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Janet Yellen Suggests Much Lower For Much Longer
On October 5, 2023, Treasury Secretary Janet Yellen made a very telling statement about the future course of interest rates. YELLEN SAYS DEBT SERVICE COSTS WILL BE 1% OF GDP FOR THE NEXT DECADE. –...
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Consequences Are Always Unintended
Bloomberg recently penned a great piece on the “Law of Unintended Consequences.” To wit: “There is only one true law of history, and that is the law of unintended consequences. In the early 1920s, the...
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Bond Market Noise Hides Tremendous Opportunity
Treasury yield levels are overwhelmingly a function of inflation. However, in the short run, a plethora of influences can explain deviations between yields and inflation. These factors, which we call...
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The Pain Trade Is Higher Into Year-End
The “pain trade” continues to be higher into year-end. We made Such a point in January, suggesting the 2022 “correction” was complete. Let’s review what I wrote, and then we will expand on why we...
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Real Rates Drive Stock Prices
Our Daily Market Commentary* provides market insight, analyzes economic and financial news, and highlights a few graphs worthy of discussion. Occasionally, we stumble upon a graph that deserves more...
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Investing Rules To Navigate Volatile Markets
While often difficult, investing rules can help us maintain our focus and investment discipline in volatile or uncertain markets. This year, such has certainly been the case with surging interest...
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Why Target Date Funds Fail Investors: A $3 Trillion Delusion
Morningstar estimates that as of 2022, there is nearly $3 trillion invested in target date mutual funds. Per Morningstar: Target date strategies remain the investment vehicle of choice for retirement...
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Bond Bear Market. Is It Dead, Or Just Hibernating?
Is the bond bear market finally over? That is the question everyone is asking now that bond prices rallied sharply following the November FOMC policy meeting. As noted in the #BullBearReport this past...
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2020 vs 2023: Are Economists Making The Same Mistake?
The following headline from a July 2020 CNBC article is stunning: Here’s why economists don’t expect trillions of dollars in economic stimulus to create inflation. In hindsight, so many economists...
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Speculator Or Investor? What’s The Difference?
Are you an “investor” or a “speculator?” Over the last month, we have discussed the “false market narratives” that push investors to make portfolio mistakes. Such is why we previously discussed the...
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Employment Is Sending Signals: Recession Or Normalization?
In February 2023, we wrote Janet Yellen Should Focus On HOPE. The article walks through Michael Kantrowitz’s HOPE model. HOPE, or Housing, New Orders (ISM), Corporate Profits, and Employment, provides...
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S&P 500 Market Returns And Why Your Performance Is Worse
As I wrote this blog, the S&P 500 index is up roughly 17% year-to-date. Most likely, your portfolio isn’t. This is a common frustration among many investors in the market this year in particular....
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Stock Market Correction Coming Before The Santa Claus Rally
Is a stock market correction coming before the Santa Claus rally at the end of the year? It is a fascinating turn in sentiment, given that investors were convinced of the bear market’s return just a...
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Context And Facts Expose Bearish Bond Narratives
“For me context is the key – from that comes the understanding of everything.” -Abstract Artist Kenneth Noland. That holds true for us as well! Proper context is required to appreciate better if...
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Wall Street Analysts Are Optimistic For 2024
It’s that time of the year where Wall Street polishes up their crystal balls and pin targets on the S&P index for the upcoming year. As is often the case, while Wall Street is always optimistic,...
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The Fed Pauses: What Comes Next?
After hiking rates by 5.25% since March 2022, the Fed is in a wait-and-see period, commonly deemed a pause. Since the Fed started hiking rates, inflation has declined meaningfully but remains...
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The “American Dream” Isn’t Dead. 10-Steps To Achieve It.
The "American Dream" is dead. It would certainly seem to be the case if you believe surveys like Gallup that showed nearly 50% of the younger generation favor socialism over capitalism. To wit: "Since...
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The Markets Are Front Running The First Rate Cut
In October, the markets were down 10% from the July high, bond yields were touching 5%, and talk of a coming recession was rampant. What happened? Interestingly, a Wall Street axiom says, “Sell the...
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KISS With Bonds
The average 2024 Wall Street S&P 500 forecast is for a gain of 6.50% next year. In the past, a 6.50% expectation, while slightly lower than historical averages, was a no-brainer when choosing...
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Wealth Effect Increases and Recession Risks
What is the “wealth effect,” and why is it important? It is a great question and reminded me of “A Funny Thing Happened on the Way to the Colosseum.“ The hysterical play by Craig Sodaro features a...
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