20 Apr 2020

Unemployment Today

One of the most jarring aspects of the coronavirus epidemic is the speed and magnitude of job losses.  We now have four weeks’ worth of data, and a shocking 22 million people have filed for unemployment benefits. For reference, the previous record for initial jobless claims over a four- week period was 2,697,00 during the 1982 recession.  During the 2008 financial crisis, the record was 2,637,000, just shy of the… Read More

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14 Apr 2020

Corporate Bonds in Today’s Market

One of the areas of the market that we’re paying close attention to right now is corporate bonds.  To raise money, companies borrow money in the form of bonds or issue stock by selling ownership in the form of equity. Corporate bonds are safer than stocks in the aggregate because if a company fails, the bond holders get their money back before the equity holders.  While corporate bonds may be… Read More

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8 Apr 2019

The Most Powerful Man in the World?

Last week, Ryan Craft wrote at terrific article, titled ‘The Most Powerful Man in the World,’ which you can read here about the power of Jerome Powell, the current Chair of the Federal Reserve.  It even included a superimposed image of Powell’s face on Superman’s body. I agree with everything that Ryan said, but I couldn’t help but wonder what the leader of the free world might say if he saw that… Read More

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1 Apr 2019

The Most Powerful Man in the World

For the stock market, the first quarter of 2019 turned out to be the mirror image of the last quarter of 2018. Since hitting a low on Christmas Eve, there has been no looking back for the S&P 500 as it rebounded over 13% thus far in 2019, nearly erasing the bear market losses from the end of 2018. Clearly, this renewed optimism in the markets is a result of booming economic… Read More

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11 Mar 2019

Calling Dr. Draghi, Dr. Mario Draghi

Investors have been hyper-focused on every word that comes out of every Federal Reserve official since October, but when the European Central Bank (ECB) made a major policy reversal last week, the markets yawned. Ten years ago, Warren Buffett described the 2008 financial crisis as akin to a heart attack.  The Fed, acting as a physician, prescribed zero interest rates and when that wasn’t enough, they tried an experimental strategy known as quantitative… Read More

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7 Jan 2019

Mr. Market Evaluates Macro Data

The market rebounded firmly from yesterday’s slide, with several macro developments in focus. The market was positive on comments from Fed Chair Powell that the Fed will be ‘patient’ as the economy evolves, and that it is listening to the market’s concerns (Powell put anyone?). Participating in a joint interview with former Fed chairs Yellen and Bernanke at the American Economic Association conference in New York, Fed Chair Powell said… Read More

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10 Dec 2018

Yield Curve Inversion: What It Means for Investors

Last week, the phrase ‘inverted yield curve’ exploded from the confines of a trading room to the everyday world. It hit me when I went to a holiday cocktail party after work one night and someone said, ‘oh, I heard that the stock market is down because something else is upside down.  I guess the whole world is upside down!’ Before we get into what happened last week, let’s take… Read More

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3 Dec 2018

As The World Turns, Sometimes Quickly

Last week, I said that the stock market had three big questions for the Federal Reserve and its chair Jay Powell.  You can read the full article here, but the questions were as follows: What is the course of interest rates? What will happen with the Fed’s balance sheet? Will the Fed support the stock market, as it has in the recent past? This past week saw a major market… Read More

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26 Nov 2018

The Market to the Fed: We’ve Got Three Big Questions

Stocks have been rocky since the start of the fourth quarter, and while investors are worried about a few things from tech stocks to crude oil to junk bonds, but I think the primary concerns are interest rates and the Federal Reserve. There are three huge questions on the table.  First, how high will the Fed raise short term interest rates?  Second, what is the Fed going to do with… Read More

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30 Jul 2018

Trade Wars and Interest Rates

Every day brings another headline (or Presidential tweet) about escalating trade tensions between the US and the rest of the world. What impact could these tariffs have on the bond market? The most popular narrative is that prices may increase due to tariffs being passed through to US consumers. Higher inflation should lead to higher long-term rates and the potential of a more hawkish Fed. This “cost-push” view of inflation… Read More

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