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    • Jeffrey Kachel – CFO, Principal & CTO
    • James T. Vogt – Senior Portfolio Manager
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Market Commentary

May 23, 2022 – We avoided a bear market with a late day rally on Friday, but it’s hard to assume that a bottom is in. With stocks now down about 20%, we are more than halfway to a bear market bottom using historic averages as a guide. If we assume, at least for now, that any pending recession might be milder than average, hopefully, peak-to-trough, this market can be kinder to investors than the average bear market. Bear markets are ugly but they don’t last long, usually months, not years. Hopefully, we can see an end before too long.

//  by Tower Bridge Advisors

Stocks fell once again last week despite a sharp rally Friday afternoon. For the Dow Industrials, last week was the eighth straight down week, the longest such losing streak since 1923, an interval that includes the Great Depression, the Great Recession, and dozens of bear markets. For the S&P 500 and NASDAQ, it was the …

May 23, 2022 – We avoided a bear market with a late day rally on Friday, but it’s hard to assume that a bottom is in. With stocks now down about 20%, we are more than halfway to a bear market bottom using historic averages as a guide. If we assume, at least for now, that any pending recession might be milder than average, hopefully, peak-to-trough, this market can be kinder to investors than the average bear market. Bear markets are ugly but they don’t last long, usually months, not years. Hopefully, we can see an end before too long.Read More

May 20, 2022 – Retail earnings wreaked even more havoc on stock prices this week. Discretionary and Staple stocks suffered the most, and bonds finally offered a safe haven. A small relief rally yesterday came as options expire today. Volatility is still here, but valuations are back to historic norms.

//  by Tower Bridge Advisors

Almost all of the S&P 500 constituents have now reported first quarter earnings. Every quarterly earnings update period ends with retailers, which is what we have received this week. Although not a total disaster for actual EPS, one could use that term to describe investor reactions this week. Home Depot#, Lowe’s#, Walmart#, Target, Kohl’s, BJ’s …

May 20, 2022 – Retail earnings wreaked even more havoc on stock prices this week. Discretionary and Staple stocks suffered the most, and bonds finally offered a safe haven. A small relief rally yesterday came as options expire today. Volatility is still here, but valuations are back to historic norms.Read More

May 18, 2022 – Stocks have finally begun to rally, a sign that market valuations have normalized. Perhaps the recent sharp declines were too much. While a V-shape may be forming, hinting at a bottom, there are few signs that speculative fever has been fully purged or that investors can see clearly past the series of interest rate increases to come. An interim bottom seems more logical than a final one.

//  by Tower Bridge Advisors

Stocks rallied once again, the second strong session of the past three. Bond yields climbed but remained within their recent range with the 10-year Treasury closing at slightly below 3%. In a market up just under 2%, transportation stocks were up more than 3%. Homebuilders rose a like amount. Leading semiconductor manufacturers rose 4% or …

May 18, 2022 – Stocks have finally begun to rally, a sign that market valuations have normalized. Perhaps the recent sharp declines were too much. While a V-shape may be forming, hinting at a bottom, there are few signs that speculative fever has been fully purged or that investors can see clearly past the series of interest rate increases to come. An interim bottom seems more logical than a final one.Read More

May 16, 2022 – Stocks had a strong rally Friday after a sharp recovery Thursday afternoon, but to be convincing, we need another strong follow through today. We’ll see. Markets seem to have made a fair adjustment to a slowing economic outlook and a good part of the speculative purge has been accomplished. But, while stocks have returned to fair value, they may not yet be cheap enough to ignite a powerful, sustainable rally.

//  by Tower Bridge Advisors

Stocks staged a solid rally on Friday on the heels of a sharp recovery Thursday afternoon. An encouraging sign was a strong last half hour although a surge late Friday may have been no more than short covering going into the weekend. The strength late Thursday and Friday, however, didn’t erase earlier losses in the …

May 16, 2022 – Stocks had a strong rally Friday after a sharp recovery Thursday afternoon, but to be convincing, we need another strong follow through today. We’ll see. Markets seem to have made a fair adjustment to a slowing economic outlook and a good part of the speculative purge has been accomplished. But, while stocks have returned to fair value, they may not yet be cheap enough to ignite a powerful, sustainable rally.Read More

May 13, 2022 – The 2nd worst start to the year for equities is finally bringing numerous signs of finding a floor. We’re not at the all-clear signal yet, but many world class companies are now trading at relatively favorable entry points for long-term investors. Numerous questions remain, so baby steps are suggested for those with excess cash waiting to re-enter markets.

//  by Tower Bridge Advisors

Happy Friday the 13th! The CPI and PPI reports did little to quell inflation fears. Although they helped make the case that inflation is peaking, the decline in prices was not enough. Fueled by rents, airline fares and a methodology change to vehicle pricing that took out a lot of the recent declines, both CPI …

May 13, 2022 – The 2nd worst start to the year for equities is finally bringing numerous signs of finding a floor. We’re not at the all-clear signal yet, but many world class companies are now trading at relatively favorable entry points for long-term investors. Numerous questions remain, so baby steps are suggested for those with excess cash waiting to re-enter markets.Read More

May 11, 2022 – The messages of the bond and stock markets over the past week have been quite different. Bond prices are about where they were before the FOMC meeting, while stocks continue in free fall. The NASDAQ has performed worse as speculation continues to be purged from the market. That process is well advanced but shows no sign of ending yet.

