Published September 5, 2025
Not a day goes by that we don’t read some market observer commenting about how expensive the stock market is. Yet stocks have kept pushing higher. Why? The note below from Blackrock shows that the rise in U.S. growth stocks this year has been substantially the result of rising earnings. The increase in valuation (e.g. making stocks more expensive relative to their earnings) has been modest. Also of note, small cap stock valuations have not increased at all. (more…)
Published December 13, 2024
After a euphoric leap in the stock market once the election results came in, stocks have presented a somewhat confused pattern. The day after the election, small cap stocks ripped higher by +6%, a massive one-day leap. The beginning of a long-awaited catch-up trade for small cap stocks? Not so fast. (more…)
Published December 6, 2024
The final month of the year has arrived. And with it, all of the reminders that December is typically one of the strongest months of the year for the stock market. As the chart below shows, that strength is even more prevalent in an election year as the post-election relief rally adds more fuel to the December effect. (more…)
Published October 18, 2024
The hallmark of a strong market rally is sector rotation. Over the past couple of months, we have seen just such rotation as the rally baton gets passed from one sector to another, then back again. After months of leadership from the Magnificent Seven tech/consumer stocks, this summer saw the rally baton passed to almost all the other market sectors – everything from industrials to typically defensive consumer staples stocks found buyers.
The past couple of weeks have seen some new, and important, faces join the rally parade. (more…)
November 24, 2023
As we parse 2024 outlooks, we offer this analysis from Schwab regarding four problem areas in the economy/markets. Here is their list of problem areas:
Commercial Real Estate – High-Yield Bonds – Small-cap Stocks – Regional Banks
Published September 24, 2021
Monday’s gap down to begin the week was notable for the current stock market rally. It was the first time in almost a year that the S&P 500 broke the intermediate term trendline (in blue on the chart below). It has been an exceptionally long period of calm. (more…)
Published September 3, 2021
The S&P 500 has spent ten straight months above its 50-day moving average, one of history’s longest stretches of calm. Ultra-low interest rates from an extremely cautious and accommodative Federal Reserve have supported risk-taking investors by keeping the cost of money near zero. Very strong corporate earnings have rewarded investors by expanding the ‘E’ in the P/E ratio, justifying the market’s run upward. (more…)
Published March 26, 2021
Market corrections are typically defined as a decline of at least -10%. But they can also be corrections “through time”. A case in point is the chart of Amazon below. After leading the way higher for stocks from the initial Covid-19 plunge, Amazon has traded sideways for the past nine months, correcting in time. (more…)