Time To Look To Cyclicals? Much of the heavy lifting in the markets’ breathless recovery from March’s lows has been performed by the mega-cap growth companies such as Microsoft [NASDAQ: MSFT], Facebook [NASDAQ: FB], Apple [NASDAQ: AAPL], Amazon [NASDAQ: AMZN], and Alphabet [NASDAQ: GOOG]. We believe that the overall Read more
Even as the recovery of stock markets from the March and April decline continues and broadens, investors’ attention remains focused on Federal Reserve policy. As we described last week, Fed policy has been instrumental in preserving financial stability, not only in the U.S., but globally. With the initial crisis past, Read more
The U.S. economy is reopening across many states: While after the sharp snapback rally, a 5 or 10% market correction in June or July remains a distinct possibility, we believe that monetary and fiscal support have taken many “worst case” scenarios off the table. Last week we mentioned data from Read more
Since March, unprecedented monetary and fiscal support for the U.S. economy has rolled out in waves from the Federal Reserve and from the U.S. government. Fed Chair Jerome Powell’s determination to do “whatever it takes” to ensure the stability of the U.S. financial system, and to avert a financial crisis, Read more
In the past month, the aggressive growth industries — primarily tech hardware and software, internet, cloud, cybersecurity, and biopharma — saw their stocks rebound and move ahead, dramatically outpacing the rest of the market. The rally from the pandemic bottom was thus rather narrowly based, with technology megacaps responsible for Read more
Often in the years since the European sovereign debt crisis, we’ve noted that the European banking system has remained a weak link in the global financial system. In our view, this trouble spot was a likely epicenter of a future crisis. The coronavirus pandemic looked like it could have been Read more
The United States Perhaps the most important Federal Reserve actions in response to the crisis have been the establishment of facilities to support corporate credit – by buying both investment-grade debt, and the debt of “fallen angel” corporates driven into junk status by the effects of the pandemic. That announced Read more
Last week we reported about two large stakes taken in Indian telecom giant Reliance Jio by U.S. investors. Their interest focused particularly on the Indian consumer, one of the world’s great untapped consumer markets. Jio’s aggressive rollout of cheap internet service and mobile devices to currently unconnected Indians attracted a Read more
With markets apparently becoming tired in their post-COVID-crash reality, confusion reigns in many investors’ minds. The market has, according to many observers, become detached from underlying economic realities. Many companies have withdrawn their guidance for the second quarter and often for the rest of 2020. That absence of visibility, coupled Read more
In a recent conference call, Canaccord’s Tony Dwyer ably summarized the current market situation in a single graph: According to Dwyer, the market remains in a no-man’s-land between unprecedented economic events and unprecedented fiscal and monetary stimulus. In this “frustration” phase, we remain focused on our task at hand. Put Read more
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