//  by Tower Bridge Advisors

Yesterday was a volatile session of give and take after Monday’s rout. When it was over equities were marginally higher, although the Dow Industrials fell for the fourth straight session. This morning the 10-year Treasury yield sits at 2.93%, less than five basis points higher than where it was as the FOMC issued its statement …

May 11, 2022 – The messages of the bond and stock markets over the past week have been quite different. Bond prices are about where they were before the FOMC meeting, while stocks continue in free fall. The NASDAQ has performed worse as speculation continues to be purged from the market. That process is well advanced but shows no sign of ending yet.Read More

May 9, 2022 – Last week’s market was highly volatile, with very little net change except for the high P/E NASDAQ names. The Fed did what was expected, and both earnings and economic data were in line with forecasts. Unless the outlook changes appreciably in the weeks ahead, expect volatility to slow. Against that backdrop, reducing risk is a better path than speculation.

//  by Tower Bridge Advisors

The market has been volatile all year, but last week was volatility on steroids. The Federal Reserve on Wednesday did exactly what we outlined last Wednesday prior to the conclusion of the FOMC meeting. Exactly. It raised the Fed Funds rate by 50 basis points. It said it would likely do the same at the …

May 9, 2022 – Last week’s market was highly volatile, with very little net change except for the high P/E NASDAQ names. The Fed did what was expected, and both earnings and economic data were in line with forecasts. Unless the outlook changes appreciably in the weeks ahead, expect volatility to slow. Against that backdrop, reducing risk is a better path than speculation.Read More

May 6, 2022- Cinco de Mayo was not a festive affair. Initially, it seemed Chair Powell threaded the needle yet again with stocks staging a massive run after his speech Wednesday afternoon. That rally only lasted a few hours as rates spiked and stocks got whacked yesterday. We remain range-bound but are teetering on critical support levels.

//  by Tower Bridge Advisors

Previous Fed Chair Alan Greenspan was nicknamed the “maestro”, not because he resembled a Seinfeld character, rather, he oversaw the Fed during a steady economic growth period from 1987 – 2006. The Dow quadrupled during his tenure resulting in the greatest cumulative return for any Chairperson. His easy money policies eventually led to the Great …

May 6, 2022- Cinco de Mayo was not a festive affair. Initially, it seemed Chair Powell threaded the needle yet again with stocks staging a massive run after his speech Wednesday afternoon. That rally only lasted a few hours as rates spiked and stocks got whacked yesterday. We remain range-bound but are teetering on critical support levels.Read More

May 4, 2022 – The key to the market today is Jerome Powell’s press conference at the conclusion of the FOMC meeting. What is key is whether or not he deviates from the current consensus on rate hikes and future reductions in the Fed’s balance sheet. Stocks are off to their worst annual start since 1939. I suspect today isn’t the day Mr. Powell wants to add more fuel to the fire.

//  by Tower Bridge Advisors

Stocks struggled to turn in a positive performance for the second straight session after taking a shellacking last week. Earnings news is starting to be less and less consistent with what we have witnessed the past two weeks. Yields on 10-year Treasuries have touched 3% and fallen back. The trend remains higher but the pace …

May 4, 2022 – The key to the market today is Jerome Powell’s press conference at the conclusion of the FOMC meeting. What is key is whether or not he deviates from the current consensus on rate hikes and future reductions in the Fed’s balance sheet. Stocks are off to their worst annual start since 1939. I suspect today isn’t the day Mr. Powell wants to add more fuel to the fire.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

April 29, 2022 – Some Eskimo-Aleut tribes have dozens of words to describe particular snow conditions, but it is hard to find a precise word to best describe the current economic and market environment. Low unemployment, sky-high inflation, war-impacted, supply-chain constrained post-pandemic reopening doesn’t quite capture it. Stagflation? Maybe. Soft landing? We will see. We should have better clarity as we get through this earnings season and into the second half of the year.

//  by Tower Bridge Advisors

Anthropologist Franz Boas was traveling through Baffin Island in northern Canada during the 1880s and wanted to study the life of the local Inuit people. What Boas found was a language that can ascribe a deeper meaning and nuance in forming a single word. For example: qanuk: ‘snowflake’, kanevvluk: ‘fine snow’, qanisqineq: ‘fallen snow floating …

April 29, 2022 – Some Eskimo-Aleut tribes have dozens of words to describe particular snow conditions, but it is hard to find a precise word to best describe the current economic and market environment. Low unemployment, sky-high inflation, war-impacted, supply-chain constrained post-pandemic reopening doesn’t quite capture it. Stagflation? Maybe. Soft landing? We will see. We should have better clarity as we get through this earnings season and into the second half of the year.Read More

April 27, 2022 – You all know the old expression, “it’s darkest before the dawn”. Bear market moves can be sudden and vicious. Yesterday, leadership tech companies got hit particularly hard. When the carnage catches up to the best-in-breed, you know you are closer to the end than the beginning. Temporary relief is in sight, but longer term the focus will remain on the battle to tame the pace of wage and rent growth.

//  by Tower Bridge Advisors

Stocks took another sharp leg down yesterday, and the selling spread aggressively to the top- tier tech names. Microsoft#, Alphabet#, Amazon# and Tesla all fell by 5% or more. After the close, both Alphabet and Microsoft reported earnings. From the market’s standpoint, it was a split decision. Alphabet missed forecasts but Microsoft beat. While both …

April 27, 2022 – You all know the old expression, “it’s darkest before the dawn”. Bear market moves can be sudden and vicious. Yesterday, leadership tech companies got hit particularly hard. When the carnage catches up to the best-in-breed, you know you are closer to the end than the beginning. Temporary relief is in sight, but longer term the focus will remain on the battle to tame the pace of wage and rent growth.Read More

April 25, 2022 – For weeks Fed officials have been upping the ante, discussing more rapid moves in interest rates. Markets are no longer following the Fed; they are once again leading. Consensus says a neutral Fed Funds rate is near 3%, but that’s a guess not a fact. If 3% is too low, markets will have to take another leg lower. We will get a hint of that answer depending on the pace at which inflation recedes over the balance of this year. Thus, for now, the threat of higher rates and lower P/Es continues to weigh on stock prices.

