Guild’s Basic Needs Index
Market Summary — 15 April 2021
While we remain bullish on the U.S. market longer-term, the market is obviously ready for a normal correction. This correction may only be a 5% pullback, or it may be slightly more. Therefore we have held some cash and short positions in order to hedge out the risk and provide
The Boom Arrives on Main Street
As we noted last week, we believe that as 2021 progresses, we will have a drumbeat of increasing analyst expectations for GDP growth and economic activity. The past year’s pandemic-driven economic gyrations have been so severe that economists and macro strategists — who as a group are not the most
Market Summary — 8 April 2021
Countries We Like We are bullish on the U.S., Japan, Korea, and India, and we favor the industries mentioned below. We are optimistic on the remainder of 2021, and believe that GDP growth in the U.S. will exceed analysts’ expectations, and that they will spend the year playing catch-up. Market
What Could Derail The Economic Train? Watch Out For A Tax Policy Accident
A trend has emerged: the research departments of the big brokerage houses are gradually increasing their estimates for U.S. GDP growth in 2021. Last week, Bank of America raised its full-year target from 6.5% to 7%. Although Goldman Sachs has kept its full-year target at 7.5%, this week it pulled
Market Summary — 1 April 2021
The U.S. Market The rotation continues, and for a few more months one industry after another may see a fall in stock prices while the broad indices move ahead very slowly or rotates sideways. Interest rates will rise, but as long as five-year bond yields stay below the CPI, we
The Guild Basic Needs Index: Up 15.6% Compared to A Year Ago
Reading time: 3 minutes For many years, Guild has compiled and tracked a neutral inflation index which we call the Guild Basic Needs Index™ (GBNI). We designed it to be a simple analysis of the real state of the inflation experienced by consumers — an unchanging basket, unmanipulated by rebalancings,
How Rising Rates Are Hurting the Emerging Markets Rebound
Reading time: 3 minutes Emerging markets, like the rest of global stock markets, have enjoyed a torrid rise since the pandemic bottom just over a year ago. That rise was reinvigorated in late October and early November as word filtered into markets that covid vaccines had proven effective in accelerated
Market Summary — 25 March 2021
Reading time: 4 minutes The U.S. Market The U.S. is undergoing a rolling correction as industry after industry corrects and then stabilizes. Higher interest rates will benefit some industries more than others, and the key is that the industries most benefitted by higher rates are only benefitted as long as
Inflation Is Coming, the Cycle Is Turning, and You Need To Get Ready
The Fed’s press conferences in the era of “money printer go brrrrrr” are often derided as “nothingburgers,” but of course they are still required listening and contain important information. Nothing in Fed Chair Powell’s Wednesday press conference was surprising to us, but it served to underscore our convictions about (1)
Market Summary — 18 Mar 2021
We note that interest rates are now above where they were when the pandemic began; the economy is sitting on many trillions of newly-created dollars; and analysts are vying for more aggressive 2020 GDP growth targets. Even the Federal Reserve is raising its growth targets, and while the majority of
Where Will the Stimulus Money Go? Markets, Regional Booms, and Inflation
In the blink of an eye last spring, half the American workforce found themselves doing their jobs remotely. In spite of the rollout of vaccines and the rollback of pandemic behavioral restrictions in many places, that shift is still largely intact. In the long term, perhaps a quarter of the
Market Summary — 11 March 2021
We believe that 10-year rates will rise above 2% over the course of 2021; U.S. core inflation will move towards 3%, and total inflation (including the more volatile food and energy) towards 4%. In the context of a rising dollar, we are not bullish on emerging markets as a group.
Waiting For “The Great Reset”? It’s Already Here
The year since the advent of the covid pandemic has been unprecedented — to such an extent that the word “unprecedented” has become a cliché. Some readers may remember Alvin Toffler’s 1970 book Future Shock, which diagnosed the cultural disorientation that he identified and predicted would be a side-effect of
Market Summary — 4 March 2021
A lot of “bubble talk” is making the rounds. We concur with the recently published opinion of Ray Dalio, who sees bubbles in certain areas of emerging technology stocks, but not in the market as a whole. Market valuations are getting elevated, but are not in a bubble; stock prices
Russia Poisons Europe’s Future
In the judgment of history, the most significant shift inaugurated by the Trump administration may prove to be a shift in the relationship between the United States and China — a shift with profound potential ramifications on global trade, regional power balances, many developing-market economies, and many global industries. The
No Wasted Crisis? European Banks Tinker With Restructuring
One slightly bright spot in Europe has been the use made of the pandemic crisis by some European banks. European banks are still laden with bad debts from the bloc’s sovereign debt crisis, and unlike U.S. banks, still not adequately recapitalized, and still struggling under depressed rates. All these woes
