Published July 14, 2023
Below is a snapshot of Blaine Rollins’ regular survey of economic and market information. As we have noted, markets in June solidified a new bullish tone. Here are some datapoints and observations from Mr. Rollins noting why investors increasingly believe the Fed might succeed in tamping inflation down while economic growth remains solid – the so-called “soft landing” scenario. (more…)
Published July 7, 2023
There are a wide range of inputs portraying a change in investor attitudes over the past few weeks. Our friends at Delta Research offer one possibility of the change in how interest rates are viewed. We hope you find it interesting.
“The Federal Reserve raised the Fed Funds rate from 0%-0.25% to 5.00-5.25% since March of last year. The pace and amount of rate increases came as a surprise to most market strategists. The reason for the surprise is market strategists believed the economy would slow rapidly as a result of much higher interest rates. Coming into 2023, the market expectation was for one more rate hike, a pause and then rate cuts in the second half of the year. The Fed raised rates in March and May of this year and now is expected to raise again in July and then once again later in the year. (more…)
Published June 30, 2023
In a recent article we posited that the bear market was over. One of the reasons we say this is captured below in a series of charts. We will conclude with a Goldman Sachs outlook that is muted. But muted is not bearish. Things have changed in the market and investors have, in many cases, been caught off-guard as they typically are. (more…)
Published June 23, 2023
The market has been moving higher. However, many analysts continue to argue that a recession is upcoming, and the stock market is headed for a fall. We posted Schwab’s mid-year outlook dissecting the economic and market dynamics at work. This week, we are looking at comments from First Trust’s Brian Wesbury. Mr. Wesbury remains concerned about recession and outlines why he still sees one ahead. (more…)
Published June 16, 2023
We routinely publish Schwab’s longer-term (6-12 month) outlooks as part of our weekly blog. Below is their mid-year outlook beginning with a brief review of what has transpired so far in 2023 compared to what they thought. Schwab has been very cautious on the stock market for many months. Read below to see if the recent lift in stock prices has shifted their view. (more…)
Published June 9, 2023
The S&P 500 entered a new “bull market” this week as the index has now risen more than 20% from its low point hit last fall. Our friends at Delta research outline below how market sentiment has changed:
“The market is shifting. Sentiment is turning bullish. On the prospects of better growth and lower recession risk, funds are flowing back into equities.
(more…)
Published June 2, 2023
As the megacap stocks fueling the rise of the Nasdaq 100 (QQQ) continue to rocket upward, investors can easily believe the bear market beginning sometime late 2021/early 2022 is over. The fly in the ointment here is that the vast majority of stocks in the market are not participating in the uptrend. Below, the team at Schwab provides good information around this topic. (more…)
Published May 26, 2023
Below are excerpts from Blaine Rollins’ latest collection of market and economic observations and data. There continues to be an extraordinary lack of consensus around any market narrative. Thus, we keep chopping around mostly sideways in the broad market while the heavy-hitters of the market are perceived as the safest bet to make in the stock market. Stocks have strong competition also as short-term debt instruments offer 5%+ returns for little to no risk. At some point, this all breaks down. But that breakdown could well be a surge of money into the rest of the stock market which one of Blaine’s sources below shows is rather cheap these days. Given that such an outcome is talked about relatively little, perhaps it’s the most likely destination for stocks? (more…)
Published May 19, 2023
There is no shortage of commentary and hand-wringing about a coming recession. In the piece below, one Fidelity analyst posits that the recession may have already occurred. Here is Denise Chisholm’s analysis:
“Did we already have a hard landing? The National Bureau of Economic Research (NBER) hasn’t officially called a recession, but signs suggest that we may have already had a fairly bad one. One of the most consistent recession indicators has been a contraction in real wages (adjusted for inflation), which happened in every recession since 1962 except the 2020 COVID shutdown (chart hereunder). Real wages declined throughout 2022—falling more than they did during the Great Recession—as inflation outpaced wage growth. Real wage growth may have bottomed last fall; a rebound could provide a tailwind for the economy and the stock market. (more…)
Published May 12, 2023
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