Market Commentary
The problem today more than any time period in our history is not the accessibility of information... it is rather sifting through that information and knowing what is accurate, timely, and relevant for YOU!. In this weekly blog we break down the headlines surrounding the markets, economy and government policies that affect the financial industry and give history and context to them. Let us know topics you are interested in learning more about!
The Bull Case vs. The Bear Case—Part Two
In response to the numerous 2024 S&P 500 price targets being released by various Wall Street firms, I wanted to cover the logic, facts and expectations that underly both bullish and bearish 2024 expectations. Yesterday, I laid out the...
Read MoreThe Bull Case vs. The Bear Case
Numerous Wall Street firms are unveiling their 2024 S&P 500 targets and as I was reviewing many of them over the past several days, I thought it’d be helpful to lay out the bull case underlying positive forecasts, the bear case...
Read MoreThree Pillars of the Rally Update
Three Pillars of the Rally Updated For several months, we have pushed back against calls for a large, structural decline in stocks based on the idea that there are “Three Pillars” supporting the 2023 rally in stocks and...
Read MoreA “Good” CPI Report: Core CPI < 0.2%, 4.0% y/y. Market Reaction: A strong rally
A strong rally. A solid drop in Core CPI will help to calm concerns that inflation is bouncing back and that should trigger a solid drop in Treasury yields and a rally in stocks. Tech and growth should outperform on a decline in...
Read MoreThis market is due for some sanity and earnings surprises above and beyond any fear of the Fed
Larry Fink, who runs the biggest money management firm in the world, just said yesterday, "I'm more optimistic than ever," He says investors should be 100% in equities right now if they can handle it. Here's where he's channeling that...
Read MoreShow All
This is a market searching for “what’s next”
Now, I don’t have a crystal ball, and neither do you. But the point here is clear: If economic data is starting to roll over, then 1) Treasury yields will no longer be an influence on markets...
Read MoreBottom Line: What Can Stop This Selloff?
Stocks have fallen to multi-month lows not because of a deterioration in fundamentals, but insteadbecause an overly optimistic outlook has been rattled by geopolitical surprises, heightened U.S. political dysfunction and mega-cap tech...
Read MoreThe Israel/Hamas Conflict Explained (How It Matters to Markets)
The Hamas attack on Israel two Saturdays ago and the future Israeli response have dominated the mainstream and financial news. And with the situation set to potentially escalate in the coming days, I wanted to provide a dedicated...
Read MoreSeptember is historically the worst month for the stock market, and this year proved no different
The Dow was down 3.5% in September, and the Nasdaq was down 5.8%. Those were the worst monthly performance since December. There were plenty of reasons for stocks to fall. Inflation remained a top concern for investors and...
Read MoreSeeing the Forest for the Trees
Throughout 2023, investors have tended to take a near-term disappointment or surprise from the economic data and extrapolate it to have some medium or longer-term implications, and that happened again with this recent pullback in...
Read MoreOver time, I’ve learned to be on guard when hearing economic forecasts
I have a friend, Steve Boren, who has been a broker as long as I have. We have shared our take on the markets and economics and our jobs. He is a wise man and sometimes explains things better than I can. I am going to give you some of...
Read MoreBottom Line—Has the Outlook Really Turned More Negative?
Before I start my newsletter, I want to clarify our stance on the markets and economy. We have been conservative in our investing since the beginning of the year because of Fed tightening, earnings slow down and the possibility of a...
Read MoreWhy Did Stocks Drop on Friday?
The S&P 500 fell moderately and erased the entire week’s gains on Friday, and that begs the question: Did something bad happen? The short answer is “no,” it didn’t. Instead, Friday’s performance reveals...
Read MoreIs the Bullish Argument for Stocks Becoming Unsustainable?
The “Three Pillars” of the rally (no/soft landing, disinflation, Fed almost done) remain in place, but asI look forward to the end of this year and early 2024, I am starting to become concerned that the bullish argument is...
Read MoreFirst Trust Chief Economist has written a commentary that is worthy of our attention
First Trust Chief Economist has written a commentary that is worthy of our attention. He explains why the markets are overvalued and how you should play the next several months on the defensive. I have not edited this article so that...
Read MoreTrading Color
Trading Color Stocks enjoyed a broad if unspectacular rally to start the week past, although it came on small volume and can be largely chalked up to positioning ahead of the start of key economic data for the rest of the week. On an...
