Published September 12, 2025
We know that many investors worry about deficits and the potential impact on interest rates. There was a bit of upheaval in non-U.S. credit markets recently. (more…)
GDP growth
AI Spending Pushes the Economy
Published August 8, 2025
Our friends at Delta Research posted an amazing chart this week showing that huge AI spending by companies has contributed more to economic growth this quarter than falling consumer spending. We wouldn’t expect that to be sustainable. The question is whether consumer spending rebounds or not. (more…)
What’s Going On With Interest Rates?
Published March 7, 2025
For much of the past four years investors have focused on inflation and the Federal Reserve’s fight against it. While the Fed only controls the very short-term interest rate, their words about potential future Fed moves affect interest rates much further out in time.
In December, the Fed surprised investors by pulling back on expectations for coming interest rate cuts. Inflation has stabilized albeit at levels that might be higher than the Fed would like. But over the past two weeks, interest rates have suddenly fallen sharply, appearing to diverge from the Fed-driven path. (more…)
An Uncertain Start to the Year
Published January 10, 2025
Happy New Year! Markets have begun the year where they exited 2024, with quite a bit of uncertainty. Blake Millard does a good job laying out the sources of that uncertainty in his comments shown below:
“Policy uncertainty should lead to higher volatility
The U.S. economy remains on solid footing as we head into 2025, supported by a steady consumer, easing inflation, relief from higher/restrictive interest rates, and a pickup in the corporate earnings cycle.
With trend GDP growth expected, the fundamental underpinnings that support economic expansion are robust and well known. However, a number of wild cards patiently await in the shadows that could determine the trajectory of the economy and financial markets over the next year. (more…)
Election Year Performance
Published January 26, 2024
Below we offer a couple of recent summary reports from Delta Research. We hope you find them of interest.
“The S&P 500 returned 26% in 2023 and ended the year just short of the all-time high of 4796. Components of the 2023 return included +6.32% from better earnings, +17.91% from expansion in forward P/E multiple to ~20x, and +2.06% from dividends. Since 1950, the S&P 500 Index is positive the following year 80% of the time. In the presidential election years dating back to 1960, the S&P 500 index has been positive 81% of the time (13 out of 16 years). (more…)
Summer Doldrums for the Market
Published August 25, 2023
As summer winds down, we have seen August play out in its usual way so far – weak. Here with more comment on recent market moves is Delta Research:
“In the past three months, the 10-year US treasury rate climbed by more than 15%. The sharp move higher during the month of August took the 10-year rate to the highest level its been since November 2007. As treasuries moved higher in August, stocks traded lower. The S&P 500 declined from August 1 to the Friday low of last week by 5.5% and the NASDAQ 100 was down 6.7%. (more…)
What if the Recession Has Already Happened?
Published May 19, 2023
There is no shortage of commentary and hand-wringing about a coming recession. In the piece below, one Fidelity analyst posits that the recession may have already occurred. Here is Denise Chisholm’s analysis:
“Did we already have a hard landing? The National Bureau of Economic Research (NBER) hasn’t officially called a recession, but signs suggest that we may have already had a fairly bad one. One of the most consistent recession indicators has been a contraction in real wages (adjusted for inflation), which happened in every recession since 1962 except the 2020 COVID shutdown (chart hereunder). Real wages declined throughout 2022—falling more than they did during the Great Recession—as inflation outpaced wage growth. Real wage growth may have bottomed last fall; a rebound could provide a tailwind for the economy and the stock market. (more…)
The Market Sans Energy Is Not So Pretty
Published August 26, 2022
With summer winding down, we await the post-Labor Day return of a fuller market trading pattern to provide better clues of investor thinking. In the meantime, the summary below from Delta offers a good overview of the current economic data.
Contrasting Views Lead to Range-Bound Trading
Published September 27, 2019
Bond manager PIMCO recently offered their mid-year outlook for the global economy and markets. Their conclusions are:
“In a nutshell, we see a global economy about to enter a low-growth “window of weakness,” which we expect to persist going into 2020 with heightened uncertainty about whether it is a window to recovery or recession. (more…)