//  by Tower Bridge Advisors

Stocks got crushed on Friday as interest rates continued to climb. Key Fed officials last week began to speak of 75 basis point increases in the Fed Funds rate. Others tried to talk that back saying 75 basis point increments are unlikely for now, but the damage was done. A year ago, Fed officials still …

April 25, 2022 – For weeks Fed officials have been upping the ante, discussing more rapid moves in interest rates. Markets are no longer following the Fed; they are once again leading. Consensus says a neutral Fed Funds rate is near 3%, but that’s a guess not a fact. If 3% is too low, markets will have to take another leg lower. We will get a hint of that answer depending on the pace at which inflation recedes over the balance of this year. Thus, for now, the threat of higher rates and lower P/Es continues to weigh on stock prices.Read More

April 22, 2022 – Another volatile day on Wall Street with the usual suspects: Fed comments, spiking interest rates and damage in tech and growth stocks. We’re still in a tight range with minimal real movement for months now, except in bond land.

//  by Tower Bridge Advisors

Stocks staged an impressive opening yesterday, led by solid earnings reports out of Tesla, airlines and the healthcare sector. Nearly 20% of S&P 500 constituents have reported first quarter results so far. Our next two weeks are jam packed with a lot more earnings updates and are sure to bring more fireworks for individual movers. …

April 22, 2022 – Another volatile day on Wall Street with the usual suspects: Fed comments, spiking interest rates and damage in tech and growth stocks. We’re still in a tight range with minimal real movement for months now, except in bond land.Read More

April 20, 2022 – Yesterday’s rally was nice, but it needs follow through today to be taken seriously. Otherwise, investors still have to live in a world with cloudy crystal balls. While virtually everyone has an opinion, whether the pending economic slowdown evolves into a recession or not is much more a guess than a fact. As more data appears, futures can be better defined and volatility can fall. Until then, it’s more of the same, although earnings season will clearly add some data points.

//  by Tower Bridge Advisors

Stocks soared yesterday, the best day in April. The Dow has now turned positive for the month, although the S&P still hasn’t and the NASDAQ is still down 4%. The 10-year Treasury yield continued to rise, soaring past 2.9%. When markets are weak, the business media gives more airtime to those espousing dire outlooks. They …

April 20, 2022 – Yesterday’s rally was nice, but it needs follow through today to be taken seriously. Otherwise, investors still have to live in a world with cloudy crystal balls. While virtually everyone has an opinion, whether the pending economic slowdown evolves into a recession or not is much more a guess than a fact. As more data appears, futures can be better defined and volatility can fall. Until then, it’s more of the same, although earnings season will clearly add some data points.Read More

April 18, 2022 – We are entering peak earnings season. The focus will be almost exclusively on forward-looking guidance. Expect it to be tempered but positive. There are signs of a slowing economy but no signs yet of a pending downturn.

//  by Tower Bridge Advisors

Stocks finished lower again on Friday with the NASDAQ Composite once again leading the decline. The 10-year Treasury yield ended the week at 2.83%, a high water mark post pandemic. Philadelphia became the first major city to require masks indoors once again. Given the rise of the newer Omicron variant and seeing the statistics from …

April 18, 2022 – We are entering peak earnings season. The focus will be almost exclusively on forward-looking guidance. Expect it to be tempered but positive. There are signs of a slowing economy but no signs yet of a pending downturn.Read More

April 13, 2022 – Investors are increasingly assuming that a recession is likely. Stocks of cyclical industries highly dependent on both volume and price growth are getting slaughtered, a sure sign that thoughts of recession are quickly becoming imbedded in stock prices. Market assumptions aren’t always correct. Bond prices, while rising, don’t suggest that 3%+ inflation is embedded in long-term expectations. Perhaps some signs that inflation is moderating in the months ahead will be key to stopping the current market downdraft.

//  by Tower Bridge Advisors

Stocks fell again despite a CPI report that was a bit better than expected. Investor fears of inflation continue to rise as real time survey data begins to show some slowdown. Slowdown isn’t recession, but no one can disprove a premise that deceleration won’t end until the economy is slipping backwards. Earnings season begins this …

April 13, 2022 – Investors are increasingly assuming that a recession is likely. Stocks of cyclical industries highly dependent on both volume and price growth are getting slaughtered, a sure sign that thoughts of recession are quickly becoming imbedded in stock prices. Market assumptions aren’t always correct. Bond prices, while rising, don’t suggest that 3%+ inflation is embedded in long-term expectations. Perhaps some signs that inflation is moderating in the months ahead will be key to stopping the current market downdraft.Read More

April 11, 2022 – Markets remain both cautious and conflicted. Defensive stocks rule. But as evidence starts to appear in the months ahead that inflation will start to recede, markets will rotate once again. That inflection point is still ahead of us, but buying defensive stocks today, near all-time valuation highs, is much riskier than it was two months ago. Meanwhile, the purge of excess speculation continues. That battle isn’t over.

