Federal Reserve

Weekly Update

A Labor Squeeze Could Be the Inflation Spark


Published May 7, 2021

The predominant narrative right now in the markets is that inflation will rise as economies reopen and recover. While it’s easy to find inflationary movements in the price of some goods like lumber, houses and food, the primary driver of overall inflation comes from rising wages. Pre-pandemic, wages had been stagnant for years. (more…)

Weekly Update

Interest Rates: Getting Back to Normal


Published February 26, 2021

 

Interest rates have ripped higher along with stocks as expectations for a very strong post-pandemic economic recovery gain traction. This week, however, that rise in rates appeared to reach a point where concerns crept in. Stocks tumbled as investors worried that the rise in rates was too high, too fast. (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…)

Uncategorized, Weekly Update

Is the Recent Rally on Shaky Ground?


Published May 8, 2020

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The following recent commentary from Liz Ann Sonders at Charles Schwab highlights some of the issues associated with the recent rally. Here is Ms. Sonders’ analysis:

“The speed with which the U.S. stock market went from all-time highs to deep bear market territory broke all historical records. Then the rally that ensued was one of the fastest “new bull markets” ever in history; allowing the month of April to be the strongest since early-1987. Given the weaker start to the current month, expect to hear louder chants of “sell in May and go away.” (more…)

Uncategorized, Weekly Update

The Fed gets bigger


1 Comment

Published April 20, 2020

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Today’s front page of the Wall Street Journal carries the following stories: Jobless claims top an “unprecedented” 17 million, Fed unleashes its broadest ever array of programs, Coronavirus creates a “mountain of debt”, Saudis and Russia agree to oil production cut.  Those four topics encapsulate what markets have been wrestling with over the past month, and going forward.  We will undoubtedly spend more time in coming weeks on most of those.  This week, we are focused on the dramatically expanded role of the Federal Reserve.
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Uncategorized, Weekly Update

The Winding Road to a Strong Year


Published January 10, 2020

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Rarely has a +30% gain felt so lackluster. The year of 2019 closed with that substantial gain, one that registers in the top tenth of all market years. Yet those of us who watch the markets day-in, day-out and seek to follow the market’s trend viewed it as a play in three distinct acts, with only the final four months of the year delivering any real upside. (more…)

Uncategorized, Weekly Update

Yet More Signs of Market Risk-Taking


Published December 20, 2019

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Investors continue to be willing to take on more risk. Now that the “phase one” trade deal with China appears to be completed, the UK election results are in, and the Federal Reserve projects being on hold for quite some time, investors have breathed a collective sigh of relief. (more…)

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…)