Read MoreAnother reason for our defensive posture in stocks
Below is an article by Business Insider that points to the risks in the markets and another reason for our defensive posture in stocks: The veteran investor highlighted key economic threats to global equities including high...
Read MoreWhat’s Causing the Increased Volatility in Stocks last week?
The S&P 500 dropped moderately last week for the first time in months, and the main “reason” for the decline was the spike in longer -dated Treasury yields, as the 10 year approached one-year highs before falling off on...
Read MoreWhat’s Causing the Increased Volatility in Stocks last week??
The S&P 500 dropped moderately last week for the first time in months, and the main “reason” for the decline was the spike in longer -dated Treasury yields, as the 10 year approached one-year highs before falling off on...
Read MoreThe rally since June has been quite logical
Unlike the January-through-May advance in the S&P 500, the rally since June hasn’t been driven primarily by too-bearish sentiment or the impact of seven stocks on the S&P 500 (while the other 493 did nothing). Instead, the rally...
Read MoreCould A Recession Just Be Delayed (Not Avoided)?
Put in market terms, stocks have rallied aggressively on the idea that there will not be an economic hard landing, but what if that’s premature, and the hard landing risk is still very real over the coming quarters? If...
Read MoreIf the S&P 500 is going to materially extend the rally, then...
Stocks powered higher last week with the major U.S. equity indices rising to fresh YTD highs on Goldilocks economic data that showed falling inflation and stable growth. The S&P 500 rallied 2.42% on the week and is now up 17.34% YTD...
Read MoreBelow are two expert opinions that fall in line with what I shared with you this past Tuesday
Below are two expert opinions that fall in line with what I shared with you this past Tuesday. It is a warning to not be tempted to chase returns. The first article is from renowned economist, Brian Wesbury, chief economist of First...
Read MoreImportant explanation of our current portfolio positioning
Again this letter is long but necessary in order to explain our current portfolio positioning. Please read all of this letter as it explains why we are managing your portfolio defensively.The equity market declined over the course of...
Read MoreThe Red, White and Blue Swan
In 1852, Karl Marx said "Men make their own history, but they do not make it as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered and transmitted from the past...
Read MoreAn important read to get an understanding or our position with the markets and economy
I admit this post is long but important to read from beginning to end to get an understanding or our position with the markets and economy. Better-than-expected Q1 GDP and weekly jobless claims fueled hopes of a “No...
Read MoreIn the long run, investing based on the facts presented will ultimately be rewarded
The Wealth Alliance boss, Robert Conzo, spoke on Tuesday about the overperformance of the technology stocks so far this year. He said that investors shouldn't keep expecting dramatic returns from Big Tech going forward. He futher said,...
Read MoreThe Market Is Beginning to Believe the Fed
News flow was centered on central bank decisions and the future outlook for policy rates in the months ahead with consideration of the latest economic developments. In short, hawkish central bank commentary and actions over the past...
Read MoreNow, to be clear, I am trying not to sound like a permabear, because I’m not...
If you followed the Fed last week, you know that they paused another rate increase. They indicated that they had two more quarter point moves before the end of the year. That is consistent with my projection that they need to get to 5...
Read MoreThe Federal Reserve held interest rates steady at the end of its two-day policy meeting this week
The Federal Reserve held interest rates steady at the end of its two-day policy meeting this week. The central bank has raised its benchmark borrowing rate 10 times since March 2022, the fastest pace of tightening since the early 1980s...
Read MoreTo say this week is busy would be an understatement
Stocks were resilient again last week and the S&P 500 broke above 4,300 for the first time since August 2022, not because macroeconomic news was good, but in- stead because news wasn’t bad enough to make inves- tors doubt that a...
Read MoreMarkets took last week’s economic data as Goldilocks
Markets took last week’s economic data as Goldilocks in that it showed a sudden drop in some inflation metrics and (mostly) stable growth, and markets keyed off that and some dovish Fed speak to spark a rally that sent the S&P...
Read MoreThis summer we likely will have resolution on three key issues
This summer we likely will have resolution on three key issues, ranked below in order of importance, that will “unstuck” markets higher or lower: 1. Hard/Soft landing. 2. Inflation. 3. Fed policy. If there’s a hard...
