Feb
03
Recession, earnings, the Fed, ongoing war, housing concerns, debt ceiling, over-valuation…. The gloom can crush you. Don’t listen to it. Look at the data: S&P 500 price is above the 50-day moving average and above the 200-day moving average S&P 500 50-day moving average above the 200-day moving average (golden...
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Feb
02
We continue to believe that the likelihood of a recession in 2023 is someplace between absolutely certain and virtually guaranteed. Our recession model has been signaling that for a while now as economic demand continues to erode due to tighter financial conditions. Tighter financial conditions (the combination of higher Fed...
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Feb
01
Financial assets performance Jan 2023 v Jan 2022 – what a difference a year makes, especially after the fastest rate hiking cycle in the history of the Fed. We’re onto February. Source: Deutsche Bank, Bloomberg Finance LP Richard BarrettChief Investment Officer Congress Wealth Management LLC (“Congress”) is a registered investment advisor with...
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Jan
31
The long-term growth in money supply (M2) and the long-term level of inflation (CPI) do track together. Money supply over long periods of time has grown about +5%. That level of growth can be thought of as being made up by about 3% growth due to inflation and another 2%...
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Jan
26
In 2022, investors were hyper focused on inflation and the Fed, so much so that bad news (on the economy) was often met with a positive reaction by the stock market, in as much as it implied falling inflation and a quicker end to the Fed’s tightening campaign. As we...
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Jan
24
We’ve been talking about weak investor sentiment now dating back to last spring AFTER inflation started rippin’, AFTER the Fed finally awoke from their 2022 winter slumber, AFTER interest rates had surged, and AFTER the equity markets had sold off. SFP = sentiment follows price. Despite recent recovery in risk...
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Jan
19
As our Sean Dillon has been saying for a while now, underlying market technicals have dramatically improved since late last spring. The underlying trend and breadth of stocks has shifted from very negative last May to quite positive today. Technicals matter. To put it simply: it’s hard to get a...
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Jan
12
Another theme we expect to play out in 2023, and possibly beyond, is the outperformance of value stocks over growth stocks.First, let’s get definitions out of the way. As the name itself implies, growth companies are expected to grow their revenues and earnings at a faster clip than that of...
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Jan
11
Three things to note on non-USA stocks: After a long and painful period of relative underperformance, non-USA equities relative and absolute level of valuation is very attractive. A weakening US dollar + China better + emerging market equities better + US small caps better is often the path to a...
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Jan
10
One of the major stories – if not THE major story – for the capital markets during 2022 was the overall tardiness of the Fed in responding to rising levels of inflation. Despite inflation spiking everywhere in late 2021/early 2022, the Fed continued to pursue a policy of accommodative quantitative...
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