Conway Jarvis

CJ Update – April 3rd, 2020

The markets have spent the past several weeks making history. After hitting a record high on Feb 19, the S&P 500 closed 34% lower on March 23rd. Following that initial, dramatic selloff, we entered the relief rally phase of last week where panic subsided and volatility abated. This past week, the narrative surrounding the transmission of the virus was joined in the headlines by that of the first economic data flowing from the COVID-19 event. Predictably, it points to the…

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CJ Update – March 27th, 2020

Bottoming signs but not out of the woods… In the midst of the COVID-19 health crisis the economic crisis unfolds in parallel.  The markets continue to pile up records both bad and good.  Record volatility, fewest trading sessions to bear market, biggest 3 day loss… Biggest 3 day gain, etc.  Whenever we face an economic crisis, one on such a scale that it leads markets to bear market territory we need fall back on some history to guide us as…

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CJ Update – March 20th, 2020

Events in the world are unfolding at a rapid pace as leaders scramble to address the threat of COVID-19 and its impact on economies. The turmoil in markets matches the level of uncertainty in all aspects. How long the shutdown lasts is not known and will be a key determinant in how the eventual rebound looks on the other side. We are watching closely, gathering data and making plans on how to navigate what comes our way with regard to…

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CJ Update – March 12th, 2020

In our Investment Outlook of this past Monday we addressed the recent return of volatility to the markets and discussed how the COVID-19 event has been the catalyst for what was, at the time, a correction in the stock market. A mere three days later, we’re now writing about the end of the record long bull market as the S&P 500 and NASDAQ joined the DOW in bear market territory this morning. In these past few days, we’ve seen the…

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When Event Risk Becomes Economic Risk

Webster defines Event Risk as the possibility that an unforeseen event will negatively affect a company, industry, or security. However, the spread of the COVID-19 virus has massively expanded the scale of that definition to now include the US and Global economies. It has become the catalyst for what is now the correction we wrote about in our January letter to clients. We didn’t see COVID-19 coming but rather expected the catalyst to be economy or market-related. Over the prior…

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Then and Now. A Tale of Two Quarters

One can’t help but look back a year ago and marvel at the contrast between the current quarter and Q4 2018. Then, the Fed was fully engaged in raising key interest rates, conditions in Europe were eroding along with the prospect for an orderly Brexit, and the U.S./China trade “conflict” was escalating to an all-out war weaponized with tariffs. The resulting market collapse not only wiped out the year’s gains, but posted losses ranging from 3% to 14% across the…

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The R Word

Recession: Defined as negative GDP Growth for two or more consecutive quarters. That’s the word being widely trafficked in the media these days. Outside the US, there’s a contraction occurring in the Rest of the World (“RoW”), raising concerns for the global economy. The trade conflict has become a war, weaponized with tariffs. The UK is looking like it will crash out of the EU. Germany, the economic engine of the EU, is teetering on the verge of its own…

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Investors Bide Their Time While Others Trade the Headlines

To say that this year, to date, has been eventful is an understatement. Following a horrendous close to 2018, the first four months of ‘19 brought us a market melt-up to a new record high (2945) for the S&P 500, courtesy of the Fed’s policy shift into neutral. Soon after, trade “friction” between China and the US devolved into warfare with escalating tariffs as the weapons of choice. That took the S&P back down again almost 7%. Meanwhile, regime change…

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The Fed Successfully Fine Tunes the Economy

As we approached the close to 2018, we witnessed something not seen often, if ever, in this modern era of monetary policy. The Do-Over, or Mulligan for you golfers out there. Typically, when the Fed speaks and the markets react, the FOMC committee Chair goes about his or her business of making the rounds of congressional committees and issuing cryptic statements subject to any number of interpretations by the financial media. The September 2018 policy statement was met by an…

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Can the US Expansion Float the Global Economy?

The period following the posting of our September 18th Outlook has been eventful, to say the least. Following an upbeat finish to the third quarter, the Fed laid an egg in early October with the release of a policy statement that left the impression among investors that it had abandoned its data-dependent approach and was on a mission to raise rates not only this month, but through all of 2019. That left a significant dent in the major averages, wiping…

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