Read MoreAn interesting take on change from a nationally known economist
An interesting take on change from a nationally known economistReprint of the article "Agents of Change?"If you’ve been to a high school or college commencement lately, then you know the drill: at some point at least one speaker...
Read MoreStay patient as this all is about to change...
For all of 2023, due to a long and substantial list of risks facing the markets, investors (especially institutional investors) have expected stocks to decline (this is backed by multiple sentiments and investment surveys from...
Read MorePut differently, there’s no shortage of things that can go wrong with the economy and markets
Stocks proved resilient yet again last week, as the S&P 500 saw only a modest decline despite more bank stress (PACW), another rate hike from the Bank of England, a pop in jobless claims and a drop in consumer sentiment. The reason...
Read MoreWhat the Fed does next is important to what the markets will do over the next three months
With the jobs numbers strong and the Fed increasing interest rates .25% on Fed Funds rate, we enter a time with lots of questions. What the Fed does next is important to what the markets will do over the next three months. My...
Read MoreThis is a very important week for markets
This is a very important week for markets because by Friday’s open, we’ll know:1) If the Fedhikes 25 bps and is pausing, 2) If growth is rebounding or rolling over, and 3) If the labor market is moving closer towards...
Read MoreWill there be a recession?
This article reinforces my belief that the recovery will be fast, sustainable and large. I expect that recovery to begin in the second half of this year. Please read this as it will give you confidence to stay the course and benefit...
Read MoreWe always respect the longer standing-trend as being stronger
Stocks pulled back from multi-month highs last week as a very short-term downtrend in the S&P 500 formed in the wake of Monday’s midday reversal. A longer-term uptrend dating back to the April 10th lows was tested on Friday but...
Read MoreWhat we do know now is that the economy is slowing...
Markets started last week with hard landing and stagflation concerns but thanks mostly to the drop in CPI and PPI, those concerns eased, and stocks logged a solid rally on the week. And to be sure, the restart of broad disinflation is...
Read MoreWill other currencies like the Yen replace our currency on the international market?
I have often been asked, “Will other currencies like the Yen replace our currency on the international market?”. I have said to those asking, that our currency is the only safe currency and as a result we will continue to...
Read MoreThe S&P 500 was mostly resilient again last week...
, which implied the chances of a “hard landing” are higher than previously thought (this was before the weekend news that bank lending dropped the most in two years, something that will undoubtedly weigh on the economy...
Read MoreBull vs Bear
Current major issues facing the market that will determine the next move are: 1) Banking crisis (is it or isn’t it?) 2) Fed policy. Will they raise rates or cut rates? 3) Inflation. If it’s going to resume or decline and...
Read MoreInflation Is the Biggest Market Threat With Fed being the key catalyst
Stocks have now posted back-to-back weekly gains mostly thanks to an aggressively dovish shift in Fed policy expectations (again) following last week’s Fed decision that signaled an imminent end to the rate hiking cycle. I still believe the
Read MoreThe market starts this week facing as much uncertainty as at any time since the pandemic...
"This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or...
Read MoreThe fallout from the Silicon Valley Bank failure has dominated market news over the past weekend
1) What’s happened with SVB and other banks, 2) Why it’s happening, 3) If Fed actions over the weekend solves the budding crisis, 4) Impact on monetary policy and inflation and 5) If this is a bearish game changer...
Read MoreStocks have given back more than half of the 2023 gains over the past three weeks
Stocks have given back more than half of the 2023 gains over the past three weeks, and the reason why is clear...
Read MoreA poignant attempt to demonstrate why it is not wise to get out of the market at its lows ...
J.P. MORGAN sent me this chart. It is a poignant attempt to demonstrate why it is not wise to get out of the market at its lows in an attempt to time the upturn and reduce the downside. The best days in the market occur when you least expec
Read MoreStocks dropped to a one-month low last week and the reasons for the weakness couldn’t be clearer
Stocks dropped to a one-month low last week and the reasons for the weakness couldn’t be clearer:Disinflation has slowed materially and as a result the market is increasing Fed rate hike expectations, which is causing Treasury...
Read MoreInternational Investing: Pro or Con for this year?
You all are probably aware that I have not been a proponent of international stocks for some time. The real-world results of international stock over the last decade have been atrocious when compared to U.S .stocks. In fact,...
Read MoreWhy Warren Buffett became one of the premiere oracles...a summary
Allow me to summarize an article that describes why Warren Buffet became one of the premiere oracles of the markets. His wisdom is work noting. Last year, economic headwinds hit the stock market like a wrecking ball, and the...
