Tuesday , May 17 2022
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Tag Archives: Stocks

Weekly Market Pulse: Welcome Back To The Old Normal

Stagflation. It’s a word that strikes fear in the hearts of investors, one that evokes memories – for some of us – of bell bottoms, disco and Jimmy Carter’s American malaise. The combination of weak growth and high inflation is the worst of all worlds, one that required a transformational leader and a cigar chomping central banker to defeat the last time it came around. Or at least that’s how it’s remembered. Whether the cigar chomping central banker was...

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Weekly Market Pulse: Time To Get Contrarian?

Remember, your goal in investing isn’t to earn average returns; you want to do better than average. Thus your thinking has to be better than that of others – both more powerful and at a higher level. Since others may be smart, well-informed and highly computerized, you must find an edge they don’t have. You must think of something they haven’t thought of, see things they miss, or bring insight they don’t possess. You have to react differently and behave...

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Weekly Market Pulse: What Yield Curve Inversion

Well that didn’t last long. I wrote last week about the inversion of the 10 year/2 year term spread as the yield of the 2 year Treasury note rose above the yield of the 10 year Treasury note. Using end of day data, the curve inverted on Friday, April 1st and stayed that way until….Monday April 4th. The spread closed last Friday, April 8th at 19 basis points. Hmm. The inversion happened on April Fool’s day, huh? Sorry, I couldn’t resist poking a little fun at all the...

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Weekly Market Pulse: What Now?

The yield curve inverted last week. Well, the part everyone watches, the 10-year/2-year Treasury yield spread, inverted, closing the week a solid 7 basis points in the negative. The difference between the 10-year and 2-year Treasury yields is not the yield curve though. The 10/2 spread is one point on the Treasury yield curve which is positively sloped from 1 month to 3 years, negatively sloped from 3 years to 10 years and positively sloped again from 10 out to 30 years: So, yes, parts of...

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Weekly Market Pulse: All Clear?

Why did stocks sell off in recent months? Was it the emergence of the Omicron variant? That was a popular narrative right after Thanksgiving but that lasted less than a month before stocks decided to look past COVID make a new high right after the new year. Was the correction due to fears of the Fed raising interest rates and stopping QE? Was it the run up to and eventual start of the Ukraine war? Or was it just that stocks got too expensive and no one wanted to buy at nosebleed levels? The...

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Weekly Market Pulse: Oil Shock

Crude oil prices rose over 25% last week and as I sit down to write this evening, the overnight futures are up another 8% to around $125. Almost every other commodity on the planet rose in prices last week too, as did the dollar. Those two factors – rising dollar and rising commodity prices – mean the likelihood of recession in the coming year has risen significantly in just the last week. Rising oil prices, in particular, have been a regular feature of past recessions and while...

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