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Tower Bridge Advisors

January 27, 2023 – January strength continues to pull money in from the sidelines as FOMO is creeping back into the market. A 5% jump in the opening month historically portends to a solid year. While earnings are coming in mixed and guidance even more muted, it is the stock’s reaction that matters more.

//  by Tower Bridge Advisors

Quite the turnaround from Microsoft’s# earnings and guidance that showed a more dramatic pullback for cloud and office spending than expected. The stock opened down $10 (4.5%), as Jim noted in Wednesday’s update. It ended the day basically flat. In fact, the entire market opened down around ~1.5% before gradually climbing its way back to …

January 27, 2023 – January strength continues to pull money in from the sidelines as FOMO is creeping back into the market. A 5% jump in the opening month historically portends to a solid year. While earnings are coming in mixed and guidance even more muted, it is the stock’s reaction that matters more.Read More

January 25, 2023 – Microsoft’s somber outlook will throw a bucket of cold water on stocks this morning. While the reaction to a weak outlook is likely to be less severe than the pummeling tech stocks took after third quarter earnings reports, the news is likely to burst the recent bubble of optimism that an all-clear signal will be sounded imminently. Market volatility continues for now without setting interim new highs or lows.

//  by Tower Bridge Advisors

Stocks rallied yesterday in front of Microsoft’s# earnings report. At first, after Microsoft reported results shortly after 4 pm, the stock rallied over 2% confirming yesterday’s strength in the market. But once the post-report conference call began, what appeared from the numbers to be earnings in line with expectations melted as management added color that …

January 25, 2023 – Microsoft’s somber outlook will throw a bucket of cold water on stocks this morning. While the reaction to a weak outlook is likely to be less severe than the pummeling tech stocks took after third quarter earnings reports, the news is likely to burst the recent bubble of optimism that an all-clear signal will be sounded imminently. Market volatility continues for now without setting interim new highs or lows.Read More

January 23, 2023 – Stocks remain in a trading range, pushed higher by declining long-term interest rates and pushed lower by economic fears. While markets trade within a range, there are winners and losers reacting to their own set of fundamentals.

//  by Tower Bridge Advisors

Stocks rebounded Friday although they ended the week lower. Leading averages remain contained within a range going back to the beginning of November. Lower long-term interest rates, reacting to news of softening inflation and a slowing economy, help to push prices higher, while fears of recession and valuation concerns work to keep prices contained. What …

January 23, 2023 – Stocks remain in a trading range, pushed higher by declining long-term interest rates and pushed lower by economic fears. While markets trade within a range, there are winners and losers reacting to their own set of fundamentals.Read More

January 20, 2023 – 2022 was a battle over inflation and how high interest rates would go. 2023 is turning into a battle over recessionary conditions and how much negative news is priced into stocks and bonds. There is wide disagreement on both, leading to an even cloudier picture for investors.

//  by Tower Bridge Advisors

In 2022, when the Fed was battling inflation, bad economic news was “good” and vice versa. Every data point that showed slowing jobs, lower earnings and a decline in spending put investors at ease in hopes that the Fed would win the battle over rising global inflation and not raise rates too far. “Don’t fight …

January 20, 2023 – 2022 was a battle over inflation and how high interest rates would go. 2023 is turning into a battle over recessionary conditions and how much negative news is priced into stocks and bonds. There is wide disagreement on both, leading to an even cloudier picture for investors.Read More

January 18, 2023- It’s earnings season. Goldman Sachs’ weak numbers yesterday sent stocks lower. A few good earnings reports will move them in the other direction, at least for the next two weeks. Meanwhile we are seeing rotation back to early cycle names, a good sign. Picking tomorrow’s winners means looking forward, not chasing what led the market in the last bull run.

//  by Tower Bridge Advisors

Stocks fell yesterday in a relatively quiet mixed session. While the Dow fell a full percentage point, other leading averages fell much less. The main culprit was Goldman Sachs whose disappointing earnings report sent its shares down over 6%. That accounted for 40% of the Dow’s decline by itself. Elsewhere, the bond market was quiet, …

January 18, 2023- It’s earnings season. Goldman Sachs’ weak numbers yesterday sent stocks lower. A few good earnings reports will move them in the other direction, at least for the next two weeks. Meanwhile we are seeing rotation back to early cycle names, a good sign. Picking tomorrow’s winners means looking forward, not chasing what led the market in the last bull run.Read More

January 13, 2023 – Finally, a CPI report that did not send shockwaves through markets. A relatively in-line update with the first month-over-month decline in prices was welcome news. This continued a streak of declining monthly inflation reports and should show the Fed that it is time to slow their aggressiveness. Things will not be that easy though.

//  by Tower Bridge Advisors

Markets have been hinging on employment and inflation reports for months now, causing ripple effects on every tenth of a point in either direction. A tame, but positive, stock and interest rate response to December’s update yesterday was about the only shock provided relative to the wild swings usually accompanying the releases. Generally, money flowed …

January 13, 2023 – Finally, a CPI report that did not send shockwaves through markets. A relatively in-line update with the first month-over-month decline in prices was welcome news. This continued a streak of declining monthly inflation reports and should show the Fed that it is time to slow their aggressiveness. Things will not be that easy though.Read More

January 11, 2023 – Earnings season kicks off Friday. December CPI data will be released tomorrow. Both could be market moving. The expectation is that inflation will continue to moderate while earnings are likely to decline slightly.

