organization or entity, and such information is not considered content or images contained on MRM's website. MRM recommends that a user independently review or verify any information provided by any outside source available on MRM's website before acting or relying on such information. If users click on any third party link, any transactions undertaken or information users submit will be subject to the privacy policy of the third party's website(s). For more information, see the resulting third party's privacy policy.