The Fed has raised rates from 0 to 5% over the course of its last ten consecutive FOMC meetings beginning in March 2022. Despite this aggressive tightening of monetary policy, the S&P 500 is down only 11% from its January 2022 high of 4,796 to its current level of 4,284, which followed gains of 18% …
June 5, 2023 – Last Friday’s unemployment market action surprised investors when the two employment surveys indicated opposite results. The more reliable of the two surveys, showed strong payroll employment, which could have sent the market worrying about the Fed’s reaction to the hot report. Instead, we saw a sharp rally and we suspect that there will be significantly more “soft landing” prognostications this week.
The S&P 500 was up for the third straight week and the Nasdaq registered its sixth positive week, amid increasingly negative investor sentiment. While Treasury yields rose, the 10-year yield of about 3.7% remains within the range of the past 6 months. Can the US avoid a recession? Is there such a thing as a …
June 2, 2023 – Stocks traded higher yesterday following the passage of the Fiscal Responsibility Bill in the House as well as some dovish comments by a Fed Governor. Last night, the debt Bill was passed in a bi-partisan vote in the Senate. Now the Bill will go to President Biden to be signed, which will avert a much-feared debt default.
The debt Bill does prevent a near-term market meltdown. Moreover, the extreme members of both parties are crying foul which probably means the deal was about as fair as could be achieved under the circumstances. What the Bill doesn’t do is solve our Nation’s long-term debt problem. Total funded debt owed to creditors is almost …
May 31, 2023 – Congress now has a week to pass the debt ceiling agreement. While there will be a lot of verbal whining and expressions of righteous indignation, the majority will pass a bill that is likely to have little long-term economic consequence. Once the bill is passed, attention will turn to the mid-June FOMC meeting and the increasing likelihood of yet another interest rate increase.
Stocks were mixed yesterday after a weekend deal seemed to set the table to end the debt ceiling crisis. Now it’s up to Congress. Otherwise, the continued reaction to Nvidia’s# strong outlook continued to reverberate throughout markets. Treasury yields declined except at the short end of the curve previously elevated by fears of a possible …
May 26, 2023 – Wednesday’s earnings announcement by Nvidia shocked markets with the speed at which generative AI is being adopted. Even regulators can’t slow it down. Every software developer now has to incorporate AI into everything. The race suddenly got a lot more heated. To win requires the fastest chips and the best software development tools. It is way too early to identify the best products that will evolve but markets yesterday were quick to identify those that have the best building blocks to get to the finish line.
Stocks were mixed yesterday with the Dow falling once again while debt ceiling talks made slow progress. But the star yesterday was Nividia# which soared over 25% after issuing forward looking earnings guidance far above expectations. Bonds continued to fall as fears of default increased. While few expect an actual default to occur, market disruptions …
May 24, 2023 – The latest version of the “Fast and Furious” movie series is off to a good start. But it doesn’t draw like it used too. We have seen this plot too many times. Sounds like a repeat of the debt ceiling crisis! We don’t know the exact ending but it is unlikely to be a bond default. That doesn’t mean a solution will be without consequences. Interest rates are starting to rise again and may continue after resolution as the Treasury floods the market with new bonds. This isn’t a great short-term backdrop for equities.
Stocks fell with losses accelerating in the afternoon as concerns over debt ceiling negotiations began to register with equity investors. The yield curve has become more inverted as short-term rates rise related to a likely rush in the government’s need to sell an elevated level of Treasuries after the crisis ends. Bonds haven’t been this …
May 22, 2023 – As go debt ceiling negotiation talks, so goes the financial markets. So far, markets are sanguine, seeing the talks mostly as political theatrics. But that could change this week if no solution is in sight before we all leave for an extended Memorial Day weekend. Whether we leave Friday with a smile or a frown is anyone’s guess at the moment.
Stocks gave ground Friday as debt ceiling talks broke down. President Biden and Speaker McCarthy will meet again this afternoon with no signs of an imminent agreement. It’s pure Washington theatre. The vast majority of forecasters have been predicting a midnight solution all year long. They still believe a settlement will happen. Clearly, the consequences …
May 19, 2023 – As the debt ceiling concerns lessen, attention reverts back to earnings. Key retailers aren’t reporting stellar results but their stocks are taking weak guidance in stride, a sign much of the pending bad news is already discounted. That should put a floor underneath the stock market. At the same time, money keeps flowing toward the same technology names. Chasing momentum can be dangerous.
