16 Jul 2018

What’s Your China Exposure Amid the Trade Skirmish?

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

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9 Jul 2018

Bond Yields: Still Crazy After All These Years

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

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21 May 2018

Why Aren’t Stocks Higher?

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

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7 May 2018

Unemployment at 20-Year Lows; Time to Buy?

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

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9 Apr 2018

Tariffs, Profits and Global Growth

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

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26 Mar 2018

A Look at Tariffs and Trade Wars

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

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7 Mar 2018

The Year So Far

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

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13 Feb 2018

Stock Market Correction: The Early Autopsy

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

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6 Feb 2018

Market Summary: Extended Analysis

The S&P 500 lost more than four percent, the largest single day loss for the index since August, 2011.  The losses started out modestly through lunchtime, but accelerated sharply in the early afternoon. At one point, as seen in the Bloomberg screenshot below, the S&P 500 spiked higher, but then lost back everything that was earned in the final hour or so of trading. Although we don’t know exactly what… Read More

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29 Jan 2018

The Market’s Next Phase

Almost a year ago to the day, I wrote an article that discussed a well-known quote from a famous investor, Sir John Templeton.  He said that ‘Bull markets are born on pessimism, grown on skepticism, mature on optimism and die in euphoria.’ Clearly, the bull market that we’ve enjoyed for the last nine years was born in the pessimism of the 2008 global financial crisis.  The rally grew on optimism and… Read More

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