//  by Tower Bridge Advisors

Stocks nudged higher yesterday building on last week’s improvement, but gains were tentative ahead of tomorrow’s CPI report and the start of earnings season Friday, when several large banks report. The CPI report for December price movements will be the last one before the FOMC meeting commences at the end of this month.  Month-to-month changes …

January 11, 2023 – Earnings season kicks off Friday. December CPI data will be released tomorrow. Both could be market moving. The expectation is that inflation will continue to moderate while earnings are likely to decline slightly.Read More

January 9, 2023 – Friday’s rally was a celebration of the fact that wage increases are showing clear signs of moderating. The Fed is winning its battle against inflation and can hopefully stop raising short-term interest rates soon. The impact of higher rates is already priced into stocks. The effect on earnings will be seen shortly as corporate managements share their outlook when they report 2022 earnings. That collective optimism or pessimism will determine the near-term path for stock prices.

//  by Tower Bridge Advisors

It was an up week to start 2023. A good beginning is always a good sign. With that said, it was an up and down week punctuated at the end by a solid reaction to an employment report that indicated that wage pressures are receding a bit. Headcount growth of 223,000 jobs was still a …

January 9, 2023 – Friday’s rally was a celebration of the fact that wage increases are showing clear signs of moderating. The Fed is winning its battle against inflation and can hopefully stop raising short-term interest rates soon. The impact of higher rates is already priced into stocks. The effect on earnings will be seen shortly as corporate managements share their outlook when they report 2022 earnings. That collective optimism or pessimism will determine the near-term path for stock prices.Read More

January 6, 2023 – A calendar flipping to a new year causes some near-term movement for beaten down stocks and yesteryear’s winners, but the economic landscape does not change overnight. Data so far this week has been constructive, with ADP employment metrics, job losses and other reports coming in stronger than expected. Good news is bad news for anyone hoping the Fed will ease in 2023.

//  by Tower Bridge Advisors

The Santa Claus rally worked again this season, producing above-average returns. However, data releases continue to put pressure on relief rallies this week, now that traders are coming back to the office. Fed Minutes, which detail what the Fed discussed in December, pointed to increased concerns that they are losing their messaging power. With stocks …

January 6, 2023 – A calendar flipping to a new year causes some near-term movement for beaten down stocks and yesteryear’s winners, but the economic landscape does not change overnight. Data so far this week has been constructive, with ADP employment metrics, job losses and other reports coming in stronger than expected. Good news is bad news for anyone hoping the Fed will ease in 2023.Read More

January 4, 2023 – The die has been cast. The Fed in 2023 will finish its work to defeat inflation. While that may mean short-term pressure on economic growth and corporate earnings, the end result will be better times and lower inflation ahead. Although there might be some pain early in the year, the investment outlook will brighten considerably as the year unfolds.

//  by Tower Bridge Advisors

Welcome to 2023. Yesterday’s market seemed a bit different than late December. Futures early on suggested a strong start, but that faded quickly. Soon markets were down almost a full percentage point. That certainly didn’t feel very different from last week! But over the course of the rest of the day, persistent selling disappeared, except …

January 4, 2023 – The die has been cast. The Fed in 2023 will finish its work to defeat inflation. While that may mean short-term pressure on economic growth and corporate earnings, the end result will be better times and lower inflation ahead. Although there might be some pain early in the year, the investment outlook will brighten considerably as the year unfolds.Read More

December 30, 2022 – Maybe the Santa Claus rally is just arriving late? Stocks staged a solid rebound yesterday with every sector finishing positive. Year-end tax selling only has one day left, opening the doors for a relief rally in the most beaten down stocks. Not all investments are created equal going forward.

//  by Tower Bridge Advisors

Technology favorites from the past decade were hammered in 2022. FANG and related names were the last to fall. Two behemoths finally succumbed to market pressures as Apple and Tesla post significant losses (12% and 37%) in December alone. It is often noted that bear markets eventually get to every company, with the best getting …

December 30, 2022 – Maybe the Santa Claus rally is just arriving late? Stocks staged a solid rebound yesterday with every sector finishing positive. Year-end tax selling only has one day left, opening the doors for a relief rally in the most beaten down stocks. Not all investments are created equal going forward.Read More

December 28, 2022 – 2022 is a year both equity and bond investors will like to forget. 2023 could start bumpy but skies should clear as the year progresses.

//  by Tower Bridge Advisors

Stocks were mixed once again with the Dow Industrials rising while the NASDAQ continued to get thumped. New 52-week highs were set by Merck and Caterpillar. New lows were set by Tesla and Apple#. I don’t have to say much more. At the start of the bear market, I noted two primary influences. First, the …

December 28, 2022 – 2022 is a year both equity and bond investors will like to forget. 2023 could start bumpy but skies should clear as the year progresses.Read More

December 23, 2022 -The Santa Claus rally will have to wait. Although Nike and FedEx reported much better earnings than expected, Micron and a few other data points followed them with less than rosy projections. Bad news was good when markets wanted the Fed to slow their pace of rate increases. Now, bad news is bad as we attempt to find a soft landing instead of a deep recession.

//  by Tower Bridge Advisors

In a CNBC interview yesterday morning, a less than enthused David Tepper, one of the greatest investors of all time, along with a dour semiconductor outlook from Micron’s latest earnings disaster, and the start of a blackout period for stock buy backs put an end to the much-anticipated Santa Claus rally. Tepper’s comments are consistent …

December 23, 2022 -The Santa Claus rally will have to wait. Although Nike and FedEx reported much better earnings than expected, Micron and a few other data points followed them with less than rosy projections. Bad news was good when markets wanted the Fed to slow their pace of rate increases. Now, bad news is bad as we attempt to find a soft landing instead of a deep recession.Read More

December 21, 2022 – 2022 was a year when rising rates and inflation dominated markets. In 2023, both rates and inflation should fall by the end of the year. The focus will shift to earnings sustainability. But by the end of next year, skies should be materially brighter than they are today.

