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A Golden Cross Promises More Upside
A golden cross occurs when a shorter moving average crosses above a longer moving average. Conversely, a death cross occurs when a shorter moving average falls below a longer moving average. The graph below shows the equal-weighted S&P 500 just experienced a golden cross with the key 50 and 200-day moving averages crossing. The equal-weighted […]
Jan 12, 2023
Market Shelter With Dividend Aristocrats
Last year, as the market trended lower, higher dividend stocks sheltered investors from the storm. Within higher dividend stocks are a special breed called dividend aristocrats. To be considered an aristocrat, stocks must pay a consistent dividend and continuously increase the size of their dividend payouts. The graph below shows the performance of NOBL (ProShares […]
Jan 11, 2023
The HOPE Cycle
Michael Kantro, CIO of Piper Sandler, uses the HOPE cycle to show the order in which economic activity typically deteriorates before a recession. Michael’s HOPE model comprises Housing, New Orders (ISM), Corporate Profits, and Employment. Per his graphic below, the HOPE cycle is progressing as it typically does before a recession. Housing and ISM New […]
Jan 10, 2023
Silvergate Capital, Another Crypto Victim
Silvergate Capital (SI) fell 40% on Thursday and is down by nearly 80% over the last six months. Silvergate is a crypto-friendly bank. Driving its shares significantly lower was an announcement the bank’s deposits tumbled by over $8 billion to only $3.8 billion, in what it calls a “crisis of confidence.” Further, Silvergate is laying […]
Jan 9, 2023
Goldilocks Is Not A Likely Scenario
The Fed Funds Futures market implies the Fed will raise the Fed Funds rate to 5%, keep it there for a few months, and then gently lower it by nearly 50bps before year-end. Such is referred to as the goldilocks forecast. Goldilocks portend little volatility in the Fed Funds rate. In economic terms, it means […]
Jan 6, 2023
Large Cap or Small Cap Stocks For 2023?
Many passive investors, such as those in retirement plans, use the start of a new year to reconsider their passive investment and reallocate accordingly. Often one of the decisions is how to split their stock allocations between large-cap and small-cap stocks. For those choosing between large-cap and small-cap stocks, we present a few graphs below […]
Jan 5, 2023
The Elephant In The Room -QT
Entering 2023, investors seem to singularly focus on the Fed’s interest rate policy, not the elephant in the room. The media pontificates on whether the Fed should hike by 50bps or 75bps. They continually debate whether they will hold rates around 5% for the remainder of the year or when a pivot might occur. While […]
Jan 4, 2023
Looking Back So We Can Look Ahead
Looking back at what drove asset prices is a crucial part of the forecasting process for 2023. In hindsight, it’s obvious the Fed’s monetary policy stance and policy expectations were the critical determinants of asset prices. To reduce inflation, the Fed raised the Fed Funds rate by 4.25% and reduced its balance sheet by over […]
Jan 3, 2023
Bank Deposits Are Shrinking
You may be thinking, why should I care about bank deposits? There are a couple of reasons, but first, consider that all money is lent into existence. The lending process and, therefore, money creation begins with bank deposits. As bank deposits shrink, as they recently have been, less money is created. As shown below, money […]
Oct 19, 2022
Crude Oil Prices Fall As Biden Releases More Oil
Crude oil prices tumbled Thursday as President Biden announced the DOE would release 1 million barrels of crude oil per day for 180 days, totaling 180 million barrels. The intention is to lower gas prices. While releasing more crude oil from strategic reserves may temper inflation, a few factors are worth considering. First, the International […]
Apr 1, 2022
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