Watch The Reaction Not The News
I lost track of how many times in 32 years I have said, “it’s not what the news is, but how markets react”. On Wednesday the Federal Reserve concluded their two-day meeting. As I wrote about, the Fed did nothing and said nothing. Everything was as expected. That led to an initial reaction that Powell & Company were more hawkish, meaning more skewed towards tightening policy. Stocks sold off. Bonds sold off. Gold sold off. The dollar rallied. One day […]
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Date: June 18, 2021
Fed Meeting Ending – No Fireworks Expected
The Federal Reserve concludes its two-day meeting today. The stock market model is for plus or minus 0.50% until 2pm and then a rally. There are several historical trends which point to higher prices today based on stocks not being at new highs as well as market action so far this week that was not strong. If stocks rally today, especially after the 2pm announcement and Powell’s tea and crumpets with the press, there may a trend calling for mildly […]
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Date: June 16, 2021
Froth & Greed Are Back
Greetings from 38,000 feet as my JetBlue flight to Florida bumps along down the east coast. The markets begin the new week on continued solid footing over the intermediate-term. All market foundations appear to be solid which indicate that there should not be any major changes in trend. However, that doesn’t preclude any market, especially stocks, from seeing modest to moderate weakness over the short-term. Right now, the vast majority of stocks on the NYSE are above their long-term and […]
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Date: June 14, 2021
Inflation Soaring – Bonds Yields Falling – HMMMMM…
As you know, inflation soared in May coming in at the highest level, 5%, since August 2008. The core rate which removes food and energy because they are so volatile was 3.8% which is the highest since 1992. On the surface that is really hot and very worrisome. But my readers already knew this was coming as I began discussing it 10 months ago. Some of our portfolios introduced commodities in the middle of last year while others added my […]
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Date: June 11, 2021
I Was Wrong – We Have a Problem
I was wrong. Last week, I left you with my opinion that April’s well below expected employment report was just an anomaly or aberration. And that a big upward revision was coming along with a strong May report. Well folks, May was weaker by more than 100,000 new jobs. Thankfully, the unemployment rate came in as expected. Two months is now a nascent trend and there is something structurally wrong with the economy. You know my trifecta. Vaccines + Massive […]
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Date: June 8, 2021
***Q1 Client Update***
Many people like to read my very brief quarterly client update which I select excerpts. If you’re one of them, please read on. If not, feel free to delete now. Always happy to hear comments and questions. Although the light at the end of the proverbial tunnel has been shining since late last year, it certainly got brighter in Q1 of 2021 as more and more Americans got vaccinated and the economy continued to reopen. That’s where I am going […]
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Date: June 8, 2021
May Employment Report Is Unusually Important
I usually poke fun at the media who say things like,”this is the most important Fed meeting of all-time”. That’s just a ridiculous comment. However, I will say that the May employment due out at 8:30am on Friday is an unusually important one. Recall that last month, Wall Street was expecting more than a million new jobs and the unemployment rate well below 6%. The economy only created 266,000 new jobs with a 6.1% unemployment rate. Something looked terribly wrong. […]
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Date: June 3, 2021
June is Here – Not the Greatest Month
Over the weekend I published a video that everyone should have received discussing what keeps me up at night. In other words, the single biggest threat to U.S. economic dominance. Agree or disagree, it’s worth beginning the discussion after an unfathomable $6 trillion dollar budget was proposed by the Biden Administration. For frame of reference, the U.S. government doesn’t even receive $4 trillion in total revenue, yet the administration wants to spend $6 trillion on the budget alone. And that […]
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Date: June 2, 2021
Stocks A Bit Tired But Don’t Get Fooled Too Early
The stock market has certainly transitioned to what was a powerful rally into a narrow trading range. That’s nothing new. Since mid-April the major stock market indices have basically gone nowhere. That’s not bad thing as they digest massive gains since early March. Tuesday was interesting day in the very short-term as stocks began to look a little tired. I don’t think it’s that big of a deal. I would look to become more positive on a 1-3 day mild […]
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Date: May 26, 2021
Tech Back, Market Rangebound
Greetings from 38,000 feet where my wife and I are returning from a long weekend in CA for a wedding and some work. While the weather was cooler than normal, we still had golden sunshine every day and the sun got the best of me even though I wore sunblock 50. It was good to get away, but I always look forward to going home to my kids, my pets and my bed. The markets look to be picking up […]
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Date: May 24, 2021
