As we enjoy the Thanksgiving holiday and the usually quiet half-day of trading that follows on Friday, a few notes on current events of potential significance that we are watching. First, China. Due to China’s central role as an engine of global commodity demand, sentiment in world stock markets can Read more…
More Evidence the Inflation Spike Is In the Rear View Mirror PPI (producer price inflation) data yesterday showed slowing inflation impulses, as we have discussed. Even our own index of basic essential needs (representing food, clothing, shelter, and energy components) reflect a sharp slow down in price increases from this Read more…
The Fed “We still have some ways to go, and incoming data since our last meeting suggest that the ultimate level of interest rates will be higher than previously expected.” Jerome Powell, Nov 2 2022 By one significant measure, the Fed has succeeded. In the wake of the pandemic fiscal Read more…
Accelerating GDP data (annualized quarter-over-quarter at 2.6%, with the real-time “GDP Now” estimate running over 3%) and cooling PCE inflation data (4.5%) in the U.S. that were just released suggest that some of the most bearish economic prognostications have had the wind taken out of their sails. Earnings season is Read more…
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…
Investors with eyes riveted on upcoming CPI data have had to make a few glances across the Atlantic to the financial (and perhaps soon-to-be-political) trainwreck in the UK. The wreck has centered on UK pension funds that had leveraged themselves in order to meet actuarial targets rendered impossible by a Read more…
We commented in a recent letter that a change in investor sentiment from “catastrophically bad” to “merely bad” could occasion a strong rally. It seems that the end of the third quarter saw sentiment decline to a recent nadir, and the stock market with it. (September is a notoriously difficult Read more…
Our editor, Rudi von Abele, is taking a much-deserved week off. We apologize in advance that instead of polished, well written research analysis, this week you will get the musings of a portfolio manager. Do not despair, Rudi will return next week, and we will all be more intelligent for Read more…
All ears are waiting to hear what Fed Chair Powell has to say at Jackson Hole tomorrow. Much of the recent rally was predicated on a tacit assumption by market participants that Powell has hinted at a “pivot” in his remarks after July’s FOMC meeting. We don’t believe that a Read more…
Is it a top yet for the bear market rally? It has continued to march on into the teeth of skepticism from many professional money managers, who according to surveys, remain at the peak of bearishness even as they are almost fully invested (yes, again the phenomenon of the “fully Read more…
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