//  by Tower Bridge Advisors

Stocks finally rallied yesterday after a 4-day decline that reached 5% bringing equities back toward fair value. Bond prices fell sharply for the second straight day in reaction to a surprisingly aggressive move by Japan’s central bank. The U.S. 10-year Treasury yield has now risen a full quarter of a percentage point since its low …

December 21, 2022 – 2022 was a year when rising rates and inflation dominated markets. In 2023, both rates and inflation should fall by the end of the year. The focus will shift to earnings sustainability. But by the end of next year, skies should be materially brighter than they are today.Read More

December 19, 2022 – The sharp drop in equity prices last week was as much a response to overvaluation conditions that preceded the Fed’s announcement as it was an indication of a change in economic direction. Despite some volatility, the bond markets were almost unchanged for the week. Bond markets appear more negative than the Fed regarding future economic growth prospects. The bond market may not always be right but FOMC member predictions are usually wrong.

//  by Tower Bridge Advisors

Stocks dropped sharply last week after stern comments from Fed Chairman Jerome Powell suggesting the fight against inflation was nowhere near complete despite two consecutive CPI reports that were better than expected. While goods inflation has receded and key commodities like oil are in incline, at least for the moment, wage pressures remain high as …

December 19, 2022 – The sharp drop in equity prices last week was as much a response to overvaluation conditions that preceded the Fed’s announcement as it was an indication of a change in economic direction. Despite some volatility, the bond markets were almost unchanged for the week. Bond markets appear more negative than the Fed regarding future economic growth prospects. The bond market may not always be right but FOMC member predictions are usually wrong.Read More

December 16, 2022 – Chairman Powell, along with a punk retail sales update for the critical Holiday season, took away recent enthusiasm for a pivot from investors. Following a rapid ~20% rise in stocks since October, a realization that things are not all that rosy for 2023 is coming to the fore. Bond and stock markets are at distinct odds right now.

//  by Tower Bridge Advisors

Another Fed meeting came and went with little to be surprised about, at least for readers of our commentary. The Fed has been crystal clear on their intention to get inflation under control. They continue to emphasize that this requires a rise in unemployment and a decline in wages. The labor market is too strong …

December 16, 2022 – Chairman Powell, along with a punk retail sales update for the critical Holiday season, took away recent enthusiasm for a pivot from investors. Following a rapid ~20% rise in stocks since October, a realization that things are not all that rosy for 2023 is coming to the fore. Bond and stock markets are at distinct odds right now.Read More

December 14, 2022- Today is FOMC day. Whatever markets do before the rate announcement at 2 pm is likely to change quickly, not because there is doubt about a 50-basis point increase, but because traders make lots of bets beforehand that need to be unwound. Markets will focus on what Chair Powell has to say afterwards, but the reality is that the path of future rate increases next year will be based on facts not available today.

//  by Tower Bridge Advisors

Stocks soared at the open yesterday after a favorable CPI report showed inflation slowing. Markets then faded as investors realized the good news by itself would have no bearing on pending Fed policy. By day’s end, gains were minor and inconsequential. Now traders await the conclusion this afternoon of the FOMC meeting. A 50-basis point …

December 14, 2022- Today is FOMC day. Whatever markets do before the rate announcement at 2 pm is likely to change quickly, not because there is doubt about a 50-basis point increase, but because traders make lots of bets beforehand that need to be unwound. Markets will focus on what Chair Powell has to say afterwards, but the reality is that the path of future rate increases next year will be based on facts not available today.Read More

December 12, 2022 – Today, markets await tomorrow’s CPI report and Wednesday’s conclusion of the FOMC meeting. Both could be market moving, but neither is likely to change the longer-term economic needle by itself. Both inflation and economic growth are going to decline, as will earnings forecasts. Those are already discounted in the market. Long term values for stocks will be much more dependent on company fundamentals than short-term changes in the economic outlook, assuming any downturn is brief and moderate.

//  by Tower Bridge Advisors

Stocks fell once again on Friday and have now retreated to levels last seen a month ago. Tomorrow morning a report on consumer prices will be released moments before the FOMC commences its two-day meeting. Both the release and the meeting are likely to be market moving. While we don’t know the CPI data yet, …

December 12, 2022 – Today, markets await tomorrow’s CPI report and Wednesday’s conclusion of the FOMC meeting. Both could be market moving, but neither is likely to change the longer-term economic needle by itself. Both inflation and economic growth are going to decline, as will earnings forecasts. Those are already discounted in the market. Long term values for stocks will be much more dependent on company fundamentals than short-term changes in the economic outlook, assuming any downturn is brief and moderate.Read More

December 9, 2022 – A 4% drop so far in December finally created some buyers as major averages finished solidly in the green yesterday. As we near year-end, some critical questions remain for payrolls, energy and the changing banking landscape.

//  by Tower Bridge Advisors

After seeing major averages down for eight of the last nine sessions, it became time for a minor relief rally. China continues to point towards a relaxation of their still overly restrictive Covid lockdown measures, which should help up and down the food chain. Economic data continues to point towards a resilient consumer, who with …

December 9, 2022 – A 4% drop so far in December finally created some buyers as major averages finished solidly in the green yesterday. As we near year-end, some critical questions remain for payrolls, energy and the changing banking landscape.Read More

December 7, 2022 – Stocks plummeted for the second day in a row, raising the caution flag. Markets simply got overvalued. Obviously, the FOMC meeting next week will matter, but valuation trumps all else in the long run. Assuming stocks trade within 10% of fair value most of the time, by last Friday they passed the upper end of that range.

