The latest retail sales data suggests a robust consumer, leading economists to become even more optimistic about more robust economic growth this year.
Read More »2024-04-26
2024-04-26
The latest retail sales data suggests a robust consumer, leading economists to become even more optimistic about more robust economic growth this year.
Read More »2024-04-12
Is immigration why employment reports from the Bureau of Labor Statistics (BLS) continue defying mainstream economists’ estimates? Many are asking this question as the U.S. experiences a flood of immigrants across the southern border.
Read More »2024-03-19
With the last half of March upon us, the blackout of stock buybacks threatens to reduce one of the liquidity sources supporting the bullish run this year. If you don’t understand the importance of corporate share buybacks and the blackout periods, here is a snippet of a 2023 article I previously wrote.
Read More »2024-03-12
Over the last few years, digital currencies and gold have become decent barometers of speculative investor appetite. Such isn’t surprising given the evolution of the market into a “casino” following the pandemic, where retail traders have increased their speculative appetites.
Read More »2024-03-10
Presidential elections and market corrections have a long history of companionship. Given the rampant rhetoric between the right and left, such is not surprising. Such is particularly the case over the last two Presidential elections, where polarizing candidates trumped policies.
Read More »2024-03-05
Valuation metrics have little to do with what the market will do over the next few days or months. However, they are essential to future outcomes and shouldn’t be dismissed during the surge in bullish sentiment. Just recently, Bank of America noted that the market is expensive based on 20 of the 25 valuation metrics they track.
Read More »2024-02-16
Regarding the surprisingly strong employment data, Fed Chair Powell said the quiet part out loud. The media hopes you didn’t hear it as we head into a contentious election in November. Over the last several months, we have seen repeated employment reports from the Bureau of Labor Statistics (BLS) that crushed economists’ estimates and seemed to defy logic. Such is particularly the case when you read commentary about the state of the average American as follows.
Read More »2022-07-15
“Giant corporations are using inflation as cover to raise their prices & boost their profits. In industry after industry, we have too little competition & companies have too much power to increase prices. I’ve been calling out this corporate profiteering & price gouging” – Sen. Elizabeth Warren
Read More »2022-05-30
High inflation has captured the headlines as of late particularly as CPI recently hit the highest levels since 1981. Some are even suggesting we will face hyperinflation. However, while inflation is certainly present, the question to be answered is whether it will remain that way, or if the worst may already be behind us?
Read More »2022-03-16
Market perspective is essential in avoiding investing mistakes. With CNBC airing “Markets In Turmoil” every time the market dips, it’s no wonder investor sentiment is now the lowest we have seen financial crisis lows.
Read More »2022-03-04
Hiking rates into a wildly overvalued market is potentially a mistake. So says Bank of America in a recent article.
Optimists expecting the stock market to weather the rate-hike cycle as they’ve done in the past are missing one important detail, according to Bank of America Corp.’s strategists.While U.S. equities saw positive returns during previous periods of rate increases, the key risk this time round is that the Federal Reserve will be “tightening into an overvalued market,” the strategists led by Savita Subramanian wrote in a note.“The S&P 500 is more expensive ahead of the first rate hike than any other cycle besides 1999-00,” they said.” – Yahoo Finance
While many media experts suggest that investors should not be concerned about rate hikes, BofA makes a very valid point
Read More »2022-03-01
“Sell Energy Stocks” Was Originally Published At Marketwatch.com
Sell energy stocks? Such certainly seems counter-intuitive advice given high oil prices, geopolitical stress, and surging inflation. However, some issues suggest this could indeed be the time to “sell high.”
Before we go further, it is essential to state that I am not recommending selling energy stocks in total. As is always the case, portfolio management is about minimizing risk and preserving capital. Reducing energy exposure by selling portions of existing positions is more prudent.
As shown, there is a high correlation between the price of oil, the energy sector as represented by SPDR Energy ETF (XLE,) and even oil stocks like Exxon Mobil (XOM.) Therefore, if oil prices decline, energy stocks will also.
Read More »2022-01-19
The market selloff into January rattled investors as concerns of “So Goes January, So Goes The Year” began to dampen expectations. Combined with a more aggressive stance from the Federal Reserve, rising inflation, and a reduction in liquidity, investor concerns seem to be well-founded.
Read More »2021-08-08
Previously, we discussed Modern Monetary Theory (MMT) and its one limitation of inflation. However, as is always the case when “theories” collide with “reality,” the tenants of the theory are quickly discarded.
Read More »2021-08-03
The “Fear Of Missing Out” has infected retail and hedge funds alike as they ramp up exposure to chase performance. We have previously discussed the near “mania” of retail investors taking on exceptional risk in various manners. From increasing leverage, engaging in speculative options trading, and taking out personal loans to invest, it’s all evidence of overconfident investors.
Read More »2021-06-28
Furthermore, let’s understand what these debates are really about. The debates over capitalism aren’t about Mike Jones, who operates the local auto mechanic repair shop. Nor Annie Smith, the operator of a personal training studio. Mike and Annie are taking advantage of a capitalist economy. Capitalism provides the ability to earn more wealth than paid employment.
Read More »2021-05-27
Last weekend, I joined Richard Rosso, CFP and Danny Ratliff, CFP to discuss the outlook for the markets for the rest of this year and take questions from our attendees.
