With the S&P 500 bouncing off very long support at the 200-week moving average, the stage may be set for the bear market to get a breather. Inflation remains a clear problem, but as we have been telling you for some time, inflation will eventually begin to settle back from Read more…
Fed Chair Powell tried to channel Paul Volcker at Jackson Hole. Insiders report that the market’s reaction to his July press conference was to assume that a pivot to easier policy was coming — so he scrapped his prepared remarks for Jackson Hole and instead delivered a short, blunt message Read more…
While some economic data — notably year-over-year GDP growth — are flashing “recession,” some other important data are contributing to positive investor and trader psychology, and helping maintain the current counter-trend stock market rally. It can be awhile before reality comes calling… and that means that we wouldn’t want 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…
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…
At the end of March, we noted about the dollar: “In [the context] of a very likely European recession, regardless of the cessation of hostilities in Ukraine, we would expect the U.S. dollar to stage a stronger rally, particularly against the euro. Why isn’t it? And perhaps a question equally Read more…
Agustin Carstens, the General Manager of the Bank of International Settlements (BIS), spoke in Geneva a week ago — offering some soul-searching reflection on how the world’s financial authorities got the inflation story so terribly wrong. (The Bank of International Settlements is essentially “the central bank of central banks.”) We Read more…
We say it often and we will say it again: earnings are the mother’s milk of stock prices. On a market-wide basis, a flat or declining earnings trend almost invariably accompanies a flat or declining trend in stock prices. This doesn’t mean that investors should go completely to cash (particularly Read more…
Interest Rates, Inflation, and the Fed’s Coming Gut Check This morning’s CPI print hit 7.5% year-over-year, up 0.6% from the previous print, and slightly worse than expected. Some (not us) had believed that December’s number would be a peak; it was not. Given trajectories of energy and housing costs, February Read more…
This past weekend we were invited to present our views on the current investment landscape to the local chapter of the American Association of Individual Investors (AAII). As our title indicates, there are many macro factors at work, all of them of fundamental interest to investors. How do we rank Read more…
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