Market Summary

With earnings season underway in earnest this week, we continue to see consumer-facing businesses facing mounting cost pressures from labor shortages and supply-chain constraints.  A direct case in point came from Brinker International [EAT], the parent company of the Chili’s and Maggiano chain restaurants, in its recent sharply disappointing earnings Read more

As noted above, more durable inflation is becoming clearer on the horizon, driven by hard-to-resolve supply chain issues and rising labor costs in particular.  Wages are rising, particularly at the lower end of the spectrum of hourly workers, and we suspect many companies, as they report earnings, will be reporting Read more

The broad U.S. stock indices remain close to their all-time highs.  However, those indices are constructed in a way that heavily over-emphasizes the largest listed companies.  A different way of looking at U.S. stocks takes the average stock performance irrespective of a company’s size – and by that measure, stocks Read more

Is there something strange in the water in Washington — or perhaps are we approaching the “haunted house” season where strange and scary things come out to spook us?  We may not be alone; the market may be feeling the same way, gauged by its recent behavior.  An electric vehicle Read more

U.S. stock indexes came close to their first real correction in almost a year (however, many individual stocks have been correcting for weeks or months).  Of the selection of possible catalysts, the one that seemed to get the most attention is the fear that Chinese real estate developer China Evergrande Read more

U.S. Stocks September thus far has seen a modest decline in the S&P 500, which historically has been typical after a period of many months of positive returns.  There are many potential reasons — excuses? — for the decline; but the history also suggests that after a string of positive Read more

In many respects, a relative goldilocks period seems to be ending.  Growth, revenue, and profit recoveries have lapped pandemic lows.  Further direct consumer stimulus is not forthcoming.  Further broad fiscal stimulus is running up against more significant Congressional resistance, and scorched-earth warfare over the debt ceiling may be approaching.  The Read more

It was a great Q2 2021 earnings reporting season, as anticipated, with U.S. firms as a whole beating estimates by 19% (versus a 2% average beat over the period of 2000-2019).  From this point forward, the hurdles get higher. Supply chain issues, inflation, labor problems, and consumer sentiment are all Read more

While listening to the recent round of quarterly conference calls, we noted that most managements were still discussing supply-chain issues — and saying that these were problems that have not yet been resolved.  Trans-Pacific spot shipping rates remain elevated.  The Port of Los Angeles, which receives a third of all Read more