Read MoreAnyone who thinks they know exactly how things will turn out is fooling themselves
At the beginning of the season, not many predicted that the Philadelphia Eagles would be in the Super Bowl this year. But, they had a fantastic season and are favored over the Kansas City Chiefs. Predicting this economy is equally hard...
Read MoreUnderstanding The January Effect and Barometer
There are two indicators that are worth noting in looking at the markets for 2023: The January Effect and The January Barometer. Both are flashing green lights for stocks. Allow me to explain.The January Effect is a perceived seasonal...
Read MoreBottom line the Fed’s policies are working and the economy is slowing
Retail sales, a measure of purchases at stores, restaurants and online, declined a seasonally adjusted 1.1% in December from the prior month, the Commerce Department said Wednesday. That was the biggest monthly decline in a year...
Read More“It better turn around soon or I’m out.”
That’s what a friend, who is a successful small business owner in the local area, said to me over the Christmas break when we were discussing the markets, as he vented about his portfolio and worried that next year would...
Read MoreStocks declined modestly last week...
Stocks declined modestly last week thanks to another surprisingly hawkish decision from a global central bank, stubbornly high employment data, and recession warnings, although an earnings-driven midweek rally helped to keep the losses...
Read MoreWhat a difference a year makes!
What a difference a year makes! One year ago the Federal Reserve was forecasting that real GDP would grow a strong 4.0% in 2022, that PCE prices would be up a relatively moderate 2.6%, and we should expect a grand total of three...
Read MoreSiegel's views for what will happen to the stock market and economy next year
One of the true most respected pundits in the financial markets is Wharton professor, Jeremy Siegel. I have quoted him in the past. He was just interview about the markets and I thought it worthy of your review. Key points:Wharton...
Read MoreMy position? The US is headed for a recession, but we’re not quite there yet
My position on the economy has been that the US is headed for a recession, but we’re not quite there yet. Nothing in all the recent data reports changes my mind. If we enter a recession, I believe it will happen in the first half...
Read MoreMy recommendation: please feel free to ignore this news...
It’s that special time of the year, and we will all hear and read a great deal about Black Friday, Thanksgiving Weekend, and Cyber Monday during the next few days. Many pundits are going to make sweeping conclusions about the...
Read MoreThe third-quarter corporate earnings season has wrapped up
Earnings have been strong: So far, S&P 500 earnings growth has been better than expected. As of Tuesday morning, 69% of S&P 500 companies had beaten analysts estimates for the third quarter. American consumers may be feeling lousy, but the
Read MoreThe Democratic Party substantially beat expectations on Tuesday
The Democratic Party substantially beat expectations on Tuesday, already having clinched control of the US Senate for the next two years and, for now, hanging on to a (very slim) possibility of keeping control of the House of...
Read MoreElection day is today!
Election day is today and will bring results for key Senate, House, and Governors races from all around the country, plus local legislative races and more. For the federal races, our projection is that the Republicans are essentially a slam
Read MoreBank of America is touting small-cap stocks for the bull market that will begin next year
. Let’s see if they are on track. I am ready to change my mix of stocks now that earnings reports are pretty much completed and now that the election is pretty much over. “Instead of the large-cap behemoths that...
Read MoreMy contention is that the severity of the market downturn this year was caused by three events
My contention is that the severity of the market downturn this year was caused by three events: Russian Invasion of Ukraine, China’s no COVID policy, and UK fiscal drama. These surprises made the declines in the S&P 500 worse...
Read MoreHow the Stock Market Downturn is an Opportunity for Substantial Gains
How the Stock Market Downturn is an Opportunity for Substantial Gains
Read MoreAre we in a recession or will we be by the end of 2022?
Most investors I talk to think the US is already in a recession or that a recession will start by the end of 2022. I think they’re wrong on both counts.Yes, we are fully aware that the reports on real GDP growth for the...
Read MoreI found this interview compelling...
Jeremy Siegel (R), professor of finance at the Wharton School, University of Pennsylvania, participates in a panel discussion during the Skybridge Alternatives (SALT) Conference in Las Vegas, Nevada May, 9, 2012. REUTERS/Steve...
Read MoreIs the Market Near a Bottom?
