There is no more guessing about Russia’s intent; they have invaded Ukraine. This is causing ripple effects throughout the global economy. Markets despise uncertainty. Equity markets down, bond prices up, commodity prices up. Equity markets up, bond prices down, commodity prices down. All of the day-to-day prices movement is based on the extrapolation of short-term data into a long-term view. …
We have a winner!
We have a winner! Our base case in this election was following the polling that was consistent over the past several months a Biden presidency, and a Democrat Senate. While the Presidency will flip, it is looking more unlikely that the Senate will. It is not a done deal, but the Georgia runoffs has a strong likelihood of keeping the …
Is the economy dead, or reviving?
The noise has been deafening over the past several months. So much so, that it is difficult to know what to think. Is the economy dead, or reviving? Is COVID out, or coming back? Should the stock market follow the news, the economy, or some semblance of both? The economy of the United States is firmly in the hand of …
The government definitely wanted to throw a big stick to keep the economy rolling.
It is hard not to start a market update with the following graph. The economy of the United States is firmly in the hand of the people and their comfort with the state of the Coronavirus. Ask yourself the following questions: 1. When would you feel comfortable going to the grocery store? 2. When would you feel comfortable enough to …
Making Lemonade out of Three COVID Lemons
In light of recent concerns over the economy, we are all worried about the performance of our investment portfolios. The latest pandemic has spiraled the market into a decline that is proving to be unpredictable. With this has come a lot of uncertainty and a few sour lemons. However, there are actions you can take that will help sweeten things …
It’s the end of the world as we know it – and we will be fine
One of my most despised words over the past five years is “unprecedented.” The word has been used so much that I’m pretty sure its true definition has become “normal.” “Unprecedented” times have now become “normal” times. At least it seems so. The first real piece of economic data is in on the “COVID-19 economy” and that is the jobs …
Panic is not an investment strategy that works
Panic is not an investment strategy that works. The nice part about the market is that we have an incredible amount of data on historical events and how the markets have responded. Our current situation is no different. Since February, the markets have dropped around 30%. A bear market is when the markets are down 20% from their highs. Normally …
Does this mean that our economy goes into recession?
I have included, at the end of this note, a few paragraphs of Liz Ann Sonders, Chief Investment Officer of Charles Schwab. Her advice is sound in times like these. From our side, the selloffs are overdone. This does not mean, however, that they will bounce back right away. In previous Market Updates, we have mentioned that there will be …
Equity markets have taken a bit of a beating
The equity markets have taken a bit of a beating over the past week on the backs of the Coronavirus. Some of this is justified, some is not. As per our previous update, this virus continues to have a negative impact on supply chains. Anyone manufacturing in China will be impacted by the slowdown in the supply. The numbers behind …
What is the Coronavirus going to bring us?
The current outbreak of the Coronavirus has brought me back to a book I read last summer called Get Well Soon, History’s Worst Plagues and the Heroes who Fought Them. What was fascinating about the book was not necessarily the disease, but how humanity reacted to them. The world has lived through the nastiness of leprosy, polio, syphilis, and even …
The Market is Not Always Rational
When the market goes up, it is said, it takes the stairs; when the market goes down, it takes the elevator. Today’s market performance was a result of the President’s tweet indicating that he will add an additional 10% to $300 billion in imports from China. We quickly do the calculation and figure that adds up to $30 billion. (How …
Global Interest Rates
While the market seems to be on a rocket ride this year, we may want to move back a little bit and take a look at the market over the past two years. Frequently we look at and are told about the market’s Year-to-Date return. In 2019, it looks fantastic. Who can complain about a 20% plus return in the …
Federal Reserve
Yesterday the Federal Reserve gave us an idea of what they were thinking for 2019. The market does not like it and is showing it with its actions. It is my opinion, that both the market and the Federal Reserve are wrong. Let me explain. The Federal Reserve has a dual mandate; full employment and price stability. As the chart …
Greece in Focus
The equity markets seem particularly roiled today as a result of the failure of the ECB and Greece to come to a deal on their debt. While this is great news for traders, as it increases the volatility of the markets, it is really a yawner for longer term investors. Here are several reasons why: First, Greece is just not …