//  by Tower Bridge Advisors

Stocks were mixed on Friday as interest rates continued to rise. The 2-10 year yield curve is marginally upward sloping once again although the 2-5 yield curve is inverted. Conservative utility, health care, and consumer staples stocks led the market Friday while tech and other high multiple names continued to lead the retreat. Clearly, investors …

April 11, 2022 – Markets remain both cautious and conflicted. Defensive stocks rule. But as evidence starts to appear in the months ahead that inflation will start to recede, markets will rotate once again. That inflection point is still ahead of us, but buying defensive stocks today, near all-time valuation highs, is much riskier than it was two months ago. Meanwhile, the purge of excess speculation continues. That battle isn’t over.Read More

April 8, 2022 – More Fed tightening measures and continued inflationary pressures create as much uncertainty as we can remember. When the range of outcomes is this wide, volatility is likely to persist. High quality assets remain the preferred play.

//  by Tower Bridge Advisors

Fed Governor Lael Brainard warned us on Tuesday. Former Fed President Bill Dudley’s Op-ed followed on Wednesday, noting “One thing is certain, to be effective, it’ll (the Fed) have to inflict more losses on stock and bond investors than it has so far.” Meeting minutes released from the Fed on Wednesday afternoon confirmed what both …

April 8, 2022 – More Fed tightening measures and continued inflationary pressures create as much uncertainty as we can remember. When the range of outcomes is this wide, volatility is likely to persist. High quality assets remain the preferred play.Read More

April 6, 2022 – Fed Vice-Chair Lael Brainard threw a bucket of cold water on the heads of those hoping that inflation would somehow vanish without aggressive Fed intervention. Markets retreated and it looks like the rout will continue this morning. Fed minutes of the March meeting to be released later today may offer more details. In an economy that is slowing and facing strong Fed headwinds for many months ahead, it is premature to be overly optimistic.

//  by Tower Bridge Advisors

Stocks fell sharply yesterday, with the NASDAQ leading the way down after Federal Reserve Vice-Chair Lael Brainard said simply that the Fed is going to go all out to fight inflation. 50-basis point rate increases are on the table at each meeting. In addition, the FOMC should lay out a map to reduce the size …

April 6, 2022 – Fed Vice-Chair Lael Brainard threw a bucket of cold water on the heads of those hoping that inflation would somehow vanish without aggressive Fed intervention. Markets retreated and it looks like the rout will continue this morning. Fed minutes of the March meeting to be released later today may offer more details. In an economy that is slowing and facing strong Fed headwinds for many months ahead, it is premature to be overly optimistic.Read More

April 4, 2022 – Inflation woes have many causes but they all come down to too much demand. Even many of the supply shortages are caused by too much demand. Too many cars on the road create gridlock. The cures are obvious and the Fed has the tools. It remains unclear whether they can use them without creating a recession. In March, investors showed more hope than earlier in the year, but the conclusion simply hasn’t been written. Markets will adjust to the changing winds until that happens.

//  by Tower Bridge Advisors

Stocks closed mixed Friday to start the second quarter. The S&P closed down close to 5% in the first quarter rallying hard in the last three weeks to cut losses for the quarter by more than 50%. As we start the second quarter, growth is starting to decline from the torrid pace of 2021 as …

April 4, 2022 – Inflation woes have many causes but they all come down to too much demand. Even many of the supply shortages are caused by too much demand. Too many cars on the road create gridlock. The cures are obvious and the Fed has the tools. It remains unclear whether they can use them without creating a recession. In March, investors showed more hope than earlier in the year, but the conclusion simply hasn’t been written. Markets will adjust to the changing winds until that happens.Read More

April 1, 2022 – As the calendar rolls into April, we close out a wild first quarter. Somehow, we ended with just as many open-ended questions as when the year started. Under the surface markets have been volatile, offering risks and opportunities alike.

//  by Tower Bridge Advisors

To say this quarter has been unusual would be an understatement. Before the start of 2022, we cautioned that easy money had been made in stocks, considering ~25%+ annual returns over the last three years. We did not expect this type of volatility: • Inflation accelerated even further with oil up 80% at one point. …

April 1, 2022 – As the calendar rolls into April, we close out a wild first quarter. Somehow, we ended with just as many open-ended questions as when the year started. Under the surface markets have been volatile, offering risks and opportunities alike.Read More

March 30, 2022 – Even a whisper of peace in Ukraine encourages investors as we saw yesterday. But Russian talk rarely matches Russian actions. The future course of markets is more dependent on the war against inflation, not Ukraine. That battle only started this month and could take years to play out. One doesn’t stamp out 6% inflation overnight. How that battle unfolds will determine the destiny of the stock market. If rates continue to move higher, bonds won’t be a satisfying alternative.

//  by Tower Bridge Advisors

Stocks continued to rally as peace talks progressed, trying to end the Ukraine war. Bond yields fell sharply, especially at the long end of the curve. Any movement toward a secure and enduring peace is going to be difficult. There is much distrust. You can never listen to Russian words without watching their actions, often …

March 30, 2022 – Even a whisper of peace in Ukraine encourages investors as we saw yesterday. But Russian talk rarely matches Russian actions. The future course of markets is more dependent on the war against inflation, not Ukraine. That battle only started this month and could take years to play out. One doesn’t stamp out 6% inflation overnight. How that battle unfolds will determine the destiny of the stock market. If rates continue to move higher, bonds won’t be a satisfying alternative.Read More

March 28, 2022 – Stocks continued to recover last week but higher interest rates slowed the pace. Investors are going to keep a laser focus on inflation and growth data. The impact of Fed tightening is months away, but investors will be looking for any indication that trends will move in the right direction without creating recession. There is enough momentum to avoid recession this year. Next year is still an open question.

