S&P 500

Weekly Update

Stronger Economic Growth – Good and Bad for Markets

By

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…)

Weekly Update

Are International Stocks Turning the Corner?

By

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…)

Weekly Update

What Happens to the Market if We Have a Recession?

By

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…)

Weekly Update

What Will Get the Bulls Really Running

By

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:

  • An expectation for typical seasonal strength in November and December
  • A perfect history of 18 – 0 of positive S&P 500 performance from November through April in mid-term elections years dating back to 1950
  • Mid-term elections that deliver a divided U.S. Congress which is expected to reduce the likelihood of any new taxes and major fiscal expenditures
  • Earnings reports are not as bad as feared
  • Maybe the Fed will stop raising rates sooner rather than later

(more…)

Weekly Update

The Market Bottoms Well Before the Economy Does

By

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…)

Weekly Update

Spiking Interest Rates Drive Housing Slowdown

By

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…)

Weekly Update

The Market Sans Energy Is Not So Pretty

By

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.

(more…)

Weekly Update

Is the Market Selloff Overdone?

By

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…)

Weekly Update

Will Commodities Continue Leading the Market?

By

Published May 20, 2022

 

Do you remember a couple of years ago in the height of Covid fear when the price of oil went negative?  The global economy shut down. The world was suddenly awash in oil. And there was no place to store it. Nobody wanted the excess oil barrels. Holders of oil had to pay someone to take the excess off their hands – a negative oil price. Things have dramatically changed since then as the price of oil has skyrocketed to as high as $130 per barrel. (more…)

Weekly Update

The Stock Market Is at a Critical Juncture

By

Published February 25, 2022

 

This week’s acceleration of market turmoil had us reaching back into the bag for a little history. Below is a table of single-day declines in the S&P 500. First, note how clustered these selloffs are; all but one taking place around three major events – the global financial crisis, the pandemic, and 1987 market crash. (more…)