We talk about the ongoing shift in labor market dynamics and its implications for inflation going forward, which could be “higher-er for longer-er”. The market’s recent rebound, fueled by hopes of a soft landing and a bounce in the most shorted stocks, is also discussed. We also look at concentration of the index in a handful of stocks and compare recent earnings for some of the tech titans to the rosy projections for next year.
Will and Adam provide their perspective on the market impact of events in Israel and Gaza, which come at a perilous time from a market perspective with yields reaching psychologically important levels. We also discuss how flows into passive funds have had an outsized impact on the so-called Magnificent Seven stocks and juxtapose their performance (and valuation) versus the rest of the market. Finally, we look at some real-time data on what is happening for economic canaries like shipping and small business.
October Update - Key Takeaways • Bond vigilantes pushed U.S Treasuries into a historic decline in September. • The end of 2023 may be a crucible for investors. • Events in the Middle East are eerily similar to prior flashpoints that have devolved into wider conflagrations.
In the midst of typical seasonal weakness, we examine the causes for the stock market’s recent volatility, as well as the unprecedented moves in the bond market. We also look at oil’s ability to help the economy to a Goldilocks scenario, how labor unrest is affecting inflation and consumer sentiment, and whether one person can riot.
After enjoying the festivities, including a fantastic caricature, we delve into the underappreciated risks associated with both zero-day options and put writing, given the launch of a new ETF that combines the two. We examine the market’s recent reaction to CPI data and the potential for inflation to re-accelerate with soaring oil prices and wage pressure from the current UAW strike.
America lost a television icon in August with the passing of Bob Barker, long-time host of The Price is Right. As one of our colleagues insightfully noted, he died at age 99, coming as close as possible to 100 without going over. We will come on down and use a few of the show’s games for this month’s recap. September Update - Key Takeaways • Fed policy finally started to squeeze investors in August. • The deck remains stacked against investors as we consider the factors we track. • The rest of the year may be a cliff hanger, especially for higher valuation stocks.
The French Enlightenment philosopher, writer, historian Voltaire once wrote: “The Holy Roman Empire was neither holy, nor Roman, nor an empire.” Adapting one of history’s pithier jibes to the realm of financial advice, we think the so-called passive index is most often neither passive nor an index, and it is most certainly not investing. Investors should take heed.
We parse Fed Chair Powell’s Jackson Hole speech and assess the odds (and timing) of further rate hikes versus a pivot. We also examine the impact on the global economy of China’s weakening property market. We conclude with a look at the recent weakness in U.S. consumer stocks and debate whether expectations for megacap tech earnings are too high in the wake of this week’s market reaction to everyone’s favorite AI stock.
We return from hiatus with a recap of the happenings in emerging markets, including Chinese property problems and Argentinian elections. We juxtapose the echo boom in tech names with the so-called dot com darlings, and look at how those high-flying companies fared in terms of sales growth (outstanding) and investment returns (dreadful). We close with the odds of and implications for a pivot by the Fed.
August Update - Key Takeaways • Returns for equities continue to be dreamy in 2023. • While GDP growth remains resilient, other factors point toward a dose of reality. • While investors remain transfixed by the attraction of stereotypical growth at any price, we look for opportunities elsewhere.