//  by Tower Bridge Advisors

Stocks managed to achieve a second week of gains despite a continued rise in interest rates. Investors took apparent advantage of the selling climax two weeks ago to scoop up bargains. Whether the sharp rally after an equally sharp decline constitutes an end to the market correction will depend on the economy’s course over coming …

March 28, 2022 – Stocks continued to recover last week but higher interest rates slowed the pace. Investors are going to keep a laser focus on inflation and growth data. The impact of Fed tightening is months away, but investors will be looking for any indication that trends will move in the right direction without creating recession. There is enough momentum to avoid recession this year. Next year is still an open question.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

March 23, 2022 – The bond market falls as stocks continue to rise. That can happen in the short run, but both compete for the same investment dollars. Bond markets are predicting sharply higher borrowing costs. Stock markets suggest profits will rise anyway. Can both be right? For a time, yes. But in the long run, can the Fed win the war against inflation without inducing a recession? We don’t have enough facts yet to reach a solid conclusion.

//  by Tower Bridge Advisors

Stocks resumed their upward march yesterday despite further increases in interest rates. “We made a mistake.” How often do you hear anyone in Washington say that? Hardly ever. Federal Reserve Chairman Jerome Powell said that in a speech this week, and he said it in crystal clear fashion. The Fed thought there was slack in …

March 23, 2022 – The bond market falls as stocks continue to rise. That can happen in the short run, but both compete for the same investment dollars. Bond markets are predicting sharply higher borrowing costs. Stock markets suggest profits will rise anyway. Can both be right? For a time, yes. But in the long run, can the Fed win the war against inflation without inducing a recession? We don’t have enough facts yet to reach a solid conclusion.Read More

March 21, 2022- The Fed did what it said it would do, economic growth remains intact, and the war isn’t getting worse by leaps and bounds. That set the table for a strong rally in stocks. Is the bottom in? Or is this just a bounce? The answer may be a little yes and a little no. For some stocks, the bounce might be over, but if the economy stays solid, there remain plenty of opportunities.

//  by Tower Bridge Advisors

Stocks rose sharply all week as the NASDAQ rebounded out of bear market territory and both the Dow and S&P 500 cut their 2022 losses roughly in half. Oil prices remained volatile closing at over $100 per barrel. Pain at the pump continues but it isn’t getting worse, at least for now. Interest rates rose …

March 21, 2022- The Fed did what it said it would do, economic growth remains intact, and the war isn’t getting worse by leaps and bounds. That set the table for a strong rally in stocks. Is the bottom in? Or is this just a bounce? The answer may be a little yes and a little no. For some stocks, the bounce might be over, but if the economy stays solid, there remain plenty of opportunities.Read More

March 18, 2022 – Stocks continue to bounce off their respective lows, but with more strength and vigor this week. Those hit hardest, rebound furthest (technology), while profit taking occurs in safe havens. Plenty of good news this week to digest, not the least of which is the Fed finally starting to thwart inflation.

//  by Tower Bridge Advisors

Plenty to digest over the past few days, mostly positive from a market standpoint. First and foremost, the Fed meeting came and went without any real fireworks, which is certainly a good thing. As we discussed a few weeks ago, Chairman Powell’s testimony in D.C. laid a clear path which markets can follow. Small, 25bps …

March 18, 2022 – Stocks continue to bounce off their respective lows, but with more strength and vigor this week. Those hit hardest, rebound furthest (technology), while profit taking occurs in safe havens. Plenty of good news this week to digest, not the least of which is the Fed finally starting to thwart inflation.Read More

March 16, 2022 – Markets rose sharply despite higher interest rates, as oil prices fell sharply for the second straight session and the economic risks associated with war receded. The NASDAQ staged a strong rally. Was it a one-day wonder, again? Futures this morning suggest this might be at least a temporary bottom. Hopefully, the Fed doesn’t ruin the party this afternoon as it concludes its FOMC meeting.

//  by Tower Bridge Advisors

Stocks rose smartly yesterday, with most major averages rising close to 3% or more. Tech stocks led the advance. The only losers were energy names as WTI oil prices dipped back below $100 per barrel. Interest rates continued to climb as the Fed began its FOMC meeting which will end this afternoon with the first …

March 16, 2022 – Markets rose sharply despite higher interest rates, as oil prices fell sharply for the second straight session and the economic risks associated with war receded. The NASDAQ staged a strong rally. Was it a one-day wonder, again? Futures this morning suggest this might be at least a temporary bottom. Hopefully, the Fed doesn’t ruin the party this afternoon as it concludes its FOMC meeting.Read More

March 14, 2022 – The Fed’s FOMC meeting concludes Wednesday. A 25-basis point rate increase is baked in. What’s not certain is the pace of future increases. Hopefully, the post-meeting press conference will offer clarification. Meanwhile the war slogs on with no end in sight. Covid is back, this time in China, disrupting businesses there. Markets are trying to stabilize with interest rates rising modestly once again.

//  by Tower Bridge Advisors

Stocks fell again on Friday as equities declined for the fourth straight week. A combination of inflation fears, and economic concerns related to the Russian invasion of Ukraine continue to weigh on the market. While war news still dominates headlines, Wall Street attention will likely shift to Wednesday’s Federal Reserve press conference following the conclusion …

March 14, 2022 – The Fed’s FOMC meeting concludes Wednesday. A 25-basis point rate increase is baked in. What’s not certain is the pace of future increases. Hopefully, the post-meeting press conference will offer clarification. Meanwhile the war slogs on with no end in sight. Covid is back, this time in China, disrupting businesses there. Markets are trying to stabilize with interest rates rising modestly once again.Read More

March 11, 2022 – Invasion and inflation updates continued to dominate market action with violent swings in both directions this week. Commodity prices are feeling the effects of even more supply constraints, although some price swings are out of whack. Half of all stocks are already in a bear market, pricing in a lot of bad news.

