Following the Brexit Signs

Yesterday the United Kingdom made history by delivering a surprise vote to leave the European Union. Though the odds were close, market pricing was tilted towards a "Bremain" vote -- so "Brexit" was an unexpected outcome. Markets reacted commensurately today, European equity markets were down more than 7% and the Sterling down more than … Continue reading Following the Brexit Signs →

Picking Cherries

In the previous post, I made the point that US stock market valuation isn't as high as a cursory glance at traditional P/E measures might imply. Adjusted for inflation, valuations actually look more "median" than anything. But I also don't think US market valuations are currently attractive. And some of the arguments I've seen about … Continue reading Picking Cherries →

Valuation Conundrum

US equity market valuation is puzzling. With the S&P 500 priced at 24x trailing earnings, stocks look expensive and long in the tooth -- the market has persistently traded above average valuation levels since 2013. Meanwhile, economic conditions have been, at best, lackluster over the same period. As earnings and the business cycle inch towards … Continue reading Valuation Conundrum →

Fitting the Earnings Shoe

The first quarter started with a bang but ended with a thud. The US stock market was basically flat and the bond market was modestly up. The widespread global recession rhetoric seems to be quieting. This is particularly true in the US where we have been pointing out economic conditions are not as bad as … Continue reading Fitting the Earnings Shoe →

The US Muddles Along

As I've been pointing out, economic conditions in the US aren't as bad as some fear mongers in the financial media are portraying. To be clear, conditions aren't spectacular. Growth is muted and prospects aren't stellar. But on the margin, the US economy continues to grind forward with no imminent signs of the dreaded "R" … Continue reading The US Muddles Along →

This Time is Different

2016 has started off with a bang. The S&P 500 is off more than 7% in January, one of the worst calendar-year starts in history. That has everyone wondering if 2016 will be the year of the next big market crash. Though Reinhart and Rogoff might argue otherwise -- I think this time may actually … Continue reading This Time is Different →

Halfway Between Double or Nothing

The official numbers aren't in yet but it looks like 2015 ended without a bang for US markets. The S&P 500 managed somewhere around 1% total return and the Barclay's Aggregate ended up about .5% -- nothing worth getting excited over. Of course, across the globe and everywhere in between there were substantial divergences in … Continue reading Halfway Between Double or Nothing →

Japan’s Footsteps

After improving economic prospects earlier this year, Japan has abruptly reversed course. A third-quarter annualized GDP reading of negative -.8% puts Japan back in a technical recession (defined as two quarters of negative GDP growth). Following stimulative policies (aka "Abenomics") by Prime Minister Shinzo Abe and a blossoming recovery from 2014's technical recession, many assumed … Continue reading Japan’s Footsteps →

Full Swing Voting

Following a choppy third quarter, global markets have made a comeback. Since October 1, the S&P 500 and EAFE have both rebounded over 5%, and emerging markets have bounced by more than 8%. Strangely enough, the same fears that stoked the sell-off also seem to be fueling the rally. Investors who disliked the uncertainty … Continue reading Full Swing Voting →

Rolling the Dice

The third quarter is officially in the books, and it ended a dicey one. Global stocks ended the quarter squarely in correction territory, the FTSE Global All Cap Index was down 10.5% for the period. Meanwhile, the S&P 500 was down 7.3%, the EAFE was down 10.1%, and emerging markets were the worst at … Continue reading Rolling the Dice →

Never a Wrong Time

Market volatility picked up significantly in August and US stocks have been teetering in and out of correction territory ever since. Uncertainty is pervasive and investors' nerves are rattled. At times like these, it's more important than ever to manage expectations and maintain appropriate expectations. A market correction is generally defined as a pullback of … Continue reading Never a Wrong Time →

Red is the New Green

After more than doubling since 2014, China's stock market has fallen about 30% over the past couple of months. That has investors holding their breath and scratching their heads at the same time. Everyone wants to know what's behind the selloff -- and there are many theories to meet the demand. I don't know why … Continue reading Red is the New Green →