The latest inflation numbers came in at 6.8% year-over-year (headline CPI). That's the highest since the 1980s. What's more, the Federal Reserve capitulated from its "transitory" position and has signaled an acceleration of taper and interest rate hikes. Figure 1: US Inflation Unfortunately, this is the scenario I did not want to see but have … Continue reading Potentially Potential
In October, the US printed weaker than expected GDP growth. The first reading was 2% year-over-year versus a consensus forecast of 2.7%, which itself was already well below Q2's 6.7%. This corroborates the "moderating growth" narrative of the past two quarters. That doesn't mean we're on the cusp of a double-dip recession. Actually, some economic … Continue reading The Show Must Go On
NOTE ON UPDATES Starting with Q1 2021, BCM is consolidating its various update notes into a single "Quarter Update," labelled as "Quarter Update" under Categories. This reduces redundancy and makes updates easier to follow. QUARTER REVIEW Q1 started with a rally in risk assets, but equity markets are still off their all-time-highs notched in February. … Continue reading Q2 2021 Update
QUARTER REVIEW The fourth quarter capped what can only be described as a breath-taking year for the markets (and the world). The global equity market rose +15.15% in 2020, as measured by the MSCI ACWI. While that doesn't look outstanding by itself, keep it mind that was after clawing back a -34% decline from Q1 … Continue reading Tactical Allocation Update, Q4 2020
QUARTER REVIEW Global equity markets continued their ascend from their Q1 lows. As of September 30, the MSCI ACWI (global stock market) is +1.89% year-to-date. That doesn't sound like much, but that's after recovering the -36% peak-to-trough decline from Q1. From that perspective, this year has been nothing short of remarkable. Figure 1: Global Equity … Continue reading Tactical Allocation Update, Q3 2020
Global equity markets have continued an "unprecedented" rally and in the US the S&P 500 has notched a new all-time-high. Many intelligent investors have watched in disbelief as stocks shot up despite dismal economic conditions. But the seemingly irrational market may be more logical than it appears. Caution and Uncertainty BCM was certainly in the … Continue reading For Better or Worse
US equities bounced hard off their March lows. The disconnect with fundamental data has many intelligent investors trying to explain the rally with acronyms like FOMO and TINA. But the best explanation may come from the original Intelligent Investor Benjamin Graham who said, "in the short-run, the market is a voting machine, but in the … Continue reading Stupid Acronyms
An excerpt from my article published at SeekingAlpha.com. We just experienced one of the fastest bear market drawdowns in history and the S&P 500 was down -36% from peak to trough. Since then, we've also had a quick bounce of +27%. The whipsaw has everyone guessing if the stock market bottomed in March. Of course, … Continue reading A Hopeless Bottom
MARKET SUMMARY After a strong 2019, global equity markets made an abrupt move to the downside in the past month. Most major stock markets have officially entered into bear market territory and are down between 20% to 30%. Figure 1: Global Equity Markets YTD Price Returns With markets already uneasy about slowing economic conditions, the … Continue reading When Boring is Better
An excerpt from my article published at SeekingAlpha.com. Last month, I wrote a piece on coronavirus and China. This month it's clear COVID-19 has become a global concern. While people all over the world are still grappling with the viral pandemic, markets are overcome by a fear pandemic and already in correction territory. Markets are … Continue reading Fearing the Pandemic
An excerpt from my article published at SeekingAlpha.com. Fear is in the air It used to be "when America sneezes, the world catches a cold," but recent market action shows China may be the new snotty-nosed kid on the block. I mean the now-notorious coronavirus. Since its outbreak, the news flow has been frantic and … Continue reading When China Sneezes…
Stocks are set to close on a great 2019. Year to date, global stocks are up well over 20%. US stocks have led and are making new all-time highs along the way. Fed Chair Powell has suggested no more rate hikes in 2020 and President Trump announced a "phase one" agreement in the US-China trade … Continue reading Full Circle
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