//  by Tower Bridge Advisors

Not all market lows are V-shaped occurrences. In fact, many take months to form a new base from which to propel higher. Today’s range-bound market continues to make lower highs and lower lows. Wednesday’s nearly 3% pop was followed by a 0.4% drop yesterday where declines were led by technology. In the short run, returns …

March 11, 2022 – Invasion and inflation updates continued to dominate market action with violent swings in both directions this week. Commodity prices are feeling the effects of even more supply constraints, although some price swings are out of whack. Half of all stocks are already in a bear market, pricing in a lot of bad news.Read More

March 9, 2022 – The market’s wild swings were in full view during a very volatile session yesterday. The shock of war and its attendant sanctions may be largely priced in. The focus could soon change to the Fed’s FOMC meeting in two weeks when some clarity on the pace of future rate increases and balance sheet reduction could occur.

//  by Tower Bridge Advisors

Stocks went on a roller coaster ride yesterday in an extremely volatile session. The intraday lows reached almost two weeks ago held. Although prices fell sharply at the close, the volatility suggested that a lot of the selling pressure has been exhausted in the near term. There can be violent rallies in bear markets. Futures …

March 9, 2022 – The market’s wild swings were in full view during a very volatile session yesterday. The shock of war and its attendant sanctions may be largely priced in. The focus could soon change to the Fed’s FOMC meeting in two weeks when some clarity on the pace of future rate increases and balance sheet reduction could occur.Read More

March 7, 2022 – While the war outcome continues down a path leading to a Russian occupation of Ukraine, the economic costs are becoming both starker and more apparent. Gasoline prices are rising close to $0.50 per week. If anything, the pace is accelerating. Wheat, aluminum, copper and palladium are spiking as well. These root commodity price increases will flow into a massive array of products. Inflation is quickly becoming more supply constrained than demand driven. The Fed’s weaponry can’t increase supply.

//  by Tower Bridge Advisors

Stocks fell last week for the fourth week in a row, a combination of inflation fears and the war in Ukraine. Bond yields fell amid a flight to safety. The news from Ukraine is discouraging, to say the least, but it isn’t unexpected. Russia has overwhelming military advantages and continues to make progress in its …

March 7, 2022 – While the war outcome continues down a path leading to a Russian occupation of Ukraine, the economic costs are becoming both starker and more apparent. Gasoline prices are rising close to $0.50 per week. If anything, the pace is accelerating. Wheat, aluminum, copper and palladium are spiking as well. These root commodity price increases will flow into a massive array of products. Inflation is quickly becoming more supply constrained than demand driven. The Fed’s weaponry can’t increase supply.Read More

March 4, 2022 – Geopolitical events and inflation continue to counteract positive economic data. This volatile period won’t end until more definitive data arrives, and hopefully also a cease fire and calm leadership. On the Fed front, markets digested Fed testimony in D.C. resulting in a somewhat clearer path on rate hikes prior to a final decision coming in two weeks.

//  by Tower Bridge Advisors

Chairman Powell, whose title is now Chair Pro Tempore (as his 4-year term ran out) until the Senate votes on his next term, was back on Capitol Hill speaking with elected officials over the past two days. After opening remarks, politicians began peppering him with questions about the economy, inflation, jobs and what effect the …

March 4, 2022 – Geopolitical events and inflation continue to counteract positive economic data. This volatile period won’t end until more definitive data arrives, and hopefully also a cease fire and calm leadership. On the Fed front, markets digested Fed testimony in D.C. resulting in a somewhat clearer path on rate hikes prior to a final decision coming in two weeks.Read More

March 2, 2022 – Sanctions squeeze harder as commodity prices rise and interest rates fall. Markets are not in a happy mood as we saw yesterday when equities fell almost 2%. There is little new news this morning to change one’s view in either direction. For stocks to rally, even short term, some resolution of the conflict in Ukraine needs to be achieved. That doesn’t seem likely this week.

//  by Tower Bridge Advisors

Stocks fell sharply once again as the war in Ukraine intensified and the West increased the level of sanctions against Russia. Bond yields fell sharply amid a flight to safety. There was no significant economic news during the session that moved prices. Clearly the war and the attendant economic isolation of Russia will have economic …

March 2, 2022 – Sanctions squeeze harder as commodity prices rise and interest rates fall. Markets are not in a happy mood as we saw yesterday when equities fell almost 2%. There is little new news this morning to change one’s view in either direction. For stocks to rally, even short term, some resolution of the conflict in Ukraine needs to be achieved. That doesn’t seem likely this week.Read More

February 28, 2022- Ukraine hasn’t fallen. Sanctions are increasing so is the economic impact of the war. Stocks appear likely to give back some of Friday’s gains, at least this morning. Longer term, however, it is the battle against inflation that matters. The war only aggravates matters. The fight begins with the FOMC meeting in three weeks.

