Are risks growing or will the bull market continue? We believe the answer to both is yes. Political bumbling, monetary policy shifts, and geopolitical tensions have all escalated, but the bull continues to power ahead, largely unscathed by the tumult that surrounds it.
Valuations continue to reach new highs, and the market looks very expensive—by some measures, the third highest of all time after 1929 and 1999. Meanwhile, the economy is showing signs of slowing.
I am not quite sure how I met Leon Tuey, but meet him I did a few years ago, much to my benefit. My guess it was through either a mutual friend or a Canadian reporter that we both speak to.
When looking at the stock market, one of the key things we should focus on are earnings, as they represent the bedrock of a stock’s value. The best way to value stocks—the dividend growth model—analyzes earnings, growth rates, and required returns to determine what a stock is worth fundamentally.
Market risks come in three flavors—recession risk, economic shock risk, and risks within the market itself. Using a red light/yellow light/green light system, this monthly post explores the risk level in the markets, based on a number of factors.
The data for June was generally positive, with a rebound in job growth and a surprise increase in business confidence supported by continued high levels of consumer confidence.
We first published this in 2014, but decided to republish it today given the cover story of Barron’s that reads “The Machine Driven Market,” which intuitively means the era of those machine driven models is nigh. I like this story.
The environment for U.S. and global stocks continues to be in decent shape, but some risks are elevated and the possibility of a pullback exists. A notable potential driver of bouts of volatility could be U.S. and global central bank policy as they sail toward monetary policy normalization.
It is a Seinfeld market. The story is about nothing, but must be described along the way. With nothing better to discuss, people will be asking what should we expect for the rest of 2017.
Despite a weak first quarter, the second quarter has looked good, and signs are pointing to a solid remainder of the year. Recent data has shown an expanding economy, while companies have grown both their top and bottom lines. Markets around the world have reacted to this by rising substantially, and we’ve continued to hit new highs here in the U.S.