There is a rhythm to the markets, and market cycle lows support bull market recoveries. Recently, Ed Yardeni made a bold prediction that the S&P 500 index could hit a high of 5400 in 2024. To wit: “Market veteran Ed Yardeni predicts that the S&P 500 could reach a record high of 5,400 within the […]
“The stock market is not the economy.” Such is the latest rationalization to support the “bull market” narrative. The question, however, is the validity of the statement. During the 2020 economic shutdown and surging market rebound I stated:
Our recent article, The End of an Era for Stocks, warns that a tremendous thirty-year tailwind for corporate earnings is dying down. Consistent corporate interest and tax rate declines significantly boosted stock prices and valuations. However, with effective corporate interest rates near record lows and tax rates at their lowest levels ever, further reductions are […]
“Bullish measures are getting really bullish.” This is an interesting statement, given how “bearish” sentiment was in 2022. As I noted then: “Investor sentiment has become so bearish that it’s bullish. One of the hardest things to do is go “against” the prevailing bias regarding investing. Such is known as contrarian investing. One of the most famous […]
Jerome Powell and his colleagues endlessly reassert their “higher for longer” plan for interest rates. They aim to weaken economic growth, bringing inflation back to pre-pandemic levels. The Fed has little choice because the government can’t afford the Fed’s higher-for-longer stance for much longer! In the past few months, we have written many blog posts […]
No matter what happens, financially or economically, there is always a high number of companies regularly beating Wall Street estimates. Are Wall Street analysts that poor at predicting future corporate earnings, or is there something else potentially going on? Furthermore, what does that mean for investors using those estimates in making investment decisions? As noted […]
ESG scoring and mandates remain a subject we have contested since it sprang to life in 2020. The push of “woke activism” on, and by companies, to meet nebulous or artificial standards has led to various bad outcomes. ESG refers to the Environmental, Social, and Governance risk theoretically embedded in a business. However, while ESG […]
In the social media era, where attention spans are measured in seconds, and 300-500 words are considered a “readable” article length, our articles can be too much for some readers at three to four times “readable” length. Instead of writing another 1,500-to-2,000-word diatribe on why we like bonds, we present a “readable,” sub-500-word elevator pitch […]
The volatility index is so low it has to go higher eventually. Such seems obvious, but this year, despite the banking crisis, higher interest rates, and slowing economic data, investors continue to abandon hedges amid bullish optimism. But what exactly is the volatility index, more commonly called the “VIX,” and why does it matter? “The […]