//  by Tower Bridge Advisors

Stocks soared on Friday after Thursday’s huge comeback. The reversal on Thursday was triggered as market watchers were relieved by the modest package of sanctions initially put on Russia by President Biden and Western allies. From a technical viewpoint, the two-day recovery of close to 6% was a typical relief rally within a market correction. …

February 28, 2022- Ukraine hasn’t fallen. Sanctions are increasing so is the economic impact of the war. Stocks appear likely to give back some of Friday’s gains, at least this morning. Longer term, however, it is the battle against inflation that matters. The war only aggravates matters. The fight begins with the FOMC meeting in three weeks.Read More

February 25, 2022 – Tail risks have arisen with an outright invasion by Putin, as opposed to just taking over already controlled zones. He threw global markets into a tizzy, including his own stock market that was down 50% at one point. Any and everything is on the table for now. Markets, as usual, were ahead of the game and actually finished in the green.

//  by Tower Bridge Advisors

Major leaders were hopeful that Russia’s aggressions would be limited to the eastern section of Ukraine which was already predominantly controlled by Russian allies. That proved to be wrong and Putin is flexing his muscle, both militarily and financially, via Europe’s reliance on Russia for natural gas and many other commodities. Fighting against Russia via …

February 25, 2022 – Tail risks have arisen with an outright invasion by Putin, as opposed to just taking over already controlled zones. He threw global markets into a tizzy, including his own stock market that was down 50% at one point. Any and everything is on the table for now. Markets, as usual, were ahead of the game and actually finished in the green.Read More

January 10, 2022 – If there was a message last week, it was that speculative fever is dissipating as the Fed winds down its pace of bond purchases. No one knows when the purging of speculation will end but it probably will be with a thud, not a whimper. Market rotation to financials, industrials and energy names suggests the economy continues to thrive despite Omicron. The rotation can go a bit farther. The high growth sector got very overpriced, outpacing cyclical and value stocks for years, and it could take several more months for the rotation to run its course, allowing for some intermittent bounces and reversals. The overall market is down only modestly as the speculative fringes blow apart.

//  by Tower Bridge Advisors

It was a tough week for stocks particularly on the NASDAQ. The speculative end of the market took the biggest hit as bond yields rose in line with continued economic growth. I noted last week the relevance of the January barometer. While not always valid, there is a trend that says, “as goes January, so …

January 10, 2022 – If there was a message last week, it was that speculative fever is dissipating as the Fed winds down its pace of bond purchases. No one knows when the purging of speculation will end but it probably will be with a thud, not a whimper. Market rotation to financials, industrials and energy names suggests the economy continues to thrive despite Omicron. The rotation can go a bit farther. The high growth sector got very overpriced, outpacing cyclical and value stocks for years, and it could take several more months for the rotation to run its course, allowing for some intermittent bounces and reversals. The overall market is down only modestly as the speculative fringes blow apart.Read More

October 11, 2021 – Markets remain volatile as growth slows, interest rates rise, and Washington politics remain a mess. Until supply chain problems are resolved the picture is unlikely to change. Demand is strong but much of it is unfilled. Perhaps it is time for Washington to take notice.

//  by Tower Bridge Advisors

Stocks gave up some ground on Friday but still finished the week with decent gains. Trading remained volatile. Leadership rotated between growth and value stocks several times depending on the economic news of the day and trends in interest rates. The week ended with 10-year Treasury yields crossing the 1.60% barrier for the first time …

October 11, 2021 – Markets remain volatile as growth slows, interest rates rise, and Washington politics remain a mess. Until supply chain problems are resolved the picture is unlikely to change. Demand is strong but much of it is unfilled. Perhaps it is time for Washington to take notice.Read More

October 4, 2021 – A tough September is not a harbinger of what’s to come. The Delta variant is fading, and interest rates are not likely to rise as fast as they did in September. Inflation concerns remain. However, that should mute future upside. Higher earnings, on the other hand, will mute the downside.

//  by Tower Bridge Advisors

Stocks rallied at the end of a dismal September. While growth in September deteriorated a bit thanks to the persistence of the Delta variant of Covid-19, stocks fell due to a combination of issues, a slowdown in growth being just one. Interest rates rose, the Fed hinted at tapering bond purchases before year end, and …

October 4, 2021 – A tough September is not a harbinger of what’s to come. The Delta variant is fading, and interest rates are not likely to rise as fast as they did in September. Inflation concerns remain. However, that should mute future upside. Higher earnings, on the other hand, will mute the downside.Read More

October 1, 2021 – Concerns, they are aplenty. Markets ended September on a sour note, as major averages tested last week’s spike lows. The key to the next 5% move revolves around equities holding near current support levels. Near-term headwinds are compounding, pointing to more downside risk. Rest assured, this bull market is not over yet.

//  by Tower Bridge Advisors

Another quarter is in the books as we enter October which historically has been a favorable seasonal time to be invested. This is especially true in years where stock market returns are already generous. History says we should expect a solid finish for 2021. Even after a nearly 5% drop across the board in September, …

October 1, 2021 – Concerns, they are aplenty. Markets ended September on a sour note, as major averages tested last week’s spike lows. The key to the next 5% move revolves around equities holding near current support levels. Near-term headwinds are compounding, pointing to more downside risk. Rest assured, this bull market is not over yet.Read More

June 18, 2021-Fed announcements usually take a few days before the market figures out what they really said. This time is no different as rates initially spiked but made a 180 degree turn yesterday. Winners and losers in the stock market also flip-flopped. What to do now?

//  by Tower Bridge Advisors

Market participants, in both stocks and bonds, waited with bated breath for the conclusion to the 2-day Federal Reserve Meeting. After two straight months of worrisome inflationary data, lower than expected employment reports and a continued rise in consumer spending, many were frightened at the prospect of the Federal Reserve changing their stance and pulling …

June 18, 2021-Fed announcements usually take a few days before the market figures out what they really said. This time is no different as rates initially spiked but made a 180 degree turn yesterday. Winners and losers in the stock market also flip-flopped. What to do now?Read More

May 21, 2021 – After a 3-week hiatus, buyers came rushing back to the markets. Technology stocks rebounded the most, coinciding with a slight reversal in interest rates. Taper talk is coming, and we examine what that means for markets from here.

