commodities

Weekly Update

The Stock Market Shudders as the Fed Starts to Shift Gears


Published June 18, 2021

This year’s stock market has been all about rotation with money moving into value stocks and out of growth stocks. The narrative has been that rising inflation would push up interest rates. The hike in rates in turn raises the denominator of the classic stock price valuation (e.g. earnings/interest rates) which devalues high-flying growth stocks. The beneficiaries of this narrative have been cyclical sectors like materials, industrials, and energy. This week that narrative took a beating. (more…)

Weekly Update

Markets Shrug off Inflation


Published June 11, 2021

This week’s inflation report generated plenty of alarming headlines. As the chart below shows, inflation hit its highest point since, well, the end of the last economic crisis. Which points to one of the reasons why the alarming headlines are misleading. (more…)

Weekly Update

Reminder: The Market Is All About Supply and Demand, Nothing Else


Published February 5, 2021

That’s right folks, any market: stocks, bonds, commodities, milk, diapers, et al. is ONLY about supply and demand. Sure, we try to make ourselves feel better by assigning formulas and trying to figure out some “fair value” based on historical data. But it’s a complete wild west guess, right? Take the price-earnings ratio, so frequently used to peg the stock market as being “expensive” or “cheap”. This ratio has run anywhere from 10 to 100, settling in a typical range of 15-20 or so. Still, it’s a bell(ish) curve with a very wide range of possible values. That typical range does not say anything about the investing or economic environment of the times. (more…)

Weekly Update

A Falling U.S. Dollar Fuels Stock Gains Abroad


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

The Case for a Shift Toward International Stocks


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…)