Is the Market Near a Bottom There's reason to believe the stock market is close to its low point, according to RBC. Top US stock strategist Lori Calvasina expects a recovery in 2023 after some further choppiness. She says US electoral
Read MoreThe bottom line is that the Fed isn’t going to stop or even slow rate hikes very soon
Recent economic reports further undermine the politically-motivated argument from earlier this year that the US was already in a recession. They also undercut the Fed’s hopes that inflation will soon subside.On the job front,...
Read MoreThere has been much written about an impending recession facing the United States
There has been much written about an impending recession facing the United States. Though the definition of a recession seems to be a hot-button topic of late, the reality is no one knows whether we’re in for an economic downturn or how sev
Read MorePerhaps the two most important charts for investors to keep an eye on
Perhaps the two most important charts for investors to keep an eye on to determine when the market will recover next year are the two-year Treasury note yield and the U.S. Dollar Index Why? Because they have been leading and...
Read MoreI am not a “recession denier,” we just don’t think one has started yet
I am not “recession deniers,” we just don’t think one has started yet. The distortions of economic activity from lockdowns, massive deficit spending, and money printing are immense. It’s hard to imagine the US can unwind these policies an
Read MoreIf You Think a Big Loss is Painful
Withstanding the harshness and fears of a bear market is to understand history. If you think a big loss is painful, try missing out on a big gain. Markets have historically moved up more often than down and particularly immediately...
Read MoreFor many of you the recent downturn to June 30th levels is a bit disconcerting
For many of you the recent downturn to June 30th levels is a bit disconcerting. I understand the feeling. This is a troubling time and whether we like what the Fed is doing or agree with their past mistakes, does not change the current...
Read MoreWe know many people think we are beating a dead horse, but this horse is far from dead
"This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or...
Read MoreI think the Fed is slowing the economy enough to help rein in inflation
I think the Fed is slowing the economy enough to help rein in inflation without provoking a major slowdown, and I am projecting annual real GDP growth rates to remain in positive territory. Although real GDP dropped in the first...
Read MoreThe Fed is almost certainly going to raise rates by three-quarters of a percentage point
If you’re still wondering how much the Federal Reserve will raise short-term interest rates next week, you should wonder no more: the Fed is almost certainly going to raise rates by three-quarters of a percentage point (75 basis...
Read MoreThe housing sector surged during COVID in large part due to loose money
The housing sector surged during COVID in large part due to loose money. The Federal Reserve kept short-term rates artificially low and the M2 measure of the money supply soared. Now, with rising short-term rates and slower...
Read MoreCan we support the theory that this is not a recession?
I got my masters for Northwestern, and one professor (Robert Gordon) whom I agree with per an article in the Wall Street Journal says, “The economy is stagnating, but it’s not declining." Robert Gordon is a Northwestern University professor
Read MoreThe market is attempting to digest just how far from economic reality politicians have become
The Dow Jones Industrial Average fell more than 1,000 points on Friday, caused apparently by Fed Chairman Jerome Powell’s attempt to use a brief speech to channel the ghost of Paul Volcker. Obviously, this was part of the...
Read MoreWill the markets continue to rise…temporarily until the shoe drops...
One thing we must remember when looking at economic data, is that everything is distorted. The US (in fact, much of the world) panicked in 2020. COVID caused governments around the world to implement unprecedented policies....
Read MoreWhy the inflation scare will fade
Why the inflation scare will fadeLoose monetary policy sent inflation soaring. A looming crunch will bring it down equally fastThe front cover of The Economist on April 23rd showed a picture of Benjamin Franklin with his hand covering...
Read MoreYou can find whatever you are looking for whether positive or negative
JPMorgan Chase chief executive Jamie Dimon sees only a 10% chance of an economic slowdown that doesn’t lead to a recession, while warning there are 20% to 30% odds of “something worse.” I agree. But that means that...
Read MoreIt is officially silly season when it comes to interpreting economic reports
With less than three months left before the 2022 mid-term elections, it is officially silly season when it comes to interpreting economic reports. For many analysts it’s pretty much all politics all the time, with data seen...
Read MoreWhat’s important to keep in mind is that it could have been worse…much, much worse
The Senate passed a budget plan yesterday with only Democratic votes as well as a tie that was broken by Vice President Harris. It is now only a matter of time before President Biden signs the first significant tax hike since the...
