What is the “wealth effect,” and why is it important? It is a great question and reminded me of “A Funny Thing Happened on the Way to the Colosseum.“ The hysterical play by Craig Sodaro features a naive Swiss farmer heading for Rome. His dream is to become a stand-up comedian. Little does he know […]
The average 2024 Wall Street S&P 500 forecast is for a gain of 6.50% next year. In the past, a 6.50% expectation, while slightly lower than historical averages, was a no-brainer when choosing between stocks and sub-2.5% bonds. Today, that calculus has changed dramatically, with interest rates offering respectable yields. Since stock-bond allocation decisions are […]
In October, the markets were down 10% from the July high, bond yields were touching 5%, and talk of a coming recession was rampant. What happened? Interestingly, a Wall Street axiom says, “Sell the last Fed rate hike.” The reason is that when the Fed starts cutting rates, it is due to the onset of […]
The “American Dream” is dead. It would certainly seem to be the case if you believe surveys like Gallup that showed nearly 50% of the younger generation favor socialism over capitalism. To wit: “Since 2010, young adults’ positive ratings of socialism have hovered near 50%, while the rate has been consistently near 34% for Gen […]
After hiking rates by 5.25% since March 2022, the Fed is in a wait-and-see period, commonly deemed a pause. Since the Fed started hiking rates, inflation has declined meaningfully but remains moderately above the Fed’s 2% target. The economy continues to thrive, fueled by a strong labor market. Despite the good news, a dark cloud […]
It’s that time of the year where Wall Street polishes up their crystal balls and pin targets on the S&P index for the upcoming year. As is often the case, while Wall Street is always optimistic, the forecasts prove pretty wrong. For example, on December 7th, 2021, we wrote an article about the predictions for […]
The 10-Commandments were born from the boom of the stock market and the internet. That boom changed the face of investing from the stodgy oak-filled rooms of brokerage firms to computer and mobile phone screens. There is nothing wrong with this; of course, except for the fact that a raging bull market, as seen from 2009-2021 […]
“For me context is the key – from that comes the understanding of everything.” -Abstract Artist Kenneth Noland. That holds true for us as well! Proper context is required to appreciate better if market narratives accurately describe the truth. For example, in Moody’s recent decision to put the United States government on credit watch negative, […]
Is a stock market correction coming before the Santa Claus rally at the end of the year? It is a fascinating turn in sentiment, given that investors were convinced of the bear market’s return just a month ago. Now, investors are “making their list and checking it twice.” Given the 10% advance over the past month, it […]