Stocks moved higher late yesterday, following optimistic comments from Speaker Kevin McCarthy that a compromise could be reached before bumping up against the debt ceiling. Congress still has to write and pass bills, and that is likely to cause some tension that could still upset markets over the next two weeks. But the odds of …
May 17, 2023 – Right now, stock and bond prices are slaves to the progress of efforts to extend the debt ceiling. Yesterday afternoon’s White House meeting was more productive than last week’s. Thus, futures are up this morning, but the job is far from done. An inevitable 11th hour moment lies ahead. Hopefully, a solution will emerge, but in this bifurcated Congress, risks of miscalculation are elevated.
Stocks tumbled at the close as political leaders met at the White House to try and move forward a compromise solution that would allow the debt ceiling to be raised. The result, after the close, was pure political theatre. Shakespeare couldn’t have staged it better. All parties expressed optimism as each identified point personnel that …
May 15, 2023 – The debt ceiling approaches but markets don’t seem to care. Perhaps they are right, and a compromise solution is just around the corner. But while June 1 is only a bit over two weeks away, any compromise must pass Congress. That may not be a simple task. If no progress is apparent before Biden leaves for overseas, expect markets to start to show concern.
Stocks rallied late Friday, eliminating most earlier losses to close mixed. Bonds fell but yields stayed within a narrow range. With just over two weeks to go before a possible debt default, most attention will be focused on progress toward raising the debt ceiling. While both sides seem entrenched, behind the scenes talks are taking …
May 12, 2023 – While mega caps keep gaining steam, the average stock is now down for the year. Eight of the last nine trading sessions have been negative for the Dow Jones Industrial Average. The Fed may be done raising rates, but an all-clear signal is far off in the distance. Transitions are hard!
April’s consumer inflation report was well received, with a continuation of a gradual slowing for inflation. Ditto for the Producer Price Index yesterday morning. Our infamous “Fed whisperer”, Nick Timiraos, helped fuel a minor rally in growth stocks when his latest Wall Street Journal missive noted “Federal Reserve officials were already leaning toward taking a …
May 10, 2023 – Stocks have stayed within a narrow range awaiting today’s CPI report. Yesterday’s White House meeting to find a solution to the debt ceiling crisis was an expected dud. All sides seem to expect an 11th hour solution but no one has found the solution yet. Congress normally reacts to pending crises at the proverbial 11th hour. Investors still favor that outcome this time around, but the black swan risk of failure grows larger as the deadline approaches.
Stocks finished lower yesterday as investors awaited the meeting at the White House between the President and leaders of Congress and this morning’s CPI report. Unfortunately, the meeting, which took place after the market closed, produced no headway. We are now within three weeks of a debt default although we have seen this movie before. …
May 8, 2023 – Stocks rallied on Friday as regional bank stocks rebounded. Was it simply short-covering or was Thursday a washout moment for this battered group? Today’s action will say a lot. Apart from the regional banks, the focus will be on this week’s White House meetings regarding the pending debt ceiling crisis. The outcome, good or bad in tone, may be market moving.
Stocks rallied sharply on Friday, led by a sharp recovery in regional banks. This will be a big political week as President Biden meets with Kevin McCarthy and then with Congressional leadership teams. Thursday will mark the end of Title 42. Without any administration response, beyond sending troops to our southern border, immigration will once …
May 5, 2023 – The Fed followed through with the insanity. Raising rates after 3 of the largest bank failures in US history makes little sense at this point in time. Banks responded with more downside pressure. Even though this is likely the last rate hike, there is sure to be more pain in the near-term, which typically offers long-term opportunities. Patience is key. April’s employment report will be closely watched this morning following another better-than-expected earnings report from a mega cap leader in Apple.
Spanning 2008 – 2012 (during the Great Financial Crisis), 465 banks went under. They totaled $687B in deposits. No customer lost their savings accounts. So far in 2023, 3 banks (Silicon Valley, Signature and First Republic) have failed, totaling $367B in deposits. I fear there are more shoes to drop and we are only a …
May 3, 2023 – Today concludes the 2-day FOMC meeting. All odds say another rate increase is coming. In the face of banking turmoil and a U.S. debt default possibility before the next meeting, such a decision is a mistake. If future rate increases are necessary to defeat inflation, they could be done later. Assuming rates are raised, look for markets to take the news negatively, even if the Fed hints that today’s increase could be the last one.
Stocks took a beating yesterday as regional bank stocks collapsed. Oil prices fell sharply sending that sector down as well. Yesterday was the start of a 2-day FOMC meeting. It will conclude this afternoon. All signs suggest the Fed will raise interest rates by another 25-basis points despite the turmoil in the banking sector and …
May 1, 2023 – Was the First Republic Bank failure the last shoe to drop? Maybe for now, but high rates are stressing the commercial real estate market. Problems there will play out over an extended period of time. The failure of Bed Bath & Beyond also reminds us that the evils associated with high rates aren’t confined to the banking system. Nonetheless, it is now a virtual certainty that the Fed will raise rates again this week.
