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In March and April, the price of gold rose by 15% as the debt cap was hit, and the banking crisis accelerated. Since early May, gold has given up a third of those gains. Recent volatility in gold prices corresponds inversely with the dollar and with the news surrounding debt cap negotiations. At first glance, […]
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What can breakeven inflation rates tell us about oil prices, energy stocks, and market direction? It turns out it’s a lot more than you think. Since 2021, as the impact of an economic shutdown collided with $5 Trillion in artificial, stimulus-driven demand, inflation has consumed everything from headlines to financial markets and the Fed’s monetary […]
Yesterday’s FOMC meeting was likely one of the toughest for the Fed in a long time. As we have written numerous times, the Fed must carefully balance fighting inflation with rising financial instability. Before the meeting, Fed Funds Futures were implying a 40% chance of one more 25bps rate increase at the May or June […]
Housing comprises almost 40% of CPI, of which rents account for about three-quarters of that amount. Therefore, to help forecast CPI and, notably, consider what the Fed may or may not do, let’s closely examine rent costs, particularly apartment rents. To do so, the graph below shows that owners’ equivalent rent (OER), mainly comprised of […]
In our Commentary 2023 Challenge: Contradiction, we discussed Lance’s recent article, The Technicals Vs. The Fundamentals. Specifically, the two pieces aim to raise awareness that technical studies are a reason for bullishness, while fundamentals tend to argue a bearish case. As if the divergence between technicals and fundamentals was not enough to grapple with, there […]
As we start 2023, the challenge this year for investors appears to be whether we rely on bearish fundamentals or bullish technicals. Forecasting market direction becomes easier when technicals and fundamentals are in alignment. However, investing can be very challenging in periods like the last few months of 2022 and the beginning of 2023, where […]
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 […]
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Don't worry. The Fed has belts and suspenders. The Fed's balance sheet is approaching $7 trillion dollars. This is what Bernanke meant by suspenders.
Daily Market Commentary
S&P 500 companies have been the marginal buyer of US stocks for a decade. Stock buybacks reached a record $1.020 trillion in the twelve months through September 2025, accounting for roughly 60% of all cash returned to shareholders. That tailwind has had a big impact on returns. If we decompose the S&P 500 return from […]