Read MoreI have been explaining all the misperceptions in the news for several weeks
The Federal Reserve raised short-term interest rates by three-quarters of a percentage point (75 basis points) on Wednesday. The day before, the Fed released M2 money supply data for June and it fell slightly, the second decline in...
Read MoreTo many investors, this week’s GDP report is more important than usual
The reason is that real GDP declined in the first quarter and might have declined again in Q2. If so, this could mean two straight quarters of negative growth, which is the rule of thumb definition many use for a recession.Janet Yellen...
Read MoreRaising rates may slow the economy, but that alone won’t fix inflation
If you follow the financial press, the conventional wisdom has come to the simple conclusion that the way to fight inflation is raising interest rates. Unfortunately, this is just not true. Yes, raising rates may slow the economy,...
Read MoreSome investors think the US is already in a recession
Some investors think the US is already in a recession. As I wrote two weeks ago and as recent data have confirmed, I don’t think that’s the case. Industrial production is up at a rapid pace so far this year, while payrolls...
Read MoreFreedom Works...
As we celebrate 246 years of national independence, our country is now more than two years into an economic recovery from the two-month COVID Lockdown Depression. Although the economy has improved dramatically from the complete...
Read MoreThe Monetary Surge Continues to Ebb
I have been telling you to watch the M2 measure of money to understand whether inflation will cool down or heat up. The Fed only releases this data monthly.Today the Fed released May data on the M2 money supply and from my point of...
Read MoreStay the course and take a vacation from looking at your account for now
Real GDP declined at a 1.5% annual rate in the first quarter and, as of Friday, the Atlanta Fed's "GDP Now" model projects zero growth in Q2. We still think real GDP will turn out to be positive in the second quarter, but if you...
Read MoreMy hope is that demand is strong enough to keep earnings strong without pushing inflation higher
I became bullish about stocks once mark-to-market accounting was fixed in March 2009. I was also bullish after COVID-19 hit. I look back at the low-interest rates and healthy profit growth, and I don’t see any other course to...
Read MoreAll eyes will be on the results of the Federal Reserve meeting on Wednesday...
All eyes will be on the results of the Federal Reserve meeting on Wednesday when it announces how much it’s going to raise short-term rates, its new projections for the economy and short-term rates for the next few years, as well...
Read MoreHow similar are 1981 and today when it comes to inflation per the cpi?
In the past week, it was reported that the inflation per the cpi was as high as in 1981. I think this begs the question, how similar are the two time periods? So I am going back to 1981 to help you understand the perspective. Frankly,...
Read MoreJP Morgan CEO caused a stir lately when he talked about a “hurricane” hitting the economy
JP Morgan CEO Jamie Dimon caused a stir lately when he talked about a “hurricane” hitting the US economy. We think he may eventually be right but is way too early. The employment report for May confirmed that the US economy...
Read MoreIf you want the Florida sunshine, you'll have to put up with an occasional hurricane
The Federal Reserve began the process Wednesday of shrinking its $8.9 trillion asset portfolio. Here are answers to five of the most commonly asked questions.Q: When the Fed shrinks its asset portfolio, is it selling bonds?No. The Fed...
Read MoreInvestors may be giving central banks too much credit—or blame—for whatever happens to inflation
Investors may be giving central banks too much credit—or blame—for whatever happens to inflation. Stocks remain volatile even after late May’s relief rally, showing a tight inverse link with indicators of global...
Read MoreIf you want the Florida sunshine, you'll have to put up with an occasional hurricane
We’ve reached that stage in the market’s decline when you are starting to notice just how crummy your portfolios look. Put another way, all the high-flying tech giants that were propping up the Nasdaq Composite over the...
Read MoreBusiness winners and losers of the next couple of years are very likely to look a lot different...
I know a lot of you are worried about this market. These commentaries are meant to provide detailed analysis of the business and economic data that should help to ease your mind. I will not mince words if my projections change and if...
Read MoreAt long last observers from across the political spectrum agree on one thing...
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The bull market in stocks won't last forever. But for now, it isn't at an end
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The financial markets have been on thin ice for two main reasons: Russia and rate hikes
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Stocks are still the only way to get a reasonable income and growth...
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Amid significant market volatility, the fourth-quarter earnings season continued last week
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The markets have been sliding since the beginning of the month. Is it time to worry?
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Many analysts were disappointed by last Friday's job report for December...BUT
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Welcome to 2022! We can't imagine a more transformative year for America.
