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Uncategorized, Weekly Update

How Emotion Drives the Economy


Published September 20, 2019

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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…)

Uncategorized, Weekly Update

The Stock Market’s Unspent Fuel


Published September 13, 2019

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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…)

Uncategorized, Weekly Update

A Mixed Bag Economy


Published August 30, 2019

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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…)

Uncategorized, Weekly Update

Business Cycle/Sector Investing Takes a Curve Ball This Cycle


Published August 23, 2019

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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…)

Uncategorized, Weekly Update

The Dreaded Yield Curve Inversion


Published August 16, 2019

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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…)

Uncategorized, Weekly Update

Currencies in focus


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Published August 9, 2019

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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.

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Uncategorized, Weekly Update

Paying the bank to hold your money


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Published July 26, 2019

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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.

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Uncategorized, Weekly Update

Stocks and bonds both pushing higher


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Published July 19, 2019

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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.

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