CJ Newsletters

Our latest Investment Outlook noted the prevailing forecast for the end of recession at the close of the third quarter and what that might mean for stocks. While we anticipate the return of expansion to the economy, we don’t view that as a reason to increase exposure to the market at this time. We’d reiterate our view that a smaller, slower economy will be emerging from this recession. To what level the economy recovers remains uncertain due to several factors,…

Not a Market Bubble….Yet Last week we highlighted the Fed’s shift in policy allowing for a period of higher inflation beyond the 2% target threshold where previously it would begin to normalize (raise) key interest rates. We noted that allowing the economy to inflate was more acceptable and easier to remedy than the alternative: deflation leading to a depression. History has shown that the massive injection of liquidity such as we’re seeing can have a side effect. Investors tend to…

Is the Fed Inflating the Economy or a Market Bubble? That’s what investors are asking this week following a statement from the Fed that threw new light on how it would implement monetary policy in pursuit of its mandate. You know, the mandate that characterizes stable prices as a rate of 2% inflation? That rate, in the past, has sounded the starting gun for the Fed board of governors to beginning normalizing interest rates. In the parlance of investing, that…

A Week for Setting Records Last week we got a quick peek at what the much-talked-about market rotation might look like. Following a massive reversal of a broad-based rally in the Cyclicals that occurred a week ago Tuesday, the S&P 500 embarked on a slow march upward that culminated in that index posting a new record high this past Monday. That put an end to any further speculation about a failed bear market rally and marked its advance from the…

A Brief Glimpse of the Rotation Ahead This week we got a quick peek at what the much-talked-about market rotation might look like. Monday brought a significant divergence among the benchmark averages with the DOW up 1.3%, the S&P 500 up .28%, and the NASDAQ down .39%. That is a reversal of the trend that we’ve seen in the past couple of months as the NASDAQ roared to a new record bull market high while the other benchmarks languished within…

Stocks Surge Along with the Virus This week we saw the NASDAQ extend its lead in performance over the other major averages as it breached the 11000 level. That leaves it as the sole bull market among the major averages while the “market”, defined as the S&P 500, is closing in on its record high of February. So, why are the indexes advancing against bearish sentiment surrounding the virus? The construct of these indexes could distort the connection of the…

Consolidation of Growth Stocks Looming  We see the recent consolidation of large-cap tech stocks as the beginning of the shift of investor capital from growth to select value sectors that we commented upon last week. The pendulum won’t swing from growth to value overnight. It will occur in fits and starts as rationality returns to valuations and news of the virus charts a course for the economy.  Financial performance of the market leaders will be revealed in the current and…

The Imbalance of Growth vs. Value During this advance from the March lows, we’ve focused on the market’s disconnect from an underlying economy in recession. We’ve also noted the bifurcation between winners and losers among stocks as evidenced by the NASDAQ’s lone return to a bull market while the other indexes still tread below their February highs. That bifurcation was seemingly drawn along the line between stocks categorized as Growth or Value. The former being generally described as higher multiple/volatility…

“Talking” the Market Higher Seems to Be Working In a holiday-shortened week we’ve seen the stock market close out Q2 on a high note, leaving all the major averages with double-digit gains for the quarter. That momentum carried into Q3 with three consecutive advances for both the NASDAQ and S&P 500. Better than expected economic data and speculation regarding vaccine development fueled the advance despite news of the virus transmission spiking in a number of states. Today’s employment report indicates…