//  by Tower Bridge Advisors

Stocks fell for the second straight session, although a modest late rally lessened the damage yesterday. Pundits suggested that rising recession fears, concerns over China’s zero-Covid policy, or trepidation that the Fed might raise interest rates more than previously expected accounted for the declines. I think it is simpler than that. Since the rally began …

December 7, 2022 – Stocks plummeted for the second day in a row, raising the caution flag. Markets simply got overvalued. Obviously, the FOMC meeting next week will matter, but valuation trumps all else in the long run. Assuming stocks trade within 10% of fair value most of the time, by last Friday they passed the upper end of that range.Read More

December 5, 2022 – We are in one of those mid-quarter quiet times when any surprise could elicit an outsized reaction. Without any surprise the focus will shift to next week’s FOMC meeting. Seasonal momentum is still working in the stock market’s favor, so are declining long term bond yields.

//  by Tower Bridge Advisors

A stronger than expected jobs report sent stocks lower early Friday but an afternoon rally erased most of the losses. The rally demonstrated the market’s current strong momentum. We are once again at a time on the calendar when there is relatively little in the way of corporate or economic news, at least until next …

December 5, 2022 – We are in one of those mid-quarter quiet times when any surprise could elicit an outsized reaction. Without any surprise the focus will shift to next week’s FOMC meeting. Seasonal momentum is still working in the stock market’s favor, so are declining long term bond yields.Read More

December 2, 2022 – On Wednesday, Chairman Powell offered an early holiday treat for markets, especially growth stocks. While his comments jibe with what most Fed officials have been saying for weeks, it was welcome news following the blowup from his surprisingly hawkish Jackson Hole speech a few months ago. Not much follow-through yesterday though, as major averages ran into significant resistance levels.

//  by Tower Bridge Advisors

Chairman Powell’s final speech before a blackout window starts was one for the bulls. Prior to the next Fed meeting in a couple of weeks, he made sure to lock in a 50bps rate hike as the time has come for moderation in the size of increases down from 75bps. This was (or should have …

December 2, 2022 – On Wednesday, Chairman Powell offered an early holiday treat for markets, especially growth stocks. While his comments jibe with what most Fed officials have been saying for weeks, it was welcome news following the blowup from his surprisingly hawkish Jackson Hole speech a few months ago. Not much follow-through yesterday though, as major averages ran into significant resistance levels.Read More

December 1, 2022 – Fed Chair Powell’s speech was more market friendly than anticipated sparking a 2%+ rally. With that said, rates are still headed higher, at least at the short end of the curve, and earnings likely are headed lower. Seasonal momentum remains strong, but valuation becomes an increasing concern as stock prices keep rising.

//  by Tower Bridge Advisors

Stocks took off yesterday after Fed Chair Jerome Powell strongly indicated that the Fed would start to reduce the pace of future interest rate increases. He did leave some wiggle room noting that there are at least two key economic data points between now and the next Fed rate decision in two weeks, which are …

December 1, 2022 – Fed Chair Powell’s speech was more market friendly than anticipated sparking a 2%+ rally. With that said, rates are still headed higher, at least at the short end of the curve, and earnings likely are headed lower. Seasonal momentum remains strong, but valuation becomes an increasing concern as stock prices keep rising.Read More

November 28, 2022 – Futures point lower this morning amid Chinese concerns and a tepid start to the holiday season. Fair value for stocks is at or below current prices, suggesting a slower pace in the rise of the past two months may be in order despite seasonal influences.

//  by Tower Bridge Advisors

Stocks were mixed on Friday in a shortened holiday session. Bond yields continued to fall.  Indeed, probably the biggest economic story over the past month has been the decline of over 50-basis points in yield on the 10-year Treasury in the face of stronger than expected economic data. Third quarter GDP grew by over 2.5%, …

November 28, 2022 – Futures point lower this morning amid Chinese concerns and a tepid start to the holiday season. Fair value for stocks is at or below current prices, suggesting a slower pace in the rise of the past two months may be in order despite seasonal influences.Read More

November 25, 2022 – Momentum continues to push stocks towards the upper end of their trading ranges. Investors still have plenty of cash on the sidelines. So long as the dollar and interest rates continue their recent declines, stocks could keep advancing. As stocks start to recoup earlier losses, valuations are becoming quite full again. We examine some relevant questions investors have been contemplating lately.

//  by Tower Bridge Advisors

Although Black Friday is not the shopping spree it used to be, bond and stock markets will close early today. The tradition started back in 1992 as exchanges realized that traders and professionals took the day off, which created very thin trading volumes. Retailers still look forward to the day, which turns their yearly profit …

November 25, 2022 – Momentum continues to push stocks towards the upper end of their trading ranges. Investors still have plenty of cash on the sidelines. So long as the dollar and interest rates continue their recent declines, stocks could keep advancing. As stocks start to recoup earlier losses, valuations are becoming quite full again. We examine some relevant questions investors have been contemplating lately.Read More

November 23, 2022 – Stocks continued to rally as fears of recession receded. Earnings reports from retailers were generally positive, reflecting an economy that is still growing. Inflation appears to have peaked. Gasoline prices are down 3% in a week, not bad right before holiday travel starts. In short, investors are still in a good mood. Valuation concerns will ultimately limit the upside from here.

