Newsletters

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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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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