//  by Tower Bridge Advisors

After three straight days of losses in the overall market, bargain hunters stepped up to the plate yesterday with technology stocks leading the charge higher. The Nasdaq bounced back 1.8%, pointing towards hope of at least a short-term bottom after another mini-correction. The Dow closed up 0.5% and the Russell 2000 Small Cap Index gained …

May 21, 2021 – After a 3-week hiatus, buyers came rushing back to the markets. Technology stocks rebounded the most, coinciding with a slight reversal in interest rates. Taper talk is coming, and we examine what that means for markets from here.Read More

February 22, 2021 – The biggest factor this morning is the ongoing rise in 10-year bond yields. Higher yields mean lower P/Es for stocks. They impact growth stocks more than value names. As the economy recovers in a rising rate environment, watch for better relative performance from value sectors and a sharp headwind to excessive speculative activity.

//  by Tower Bridge Advisors

Last week was highlighted by a continued move higher for long-term bond yields, a modest correction among high flying tech stocks, and ongoing volatility in the speculative fringes of the stock market. The short squeeze targets like GameStop continued to move back down in the direction of fair value, while SPACs continued to raise billions …

February 22, 2021 – The biggest factor this morning is the ongoing rise in 10-year bond yields. Higher yields mean lower P/Es for stocks. They impact growth stocks more than value names. As the economy recovers in a rising rate environment, watch for better relative performance from value sectors and a sharp headwind to excessive speculative activity.Read More

November 22, 2021 – Record highs in the stock market masked an overall deterioration as slowing growth and rising costs impact more companies. While some of the pressures may be peaking or have already peaked, the clear sailing witnessed last spring is unlikely to return.

//  by Tower Bridge Advisors

Lockdowns in Austria sent the Dow and S&P 500 lower on Friday although the NASDAQ continued to rise. Interest rates remained within a tight range. While stocks continue to rise, look at the chart below. It is a chart of the Russell 3000, perhaps the market’s broadest relevant index containing, as the name implies, 3,000 …

November 22, 2021 – Record highs in the stock market masked an overall deterioration as slowing growth and rising costs impact more companies. While some of the pressures may be peaking or have already peaked, the clear sailing witnessed last spring is unlikely to return.Read More

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  • May 23, 2022 – We avoided a bear market with a late day rally on Friday, but it’s hard to assume that a bottom is in. With stocks now down about 20%, we are more than halfway to a bear market bottom using historic averages as a guide. If we assume, at least for now, that any pending recession might be milder than average, hopefully, peak-to-trough, this market can be kinder to investors than the average bear market. Bear markets are ugly but they don’t last long, usually months, not years. Hopefully, we can see an end before too long.
  • May 20, 2022 – Retail earnings wreaked even more havoc on stock prices this week. Discretionary and Staple stocks suffered the most, and bonds finally offered a safe haven. A small relief rally yesterday came as options expire today. Volatility is still here, but valuations are back to historic norms.
  • May 18, 2022 – Stocks have finally begun to rally, a sign that market valuations have normalized. Perhaps the recent sharp declines were too much. While a V-shape may be forming, hinting at a bottom, there are few signs that speculative fever has been fully purged or that investors can see clearly past the series of interest rate increases to come. An interim bottom seems more logical than a final one.
  • May 16, 2022 – Stocks had a strong rally Friday after a sharp recovery Thursday afternoon, but to be convincing, we need another strong follow through today. We’ll see. Markets seem to have made a fair adjustment to a slowing economic outlook and a good part of the speculative purge has been accomplished. But, while stocks have returned to fair value, they may not yet be cheap enough to ignite a powerful, sustainable rally.
  • May 13, 2022 – The 2nd worst start to the year for equities is finally bringing numerous signs of finding a floor. We’re not at the all-clear signal yet, but many world class companies are now trading at relatively favorable entry points for long-term investors. Numerous questions remain, so baby steps are suggested for those with excess cash waiting to re-enter markets.
  • May 11, 2022 – The messages of the bond and stock markets over the past week have been quite different. Bond prices are about where they were before the FOMC meeting, while stocks continue in free fall. The NASDAQ has performed worse as speculation continues to be purged from the market. That process is well advanced but shows no sign of ending yet.
  • May 9, 2022 – Last week’s market was highly volatile, with very little net change except for the high P/E NASDAQ names. The Fed did what was expected, and both earnings and economic data were in line with forecasts. Unless the outlook changes appreciably in the weeks ahead, expect volatility to slow. Against that backdrop, reducing risk is a better path than speculation.
  • May 6, 2022- Cinco de Mayo was not a festive affair. Initially, it seemed Chair Powell threaded the needle yet again with stocks staging a massive run after his speech Wednesday afternoon. That rally only lasted a few hours as rates spiked and stocks got whacked yesterday. We remain range-bound but are teetering on critical support levels.
  • May 4, 2022 – The key to the market today is Jerome Powell’s press conference at the conclusion of the FOMC meeting. What is key is whether or not he deviates from the current consensus on rate hikes and future reductions in the Fed’s balance sheet. Stocks are off to their worst annual start since 1939. I suspect today isn’t the day Mr. Powell wants to add more fuel to the fire.
  • 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.

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