Markets movements and data/news have a funny relationship. Different data points become the focus of market movements, and those data points change over time. This relationship between markets and data also contains the layer of "good news is bad news, bad news is good news, and bad news is bad news, and finally good news is good news. In each market cycle and sometimes each cycle, which of the four choices will prevail. After market...
Usually, volatility as a descriptor or roller coaster ride are used to describe declines in stock averages. Proving that declines happen faster than increases and the pain of losing value is twice as great as the satisfaction of gains. We are living in this world. After last week's huge declines including into the close of the market day indicate more to come. Every newspaper and publication had a headline similar to “what to do now...
Reality returns on Friday 3/28 as markets respond to tariff threats by Trump. The challenge is the high degree of uncertainty of what the Trump administration, in fact Trump himself will actually do. Reciprocal tariffs are set to start on April 2nd, but we have had repeated deadlines previously that Trump has changed at the last moment. The thinking by Wall Street is that tariffs were a negotiating tool, and deals would be worked out...
Another tumultuous week in the markets. The data continues an indication of slipping consumer confidence including an article in the WSJ indicating that wealthier Americans are cutting back on spending. WSJ - Slumping stocks It is still too early for the preliminary data to lead to more certain conclusions because the disruption of the new administration accompanied by chaos and court cases only has a history of 2 months. Today, the IRS is saying that...
Remember when markets were sanguine about the disruption and chaos in regard to the rapid introduction of the 2nd Trump era. The general rule is that markets function best with certainty. Disruption can create opportunity but chaos makes opportunity hard to find. The Wall Street Journal is mystified at the strategy with tariffs. The WSJ has repeatedly stated no one benefits from tariffs, especially when used against our closest trading partners. Especially after signing an...
This week the yield curve inverted again meaning the 10-year US Treasury yield is higher than the 3-month yield. Past history says this is one of the more reliable indicators of a recession in the next couple of years. This works except when it doesn’t. It did not work from 2023 through mid 2024 so although it has worked in the past, how concerned we should be depended on other factors. Today the understood popular...
Markets closed the week near new highs despite the volatility of the news that on first look might cause an investor to pause in the purchase of stocks because of concern about a sharp decline. Chaos and uncertainty generally cause large declines with the last bear market and recession caused by covid in 2020 although brief. Of course, as stated before, this could change in a day such as 11 days ago on a Monday...
It is hard to keep up with anything. I wake up with a feeling of exhaustion. I do not read the news. Even though it is only February, it feels like this year has been 5 years already. Disruption and chaos seem to be part of our daily routine. While all this is happening, markets continue to be overall, pretty sanguine. Until they are not. We experienced some of that not so sanguinity on Monday...
Here we are 2 weeks into the new administration and the pace of change for what we normally expect of government is being turned upside down. Every day brings changes and uncertainty in terms of the outcome on the economy. So far markets are still sanguine. Averages have made new highs or are near new highs. With equity markets making new highs, at the same time, the bond market is having a more significant reaction...
Happy New Year! We took a couple weeks break from a very busy year to get ready for this year that will be very busy as well. It is important to recharge, renew, and be intentional about the other parts of our lives other than work because if we don’t take care of ourselves, who is going to take care of us? As far as markets are concerned 2024 was another 20% return for equity...
The week of world chaos. Head spinning events including the lack of confidence vote and resignation of the prime minister of France, the fall of the Assad regime in Syria, martial law declared in South Korea for six hours, rumblings in Eastern Europe in Georgia and Romania of Russian influence in elections and that is just in one week. What is going on and how does this affect the United States. For a very good...
The volatility of markets since the election is head spinning. After the massive gains on the day after election day 2 weeks ago, markets caught their breath and decided that the risks of uncertainty appeared greater than the opportunities. The Fed seems to be hedging its bets on continuing interest rate reductions saying that any further reductions are data dependent. Mixed into this reaction are President elect Trump's threats to fire the Federal Reserve chairman...
