Newsletters

CJ Update – May 22nd, 2020

 A Week Light on News, Heavy on Speculation This week started off with Monday’s 3+% advance of stocks courtesy of headlines regarding the development of a vaccine and a pledge from the Fed of further stimulus. It was a week bereft of actual economic data and substantive news regarding testing or a vaccine.  That left investors with shorter investment horizons to trade on the noise. That served to push the upper boundary of the current trading range a bit higher…

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CJ Update – May 15th, 2020

The Fed Delivers a Sobering Assessment  This week the stock market took a step in a direction toward reconnecting with the longer term outlook for the economy. On Wednesday, Fed Chairman Powell offered that “the outlook for the recovery is highly uncertain and subject to significant downside risks.” He made that comment while addressing questions about how much more the Fed may have to do in deploying its resources if the recovery doesn’t appear as quickly as the market and…

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CJ Update – May 8th, 2020

A Disconnect between the Economy and the Stock Market For nearly 30 years we’ve preached, yes preached, that in the long run stock market performance will correlate with that of the economy. However, in the short-term the market often disconnects from the economic data and prices in factors that may or may not have an impact on the economy.  That brings us to where we are today: Early in Q1 the public safety response to COVID-19 took the form of…

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CJ Update – May 1st, 2020

 Competing Narratives Drive the Market Let’s sum up the trimester that’s drawing to a close. The S&P 500 peaked at a record high on Feb 19th. Courtesy of the COVID-19 event, we found ourselves almost 34% off that high on March 23, ending the record-long recovery bull market and officially logging the first bear market since the Great Recession of ’08-’09. Since that day, we’ve witnessed an unprecedented fiscal and monetary policy response to the crisis. There was little choice…

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CJ Update – April 9th, 2020

What a pleasant surprise. A large dose of good short term news this week has pushed the markets up nearly 12%, clearly extending the Relief Rally we mused we had seen in the few short sessions 2 weeks ago.  News of cresting virus cases in hard hit areas such as New York and our own state of Washington among others helped considerably.  In addition, a potential oil production cut worldwide seems to have been agreed upon in theory. This will…

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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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