Published May 13, 2022
The commentary below comes from Josh Brown, where he argues that we should be rooting for a recession so we can go ahead and get it behind us, cleanse the palette, and begin a new cycle. (more…)
Published May 13, 2022
The commentary below comes from Josh Brown, where he argues that we should be rooting for a recession so we can go ahead and get it behind us, cleanse the palette, and begin a new cycle. (more…)
Published May 6, 2022
This week the Fed made the first of their larger interest rate hikes with a 0.5% move (50 bps in bond market parlance). Here’s the path of Fed interest rates that the market foresees – straight up from now through March 2023. (more…)
Published April 29, 2022
We really enjoyed Ryan Detrick’s article on the typical stock market movements during midterm election years (aka the second year of a presidential cycle). We hope you will find it interesting. (more…)
Published April 22, 2022
A couple of odds and ends from our reading this week. First, Delta’s observations from the beginning of this earnings season. We note that investors are clearly on edge as the Fed drives interest rates higher, removing the free money that has served as market rocket fuel for the past few years. It will take a few months for the impact of that to shake out. Some argue that a recession is the ultimate result of the Fed’s actions. (more…)
Published April 15, 2022
This week, with all the talk about inverted yield curves and interest rates, we shift our attention from stocks to the newfound misery experienced in the bond market. Money is leaving bonds and rolling into any stock with a tasty yield – e.g. dividend and utility stocks, real estate. (more…)
Published April 8, 2022
The recent inversion in the yield curve has certainly generated a lot of headlines. The inversion occurs when short-term interest rates become higher than long-term interest rates. The driver of the inversion is usually a Federal Reserve raising rates while investors are skeptical about the long-term economic strength. Thus, the interest rate curve reflects a sort of temporary spike in rates. This inversion often suggests a recession is upcoming as the economic cycle has overheated to the point where the Fed has had to step in to slow it down. (more…)
Published April 1, 2022
This week saw a strong move in growth stocks with breakouts in small-cap growth, software, semiconductors, real estate and other beaten-down growth and cyclical areas. This is a positive development for the broader stock market as the rally expands its reach beyond the commodity and defensive leaders of the past few months. (more…)
Published March 25, 2022
The stock market has settled down quite a lot in recent days as this chart of the volatility index shows. When volatility jumped down over that blue trendline, and kept going down, it was a likely sign that stock investors could breathe a little easier. Nevertheless, we also note that volatility has been generally elevated since mid-November and has a ways to go before true calm returns to the market. (more…)
Published March 18, 2022
The question below, “Could we be near a market bottom?”, posed in the most recent letter from Blaine Rollins, coincided with what appeared to be a complete washout in European and Chinese, stocks. Whereas the emergence of the Omicron strain of coronavirus may have kickstarted the negative market proceedings back in November, the more recent events have mostly been happening outside the U.S. with the war in Ukraine and China’s covid crackdown adding further fuel to the downtrend. (more…)
Published March 11, 2022
The market mess enters its fourth month with Chinese stocks now getting hit (down -15% in the first 10 days of this month). Credit spreads, a proxy for risk concern in the bond market, have risen sharply as the chart below shows. So plenty of reasons for hand-wringing, all of which builds to a buy point for stocks, eventually. (more…)