Published September 22, 2023
Below we present an article from the Wall Street Journal talking about the September Effect in stock prices. With the month of September now ¾ of the way done, we find that stocks have lived up to their sour September reputation, so far falling anywhere from 3-6%. (more…)
Published June 9, 2023
The S&P 500 entered a new “bull market” this week as the index has now risen more than 20% from its low point hit last fall. Our friends at Delta research outline below how market sentiment has changed:
“The market is shifting. Sentiment is turning bullish. On the prospects of better growth and lower recession risk, funds are flowing back into equities.
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Published February 17, 2023
Below, our friends from Delta offer a summary of recent data which shows the economy being stronger than many expected. But that strength is pushing interest rates upward in a renewed push. The upward thrust in rates could well undo the stock market rally so far in 2023. Broad market analysts remain very split over the outlook for the economy and markets. We think now is a particularly important time to have a tactical approach to investing, with the ability to quickly adjust to changing conditions. Our models offer just such an approach. (more…)
Published January 6, 2023
After the dot.com market crash of 2000-2002, international stocks went on to outperform U.S. stocks until the 2008 Great Financial Crisis. That rise was driven by two factors: 1) the “buildout” of China which pushed any and all commodity-related stocks (e.g. industrials, materials thus emerging markets) higher, and 2) the decline in the dot.com darlings which had become outrageously priced.
It usually happens that the leader of the market in one cycle becomes the laggard in the next as the excess is worked off. So it was post-2002 as the chart below shows with the black line highlighting the period where international stocks outperformed. (more…)
Published December 30, 2022
Below is a high-level summary of the past year and potential decline levels for the S&P 500 if a recession comes about. Thanks to the folks at Delta for the summary information and to our friend Ravi Palaiyanur for the bottom chart.
“Two of the most robust, leading indicators of recession are the inverted yield curve and a negative six-month moving average of the Leading Economic Index (LEI). The six-month moving average of the LEI turned negative in June and the 2yr/10yr treasury inverted in July. (more…)
Published November 18, 2022
The folks at Delta have provided a good succinct overview of the state of the stock market and what needs to happen for a sustainable uptrend to occur. Here’s what they have to say:
“Since mid-October, the Bull has shown some life. The S&P 500 is up by about 5% from the closing low on October 12. Bullish drivers of the market include:
Published October 21, 2022
These days, there is much talk about a coming recession. By the time the recession gets here, if it does, the stock market will have already suffered much of its decline and will be near its low point. The article below from an analyst at JP Morgan presents a historical perspective of the timing between recessions and stock market bottoms. (more…)
Published October 7, 2022
The market is obsessed with the impact of sharply rising interest rates. The brief below from Delta outlines some of the impacts of this sharp change in Fed policy and what investors are looking for to turn the markets around.
“The Federal Reserve is now projecting a terminal Fed Funds rate of about 4.6%. This is up from about 3.8% over the past month. On August 1, the 10-year US treasury was about 2.6%. Today, it is approaching 4.0% – a dramatic increase in a short time. (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 May 27, 2022
After seven weeks of declines, the stock market finally found some buyers this week. Still, the trend remains down. The comments below from Delta Research provide a couple of charts to frame the recent declines and what might lie ahead for the stock market in the coming months. (more…)