Published September 20, 2019
Finance, and investing even more so, are resting on the foundation of human emotion. How much a stock is worth certainly has some underpinning in the company’s earnings. But perhaps more important is the price-earnings or P/E ratio, which is how much investors are willing to PAY for those earnings. (more…)
Published September 13, 2019
Stocks in the U.S. have come roaring back from the weakness of one month ago, returning to the doorstep of new high ground. Lost in the enthusiasm about new highs, however, is the fact that fully half of the stock market has been treading water for almost two years now. If that lagging half of the market were to break through, stocks would be in a position to substantially rally. (more…)
Published September 6, 2019
For the past month stocks have chopped within a fairly wide range as the circled area on the chart below shows. Hemmed in by on-again, off-again trade tariff talks, stocks have made no progress over the past year. (more…)
Published August 30, 2019
Liz Ann Sonders at Charles Schwab recently wrote a thorough overview of the current economic state. Given the latest increase in economic uncertainty courtesy of the ramping of the trade war—but also last week’s release of the Leading Economic Index (LEI), her report is worth posting here for our subscribers who are interested in tracking the economy and musing about where that might be headed. (more…)
Published August 23, 2019
Business cycle/sector investing is a seemingly easy way to apply a layer of insight to traditional buy-and-hold investing. By focusing our investment funds on sectors that typically show improved performance during certain phases of the business cycle, a sector investor can presume to outperform the broad market. However, it is never quite that easy. (more…)
Published August 16, 2019
Like a surfer bounced by wave upon wave, investors were hit this week by a second wave. After a one day burst of market joy as the Trump Administration dialed back the September 1st imposition of trade tariffs, the U.S. Treasury bond market was rocked by a deeper reduction in yields. (more…)
Published August 9, 2019
This week’s shocking currency move by China brought currencies and their management into the spotlight. The Chinese lowered their currency “peg” to a surprisingly low number as a retaliatory move in the trade skirmish with the Trump Administration.
Published August 2, 2019
As earnings roll in for the quarter, we post an article from Josh Brown that highlights analysis done by David Kostin at Goldman Sachs discussing the outlook for earnings growth.
Published July 26, 2019
As we’ve noted many times before, the stock and bond markets since the financial crisis have been driven for the most part by the policies of the world’s central banks. Central banks, such as the Federal Reserve in the United States (the “Fed”) and the European Central Bank (“ECB”), have been very sensitive to markets and have clearly sought to directly influence them. There is no question they have been successful in this task. Simply look back to December when U.S. markets were struggling.
Published July 19, 2019
Below is a survey of markets through a series of charts with the idea being a quick scan to highlight the recent new highs, and how close other market indexes are to joining in those highs. The run higher in stocks has been largely propelled by optimism over a new round of Federal Reserve interest rate cuts, with investors preferring to take an optimistic view that the cuts in rates will avert a possible recession.
