Guild’s Basic Needs Index

Market Summary: November 21, 2019

The U.S. U.S. stocks continue to forge ahead.  In the ebb and flow of news related to trade, impeachment, geopolitics, and the 2020 election, we continue to note underlying reasons for strength.  (Of course, the market may decline by 1–4% at any time). One of these reasons is the perpetually

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Market Summary: November 15, 2019

The U.S. With most major indices having pushed to new highs, a modest correction of a few percent is possible at any time.  Still, we anticipate that by the end of the first quarter of 2020, the U.S. stock market as a whole will likely be 8–10% higher than today,

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Market Summary: November 8, 2019

The U.S. Most large U.S. indices have pushed to new all-time highs, on the back of optimism stoked by positive earnings (as we have have been anticipating over the past few weeks) and perhaps because of optimism about U.S./China trade negotiations.  We see that negotiation process continuing to play out,

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Traders, Don’t Get Hurt By Bad Gambling Psychology

Two and a half years ago, University of Chicago economist Richard Thaler won the Nobel Prize for his foundational work in creating the discipline now known as behavioral economics, from which we have gotten the field of behavioral finance.  We described one of Thaler’s main discoveries: “Humans are not immune

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Market Performance and the Presidential Cycle

Many investors are cycle-watchers.  The cycles they watch vary greatly and encompass the whole spectrum of economic, financial, political, and geopolitical events and trends.  Some are brief, some are long, and some (such as the Kondratiev wave cycle) attempt to frame and track historical epochs.  We do not assign decisive

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Market Summary

The U.S. The U.S. Federal Reserve cut interest rates by 0.25% yesterday.  That, plus an announcement that they were closely watching the growth of the U.S. and world economies, will continue to keep the market in a trading range for the next few weeks.  The U.S. market is overbought and

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Recession Risk and Green Shoots

Perceived recession risks continue to tick down, after reaching a flurry over the summer.  Morgan Stanley’s recession risk model continues to register lows for the year. Source:  Morgan Stanley Research They comment: “Parts of the economy are responding well to the sharp drop in interest rates since January, an indication

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Third-Quarter Earnings Help Dispel Recession Fears

As we’re fond of saying, corporate profits are the mother’s milk of stock prices, so every three months, as quarterly U.S. earnings reports come out, we’re busy watching and listening to see what trends are emerging and what companies have to say about the immediate past and about the near

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Market Summary

The U.S. As earnings season progresses, most companies are beating estimates, and sequentially, earnings are coming in on average slightly up.  So far, earnings support our view that the U.S. economy is bottoming and preparing to exit the third slowdown of the post-2009 expansion.  We note that the U.S. seems

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Millennial Demographic Dominance and U.S. Consumption

Boomers as the largest demographic “generation” in America.  Of course, the divisions are arbitrary; this milestone is courtesy of the Pew Research Center, which anticipates the total of Millennials (as they define it, born between 1981 and 1996) reaching 73 million this year, and the total of Boomers (born between

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Ursula von der Leyen and the Shape of Post-Brexit Europe

Last week we mentioned the “election” of a new President of the European Commission (EC), Ursula von der Leyen.  We say “election” in quotation marks to remind readers that the European Commission, the primary legislative organ of the European Union, is not comprised of popularly elected members.  Von der Leyen

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Market Summary

The U.S. The U.S. market got a modest boost from the announcement of a trade truce with China, in which China agreed to boost some U.S. agricultural imports, and the U.S. suspended a tariff hike on $250 billion worth of Chinese imports.  According to the announcement, the initial deal will

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Strategic U.S. Investment in Australian Rare Earths

U.S. Secretary of Commerce Wilbur Ross recently took a trip to Australia to help strengthen commercial ties between the two close allies.  One of the key points of his visit was to lay the groundwork for discussions of a “U.S.-Australia Critical Minerals Action Plan” that will be finalized in November. 

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Utilities As Growth Companies

Electric power generation in the United States is a highly regulated industry, and has been since the 1920s and 1930s.  The primary Federal entity regulating the production and transmission of electricity is FERC, the Federal Energy Regulatory Commission, but FERC’s regulation is high-level.  The nitty gritty of pricing regulation that

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Market Summary

The U.S. The U.S. earnings season will shortly be getting underway.  We suspect that as usual, companies have telegraphed enough realism to get analysts’ estimates into reachable or beatable territory.  Of course, Mr Market will not just be watching EPS numbers, but looking at margins and watching for forward guidance

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