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From 30,000 feet, the COVID lockdown and re-opening played out pretty much like we thought
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The bottom line is that although I remain bullish, I am not as bullish as in recent years
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We think taking the economic pain earlier rather than later is the better option.
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It's not the new variant that is the problem, but the government's potential reaction to it.
On Friday, news of a COVID-19 variant identified in South Africa, and the announcement of new travel restrictions, sent markets reeling. This is obviously not the only variant, and it won't be the last, either. In my opinion, it's not...
Read MoreFor now, be thankful. I remain bullish on equities and the economy
The holiday season always comes with blessings and unfortunately for some sadness. I do not want to become insensitive to those who mourn a holiday season for the first time a loss of a loved one nor do I want to be insensitive to...
Read MoreInflation is back
Inflation is back and worse than it's been in decades. Consumer prices rose 0.9% in October and are up 6.2% in the last twelve months. Two more months of moderate increases, and the CPI will be 6.5% in 2021, the highest inflation since...
Read MoreElection results, 1 trillion dollar spending bill, and keeping an eye on inflation
Despite what listening to the mainstream media might make you think, the voting public doesn't change much from year to year or election to election. As a result, when leaders try to take policy too far in one direction, without enough...
Read MoreInvestors will be focused on the Federal Reserve this week
Investors will be focused on the Federal Reserve this week and we expect that it will finally announce an overdue tapering of quantitative easing. In addition, we expect Chairman Jerome Powell to make it clear in the press conference...
Read MoreThe market is reaching new highs, but the future still looks a little hazy
Any of you that took High School or College economics are familiar with Keynesian Economics. Keynesian economics is a macroeconomic theory of total spending in the economy and its effects on output, employment, and inflation. Keynesian...
Read MorePoliticians and many others like to focus on who owns what share of the pie
Politics today is in large part about p itting one group against another and convincing one side they've been treated unfairly. One of those groups is the younger generation of workers known as Millennials, who are supposedly up to...
Read MoreIs there a chance we will default on our debt payments?
I try not to get political in these commentaries, but when I hear something that deals with financial matters and is an outright lie, I cannot help myself. I keep hearing Nancy Pelosi and others say if we do not vote to raise the debt...
Read MoreIt is now clear that the cost of the lockdowns is immense
Last March, when the government was considering whether to lock down the economy, I argued that the longer we stayed locked down the more permanent the damage we would do to the underlying economy. It is now clear that the cost of the...
Read MoreBond yields have been on a mini-surge this week.
Bond yields have been on a mini-surge this week. The current yield on the 10-year Treasury suggests it can rise even more in the short-term, making cyclical stocks look like good bets. The 10-year yield rose to 1.46% on Friday from a...
Read MoreSome analysts breathed a big sigh of relief on inflation when it was reported last week...but
Some analysts and investors breathed a big sigh of relief on inflation when it was reported last week that the Consumer Price Index rose 0.3% in August versus a consensus expected 0.4%. But we think any sense of relief is premature....
Read MoreThe market is not overvalued, but it is not as undervalued as it once was.
If you've read my two most recent commentaries, you know I raised our forecast for the S&P 500, but lowered our forecast for real GDP growth. How can that be? The first thing to recognize is that when we say we're bullish on stocks...
Read MoreWithout borrowing from the future, the economy would be smaller today
In early 2020, when COVID hit, the unemployment rate in the United States was 3.5%, wages for low-income earners were rising faster than wages for high-income earners, living standards were rising...the economy was on a roll.Then,...
Read MoreLittle in our lives avoid governmental influences these days
Similar to the topics we wrote last week, it's nearly impossible to analyze the economy these days without focusing heavily on what the government is doing. Between the Federal Reserve, fiscal policy, and COVID-related restrictions,...
Read MoreThree major issues related to government policy are now looming large among investors' concerns
In an ideal world, analysts and investors wouldn't have to spend much time, perhaps none at all, trying to navigate changes in government policy. In that world, government (in terms of spending, taxes, or regulation) would be small and...
Read MoreInflation has arrived and it’s not just transient
Last week, the government reported real GDP in the US grew at a 6.5% annual rate in the second quarter and was up 6.4% at an annual rate in the first half of 2021. Real GDP is now 0.8% larger than it was at its peak just prior to COVID...
