Markets This Week

Of course, all eyes are on the Fed, inflation, and employment, so much of what we wrote above fills out our general view of where markets are and what is most important to pay attention to. We’ve commented many times in the past about the rise of ESG investing — Read more

In this second quarter of 2022, individual investors’ sentiment hit levels not seen since 2009.  History suggests that periods with historically low investor sentiment (1) usually precede a large tradeable rally, and (2) can create an attractive entry opportunity for longer-term investors.  Market tops do not announce themselves beforehand, or even Read more

After a brief moment of optimism (intoxication?) after Fed Chair Powell took 75-basis-point rises in the Fed funds rate off the table, stock markets accelerated their decline. The damage to stocks is more evident internally than externally.  On the surface, the correction has only started getting to the broad indices. Read more

As earnings season unfolds, we are hearing many company managements mentioning foreign exchange issues as headwinds — when you hear “currency neutral” numbers being reported, it is likely that under the hood, there are negative foreign-exchange effects to be found.  A strong dollar will hurt many companies which are reliant Read more

What is Happening In China?  Shanghai, and many other Chinese cities, are once again under extreme covid lockdown conditions — the most stringent since April 2020, as China pursues its apparent “zero covid” policy.  The images and videos percolating through to western social media are profoundly disturbing, and prompt a Read more

Earnings season is underway.  As we wrote last week, we expect a down quarter for real earnings; of most interest to us will be the tone of management forward guidance.  We are already hearing a lot of talk about rising costs and ongoing supply chain issues.  We’ll be listening closely Read more

The points raised in our main post this week all suggest to us that the shelf-life of the traditional, indexed, 60/40 portfolio is close to expiration.  Bonds were long thought to be — and long functioned as — counterweights to the equities in a portfolio, and would blunt volatility, since Read more

Markets have staged a strong rally following the volatility that accompanied the start of the war in Ukraine.  The S&P 500 has rallied 10% from its bottom, and the NASDAQ 15%.  (The NASDAQ is still 10% down from its peak, and the S&P is down about 4% from its peak.)  Read more

Our Upcoming Conference Call: Optionality Is King We have written before that the investment climate has changed dramatically.  The cost of money is rising, and the risks of illiquidity episodes are rising.  This is probably not the time to be locking yourself into anything, unless you absolutely must (e.g., you Read more