Stocks finished last week on a solid note as earnings reports lifted spirits. Treasury yields slid. The FOMC meets this week. The only thing that could have held back another 25-basis point increase in the Fed Funds rate on Wednesday was a chaotic resolution of the First Republic Bank crisis. That was avoided as JPMorgan …
April 28, 2023 – Japanese lunar exploration company ispace attempted a soft-landing on the moon on Tuesday, but lost communication with the spacecraft and deemed the attempt “unsuccessful.” Last week, Elon Musk’s SpaceX Starship rocket blasted off on an unpiloted flight but then tumbled out of control and exploded. SpaceX called it a “rapid unscheduled disassembly.” Let’s face it: soft-landings are very difficult and delicate endeavors. With mixed signals on the economy emerging, we hope the Federal Reserve can engineer better results.
There are conflicting signals on the economy for sure. Consumer spending on travel and leisure has been continuing to lift off steadily. Visa# recently posted strong revenue and earnings as cross border travel continues to expand and customers spend on travel and leisure activities. Aerospace and travel related companies are getting a boost to revenue …
April 26, 2023 – Markets are being buffeted by crosscurrents. The banking crisis has come back into focus amid turmoil at First Republic. Earnings reports move individual stocks both ways. Bond market strength portends a weakening economy and slower inflation. Yet pockets of economic strength endure, mostly in the travel and leisure sectors. The net for equity investors is a standoff, one likely to endure for some time amid persistent rotation of leadership.
It was a wild day yesterday with several strong moves relative to earnings, a wild ride for First Republic Bank, the regional bank most people see as the stress point within the banking system, and a sharp rally in bonds. The major averages were all lower. After the close, solid earnings from Microsoft# reduced some …
April 24, 2023 – Earnings season peaks this week before winding down. The debt ceiling is approaching and soon will replace earnings as the lead story. Washington remains as split as ever, setting up a nasty battle likely to go to the proverbial 11th hour. It could be a bumpy ride in financial markets until then.
Stocks gave up some ground last week as earnings season got into high gear. This will be the biggest week for earnings. In the bond market, the big news was the emerging huge spread between ultra-short Treasuries (those sure to mature before any debt ceiling default) and 3+ month maturities (those that might get hung …
April 21, 2023 – Mixed earnings reports are sending confusing messages to the market. While Tesla has trouble selling cars at elevated margins, housing stocks say consumer spending is fine. American Express sees consumer travel booming, but banks are building reserves for future defaults. This is quite typical of a range-bound market where bulls and bears are both right and wrong.
Various earnings updates are flying in with fodder for both sides of the investment community. 19% of the S&P 500 companies have reported so far, with next week being the most important, as many mega-cap leaders announce results (Procter & Gamble, Coca-Cola, UPS, McDonald’s, Alphabet, Visa, Microsoft, Boeing, Meta, Honeywell, Amgen, and Amazon among many …
April 19, 2023 – It is still early in earnings season, but reactions to date suggest a darker outlook is not priced in. The delayed reaction to interest rate increases is only starting to be felt on the bottom line. Stocks should remain within the S&P500 trading range of 3800-4200 for a while longer.
Stocks moved sideways yesterday with very few changes in the major averages. This outcome was despite negative reaction to earnings reports from Dow components Johnson & Johnson# and Goldman Sachs#. Bond yields continued to move higher with the 2-year Treasury yield now back above 4.25%. I was speaking to one of my partners yesterday who …
April 17, 2023 – Despite a strong performance over the past month, stocks remain within a multi-month trading range. If a consensus forecast of recession ahead is correct, earnings season should lower future expectations. That should be a near-term headwind for stocks. Bull markets never start before a recession begins. This time could prove the exception, but some retracement is more likely.
Stocks gave ground on Friday despite strong earnings from Dow component JPMorgan Chase#. Bond yields climbed. March retail sales were notably weak. The recent flood of data supports the conclusion that both our economy and inflation are slowing. One can argue the pace. While a majority of Fed officials now support the notion that a …
April 14, 2023 – A solid bounce yesterday in Technology and Discretionary stocks helped recoup the unexpected post CPI-report market weakness from Wednesday. Today’s movement will be dominated by Big Bank earnings. Going forward, jobs, availability, cost of capital and earnings expectations take center stage away from the improved CPI and PPI reports.
