Published November 11, 2022
For the first time in awhile the usual market suspects of inflation and the Fed’s assault on the stock and bond markets took a backseat for a couple of days. When interest rates rise sharply as they have this year, investors find out who was overly leveraged and caught without a seat in the market’s cakewalk. This week, we found out that cryptocurrency exchange FTX was the latest one without a seat. (more…)
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.
Published August 19, 2022
It has been quite a long time since we have seen such disparity in the narratives flowing down Wall Street. How long and hard the Fed will tighten rates is one source of contention. But it’s not the biggest. That would belong to where corporate earnings are headed, which is sort of a Street barometer for whether or not the economy falls into a recession (how deep that recession is a third dimension discussion floating around also). (more…)
Published July 29, 2022
In a bull market, investors buy the rumor and sell the news, with the selling being typically light. In a bear market like we are in now, this week showed us it is the opposite. Investors fear the news, sell stocks down on the fear, buying them back when the news, though bad, is not quite as terrible as it could be. So it was with the Federal Reserve announcement this week. (more…)
Published June 24, 2022
While no one has any clue which way the stock market goes from here, what we do know is that the magnitude of negative sentiment is extreme. The last time we saw consumer sentiment at these levels was in 1980, a dismal period for the economy. The current sentiment reading seems very much at odds with what’s really going on in the economy. (more…)
Published June 10, 2022
Investors are facing a tremendous amount of uncertainty these days as inflation continues to push out the timeline for when the Federal Reserve might pause interest rate hikes. Friday’s “hot” inflation data offered the Fed no new cover for backing off their inflation-fighting posture. (more…)
Published May 6, 2022
This week the Fed made the first of their larger interest rate hikes with a 0.5% move (50 bps in bond market parlance). Here’s the path of Fed interest rates that the market foresees – straight up from now through March 2023. (more…)
Published March 11, 2022
The market mess enters its fourth month with Chinese stocks now getting hit (down -15% in the first 10 days of this month). Credit spreads, a proxy for risk concern in the bond market, have risen sharply as the chart below shows. So plenty of reasons for hand-wringing, all of which builds to a buy point for stocks, eventually. (more…)
Published February 18, 2022
Stocks remain fully in the midst of a correction, searching for a bottom that may not come until after the Federal Reserve takes action in March. In the meantime, our friends at Delta back up and survey the broader picture to comment on market behavior during various interest rate/economic growth scenarios. (more…)
Published January 28, 2022
This week we are reviewing some interesting data from a recent presentation made by CFRA. The three charts tell a possible story for how this year will play out. First, after a strong year in the market in 2021, we have seen stocks hit a wall, tumbling hard throughout January. This selloff following a strong period is common, at least in the short-term. (more…)