//  by Tower Bridge Advisors

Stocks continued to climb as fears of a recession waned. Bond markets were relatively quiet. Oil prices rebounded as traders were unsure whether OPEC would raise production as much as rumored when the next phase of embargoes of Russian crude takes place in early December. Investors continue to digest the Fed’s intent to raise interest …

November 23, 2022 – Stocks continued to rally as fears of recession receded. Earnings reports from retailers were generally positive, reflecting an economy that is still growing. Inflation appears to have peaked. Gasoline prices are down 3% in a week, not bad right before holiday travel starts. In short, investors are still in a good mood. Valuation concerns will ultimately limit the upside from here.Read More

November 21, 2022 – It should be a quiet holiday week with little in the way of important corporate or economic news on the horizon. The big corporate story this morning, is the return of Bob Iger as CEO of Disney. Crypto talk still dominates the front page but has little bearing on overall financial markets.

//  by Tower Bridge Advisors

Stocks rose again Friday, lifted by a late afternoon rally. Bond yields crept higher. Oil prices fell. The tech sector continues to lag, a combination of valuation concerns and deteriorating demand. This is Thanksgiving week. Markets will be closed Thursday and trading hours will be shortened Friday. More Americans will be focused on travel and …

November 21, 2022 – It should be a quiet holiday week with little in the way of important corporate or economic news on the horizon. The big corporate story this morning, is the return of Bob Iger as CEO of Disney. Crypto talk still dominates the front page but has little bearing on overall financial markets.Read More

November 18, 2022 – As we enter the final weeks of a very rough 2022, one must start looking towards 2023. Unfortunately, the outlook is just as cloudy. While the Fed rate hiking schedule will come to an end, previous rate hikes are still cycling through our economy. Seasonality usually favors the bulls following an election and post-Halloween, but that does not always work. In the end, we must see earnings rise to expect gains to advance from here.

//  by Tower Bridge Advisors

Six months ago, major stock averages were at similar levels as today. The Dow Jones Industrial average has been the strongest since then, with a ~2% advance since June. Rotation has occurred, with funds flowing out of mega-cap technology leaders and into commodity related areas, but for the most part, stocks have gone nowhere. However, …

November 18, 2022 – As we enter the final weeks of a very rough 2022, one must start looking towards 2023. Unfortunately, the outlook is just as cloudy. While the Fed rate hiking schedule will come to an end, previous rate hikes are still cycling through our economy. Seasonality usually favors the bulls following an election and post-Halloween, but that does not always work. In the end, we must see earnings rise to expect gains to advance from here.Read More

November 16, 2022 – Stocks continue to rise on signs of slower inflation, but bargains are disappearing. Even if inflation slows to a pace that allows the Fed to take a back seat, a high P/E and meager earnings growth limit upside potential. At the same time, there is little reason to expect the lows of early October to be violated. As investors see limited upside, the rally of the last six weeks should moderate a bit.

//  by Tower Bridge Advisors

Stocks continued to rally yesterday after a favorable PPI report showed commodity inflation slowing. That really should have come as no surprise. Markets were also boosted by a stronger than expected earnings report from Walmart#. The strength came from essentials, like groceries. Discretionary items such as apparel and electronics were weak. This morning, Target’s numbers …

November 16, 2022 – Stocks continue to rise on signs of slower inflation, but bargains are disappearing. Even if inflation slows to a pace that allows the Fed to take a back seat, a high P/E and meager earnings growth limit upside potential. At the same time, there is little reason to expect the lows of early October to be violated. As investors see limited upside, the rally of the last six weeks should moderate a bit.Read More

November 14, 2022 – Stocks continued to surge last week after a favorable inflation report. While inflation may have peaked, it remains too high. The fight to bring it down is still going to take a lot of time and will stifle economic growth until it’s over. The recent market surge has diminished the number of bargains that existed when trader sentiment was so negative. Now, amid fair or even slightly expensive valuations, this isn’t the time to chase, even assuming momentum could carry the market a bit further.

//  by Tower Bridge Advisors

Stocks had another very strong week, building on the strength exhibited in October. A favorable CPI report on Thursday sparked a huge rally, lifting the Dow by 3% and the NASDAQ by 6%. There were some distortions in the numbers that amplified the reduction in the pace of inflation, but clearly, we have seen the …

November 14, 2022 – Stocks continued to surge last week after a favorable inflation report. While inflation may have peaked, it remains too high. The fight to bring it down is still going to take a lot of time and will stifle economic growth until it’s over. The recent market surge has diminished the number of bargains that existed when trader sentiment was so negative. Now, amid fair or even slightly expensive valuations, this isn’t the time to chase, even assuming momentum could carry the market a bit further.Read More

November 11, 2022 – Finally, an inflation report for the bulls. Stocks and bonds moved in unison yesterday, with the most oversold areas (Big Tech, REIT’s and Consumer Discretionary) leading the 4%+ surge higher across all indices. Interest rates also collapsed across the yield curve. While clearly a positive inflation update, we caution on expectations for a sudden easing of market conditions.

//  by Tower Bridge Advisors

We have been noting for months that leading economic indicators have all been pointing to inflation cooling, money supply tightening, hiring plans dropping and growth going lower. However, these variables take time to cycle through an economy before showing up in a backward-looking CPI metric. To that end, some positives are finally showing for inflation …

November 11, 2022 – Finally, an inflation report for the bulls. Stocks and bonds moved in unison yesterday, with the most oversold areas (Big Tech, REIT’s and Consumer Discretionary) leading the 4%+ surge higher across all indices. Interest rates also collapsed across the yield curve. While clearly a positive inflation update, we caution on expectations for a sudden easing of market conditions.Read More

November 9, 2022 – Stocks continued to rally amid market rotation away from tech. Dow constituent Disney will be a drag this morning after a disappointing earnings report last evening. The next big news for investors to digest will be tomorrow’s CPI report. The election proved closer than most thought, but Republicans seem likely to regain control of the House.

