Aug
19
Higher interest rates and tighter financial conditions are clearly now impacting demand. It took 3-4 months to take effect, but the combination of those two things is doing what the Fed wants to do to fight inflationary pressures: purposefully destroy economic demand. Housing slowing, lumber prices down, gasoline at the...
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Aug
18
While the excessive money printing and fiscal stimulus of 2021 is the primary cause of above trend/pronounced inflation, it’s the Fed’s lack of action in early 2022 with regards to monetary policy and fed funds rate hikes that is the primary source of the current market volatility. The dark blue...
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Aug
16
Succession planning is an important piece of practice management for independent advisors, and it is an issue many advisors are facing – or will be in the near future. Simple demographics of the United States and the American advisor community add credence to this statement. According to data from Cerulli...
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Aug
16
When we quote investor “sentiment”, there’s three big data points we look at: the put/call ratio, the bull/bear ratio, and what’s going on within the Bank of America Fund Managers Survey. When everyone is buying calls, when everyone is bullish, and when fund managers are running little to no cash...
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Aug
09
The normally reliable US bond market is sending conflicting signals at the moment, adding to the confusion about whether the economy is currently in a recession, heading into a recession, or will achieve a soft landing and avoid a recession. High quality bonds continue to send warning signals, with the...
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Aug
04
Number #1 question being asked now sounds like this: “Why should I invest now?” The Fed is raising rates, recession risks have surged, economic demand is being destroyed, and volatility is both substantial and persistent. All reasonable reasons why not too invest – there’s plenty of cash on the sidelines...
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Aug
04
Energy outperformance has cooled recently, which was to be expected after an historic run of outperformance from January to June. But this recent pullback was certainly not due to company fundamentals and sentiment which is under a major secular shift. Monitoring 2022 EPS growth we can see that S&P 500...
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Aug
03
Tougher/tighter financial conditions and an aggressive Fed still playing from behind with regards to rates and inflation are purposefully destroying economic demand. Last week US housing data looked softer. This week demand destruction is being felt in the labor market. Just released job openings data (JOLTS) looks soft. The summer...
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Aug
02
The S&P 500 index is roughly halfway through reporting season for 2Q results, with 282 companies out of 500 having reported results so far. Last week was the busiest week of the season, with 173 companies reporting results, including some of the largest names in the index such as Apple,...
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Jul
29
We have been talking about tighter financials conditions (higher rates, higher yields, tougher lending, etc.) and the theme of demand destruction (how the Fed is attacking inflation) for the past several months. Higher yields don’t just hit the US Treasury bond market – they hit mortgage rates too. The median...
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