When I graduated from college and started working for Mark Twain Bank’s brokerage unit, there was an older gentleman who occupied one of the offices in the branch. I’m not sure he was actually employed by the bank at that point, but I was told that he had been an important executive at one time. He came in around nine, read the newspaper (we all did in those days), made… Read More
Market risks often come from the most unexpected places. Last week, a possible economic meltdown in Turkey rattled global markets. I wouldn’t have guessed that as recently as a week ago, and while I still think that Turkey won’t affect US markets too much more than they did Friday, I also wouldn’t have thought that problems in Greece would have created an existential crisis for the euro. I am not… Read More
One of the interesting things about the current trade skirmish (I’m not willing to call it a war yet), is that we are fighting on multiple fronts. Even though we have tariffs on aluminum and steel from Canada, Mexico, and the European Union, we all know that the primary combatant in this altercation is China. Even more interesting, perhaps, is that we have more exposure to China than ever before,… Read More
To my surprise, it’s been more than three years since I wrote about negative yields on bonds throughout the world. In my article, which can be found here, I wrote that bond yields could go a lot lower than I ever thought since I thought that they were ‘zero-bound.’ A year later, I returned to the topic when the yield on 50-year Swiss bonds had a negative yield. The article… Read More
At this point, 93 percent of S&P 500 stocks have announced their first quarter results, which means that earnings season is almost over. The expectations for earnings were relatively high at the beginning of the season, as Wall Street analysts expected that earning would grow by 11.3 percent. In fact, it was a blow out earnings season, with FactSet reporting that the blended average earnings grown at 24.5 percent –… Read More
Market participants and the news media alike are focused on round numbers, whether it’s the hopefully forthcoming Dow 25,000 or the 10-year Treasury crossing three percent last week. Amidst all of the news last week, one round number caught my eye: the unemployment rate crossing below four percent for the first time in nearly 20 years. The chart above shows the unemployment rate, or, more officially U3, for the past… Read More
Concerns about a trade war flared back up again last week. The US released a list of proposed tariffs on some $50 billion worth of Chinese imports. The 25 percent levies reach broadly, including medicine, aviation, semiconductors and consumer goods like dishwashers, snow plows and motorcycles. Beijing was quick to respond with reciprocal tariffs, announcing $50 billion on 106 products including soybeans, automobiles, chemicals and aircraft. Some analysts pointed out… Read More
This past Thursday, President Trump announced tariffs on Chinese imports citing security concerns and a significant trade deficit and estimated approximately $50-$60 billion in new tariffs. This was a follow up to his previous announcement of a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. Following both announcements, stocks proceeded to sell-off on fears of a trade-war. Since the simple act of increasing tariffs… Read More
We are two months into 2018 and so far it has been just about everything that 2017 wasn’t. Higher interest rates, higher inflation expectations, more stock market volatility, new tax laws, the list goes on and on. I usually have to wait for an entire year to go by before having enough to do a full recap – this year I get to do it in the first days of… Read More
While I think it’s far too early to say that the correction is over, the sharp rallies over the past two days are welcome signals that suggest the forced selling that characterized last week’s sharp daily losses may be over. My view of the recent market selloff has two components. First, as I outlined on last Monday, February 5th (click here for the article), I believe that the initial cause… Read More
