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
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
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
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
The NASDAQ is down almost -30% from its November 2021 highs. Unlike the pandemic drawdown, this sell-off doesn't have a clear catalyst. It's unfolding in fits and starts and has investors pointing at a growing list of potential causes - rising rates, a tightening Fed, inflation, slowing growth, high valuations, disappointing guidance, etc. Whatever the … Continue reading A Matter of Perspective
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
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
I wrote several times this year about my preference for international equities versus US. In August, I pointed out the selloff in Chinese stocks looked like an overaction. The Chinese market is up about +10% from its August lows. My timing was lucky, but there are still many long-term reasons to be bullish on Chinese … Continue reading A Real Distinction
Many things about China don't make sense in the West. It's not just food and politics, but markets too. In China market quotes flash red on upticks and green on downticks. In the wake of the pandemic Chinese stocks led a global rebound with an outstanding rally few expected. But fortunes turned again quickly. The … Continue reading Red is the New Green
Every decade or two financial markets enter a state of what Alan Greenspan called "irrational exuberance." These periods are characterized by markets that defy logic and reason. The time changes but the narrative repeats. "We've entered a new paradigm." "Old investing rules no longer apply." And of course, "Things are different this time." In the … Continue reading Same Old Dance Moves
MACRO OVERVIEW Global equity markets notched a new all time high in early September only to pull back since. The rise in market volatility has some fearing another meltdown. To be clear, nobody knows what happens next, but it's worth noting how current economic and market conditions contrast with Q1. Figure 1: Global Equity Market … Continue reading Macro Value 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
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