Something’s Got to Give | August 6, 2022

Something’s Got to Give There is an extraordinary dichotomy in market outlooks Bull Case: The growth slow-down has been priced in The consumer remains strong Labor market is still tight Inflation will recede Recession will be mild at worst, avoided at best Rates will decline soon, buy risk (stocks, bonds, RE, etc.) Bear Case: Valuations […]
READ POST

Sugar High? | July 30, 2022

Sugar High? The stock market rallied as the Fed said we have reached the neutral rate. Markets are already anticipating a reversal of rate increases as stocks and bonds rallied. It’s as if the recession has been cancelled, or maybe it’s over before we knew it was here. But the Fed emphasized that it is […]
READ POST

Quick Takes | July 16, 2022

Quick Takes A Shot Across the Bow? There is so much focus on narratives these days, we are increasingly compelled to play by the old rule. Watch what they do, don’t listen to what they say. We’ve been watching what JP Morgan has been doing: June 24: JPM announces layoffs in the mortgage unit. It […]
READ POST

Searching for Goldilocks | July 9, 2022

Searching for Goldilocks Watching the stock market these days is very easy, but also very frustrating. Good news is bad news and vice versa. Case in point was Friday’s employment report. Nonfarm payrolls increased by 372,000 in June, well above the 250,000 Street estimate and the unemployment rate remained at 3.6%. What was the reaction […]
READ POST

Do you Believe in Miracles? | July 2, 2022

Do you Believe in Miracles? We just completed the worst first half stock performance since 1970. (See chart below.) To make matters worse, rates increased and bonds were also hit extremely hard. The result was that the ‘standard’ 60/40 portfolio (60% S&P 500 /40% Aggregate Bond Index) declined a record 16.1% in the first half. […]
READ POST

Where Are We Going? | June 25, 2022

Where Are We Going? We suffered the great exasperation of hearing parts of Fed Chair Powell’s Humphrey-Hawkins testimony in front of the Senate on Wednesday. Fortunately, we managed to miss some of it, but rather than a session to better understand our current economic problems, it became a series of political advertisements, each charging the […]
READ POST

How Long? How Bad? | June 18, 2022

How Long? How Bad? As we have stated numerous times, we are faced with a menu of bad options. After 20+ years of ever-increasing, Fed-induced, financial largesse, inflation has turned the tables and we face the inevitable reversal of that largesse. There are no good options. The Fed will remain optimistic to the end, but […]
READ POST