Published June 19, 2020
A recent commentary by Blaine Rollins of 361 Capital offered a good selection of charts explaining why the stock market continues to believe that the worst is behind us and sunnier skies are ahead. (more…)
Federal Reserve
Is the Recent Rally on Shaky Ground?
Published May 8, 2020
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…)
The Fed gets bigger
Published April 20, 2020
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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Crazy Market Provides Profit Opportunities
Published March 20, 2020
As we go to press here on Thursday, it’s been five full weeks since we had two consecutive positive days in the stock market. Over the past four weeks the S&P 500 has lost 1000 points (an almost -30% drop). That’s an astoundingly bearish run. (more…)
The Winding Road to a Strong Year
Published January 10, 2020
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…)
Yet More Signs of Market Risk-Taking
Published December 20, 2019
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…)
How Emotion Drives the Economy
Published September 20, 2019
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…)
Stocks and bonds both pushing higher
Published July 19, 2019
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.
Small Bites
Published June 21, 2019
This week, we offer not a single particular point, but instead a couple of market observations. (more…)
Oh That Inversion? No Big Deal
Published April 5, 2019
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…)