How to Know if The Bear Market is Ending

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

Not Yet Broken

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

Q3 2022 Update

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

Splitting Straws on Recession

I've been paying close attention to the US Treasury yield curve since last year because it is, historically, a reliable bellwether for economic conditions. After threatening an inversion for months, the 2-10 year curve finally did so in late March. The inversion was short-lived, however, lasting only days. Figure 1: 2-10 Year Treasury Curve It … Continue reading Splitting Straws on Recession

Q2 2022 Update

QUARTER IN REVIEW Q1 was a bumpy ride for investors. Global equity market prices (MSCI ACWI) swung from being down almost -13% to only down about -6% for the quarter. However, the negative returns were broad. All major equity regions and even the US bond market were down YTD. Figure 1: Global Markets YTD MACRO … Continue reading Q2 2022 Update

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

Has Janet Lost Her Patience?

Speculation has been rampant about when Janet Yellen and the Federal Reserve will finally begin raising interest rates.  Last month all the buzz was focused on whether Yellen would drop the word "patient" (with respect to rate increases) from her scheduled Fed policy statement.   She did, and ever since strategists and traders all up … Continue reading Has Janet Lost Her Patience?