Markets are always shifting. Over the past year, good news was bad and vice versa. Strong employment and robust earnings pushed up inflation which meant larger Fed rate hikes. Higher interest rates helped bring stocks down, substantially so for long-duration assets (growth). Solid economic news was actually bad for stocks. Finally, this rate hike cycle …
April 12, 2023 – This morning’s CPI report is likely to be market moving, but will it dissuade the Fed from raising rates again in three weeks? The Fed wants to see a clear trend. Inflation is coming down, but is the pace fast enough? I doubt one CPI rating will change minds. More financial turmoil, should it happen, might.
Stocks rose again in anticipation of a favorable reading on inflation when the consumer price index numbers are released before the market opens this morning. While those numbers are likely to be market moving, the question is whether they can alter what appears to be an intent by Federal Reserve leadership to increase the Fed …
April 10, 2023 – Friday’s employment report showed a slowing employment market, but with an unemployment rate down to 3.5%, it is still too strong for Fed comfort. Look for another increase in rates in May as long as the banking situation remains stable.
While markets were closed Friday, the government issued the March employment report. Numbers were close to consensus but probably still too strong for the Fed to end its string of interest rate increases. Fed Funds futures this morning still lay odds close to 2:1 that the Fed will move rates up another 25-basis points when …
April 5, 2023 – Markets are starting to assume the rate hike cycle will end soon. Next week’s CPI report and Friday’s employment report are key to the May rate decision. If the rate hiking cycle is ending, attention will turn to economic data. Slower growth or a recession will impact earnings and thus stock prices. We will hear from managements starting late next week when first quarter earnings reports commence.
Stocks gave back some ground yesterday after economic data suggested the economy is slowing. Bond yields barely changed while oil prices gave back some of Monday’s sharp gains. Market leadership was led by risk-off stocks as tech and industrial issues slid. For many months, investors celebrated economic weakness hoping that a slower economy would lead …
April 3, 2023 – Q1 is in the books and was surprisingly good for equity investors given the Fed’s continued tightening path and several high-profile bank failures. But the rate hiking cycle could be near an end, and there are increasing signs that inflation is waning, perhaps faster than some expect. As long as credit concerns don’t mushroom, investors could look forward to a better investing climate in the second half of this year.
It was quite a first quarter. January was a superb month following heavy tax selling in December. Momentum slipped in February as the economy continued to run stronger than expected and inflation seemed resistant to Fed pressures. At one point, Fed officials began to signal that a 50-basis point increase in March was quite possible, …
March 31, 2023 – Quite the volatile quarter to start 2023. Even with all of the negative headlines, the average stock is flat, while beaten down Technology and Discretionary stocks charged higher. Even though another Fed tightening cycle is nearly ending, the all-clear signal requires more patience.
The further away from multiple banks failing and another shoe not dropping, the more constructive investors are becoming. While it would be rare for contagion to not occur, it is not impossible. Bank withdrawals are slowing. Fed borrowings are showing some semblance of returning to normalcy. Interest rates have spiked lower, which helps reduce the …
March 29, 2023 – Banks stocks are an important market indicator, usually outperforming as the market recovery begins. Current bank stock valuations suggest upside for the long term, but until investors are satisfied that banks are adequately reserved to withstand economic weakness, the volatility will continue. We take a deeper look at bank loan portfolios and the position of commercial loans.
Obviously, the market is worried about banks. I do not need to restate the events of the past few weeks, but this sector is an important market indicator as banks usually outperform early in a recovery cycle. Bank stocks outperformed late in 2020 as the US recovered from the COVID shutdown, but then the Fed …
March 27, 2023 – A hectic week ended with markets close to where they began. Banks continued to be a weak spot. Lower oil prices impacted the energy sector. Overall, the economy still seems resilient, but recent stress will impact activity as banks tighten loan standards and corporations seek liquidity.
Stocks dipped at the open on Friday as traders worried about contagion in the banking world in Europe, with most concern focused on Deutsche Bank. Although the prices for credit default swaps climbed sharply, there were no definitive signs of pending disasters. By afternoon calm had returned and stocks closed marginally higher. For the week, …
March 24, 2023 – Contradictions abound as we close out the week following another volatile reaction to a Fed meeting. The Federal Reserve raised interest rates again, even though banks are begging for cash at the discount window at levels above the peak in 2008. Numerous officials preach that bank deposits are safe, but Secretary Yellen offered less enthusiasm than hoped for with her Congressional testimony. All of this adds up to more uncertainty and a range-bound market.