//  by Tower Bridge Advisors

Stocks rallied once again as bond yields held steady. Economic data continues to show an economy in slow growth mode. Thursday morning’s CPI release will give some hint as to whether inflation is slowing at a pace sufficient to allow the Federal Reserve to slow its pace of rate increases. Markets certainly are expecting the …

November 9, 2022 – Stocks continued to rally amid market rotation away from tech. Dow constituent Disney will be a drag this morning after a disappointing earnings report last evening. The next big news for investors to digest will be tomorrow’s CPI report. The election proved closer than most thought, but Republicans seem likely to regain control of the House.Read More

November 7, 2022 – Volatility accompanies change. Investors are accepting that the battle against inflation will take longer than previously hoped. At the same time, the economic impact is stirring a pronounced rotation within the stock market, creating a large number of winners and losers within a choppy market.

//  by Tower Bridge Advisors

Stocks went for a wild ride Friday after an employment report that showed the economy was continuing to grow and wage rate increases were still higher than central bankers wanted to see. At the start of Friday’s session, the Dow Industrials rose by more than 600 points, only to give all the gains back by …

November 7, 2022 – Volatility accompanies change. Investors are accepting that the battle against inflation will take longer than previously hoped. At the same time, the economic impact is stirring a pronounced rotation within the stock market, creating a large number of winners and losers within a choppy market.Read More

November 4, 2022 – Another Fed Day produced another extremely volatile response, this time to the downside. Chairman Powell has been crystal clear for months now. They will beat inflation with little regard to jobs, GDP or other temporary side effects. However, there was a positive bent.

//  by Tower Bridge Advisors

Following the Federal Reserve’s statement, stocks initially soared. The door is open to get away from 75bps increases and slowly get back to a 25bps pace. December is now a 50/50 shot at 50bps or 75bps. The Fed also noted the need to focus not just on lagging data (like CPI and employment) but also …

November 4, 2022 – Another Fed Day produced another extremely volatile response, this time to the downside. Chairman Powell has been crystal clear for months now. They will beat inflation with little regard to jobs, GDP or other temporary side effects. However, there was a positive bent.Read More

November 2, 2022 – The focus today will be on the conclusion of the FOMC meeting where the Fed Funds rate will rise to just under 4%. More important will be Powell’s comments after the meeting setting the stage for the next meeting in mid-December. He is likely to say all options are open and data dependent. What is critical, near term, is how markets choose to receive his message.

//  by Tower Bridge Advisors

Stocks fell slightly yesterday in front of today’s conclusion of the Federal Reserve’s meeting where it is almost certain the FOMC will raise the Fed Funds rate by another 75-basis points to a range of 3.75-4.00%. But what investors really want to hear is the path for future rate increases. The recent market rally finds …

November 2, 2022 – The focus today will be on the conclusion of the FOMC meeting where the Fed Funds rate will rise to just under 4%. More important will be Powell’s comments after the meeting setting the stage for the next meeting in mid-December. He is likely to say all options are open and data dependent. What is critical, near term, is how markets choose to receive his message.Read More

October 31, 2022 – Good morning and Happy Halloween. Investors certainly weren’t spooked last week, despite big earnings disappointments for the tech giants. In fact, a buying panic erupted. Have we seen the bottom? The question is the same one we heard during the July rally. Then, the answer turned out to be no. Inflation was too persistent and the Fed tightened more than expected. Perhaps this time is different. Preliminary Q3 GDP figures showed growth for the first time, but the bottom line, ex trade and inventory changes, showed anemic growth for all three quarters this year. Essentially economic trends remain the same. Americans are paying for more experiences and buying fewer goods. Inflation has probably peaked but is receding slowly. The Fed has more work to do and will continue to raise rates. Although investors are hoping that the pace of interest rate increases will decelerate soon, it’s hard to send out an all-clear signal quite yet.

//  by Tower Bridge Advisors

Perversely, the bad tech news last week may have helped to accelerate the rally. Over 25% of the S&P 500 market cap had been concentrated in just a handful of stocks. With the exception of Apple#, all reported disappointing third quarter numbers. This was after a period where the stocks of this collective group had …

October 31, 2022 – Good morning and Happy Halloween. Investors certainly weren’t spooked last week, despite big earnings disappointments for the tech giants. In fact, a buying panic erupted. Have we seen the bottom? The question is the same one we heard during the July rally. Then, the answer turned out to be no. Inflation was too persistent and the Fed tightened more than expected. Perhaps this time is different. Preliminary Q3 GDP figures showed growth for the first time, but the bottom line, ex trade and inventory changes, showed anemic growth for all three quarters this year. Essentially economic trends remain the same. Americans are paying for more experiences and buying fewer goods. Inflation has probably peaked but is receding slowly. The Fed has more work to do and will continue to raise rates. Although investors are hoping that the pace of interest rate increases will decelerate soon, it’s hard to send out an all-clear signal quite yet.Read More

October 28, 2022 – It was a busy week for the mega-cap leaders and most of it was not pretty. Amazon is down 12%+ overnight. However, the average stock is up ~4%, disregarding the overvalued portions of yesterday’s bull market beneficiaries.

