Storied debt ceiling games Once upon a time, the U.S. government imposed a limit on how much the country could borrow. A debt ceiling was a prudent idea and a good story, but in reality, that ceiling was breached countless times since its inception. In January of this year, the U.S. broke above the most … Continue reading Playing Dirty with Default
Uncertainty loves complexity Uncertainty remains high with respect to the economy and the markets. On the one hand, we have a steeply inverted yield curve and a deteriorating housing market. But on the other, we have improving sentiment and a strong jobs market. The truth is nobody really knows what happens next and we can … Continue reading KISSing with Stocks
OVERVIEW 2023 got off to a blazing start. Global stocks were up more than 7% in Q1. That combined with some better-than-expected economic data has investors hopeful that the tide has turned on the bear market of 2022. However, there was no shortage of volatility during the quarter. And if Q1 was indicative of things … Continue reading Q2 2023 Update
An excerpt from my latest article at seekingalpha.com. After a challenging 2022, global financial markets have gotten off to a strong start in 2023. That has many investors hoping, calling, and fishing for a bottom to the bear market in stocks. Anything is possible in the near term, but whether 2023 marks the start of … Continue reading Bottom Fishing
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Gold is popular, to say the least. People have conjured up more cliches and trite sayings about the metal than any other. But this year "all that glisters is not gold" (h/t Shakespeare). From April to September gold saw an intra-year drawdown of about -19% while the S&P 500 was down by nearly -15%. Figure … Continue reading All That Glitters
Last year I wrote all good things come to an end, including the easy money from a decade-long rally in housing prices. The chart below shows how peaks (green circles) in home sales activity (blue line) historically lead prices (red line). I noted the divergence in June 2021 (green arrows) was untenable, and I expected a reversion … Continue reading Reality for Real Estate
OVERVIEW The third quarter began with a broad rebound in risk assets. The global equity market regained +13% from its June lows by mid-August. However, sentiment turned again and markets have been volatile since. Year-to-date the global stock market is down near-26%. Emerging markets fared worse, down close to -28%. The losses are broad even … Continue reading Q4 2022 Update
The bear market of 2022 feels more painful than usual because of how broad the selloff has been. From stocks to bonds, to real estate, to cryptocurrency, it seems like there's nowhere to hide. We're all hoping for a bottom in stocks, but hope itself will not help us find one. Fortunately, there are indicators … Continue reading How to Know if The Bear Market is Ending
Equity markets bounced in June, reinvigorated by strong employment data, "no recession" calls from key policymakers, and hopes the Fed would "pivot" away from aggressive rate hikes. Some believed June marked the bottom and we were starting a new bull market. I wasn't convinced by policymakers and wrote markets may want to hold the champagne … Continue reading Not Yet Broken
Today, Chairman Powell reiterated the US is not in recession and will continue to grow in the second half of 2022. Other public officials agree, US Treasury secretary Yellen and US President Biden recently affirmed their own "no recession" opinions. The argument emphasizes a strong labor market and an unemployment rate that hovers near the … Continue reading A Familiar Song & Confetti
MARKET OVERVIEW The global sell-off in financial markets accelerated during Q2. Global equities officially entered a bear market, breaching the technical definition of a -20% decline. US stocks were down most, but all major equity regions were down double digits year-to-date. Even the US bond market was off by -10% for the year. Figure 1: … Continue reading Q3 2022 Update
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