Rightly or wrongly, Chairman Powell followed expectations and brought another quarter point hike to Fed Funds, bringing the upper range to 5%. Higher rates will make it even harder for banks to retain deposits unless they start rapidly increasing the interest paid on those balances which will crimp earnings power. It will also be difficult …
March 22, 2023 – Hang on to your hats. It’s FOMC day! Fed officials face a tough call, on whether to raise rates amid current banking turmoil. Markets believe they will. But the rate hiking cycle is nearing an end. Even assuming one more increase in May, summer inflation should have cooled enough to stop the rate hikes. The strong stock market rally of the past two days suggests a belief that the cost of the current banking turmoil can be contained. Whether that is hope or truth remains to be seen. It is rare for financial crises to end until the Fed changes direction.
Stocks rallied for the second straight session in front of the conclusion of the FOMC meeting today which will help to define the Fed’s future course. Bond yields rose modestly. Fed Funds futures indicate an 87% certainty of a 25-basis point increase in short-term rates, despite the uncertain future of a few mid-sized banks. While …
March 20, 2023 – UBS buys out Credit Suisse and disaster is averted once again, but markets remain skittish. First Republic seems next in line. All this comes in front of Wednesday’s FOMC meeting. Crises don’t end until the Fed changes course. A pause is in order. That would contradict previous signals. A pause doesn’t have to concede that the fight against inflation is over. It would merely be a pause. If bank failure fears can be contained, another rise in rates in May would be possible, if needed. But there is a lot of evidence to suggest it won’t be. The stock market’s course near-term is clearly binary depending on what the Fed does Wednesday.
Stocks continued to slide on Friday as a possible collapse of Credit Suisse came into focus. Unlike other banks, Credit Suisse is primarily an investment bank, with a major securities trading arm that raises significant counterparty risk. Over the weekend UBS stepped in to buy the bank at a sharply discounted price. Another imminent crisis …
March 17, 2023 – While banks are scrounging for support, ancillary effects are becoming priced into cyclical sectors of the market as lower interest rates bring investors back to growth leaders. Quadruple options expiration and further bank concerns will drive more volatility to end this crazy week. A record breaking rush to the Fed Discount Window shows how desperate some banks are to cover recent withdrawals.
Markets rallied hard yesterday afternoon following increased intervention into beaten down banks. First, it was across the pond as the Swiss Central Bank injected up to 50 billion Francs to support their 2nd largest lender, Credit Suisse. Domestically, First Republic was rumored to be taking deposits from numerous large banking institutions totaling more than $20 …
March 15, 2023 – Stocks rebounded yesterday, stemming losses from last week, but the recovery may be short-lived as European bank stocks are under severe pressure this morning. The failures of two banks in the last week may be the end of the crisis or the tip of the iceberg. We won’t know that for days or weeks. In the meantime, markets hate uncertainty, and the likelihood of recession has risen. Beware the Ides of March.
Stocks rebounded yesterday, stemming the recent sharp losses that followed the bankruptcies and bailouts of several large regional banks. All 11 S&P 500 sectors finished with gains. Bonds sold off a bit, stopping the steepest short-term decline in yields in decades. Note that I used the word bailout in the first sentence, contrary to the …
March 13, 2023 – The Fed and FDIC stepped in over the weekend to create a new lending program to save depositors of two large banks that failed since Friday. That’s an important first step, but the rules of engagement in the banking industry have changed. Banks will have to pay depositors to retain their money. The same will go for stock brokers. We are witnessing what happens when the Fed is forced to change the money landscape too quickly. Every tightening cycle has its crisis. We are in the midst of one now. Crises happen at the end of a cycle, a consequence of earlier actions. Now the Fed needs to find a new path to secure the economy and fight inflation.
Stocks fell sharply late last week as Silicone Valley Bank, the 22nd largest bank in the country failed. Sunday Signature Bank also failed. These were the second and third largest bank failures in U.S. history, only smaller than Washington Mutual (WAMU) which failed after a run and massive exit of deposits in September 2008 at …
March 10, 2023 – It is Friday Jobs Day yet again! Never before have so many backward-looking reports meant so much for markets. February CPI is next in line this coming Tuesday. Fed Chair Powell has not really changed much of his commentary; the Fed is data dependent and the Fed Funds rate will be higher for longer. However, recent stress in the banking sector may throw a wrench in their plans to raise rates much higher.
Recent jobs and inflation reports were stronger than expected, meaning inflation remains elevated. Futures markets were pricing in an 80% chance of another 50bp increase in Fed Funds on March 22nd, up from a zero probability a few weeks ago. It is highly unusual for the Fed to change course after slowing their cadence (from …
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.
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 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.
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 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.
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 …
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.
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. …
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.
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 …
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.
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 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.
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 …
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.
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 …