//  by Tower Bridge Advisors

As noted last Friday, this was a busy week for earnings reports, especially the mega-cap technology leaders. Below is a very brief synopsis of what occurred, and more importantly how the stocks reacted. I am happy to discuss in detail if anyone wants more color. I will note, this is NOT a recommendation to buy …

October 28, 2022 – It was a busy week for the mega-cap leaders and most of it was not pretty. Amazon is down 12%+ overnight. However, the average stock is up ~4%, disregarding the overvalued portions of yesterday’s bull market beneficiaries.Read More

October 26, 2022- Stocks have now risen sharply for three straight sessions as both the value of the dollar and the yield on 10-year Treasuries retreated. But disappointing earnings last night from a trio of tech names may spoil the party this morning. Or at least give it some reason to pause. The poor numbers from tech land remind us to look forward, not back. The great opportunities that technology created over the last quarter century are now maturing. The good news is that new opportunities will appear. They always do in a capitalistic entrepreneurial society.

//  by Tower Bridge Advisors

Stocks rose sharply for the third straight session. It’s earnings season. Through yesterday, the results were basically in line with lowered expectations, but perhaps the biggest driver of higher stock prices was the reversals over the past several days in the value of the dollar and the yield on 10-year Treasuries. Within a bear market …

October 26, 2022- Stocks have now risen sharply for three straight sessions as both the value of the dollar and the yield on 10-year Treasuries retreated. But disappointing earnings last night from a trio of tech names may spoil the party this morning. Or at least give it some reason to pause. The poor numbers from tech land remind us to look forward, not back. The great opportunities that technology created over the last quarter century are now maturing. The good news is that new opportunities will appear. They always do in a capitalistic entrepreneurial society.Read More

October 12, 2022- As we enter earnings season, attention will shift from interest rate fears to corporate performance. Pepsi kicked it off this morning with good results, hopefully an encouraging sign. As always, the story for the season will revolve around expectations versus reality. In July, reality beat expectations sparking the best rally of the year. The key will be the relative performance of the large tech names, notable laggards coming into earning season.

//  by Tower Bridge Advisors

Stocks ended mixed yesterday in a very volatile session where the Dow Industrial Average moved back and forth by more than 1000 points. News was rather sparse. A brief afternoon plunge occurred after the Bank of England signaled it would halt its planned intervention to support the pound Friday as originally planned. Stock, bond, and …

October 12, 2022- As we enter earnings season, attention will shift from interest rate fears to corporate performance. Pepsi kicked it off this morning with good results, hopefully an encouraging sign. As always, the story for the season will revolve around expectations versus reality. In July, reality beat expectations sparking the best rally of the year. The key will be the relative performance of the large tech names, notable laggards coming into earning season.Read More

October 5, 2022 – Two huge up days in a row put bulls back in charge. Is this the market bottom? Only time will tell. It will largely depend on the severity of the pending economic downturn. But retreating interest rates, and weaking labor market statistics suggest the end to the Fed’s cycle of higher interest rates is nearing an end. That is at least one key ingredient to the end of a market downturn.

//  by Tower Bridge Advisors

For those of you who have read my letters over the years, you should know about my 2-day rule. It states that two consecutive days of outsized moves in the opposite direction of recent market trends marks a reversal. Certainly, the gains Monday and yesterday qualify as strong up sessions in sharp contrast to the …

October 5, 2022 – Two huge up days in a row put bulls back in charge. Is this the market bottom? Only time will tell. It will largely depend on the severity of the pending economic downturn. But retreating interest rates, and weaking labor market statistics suggest the end to the Fed’s cycle of higher interest rates is nearing an end. That is at least one key ingredient to the end of a market downturn.Read More

August 26, 2022 – Markets continued to consolidate the ~20% spike off June’s low with minor rebounds the past few days. In anticipation of Chairman Powell’s long-awaited speech at Jackson Hole today, stocks are priced for a somewhat hawkish update. Anything that deviates from that position could release energy in either direction. Other news items require some attention as well that could affect GDP going forward.

//  by Tower Bridge Advisors

Stocks staged a late day rally to help bring all 11 S&P sectors to a positive close yesterday. Gains were led by Basic Materials, Technology, and Communication stocks. The risk-on tone had defensive sectors lag the overall market with Utilities, Consumer Staples and Health Care stocks fractionally higher. Rallies continue to follow the Treasury market. …

August 26, 2022 – Markets continued to consolidate the ~20% spike off June’s low with minor rebounds the past few days. In anticipation of Chairman Powell’s long-awaited speech at Jackson Hole today, stocks are priced for a somewhat hawkish update. Anything that deviates from that position could release energy in either direction. Other news items require some attention as well that could affect GDP going forward.Read More

June 13, 2022 – Friday’s report on Consumer Prices told us all that the fight against inflation will be harder than previously anticipated. This week, the Fed will increase interest rates again. It may suggest the ultimate Fed Funds rate this cycle will need to be higher than previously thought. None of this is good news for equity investors.

//  by Tower Bridge Advisors

Friday’s CPI report didn’t make investors happy. Led by sharply higher energy expenses, and the fastest growing shelter costs in decades, the message loud and clear was that inflation shows no signs yet of abating. Recognizing that government steps to curb inflation only began in March, the numbers we are seeing now weren’t impacted one …

June 13, 2022 – Friday’s report on Consumer Prices told us all that the fight against inflation will be harder than previously anticipated. This week, the Fed will increase interest rates again. It may suggest the ultimate Fed Funds rate this cycle will need to be higher than previously thought. None of this is good news for equity investors.Read More

May 25, 2022 – While the Dow tries to find its footing, the NASDAQ continues in steep decline as one former darling after another faces reality. It’s an ugly picture and it isn’t over for the speculative end of the market. for those looking for safer havens, more dependent on predictable cash flow growth, the picture is far better. The contrast between the two worlds was most evident yesterday.

