Powell’s recent Jackson Hole Summit speech was mainly as expected. Well, except for the part where Powell obfuscated the truth behind the surge in inflation.
About once a year, I have to address the issue of chasing the “10 Best Days” of the year.
Fitch’s recent downgrade of the U.S. debt rating alarmed investors as the deficit and debt steadily increased. The downgrade sent 10-year Treasury bond yields above 4%, causing concern about America’s deteriorating financial condition.
Is a stock market rally coming? I think that is most likely the case. However, to understand why, we must review what we said at the beginning of July in “Complacency Seems Overly Complacent.”
Since the beginning of 2022, the media has regularly warned a recession is coming.
Government bonds or stocks? If you were picking an asset class to outperform over the next 18-24 months, which would you choose?
Tax receipts are falling, which has historically preceded economic recessions.
There is a rhythm to the markets, and market cycle lows support bull market recoveries. Recently, Ed Yardeni made a bold prediction that the S&P 500 index could hit a high of 5400 in 2024.
Such is the latest rationalization to support the “bull market” narrative.
Of course, hindsight is always 20/20. Last year there were many reasons to be bearish. Things were seemingly so bad, with everyone expecting a recession, that there was nowhere to go but up.
While Washington continues a seemingly unbridled spending spree under the assumption “more spending” is better, debts and deficits matter. To better understand the impact of debt and deficits on economic growth, we must know where we came from.
No matter what happens, financially or economically, there is always a high number of companies regularly beating Wall Street estimates.
ESG scoring and mandates remain a subject we have contested since it sprang to life in 2020. The push of “woke activism” on, and by companies, to meet nebulous or artificial standards has led to various bad outcomes.
The volatility index is so low it has to go higher eventually. Such seems obvious, but this year, despite the banking crisis, higher interest rates, and slowing economic data, investors continue to abandon hedges amid bullish optimism.
There is much debate as of late on the current market cycle. Is it a bear market? Maybe. But what if this is just a correction within a 40-year-long secular bull market cycle?
Does stock risk decline the longer the holding period is? It’s a great question and something I received a comment about.
Millions of young Americans will face the end of the student loan payment moratorium this summer. Why is this happening now, after a three-year break from payments?
Is the recent rally a “bull trap,” or are we in a new “bull market?” Such was a question I recently received on Twitter. Of course, understanding the term “bull trap” is needed for those not deep into technical analysis.
“Signs” was a song by the Five Man Electrical Band in 1970 about the hippie movement. The song came to mind as I was looking at the economic data recently.
The current market speculation surrounding artificial intelligence (A.I.) has garnered everyone’s attention.
“It’s a ‘New Bull Market’!” Over the past few days, the call of a new bull market has plastered headlines and media commentary.
Bullish sentiment has surged as the “Fear Of Missing Out,” or FOMO, kicked in in recent weeks. It is somewhat interesting to write this blog, given that we discussed the exact opposite roughly one year ago.
The Eurozone just entered a recession as the region posted two consecutive quarters of negative economic growth. The manner in which it entered a recession is a bit quirky.
In several recent blog posts and weekly Bull Bear Reports, we discussed our concern over the narrow breadth of the rally in 2023.
Lately, we discussed macro-related market issues such as the” A.I., chase,” but a technical review can help manage shorter-term risks. Currently, the debate is about the market rally from the October lows. Is it a resumption of the 2009 bull market trend or an extended bear market rally?
Could monetary conditions be supportive of the “soft landing” scenario? While the “recession” versus “no recession” debate rages, there is a precedent for a “soft landing” scenario. Such is where the economy slows substantially but avoids a deeper contraction.
I received many emails and questions on “why” we are adding the U.S. Treasury bond to our portfolios. The question is understandable, given its dire performance in 2022, where bonds had the biggest drawdown since 1786.
The A.I. chase is making for a very narrow market.
The artificial intelligence, or “AI,” revolution is upon us. The financial media and headlines are abuzz with stories of generative “AI” and the subsequent “industrial revolution.”
Could massive monetary support have softened the deep bear market many expected? It is an interesting question. Particularly given the Fed has hiked rates at one of the most aggressive paces in history.
What if I told you that future returns could approach zero? Such seems hard to believe, considering young investors piling back into the markets since the beginning of the year
The COT (Commitment Of Traders) data, which is exceptionally important, is the sole source of the actual holdings of the three critical commodity-trading groups, namely: Commercial Traders, Non-Commercial Traders and Small Traders.
The financial media is rife with misinformation on the debt ceiling and the jump in interest rates. However, a history review shows that the “debt-ceiling” issue is not only a non-crisis, but the recent rise in rates is likely an opportunity to buy bonds.
Taking risks is no longer necessary to make a return on your savings.
In life, there are things that we should be convicted and committed to. For example, the love for our families, spouses, and religious beliefs. We can also be convicted about other things, such as political ideologies, social issues, and environmental causes.
The vast “cash hoard of 2023” has the bullish media salivating about what it means for the future of equities. That cash hoard in money market funds now exceeds $5.2 trillion.
What can breakeven inflation rates tell us about oil prices, energy stocks, and market direction? It turns out it’s a lot more than you think.
Despite media headlines, podcasts, and broadcasts suggesting “doom and gloom” lurks around the corner, investor bullishness has increased markedly since the October lows. This isn’t the first time we have discussed investor sentiment, which is often wrong at the extremes.
Recession odds have climbed considerably since Jerome Powell’s testimony before Congress and the latest FOMC meeting. However, the recent failures of Silicon Valley Bank (SVB) and Credit Suisse (CS), as higher rates impact regional bank liquidity, also added to the risks.
The market bottomed last October despite ongoing concerns about inflation, higher rates, recessionary risks, and a banking crisis. While the media headlines and youtube podcasts are filled with “crisis” headlines, as noted in “Analysts Raise Estimates,” expectations for growth and earnings are rising.
Despite an ongoing “banking crisis,” investors continue to chase stocks triggering several bullish buy signals.
Recession indicators are ringing loudly.
“QE” or “Quantitative Easing” has been the bull’s “siren song” of the last decade, but will “Not QE” be the same?
With the collapse of Silicon Valley Bank, questions of potential “bank runs” spread among regional banks.
Could the consensus view of a “no recession” scenario be wrong? As portfolio managers, this is the question we ask ourselves daily.
Warren Buffett defended stock buybacks in Berkshire Hathaway’s annual letter, pushing back on those railing against the practice he believes benefits all shareholders.
Gen Zers, according to a recent Magnify Money survey, are overly optimistic about being wealthy.
While there are certainly many complaints that “capitalism” is broken, such is not the case.
A recent Wall Street Journal article discussed how retail traders that made millions during the pandemic trading the market are now mostly wiped out.
