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Stimulus and Consumption Are Fueling Economic Resilience
The economy has marched forward, ignoring higher interest rates and consistent calls for a recession. Credit goes to “We The People,” the citizens of the U.S. A shout-out also goes to Uncle Sam for...
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Government Bonds Or Stocks? Which Is A Better Choice Now?
Government bonds or stocks? If you were picking an asset class to outperform over the next 18-24 months, which would you choose? Such was an interesting point made by Greg Feirman last week. To wit:...
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Is Inflation Already At The Feds Target?
The Fed’s next rate move and its “higher for longer” policy mantra are predicated on high and sticky inflation. Inflation has fallen nicely from its peak but not enough to sway the Fed to officially...
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Stock Market Rally Coming? And Investing In 2024.
Is a stock market rally coming? I think that is most likely the case. However, to understand why, we must review what we said at the beginning of July in “Complacency Seems Overly Complacent.” With...
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Bond Traders And Their Bearish Stories
“China, Japan, inflation, deficits, and QT, oh my!” – The chant of bond traders watching yields creep higher. Despite the highest yields in 15 years, some bearish bond traders think they can go much...
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10 Best Days – A Meme For Every Bull Market
About once a year, I have to address the issue of chasing the “10 Best Days” of the year. Statista recently presented the analysis: “There is clear evidence that market timing is difficult. Often,...
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Inflation And Deficits And QT, Oh My -Part 2
Part one of this article discusses the potential ramifications related to policy actions that China and Japan might take. These large U.S. Treasury bondholders could temporarily upset the Treasury...
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Student Loan Repayments – Will It Start The Recession?
Millions of young Americans will face the end of the student loan payment moratorium this summer. Why is this happening now, after a three-year break from payments? It is the result of the recent...
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Mega-Cap Stocks Continue To Dominate. But Why?
Mega-cap stocks continue to dominate the market in 2023. The question is, why? After all, many other great companies have arguably much better valuations and fundamentals. Yet, those companies...
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Risk Free Government Debt – Fact or Fiction
Most investors believe that U.S. government debt is risk free. Why shouldn’t they, every economic and financial textbook, media outlet, and bond guru say so? Did you know it used to be a fact that the...
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Predictions Are Pointless. Why You Shouldn’t Listen To Gurus.
“(Market) Predictions Are Difficult…Especially When They Are About The Future” – Niels Bohr Okay, I took a little poetic license, but the point is that while we try, predictions of the future are...
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The Lag Effect Unveiled
Despite surging interest rates, there are few signs they are impeding economic activity or causing distress amongst borrowers. It may seem strange that higher rates are not proving troublesome for an...
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October Weakness Before The Year-End Run?
While September has been a bit sloppy so far, will further weakness in October weigh on investor sentiment before the seasonally strong period begins? As shown by the S&P 500 index seasonality...
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Is This Time Different- Unpacking Bond Yields
In Our Elevator Pitch For Bonds, we ask, “is this time different.” Our view of the attractiveness of bonds can be honed into an elevator pitch. It essentially boils down to a straightforward question...
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Compound Market Returns Are A Myth?
“Compound market returns.” During bullish markets, there is inevitably a regurgitation of this myth that was contrived to extract capital from retail investors and place it in the hands of Wall...
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A Crisis Is Coming: Who Is Swimming Naked?
We recently wrote The Lag Effect Unveiled to appreciate why it takes time for higher interest rates to inflict economic damage. We follow that up with a discussion of something equally worrying that...
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Government Shutdown Averted. But Is That A Good Thing?
Once again, due to the ongoing lack of fiscal responsibility in Washington, the markets and the economy faced a Government shutdown. After a day of theatrics, Congress passed a “stopgap” measure that...
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From LTCM To 1966. The Perils Of Rising Interest Rates
Based on some comments, it appears we scared a few people with A Crisis Is Coming. Our article warns, “A financial crisis will likely follow the Fed’s “higher for longer” interest rate campaign.” We...
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Fund Flows And Bond Yields. Two Different Stories
While bond yields have risen sharply lately, fund flows into bonds tell two very different stories. We have previously written much on the recent rise in bond yields related to economic growth, event...
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Bond Valuations Are Cheap.
Bond valuations are cheap. Psychology in markets is always fascinating. In February 2009, I wrote “8 Reasons For A Bull Market.” While in hindsight, it is easy to see that was the right call, overall,...
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