//  by Tower Bridge Advisors

Stocks fell once again although a sharp afternoon rally reduced the damage. Still, the NASDAQ fell another 2.4% after a prominent social media company lowered earnings guidance just a month after it previously offered a somber outlook. As a group, social media and related companies depend on advertising for revenue. With the economy slowing and …

May 25, 2022 – While the Dow tries to find its footing, the NASDAQ continues in steep decline as one former darling after another faces reality. It’s an ugly picture and it isn’t over for the speculative end of the market. for those looking for safer havens, more dependent on predictable cash flow growth, the picture is far better. The contrast between the two worlds was most evident yesterday.Read More

May 2, 2022- When leadership gets taken out to the woodshed, the whole market dies. That is what happened last week. While some escaped (e.g., Microsoft) the loud and clear message is that the big boys of the S&P 500 are now at or near economic maturity. That isn’t a message a market already worried about interest rates and recession wanted to hear.

//  by Tower Bridge Advisors

Stocks sank on Friday to close out one of the most miserable months for equities in many years. The NASDAQ took it on the chin the worst after Amazon# reported a weaker than expected outlook for its retail business when it reported results Thursday night. On Friday, Amazon# suffered its worst percentage loss since the …

May 2, 2022- When leadership gets taken out to the woodshed, the whole market dies. That is what happened last week. While some escaped (e.g., Microsoft) the loud and clear message is that the big boys of the S&P 500 are now at or near economic maturity. That isn’t a message a market already worried about interest rates and recession wanted to hear.Read More

March 25, 2022 – Investors continue to grapple with inflation, war news, Fed tightening and valuations. Historians will point to stocks not topping until earnings peak, inversion occurs and/or better alternatives. We got some answers over the past few weeks but cloudiness prevails, for now.

//  by Tower Bridge Advisors

A few weeks ago, there were almost no positives to think of. Most investment advisors were bearish. Cash was sitting on the sidelines earning nothing. Short sellers were pressed. Russian invasion continued to look worse by the hour. Oil, wheat, natural gas and many other commodities spiked higher even after doubling since Covid. The most …

March 25, 2022 – Investors continue to grapple with inflation, war news, Fed tightening and valuations. Historians will point to stocks not topping until earnings peak, inversion occurs and/or better alternatives. We got some answers over the past few weeks but cloudiness prevails, for now.Read More

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  • January 27, 2023 – January strength continues to pull money in from the sidelines as FOMO is creeping back into the market. A 5% jump in the opening month historically portends to a solid year. While earnings are coming in mixed and guidance even more muted, it is the stock’s reaction that matters more.
  • January 25, 2023 – Microsoft’s somber outlook will throw a bucket of cold water on stocks this morning. While the reaction to a weak outlook is likely to be less severe than the pummeling tech stocks took after third quarter earnings reports, the news is likely to burst the recent bubble of optimism that an all-clear signal will be sounded imminently. Market volatility continues for now without setting interim new highs or lows.
  • January 23, 2023 – Stocks remain in a trading range, pushed higher by declining long-term interest rates and pushed lower by economic fears. While markets trade within a range, there are winners and losers reacting to their own set of fundamentals.
  • January 20, 2023 – 2022 was a battle over inflation and how high interest rates would go. 2023 is turning into a battle over recessionary conditions and how much negative news is priced into stocks and bonds. There is wide disagreement on both, leading to an even cloudier picture for investors.
  • January 18, 2023- It’s earnings season. Goldman Sachs’ weak numbers yesterday sent stocks lower. A few good earnings reports will move them in the other direction, at least for the next two weeks. Meanwhile we are seeing rotation back to early cycle names, a good sign. Picking tomorrow’s winners means looking forward, not chasing what led the market in the last bull run.
  • January 13, 2023 – Finally, a CPI report that did not send shockwaves through markets. A relatively in-line update with the first month-over-month decline in prices was welcome news. This continued a streak of declining monthly inflation reports and should show the Fed that it is time to slow their aggressiveness. Things will not be that easy though.
  • January 11, 2023 – Earnings season kicks off Friday. December CPI data will be released tomorrow. Both could be market moving. The expectation is that inflation will continue to moderate while earnings are likely to decline slightly.
  • January 9, 2023 – Friday’s rally was a celebration of the fact that wage increases are showing clear signs of moderating. The Fed is winning its battle against inflation and can hopefully stop raising short-term interest rates soon. The impact of higher rates is already priced into stocks. The effect on earnings will be seen shortly as corporate managements share their outlook when they report 2022 earnings. That collective optimism or pessimism will determine the near-term path for stock prices.
  • January 6, 2023 – A calendar flipping to a new year causes some near-term movement for beaten down stocks and yesteryear’s winners, but the economic landscape does not change overnight. Data so far this week has been constructive, with ADP employment metrics, job losses and other reports coming in stronger than expected. Good news is bad news for anyone hoping the Fed will ease in 2023.
  • January 4, 2023 – The die has been cast. The Fed in 2023 will finish its work to defeat inflation. While that may mean short-term pressure on economic growth and corporate earnings, the end result will be better times and lower inflation ahead. Although there might be some pain early in the year, the investment outlook will brighten considerably as the year unfolds.

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