Published November 11, 2022
For the first time in awhile the usual market suspects of inflation and the Fed’s assault on the stock and bond markets took a backseat for a couple of days. When interest rates rise sharply as they have this year, investors find out who was overly leveraged and caught without a seat in the market’s cakewalk. This week, we found out that cryptocurrency exchange FTX was the latest one without a seat. (more…)
Published November 4, 2022
Stock investors had a bit of a panic attack this week. The Fed Chair Jerome Powell continued hammering markets with his inflation-fighting warrior pose, a pose that most all market-watchers now agree he was late in adopting. Powell is making up for lost time, of course, by ratcheting up interest rates at a breakneck pace. The sudden acceleration has been a very cold shower for some business processes with private equity and venture capital investors reducing their activity by a third or more in the most recent quarter. (more…)
Published October 28, 2022
Below we share a good summary of the housing market. As with the stock market, the woes experienced recently are really only reversing the crazy gains of the prior year. Compared to pre-pandemic, we would guess that most homeowners remain in very good shape and sitting on better-than-average appreciation (aka: inflation) in their assets. (more…)
Published October 21, 2022
These days, there is much talk about a coming recession. By the time the recession gets here, if it does, the stock market will have already suffered much of its decline and will be near its low point. The article below from an analyst at JP Morgan presents a historical perspective of the timing between recessions and stock market bottoms. (more…)
Published October 14, 2022
Investors await corporate earnings data over the next few weeks with concerns high that declining earnings outlooks will be the next shoe to drop on stocks. The chart below highlights where we have been on corporate earnings and how things have changed. (more…)
Published October 7, 2022
The market is obsessed with the impact of sharply rising interest rates. The brief below from Delta outlines some of the impacts of this sharp change in Fed policy and what investors are looking for to turn the markets around.
“The Federal Reserve is now projecting a terminal Fed Funds rate of about 4.6%. This is up from about 3.8% over the past month. On August 1, the 10-year US treasury was about 2.6%. Today, it is approaching 4.0% – a dramatic increase in a short time. (more…)
Published September 30, 2022
Blaine Rollins outlines the key questions facing investors these days. Here are some excerpts from his recent commentary:
“You can see the light at the end, but how much risk will you take to run down to the other end? Big returns await if you can only make it to the other side. But there is always the possibility that you make it part way and the train called ‘recession’ interrupts your path. (more…)
Published September 23, 2022
There are thousands of ways to invest. We prefer to remove the emotional component and use mechanical models to drive our investing. Some others like to rely on seasonal cycle analysis. One of those cycles is the four-year presidential election cycle shown below. The second year of the presidential cycle tends to be the worst of the four years. The return historically has been flat through the first nine months of the second year. This year, we are well below that flat historical trend. But the presidential election cycle suggests we are nearing the best performance of the four years. The period from the midterm election to the following May tends to offer outstanding performance. That would be a substantial change in market tone from where we are in today’s market where caution and negative sentiment rule. (more…)
Published September 16, 2022
Investors have their hands full these days trying to parse the conflicting economic reports. The labor market tells us that unemployment is at record low levels. Wages are rising for the first time in a very long time. Yet, fear is growing that the economy may be softening, while inflation remains higher than investors would like (fueled by those same rising wages). This week was a microcosm of the pitched battle between bulls and bears.
We will look at the market’s largest and perhaps most influential stock, Apple. (more…)
Published September 9, 2022
As stocks continue wrestling with many competing narratives, here is Delta’s summary of where things stand.
“The re-re-re-adjustment of interest rate expectations higher following Fed Chairman Powell’s Jackson Hole speech two weeks ago triggered a significant selloff in stocks. Then the news deteriorated further. (more…)