Newsletters

The Market Responds to the Shift in Monetary Policy These first two weeks of the year in the stock market have, so far, gone according to script as the Fed begins to remove the punch bowl. We’re seeing a slight bump in volatility as market participants shift their focus, and capital, from high-priced, large-cap Growth (mostly Tech) issues to the opportunistically-priced Cyclicals that typically perform well in a late-cycle expansion. Diversified investors with a long-term view need only make minor…

Earnings Season Remains Center Stage An impressive start to the earnings season remains so as we approach its end. The results are driving stock prices higher, leaving all the major indexes at record levels. As expected, tapering was formally announced by the Fed at this week’s FOMC meeting. This was seen as too little or too late of a response by a few market experts and media types who have predicted an impending era of hyperinflation. We’re not in that…

Earnings Kick the Market into Rally Mode Much of what investors focused on during a flat third quarter remains unchanged. The supply chain remains gridlocked. The volume of the inflation narrative remains at a high pitch. Resident CNBC media personalities and many of their guests continue to press the Fed to hastily employ a shift in monetary policy to solve a problem that, with a broken supply chain, actually falls in the bailiwick of fiscal policy makers and the White…

Stocks End the Quarter with a Whimper This week the market limped into the close of the quarter with stock prices taking a breather for several reasons. First among them are concerns over persistent supply chain constraints that have impaired the delivery of goods, pushing prices higher, and driving the inflation narrative. That could account for the recent surge in the 10-year treasury yield that typically weighs heavy on the Growth issues that have been leading the market higher this…

Inflation Worries Fade as Delta Variant Surges Since our last update, stocks have drifted somewhat erratically from their highs of two weeks ago. It’s been nothing dramatic, with the S&P 500 and NASDAQ currently off a bit more than 2% from their record highs. A look at the internals of the indexes reveals a divergence among market sectors such as we’ve seen with the several “stealth” corrections of this year. For the trailing 4 weeks Financials, Health Care, Staples, Industrials,…

The Fed Offers a Clue to Policy Timing The star of last week’s Jackson Hole Economic Symposium was Fed Chairman Jerome Powell. He offered guidance as to the Board’s policy response to the ongoing recovery and the inflation attendant to it. Indications are that the Fed will begin to reduce bond purchases before year end. We noted in our most recent Update that, in effect, the economy was reaching the point of not needing life support in the form of…

Perspective on Taper Talk Following last week’s series of new record highs for the major averages, investors have now turned their focus to news of slowing retail sales and the spread of the Delta Variant. The general view is that consumers have bought all the “stuff” they want and are now moving on to buying experiences. That might explain Amazon’s recent descent into correction territory. However, the travel and hospitality stocks aren’t responding yet to that general view and are…