Market Summary

The message from earnings season is clear: the negative earnings impact of the pandemic, index-wide, is over.  The chart below shows annualized two-year EPS growth. Source:  Deutsche Bank Research What remains for investors is first, not to be prematurely spooked out of a market in which sentiment and liquidity are Read more…

Two weeks remain until the Federal Reserve’s annual policy meeting at Jackson Hole, from which we may well learn more about the Fed’s intentions on monetary policy.  In the meantime, we note that via various technical mechanisms, the Fed and other central banks continue to control and gradually reduce liquidity, Read more…

We believe that inflation will hover from 3–5% for the next several years, even as it falls from June’s CPI print: 5.4% over the previous 12 months, and 0.9% month-on-month. Five Areas That Merit Your Attention Tech growth at a reasonable price: hardware, services, and software. We would be buyers Read more…

Earnings season is underway, and market leadership has passed once again, for now, to the big-cap growth stalwarts.  We’ll be listening to earnings calls across many sectors and industries to gain some intelligence about how managements are looking at the future — at virus resurgence and the policy response; at Read more…

Although the market averages are not far from all-time highs, the market’s tone leaves something to be desired.  In part this is due to the narrowing of market performance to a handful of the old mega-cap pandemic winners, as the recovery theme has paled before poor seasonals, the Delta variant, Read more…

Any time markets recover from panic lows and recession, there is a powerful upward movement that is eventually followed by a period of digestion.  It may come as a surprise to watchers of the broad indices to hear us say that the U.S. stock market has been in such a Read more…

Tightening By Any Other Name Two weeks ago, we observed that peak liquidity growth had already passed: “There is an important sense in which the taper already began in the first quarter.  The Fed may not be withdrawing liquidity from the system, but the rate at which liquidity is increasing (that is, the ‘second Read more…

July 1 marks the start of the third quarter, which is traditionally the worst quarter for the U.S. and other global stock markets.  Of course we don’t know what this year will bring, but as we noted above, we see some reason for caution when we look forward to fall, Read more…

Without getting technical, let’s just say that because of its impact on markets and pricing, liquidity measures (whether from the Fed, China, or other central banks) must be monitored. Much has been reported in the past week about recent Federal Reserve operations, such as increasing interest rates offered on excess Read more…

Post Fed Meeting Unwind of Many Crowded Inflation/Commodity Trades Yesterday, the Federal Reserve meeting concluded with a message that they are monitoring many of the rising costs and the inflation pressures in parts of the economy, and that there is a plan to reduce accommodative asset purchases and raise interest Read more…