Surprise, Surprise

Yesterday, the US made history with an upset of presidential proportions.  Despite being a huge underdog, Donald Trump clinched the presidency from strongly favored Hillary Clinton (who pollsters estimated had a 90% probability of winning).  Following the upset, investor uncertainty spiked and Dow futures traded down more than 800 points. Yet the S&P 500 actually … Continue reading Surprise, Surprise

Greek Lightning Strikes

Much ink has been spilled over Greece's financial woes.   And if you've followed the headlines, you might think Greek lightning was burning Athens to the ground.  While it's true that Greece's finances have been woefully mismanaged (it has the second highest Debt/GDP ratio in the world), in absolute terms things may not be as … Continue reading Greek Lightning Strikes

Looking for Bright Spots

Seems like everybody hates solar stocks.  They're down big, but with reason.  Earnings have been dismal and financials have been deteriorating. Prominent names like Solar City and Sun Power are simultaneously burning through cash and piling up debt. Adding insult to injury, two years of capitulating oil prices have softened demand for alternative energy.   … Continue reading Looking for Bright Spots

Surprises, Silver Linings, and Staying the Course

It's been a wild year so far.  A correction to start things off, Brexit, terror scares, a political coup, and a 1.36% yield on the 10 year Treasury to boot.  It's been one surprise after another.  It seems nobody knows what to expect and investors everywhere are on edge.  But despite the turmoil, the markets … Continue reading Surprises, Silver Linings, and Staying the Course

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

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