Weekly Update

An Overview of Current Economic and Market Conditions

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Published January 29, 2021

This has been the rare week where investment news has become very mainstream. The frenzied trading in Gamestop and other heavily-shorted stocks has created all kinds of buzz. There are plenty of articles discussing the phenomenon of the armies of individual investors going after big-money short sellers. Once the sparks stop flying and the dust settles, there will be some big winners and losers from this market aberration. Meanwhile, the broader markets roll on, mostly unaffected by the turmoil in that handful of stocks. (more…)

Weekly Update

2020 – a Rollercoaster Ride Ends Well for the Stock Market

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Published January 1, 2021

 

Below is a good recap of the year in investing excerpted from the Wall Street Journal. Our model-driven, long-short approach to investing responded well, protecting us from the worst of the market selloff while participating well in the rebound. We appreciate you, our family of subscribers, and wish you a healthy and prosperous 2021! (more…)

Weekly Update

Are Stock Markets Too Richly Valued Now?

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Published December 25, 2020

Investors cannot help but be amazed by the stock market’s performance this year. What began as a promising continuation of a decade-long bull run quickly turned into one of the sharpest plunges in market history as Covid-19 upended economies worldwide. Shocking as that plunge was, the subsequent rebound was even more surprising, with stocks going on to record highs despite unemployment remaining extremely high and other economic indicators remaining well below their pre-pandemic levels. The record level of stock prices in the face of still-weak economic data suggests a stock market that might have run too far too fast. A couple of notable writers on investment topics in major publications have recent tackled that topic, concluding that stocks are indeed at extremely rich prices. (more…)

Weekly Update

A Falling U.S. Dollar Fuels Stock Gains Abroad

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Published December 18, 2020

We recently noted the strength of non-U.S. stock markets. One of the primary reasons for that strength has been currency-related. The U.S. dollar, often a safe haven in times of stress, has been declining as investors focus on a recovery in global economies in 2021. (more…)

Weekly Update

Here’s Why Stock Markets Are So Bullish These Days

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Published December11, 2020

The stock market has been roaring ahead, having posted a spectacular monthly return in November. That big monthly gain portends further strength ahead as LPL’s Ryan Detrick points out in his table entitled “What Happens After 10% Monthly Gains? Bulls Smile – Historic S&P500 Index Gains Have Led To Continued Strong Returns”.

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Weekly Update

The Stock Market Has Expanded Participation and Become Expensive

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Published December 4, 2020

Below are some slides from a recent presentation by Charles Schwab market analyst Liz Ann Sonders. They give a good overview of recent market action. The first slide shows how the top 5 stocks in the market drove returns through the first eight months of the year. Since August, the other 495 stocks in the S&P 500 have at least helped do the lifting. (more…)

Weekly Update

The Case for a Shift Toward International Stocks

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Published November 27, 2020

Our recent articles have described the market’s sudden shift toward value/cyclical market sectors, like energy and financials, and away from the prior market leaders, namely the tech/consumer FANGMA stocks (e.g. FANGMA = Facebook, Amazon, Netflix, Google (Alphabet), Microsoft, Apple). The article below from Delta Research makes the case for a similar shift in market leadership toward non-U.S. markets. (more…)