Federal Reserve

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


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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…)

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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Uncategorized, Weekly Update

Oh That Inversion? No Big Deal


Published April 5, 2019

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Markets have very quickly put behind them the whole inverted yield curve fear. It lasted all of a couple of days. The cold water was poured on that fear when Chinese manufacturing posted a surprisingly high reading, reversing months of declines. (more…)