One slightly bright spot in Europe has been the use made of the pandemic crisis by some European banks. European banks are still laden with bad debts from the bloc’s sovereign debt crisis, and unlike U.S. banks, still not adequately recapitalized, and still struggling under depressed rates. All these woes Read more…
Fourth-quarter earnings continue to come in very strong. As of now, the fourth quarter of 2020 is coming in positive — 2% up from the final quarter of 2019, when analysts had expected an 11% decline. Consensus now expects a 22% rise in S&P 500 earnings in 2021, and a Read more…
Until the pandemic broke last spring, all eyes were on the yield curve — the spread between short and long-term interest rates. The inversion of that curve is thought to augur the approaching end of a period of economic expansion. When long term (usually ten-year) rates drop below short term Read more…
In our view the appropriate strategy is to be optimistic, be invested, but be careful as you build your buy list. As we said two weeks ago, there are ways to approach an elevated market in an intelligent way: As stocks rise, move your stops up. Take some profits in Read more…
Our first note of 2021 made the case that the events of 2020 heralded the return of inflation. We made two main observations. First, the Fed’s adoption of average inflation targeting, which would give the central bank cover to tolerate persistent inflation above the 2% to make up for the Read more…
Earnings season is underway. Earnings growth has turned positive for the first time since the last quarter of 2019, before the pandemic: Barring unforeseen developments on the vaccine front, which we can’t rule out but which seem unlikely, the 2021 playbook is going as expected so far: pandemic recovery, gradual Read more…
To many experienced investors, the U.S. stock market appears dangerously high. While investor and trader enthusiasm is taking the major stock averages higher, there is also an uncomfortable level of euphoria in certain types of stocks, themes, and groups, such as: Environmental themes: Global electrification, battery storage, electric vehicles, solar Read more…
The remarkable market rally since last year’s pandemic lows can be attributed in large part to the very large and rapid increase in real liquidity in the financial system — that is, “readily available money above and beyond what is needed for economic growth,” as Canaccord Genuity strategist Tony Dwyer Read more…
We mentioned above the robotics companies could be key beneficiaries of accelerated capex spending made by U.S. corporates flush with cash from bond and equity raises last year. A Bain Capital reports notes that between now and 2030, American companies are expected to invest some $10 trillion into automation. The Read more…
Yesterday passed and saw the arrival of another new U.S. presidential administration and a new Congressional majority. Our attention remains focused on the two trends mentioned above: the beneficiaries of the new administration’s policy priorities, and the technology trends which, beyond the troubled limelight of big tech, are riding the Read more…
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