The U.S. is likely already in recession. The first quarter saw a real GDP decline of 1.6%; the Atlanta Fed’s GDP now tracker suggests that the second quarter may come in at a decline of 2.1%. Two consecutive quarters of decline meets the technical definition of a recession. The question Read more…
Although we manage investment portfolios for our clients, we also view part of our vocation as being financial educators — something which, through our writing and our media appearances, we’ve been doing for almost as long as our firm has been in existence. We believe investors have a right to Read more…
As expected, the Fed hiked rates by 75 basis points on Wednesday, with a 50 or 75-basis point hike on deck as well for July. Whatever the very temporary immediate response of the market, it focuses attention very clearly on the inflation and interest rate trajectory. For the majority of Read more…
As we write, the U.S. stock market is undoing the momentary relief that followed yesterday’s hawkish Fed announcement. The proximate cause was perhaps the overnight announcement that the Swiss National Bank would consider selling down its $177 billion worth of U.S. equity holdings as it defends the Swiss franc. Perhaps Read more…
Last month we told you that it was “time for a bear market playbook.” We noted that even though there are many extraordinary geopolitical, economic, and financial events unfolding in the world, the central fact was simpler. The Fed is tightening financial conditions, raising rates and draining liquidity by allowing Read more…
Yesterday, Wednesday, June 1, saw the publication of April JOLTS data – “job openings and labor turnover” — by the Bureau of Labor Statistics. This report is one of the key data sources evaluated by the Fed as it monitors the U.S. employment situation; remember that its dual mandate is Read more…
Of course, all eyes are on the Fed, inflation, and employment, so much of what we wrote above fills out our general view of where markets are and what is most important to pay attention to. We’ve commented many times in the past about the rise of ESG investing — Read more…
First, let’s touch on the inflation level revealed by the Guild Basic Needs Index [GBNI] — our in-house, real-world inflation measure which we compile from a simple set of data series covering consumer expenses for food, shelter, clothing, and transportation. We had to adjust the x-axis on our graph: year-on-year, Read more…
In this second quarter of 2022, individual investors’ sentiment hit levels not seen since 2009. History suggests that periods with historically low investor sentiment (1) usually precede a large tradeable rally, and (2) can create an attractive entry opportunity for longer-term investors. Market tops do not announce themselves beforehand, or even Read more…
After a brief moment of optimism (intoxication?) after Fed Chair Powell took 75-basis-point rises in the Fed funds rate off the table, stock markets accelerated their decline. The damage to stocks is more evident internally than externally. On the surface, the correction has only started getting to the broad indices. Read more…
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