Economy
Pressure Points?
The first few trading days of the new year have been a seamless extension of 2017—a low-volatility, “measured” market melt-up.
Not A Tipping Point, But A “Toggle” Point?
Evidently, being a bull in a bull market is no longer good enough.
Goldilocks—Enjoy It While It Lasts
The best interpretation of the current cross-asset message is the scenario of goldilocks, and there are reasons to believe this is a possible scenario for the near term.
Stock Market Observations
The S&P 500 has labored beneath its March 1st bull market high for the last two months while underlying breadth and leadership trends have remained mostly favorable.
Spring Forward, Fall Back?
The S&P 500 has gained about 5% on the year, respectable but hardly consistent with the “melt up” scenario we thought might occur.
Rally Extension?
We’ve boosted equity exposure twice in the past several weeks, fully cognizant that it’s not a “textbook” time to do so.
The Fed’s Capitulation To The Dovish Side— A Win-Win For EM & U.S.
We have mentioned a number of times that China had experienced a very unpleasant “second-hand” tightening due to its peg to the dollar. Its trade competitiveness has suffered tremendously. With a weaker dollar the Chinese Yuan can re-gain some of its competitiveness while maintaining its peg to the dollar. A rare win-win in today’s convoluted world of finance.
Big U.S. Banks: We Have A Motion, Is There A Second?
YTD the S&P 500 has fallen 2% while the S&P 500 Banking industry group is down over 12%—a shortfall that has the attention of value investors and contrarians seeking a chance to buy high-quality banking franchises at fire-sale prices.
Stock Market Observations
The August market break did not emerge from out of the blue. The foundation for the bear case was put in place many months before those four ugly days in late August.
Sentiment, The Economy & The Fed
We wrote in the January book that 2015 would serve up no shortage of excuses for the Fed to hold off on tightening all year. Whatever window the Fed may have had is now closed.
Chinese Economic Concerns Are Overdone
The traditional economic indicators are no longer as relevant as people think, and China’s condition may not be as bad as most fear.
Recession? Too Early To Call
Among the various arguments put forward by those believing the recent decline is no more than a correction, the most difficult for us to address is the common claim that “there’s no recession on the horizon.”
The Economy In 2014: Solid But Unspectacular
This year should be a solid but unspectacular one for the U.S. economy, with real GDP growth of about +2.5%. We expect the Consumer Price Index to rise just 1.5%. Unemployment should continue to fall.
The Economy And Earnings
The YTD surge of 19% in the S&P 500 should ensure a stronger second half economy, and the big five-point jump in the latest Purchasing Managers Survey (ISM) might be the first evidence of this.
Stocks And The Economy
We’ve written before about retail investors’ tendency to “conflate” stock market action with movements in the underlying economy. Misunderstanding this interrelationship generally causes the public to liquidate stocks when the economy is weak, only to ultimately buy them back when the economic recovery is obvious to all.
Lowered Expectations — Policy Effectiveness
For central bank policy effectiveness, global economic growth, interest rates, and inflation. While lowered expectations are a good thing in the near term, long term return expectations for most asset classes should be lowered too.
A “Late-Cycle” Economy?
Economic growth is re-accelerating, but that growth is coming at a cost…price pressures are building significantly. Manufacturing prices are up along with commodity prices.
Beware The Economic Ticker Tape
It has become more and more difficult to filter out the short term economic noise. By focusing on this minutia, investors can easily lose sight of the big picture.
Stocks And Economy Joined At The Hip… For Now
Economic indicators are hypersensitive to even small changes in the data, and investors are hypersensitive to the indicators themselves.
First Year In The Books… And Still Bullish
Global bull market is now one year old. U.S. stocks are probably in fair value territory, but should move to moderately overvalued territory as both the economy and investor sentiment improve.
Perception for the Professional
March 2026 Issue
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