Read More »2021-05-18
“The strong economic recovery will not get interrupted by inflation or a credit crunch, and the market will soon reach 4,500.” – Ed Yardeni via Advisor Perspectives. After discussing BofA’s view of why the market could drop to 3800, I thought it fair to discuss a more optimistic view.
Read More »2021-05-11
“If everyone sees it, is it still a bubble?” That was a great question I got over the weekend. As a “contrarian” investor, it is usually when “everyone” is talking about an event; it doesn’t happen.
As Mark Hulbert noted recently, “everyone” is worrying about a “bubble” in the stock market.
2021-05-07
Are stocks “cheap,” or is this just another bullish “rationalization.” Such was the suggestion by the consistently bullish Brian Wesbury of First Trust in a research note entitled “Yes, Stocks Are Cheap.” To wit:
“The Fed remains highly accommodative, there are trillions of dollars of cash on the sidelines, vaccines have reached over 50% of Americans, and the economy is expanding rapidly. Some valuations have been stretched, but the market as a whole remains undervalued. As a result, we remain bullish and are lifting our targets.”
Yes, it is true the Fed remains highly accommodative, which has undoubtedly pushed asset prices higher. In fact, financial conditions recently reached a historic low, which suggests elevated asset valuations ironically.
We have busted the “myth of cash on the
Read More »2021-05-02
In this issue of “All Inflation Is Transitory, The Fed WIll Be Late Again.“
Market Review And Update
All Inflation Is Temporary
The Fed Should Be Hiking Now
Portfolio Positioning
#MacroView: No. Bonds Aren’t Overvalued.
Sector & Market Analysis
401k Plan Manager
Follow Us On: Twitter, Facebook, Linked-In, Sound Cloud, Seeking Alpha
Catch Up On What You Missed Last Week
Market Review & Update
Last week, we said:
“The market is trading well into 3-standard deviations above the 50-dma, and is overbought by just about every measure. Such suggests a short-term ‘cooling-off’ period is likely. With the weekly ‘buy signals’ intact, the markets should hold above key support levels during the next consolidation phase.”
“As shown above, that is what is currently occurring. While
Read More »2020-12-24
In 2019, we wrote about how corporate share repurchases, or “stock buybacks,” had accounted for nearly all buying in the market. A year later, that significant support for asset prices has reversed.
Read More »2020-08-26
Why this isn’t 1920 has everything to starting valuations and future returns. While, generally, I’m not too fond of comparisons between today’s markets and the past, Ed Yardeni made a comparison too bombastic to disregard in his blog.
Read More »2020-08-24
The 4% Rule Is Dead. A recent article by Shawn Langlois via MarketWatch pointed out this sobering fact but is one we have discussed previously. Retirees have long counted on being able to retire on their assets and take out 4% each year. However, a little more than 20-years later, the “death of the withdrawal rate” has arrived. What should retirees do now?
Read More »2020-08-05
As discussed in Is It Insanely Stupid To Chase Stocks, the market has gotten quite ahead of the fundamentals as money continues to chase performance. In the Q2-2020 review of Commitment Of Traders report (COT,) we can see how positioning has moved back to extremes.
Read More »2020-07-14
Since the onset of the pandemic, the Fed has entered into the most aggressive monetary campaign. Its goal was to bolster asset markets to restore confidence in the financial system. However, the trap is the Fed is in a position where they can never stop QE as interest rates can’t rise ever again.
Read More »2020-07-07
If you missed Part-1 of our series on the “Theory Of MMT Falls Flat When Faced With Reality,” start there. In Part-2, we complete our analysis of the theory and the potential ramifications. The premise of our discussion was this recent explanation of “Modern Monetary Theory” by Stephanie Kelton.
Read More »2017-11-08
The economy is booming. Employment is at decade lows. Unemployment claims are at the lowest levels in 40-years. The stock market is at record highs and climbing. Consumers are more confident than they have been in a decade. Wages are finally showing signs of growth.
Read More »2017-01-22
For the third time in four weeks, the market was closed on Monday due to a holiday. Not only is this week shortened by a holiday, it is also coinciding with the annual Billionaire’s convention in Davos, Switzerland and the Presidential inauguration on Friday. Increased volatility over the next couple of days will certainly not be surprising.
Read More »2016-10-26
It’s been really busy as of late to cover all of the topics I have wanted to address. One topic, in particular, is the bond market and the ongoing concerns of a “bond bubble” due to historically low interest rates in the U.S. and, by direct consequence, historically high bond prices.
Read More »2016-10-23
“It is not surprising the Fed once again failed to take action as their expectations for economic growth were once again lowered. In fact, as I have noted previously, the Federal Reserve are the worst economic forecasters on the planet.
Read More »2016-09-23
As I noted on Thursday, the Fed non-announcement gave the bulls a reason to charge back into the markets as “accommodative monetary policy” is once again extended through the end of the year. Of course, it is not surprising the Fed once again failed …
Read More »2016-09-02
On Tuesday, I noted the end of summer and the entrance into one of the weakest months of the year statistically speaking. “We can confirm BofAML’s point by looking at the analysis of each month of September going back to 1960 as shown in the chart below.”
Read More »2016-08-26
As summer begins to fade, and kids return to school, the focus once again turns to the annual event of Central Bankers in Jackson Hole, Wyoming. However, if you only looked at the market as a gauge as to the excitement of the event, well it must have been one pretty boring after-party.
Read More »