Published September 22, 2023
Below we present an article from the Wall Street Journal talking about the September Effect in stock prices. With the month of September now ¾ of the way done, we find that stocks have lived up to their sour September reputation, so far falling anywhere from 3-6%. (more…)
Published September 15, 2023
With our focus on the Nasdaq 100 (QQQ), we do not actively invest in bonds in our models. However, we know that many of our subscribers do. Below we offer the latest output from Delta Research. We hope you find it of interest.
“The iShares Core US Aggregate Bond ETF (AGG) representing investment grade, U.S. corporate debt was down -1.77% in 2021 and -13.02% in 2022. 2022 was by far its worst performance year ever. Never before has the AGG suffered from two sequential down years. The rolling 5, 3 and 1-year average annual returns of the AGG are 0.39%, -4.69% and -0.36%, respectively. An investor might expect bonds to bounce back after such negative performance. The index is up only 0.9% year-to-date, a significant disappointment. (more…)
Published September 8, 2023
A full slate of information this week. We start with a couple of inputs from Blake Millard’s Sandbox blog discussing oil prices and demand followed by an update on corporate earnings estimates. After this, we have a broad review by the Wall Street Journal of the economy and why the much-forecasted recession has yet to arrive. We hope you enjoy. (more…)
Published September 1, 2023
This week, we offer an educational article from Schwab on market cycles. We hope you will find it helpful in understanding why markets behave as they do.
“Market cycles, as the term suggests, happen again and again over time, and they cover a wide range of types: bear markets and bull markets, sell-offs and rallies, and expansions, recessions, and recoveries. These cycles come in different shapes, sizes, and durations, and no two are exactly alike.
By understanding the various definitions of market cycles, learning how to identify them, and seeing how they’ve played out over time, investors can potentially gain valuable insight for portfolio strategy. (more…)
Published August 25, 2023
As summer winds down, we have seen August play out in its usual way so far – weak. Here with more comment on recent market moves is Delta Research:
“In the past three months, the 10-year US treasury rate climbed by more than 15%. The sharp move higher during the month of August took the 10-year rate to the highest level its been since November 2007. As treasuries moved higher in August, stocks traded lower. The S&P 500 declined from August 1 to the Friday low of last week by 5.5% and the NASDAQ 100 was down 6.7%. (more…)
Published August 18, 2023
Stocks rise on a ‘wall of worry’. As the worries turn out not to be true, buying accelerates. The market’s euphoric rally in June signaled that investors collectively had overcome virtually all the worries of recession and interest rates leading to the bear market. In true bull market fashion, investors have rotated from the initial leaders to other sectors of the market, lifting all boats as it were. Eventually, a new worry surfaces sending prices back down a bit in a market correction. We are there now. (more…)
Published August 11, 2023
Following up on last week’s article about why recession calls have been so wrong in 2023, we offer a look at what might be a better source of high-level economic forecasting. Our friends at Delta recently wrote about the success of the Atlanta Federal Reserve Bank’s “GDPNow” model. That analysis is below. Following the Delta review, we provide a link to the Atlanta Fed’s model, which is routinely updated, for those of you who have an interest in learning more about it. (more…)
Published August 4, 2023
Here we are in the thick of summer, or perhaps the end of it, depending on where you live and when schools open (if you have children so involved). This week’s article is a bit more long-form, hardly the typical lightweight summer fare. We share JP Morgan analyst Michael Cemblast’s observations/thoughts on why markets have seemingly ignored recessionary economic indicators and blasted higher so far this year. (more…)
Published July 28, 2023
Below is the latest from Blake Millard’s “Sandbox” blog. We hope you find it interesting.
Quote of the day
“I always say that while we can’t know where we’re going, we ought to know where we are (in cyclical terms). Understanding our environment can help us decide what tactics to employ, how aggressive to be, and which potential mistakes we should try hardest to avoid. Being conscious of cycles can be extremely helpful, even if we can’t see the future.”
– Howard Marks, It’s All Good (more…)
Published July 21, 2023
The stock market has been embracing the idea of a “soft landing” whereby the Federal Reserve is able to bring interest rates back to normal levels without hurting the economy. The market also believes that corporate earnings are likely to be at their weakest in the current reports of second quarter activity. If that’s true, what happens after periods of weak corporate earnings? (more…)