Since the beginning of the year, economic data has continued to defy the recession calls of 2022. Therefore, it is unsurprising that economic data surprised analysts’ more dire predictions last year. Of course, given the underestimation of the economy previously, the risk of overestimation is now a real possibility. The upgrading of estimates also contributed […]
Most investors believe that U.S. government debt is risk free. Why shouldn't they, every economic and financial textbook, media outlet, and bond guru say so? Did you know it used to be a fact that the earth was flat and "health cigars" were a thing? Obviously, those facts and myths have been disproven, as have many others that seem equally preposterous today.
Mega-cap stocks continue to dominate the market in 2023. The question is, why? After all, many other great companies have arguably much better valuations and fundamentals. Yet, those companies continue to lag the market’s overall returns as the bifurcation between the Mega-cap companies and everything else widens. The chat below clarifies the problem, which compares […]
About once a year, I have to address the issue of chasing the “10 Best Days” of the year. Statista recently presented the analysis: “There is clear evidence that market timing is difficult. Often, investors will sell early, missing out on a stock market rally. It can also be unnerving to invest when the market […]
“China, Japan, inflation, deficits, and QT, oh my!” – The chant of bond traders watching yields creep higher. Despite the highest yields in 15 years, some bearish bond traders think they can go much higher. In their minds, China, Japan, burgeoning fiscal deficits, inflation, and QT, present tailwinds for much higher yields. We have written […]
Is a stock market rally coming? I think that is most likely the case. However, to understand why, we must review what we said at the beginning of July in “Complacency Seems Overly Complacent.” With bullish optimism quickly returning to the market, the pressure to chase performance from the “Fear Of Missing Out” will continue to provide […]
The Fed's next rate move and its "higher for longer" policy mantra are predicated on high and sticky inflation. Inflation has fallen nicely from its peak but not enough to sway the Fed to officially pause rate hikes and certainly not enough to begin reducing rates. As they remind us, rate cuts depend on meeting their 2% inflation goal. While unstated, a significant slowdown in economic activity or renewed regional banking problems would also get the Fed to act.
Government bonds or stocks? If you were picking an asset class to outperform over the next 18-24 months, which would you choose? Such was an interesting point made by Greg Feirman last week. To wit: “The market has now priced in a soft landing based on the idea that the Fed can get inflation under […]
The economy has marched forward, ignoring higher interest rates and consistent calls for a recession. Credit goes to “We The People,” the citizens of the U.S. A shout-out also goes to Uncle Sam for showering us with trillions of dollars of stimulus during the pandemic to fuel consumption. Understanding why the economy has done […]