Well, just like that stocks (the main indices) bounced back to reclaim their respective 50-day moving averages last week. Over four short trading days, investors put a technical end to the correction that began one month ago. Bonds have seen some daylight as well, with the 10-Year Treasury yield falling back below 4.5%. It seems… Read the full article.
The past few days have seen a deluge of earnings data as well as the conclusion of the Federal Reserve meeting. Earnings continue to come in above estimates, but we are starting to see some cracks, most notable in big tech and the AI darlings. As everyone knows this niche of the economy has carried… Read the full article.
Last week we saw two sets of conflicting data points. Earnings are coming in above expectations, which is good, and inflation is also coming in above expectations, which is bad. The Fed’s preferred PCE report hit the wire Friday morning and showed a rise of 2.8% year over year. The expectation was 2.7%. Month over… Read the full article.
The market correction continues in the face of the reality that rate cuts are likely not on the way anytime soon. We have seen three straight months of sticky inflation, coupled with a red-hot economy and a very strong job market. It is obvious that the tail risk right now is higher inflation, not a… Read the full article.
Investors got the March CPI numbers yesterday (Wednesday) morning and unfortunately, they came in above expectations pretty much across the board. The rising inflation we saw in the January and February data appears to be a trend – and a trend in the wrong direction. Prices for rent, insurance and other swaths of the economy… Read the full article.
Last Friday we got the PCE inflation report, and it was “in line” with expectations. This followed two reports (CPI and PPI) earlier in the month that were hotter than expected. I was worried that another similar report would be the catalyst for higher bond yields and a correction in stocks. The reason is two-fold…. Read the full article.
Stocks are closing the first quarter of 2024 on solid footing. Tech has continued to outperform, and high beta sectors have beaten low beta sectors. The last couple of weeks have seen some rotation, which may reflect that tech has gotten ahead of itself and there is some value (and less risk) in other places. … Read the full article.
We got February inflation data last week in the form of the CPI on Tuesday and PPI on Thursday. Both reports came in above expectations and evidence the fact that inflation is still hanging around and we are still some distance away from the Federal Reserve’s (the “Fed”) stated target of 2%. Bonds immediately… Read the full article.
Late last week, we got the much-anticipated PCE (Personal Consumption Expenditures) report. This is the Federal Reserve’s favorite inflation indicator. After two fairly hot inflation reports in February, this was important to see whether the downward trend in inflation remains in place. The market was looking for a .3% month-over-month increase and 2.4% twelve-month increase… Read the full article.
The past week we have seen two separate inflation measures (CPI and PPI) come in above expectations. This has increased upward pressure on interest rates while reducing chances the Federal Reserve (the “Fed”) will cut rates anytime soon. The message from our Central Bank has been clear that rate cutting will not begin until it… Read the full article.
The market cap-weighted stock indices continue to march higher after a brief pullback in early January. This continues to be led by technology stocks, while most other sectors are underperforming. Bonds, real estate, utilities, dividend paying stocks and other interest rate sensitive assets remain under pressure as yields have bounced above 4% again. Chairman… Read the full article.
The new year has started off with a return to the patterns of 2023. Interest rates have jumped, on concerns that the Federal Reserve (the “Fed”) will not cut interest rates as quickly as hoped. During the fourth quarter of last year, the bond market priced in a nearly 70% chance of a March rate… Read the full article.
The stock market continues to try and digest the outsized gains we saw in November and December. We’ve seen a whole lot of grinding nowhere since the new year began as investors evaluate whether we got ahead of ourselves with the assumption that interest rate cuts are imminent. The bond market is driving things as… Read the full article.
Happy New Year, everybody! Let’s make this one the best ever. I am going to focus on gratitude for all the amazing people in my life, not the least of which is my family who love me and support me unconditionally. I am blessed. I hope everyone can do a little bit of the same… Read the full article.
Stock and bond markets have managed to churn higher over the past week, despite increased volatility. We are still seeing much-needed catch-up in sectors such as financials, real estate and industrials. Small and mid-caps are outperforming the mega-cap tech darlings of the past year. I pointed out earlier this week that I believe this is… Read the full article.
Stocks and bonds have been able to hold and even continue the rally that began in November. This has been true across a variety of sectors in the stock market as well as in fixed income of all duration. This is not just focused on big tech – and to me, that is the best… Read the full article.
The stock market finished off a big month on Thursday having recouped all of the losses seen since the end of July. As stated in our last commentary, this has coincided with falling interest rates and the hope that the economy is cooling (but not too much), and the Federal Reserve’s next move will be… Read the full article.
Stocks have continued the rally that began two weeks ago and as of Friday are near the July highs, having erased nearly all the losses seen during the August through October swoon. Part of the recent rally could be due to short covering and oversold conditions existing at the end of October. The rest can… Read the full article.
Each week we try and identify things in the economy (and world) that we believe are important and worth thinking about. Most of the time this is all related to investing and includes objective data. I hope these commentaries are helpful, or at least interesting, even if they are often provided through one person’s lens…. Read the full article.
The bounce we saw in stocks (albeit brief) has now faded and we are again testing important support at the 200-day moving average around 420 on the market cap weighted S&P 500 (SPY). The same can be said of the high-flying Nasdaq (QQQ). I have included charts of those indices below. As long as these… Read the full article.