Read MoreI think the stock market is under-valued despite the downturn we saw today
Last week I shared why I think the stock market is under-valued despite the downturn we saw today. Today, I am going to share the news on the 2nd quarter. This information will reinforce my opinion that the economy is strong and there...
Read MoreBeing bearish on equities has not worked for a long time
I don’t think it is a secret that many believe the markets are overvalued and due for a correction or even a bear market. So, when the S&P 500 was down 1.6% last Thursday, many thought it had arrived. Then, the S&P 500 rebounded...
Read MoreA Tale of "Twin Deficits"
Many analysts have been thinking and writing about the "twin deficits" and whether the record-breaking size of those two deficits, combined, means the US dollar is about to plummet versus other currencies. Before we get into the weeds,...
Read MoreWhomever Biden appoints to run the Fed is going to have their hands full.
The old hockey adage goes, “Don’t skate to where the puck is, skate to where you think it’s going to be.” That same phrase could apply to investors once earnings season gets going in July. It’s not so much...
Read MoreIs The Labor Market Tight or Not?
Sometimes it is difficult to get any real information that can be trusted. One question many of you should be having is whether the labor market is tight or not? Well, that depends on your perspective. From a national perspective, it...
Read MoreThe Fed is not even “thinking about thinking about raising rates.”
To drive home his commitment to easy monetary policy and low-interest rates in mid-2020, Federal Reserve Chairman Jerome Powell declared the Fed was not even “thinking about thinking about raising rates.” The Fed meets...
Read MoreWe keep hearing comparisons between this recovery and those of the past as if it's apples to apples
We keep hearing people make comparisons between this recovery and those of the past as if it's apples-to-apples. For example, comparing job growth today to job growth after the 2008-2009 Panic. All in an effort to make the case that...
Read MoreIt's not a surprise. Inflation is running hot. But, is it transitory and temporary, or is it real...
It's not a surprise. Inflation is running hot. But, is it transitory and temporary, or is it real and here for the longer term? How hot will the Federal Reserve let it run, and for how long? When do transitory and cyclical become...
Read MoreFor now, there are plenty of reasons to remain bullish
The US economy is recovering rapidly from the COVID-19 disaster. The rollout of vaccines, the lifting of restrictions, loose monetary policy, and a massive increase in government spending are all playing their parts. The problem is...
Read MoreOne of the best economic debates that are happening right now isn't between Republicans and Democrat
One of the best economic debates that are happening right now isn't between Republicans and Democrats or liberals versus conservatives, it's between policymakers who want to go full steam ahead with as much fiscal and monetary...
Read MoreMulti-trillion-dollar pieces of legislation and corporate earnings update
President Biden and Congress agreed to a roughly $2 trillion stimulus back in March and are now contemplating two new additional multi-trillion-dollar pieces of legislation, on both infrastructure and social spending, as well as some...
Read MoreVery strong economic data... but like a "sugar high", it's not going to last
Mix extremely loose monetary policy, a federal government cutting checks like it's going out of style, and extensive roll-out of the COVID-19 vaccines, and what do you get? Answer: Some strong economic data. The problem is that this...
Read MoreYes, stocks are undervalued
The S&P 500 fell almost 50% between mid-February and mid-March 2020, during the initial stages of the pandemic. It bottomed at roughly 2,224 during the nationwide strategy of shutting down for “15 days to slow the spread.”...
Read MoreTo sell or not to sell...when it comes to real estate now is the time!
Last year the inventory for homes in Denver was down 27%. As a result, home sellers had a field day selling their homes or rentals. I know because I was one of them. Housing prices have soared in the past year. The national...
Read MoreWhat are the results of the Biden administration's new spending bill?
The Biden administration just announced their newest spending bill. What are the results of this bill, exactly? What happens if all this money gets into the system? Could it affect your life? How much is actually for physical...
Read MoreTaxes are going up...and not just for the rich
The federal budget deficit hit an all-time record high of $3.1 trillion last year. With the passage of the recent blowout “stimulus” bill, it’s set to be even higher in 2021. Now we watch and wait for a potential...
Read MoreYou’ve got to hand it to the Federal Reserve...
You’ve got to hand it to the Federal Reserve. With the cleverness of a seasoned head coach – think Jim Boeheim leading Syracuse in the NCAA basketball tournament – they figured out how to accomplish a great deal while...
Read MoreInflation is too much money chasing too few goods, but it doesn't always look exactly the same
Economists would define inflation as "too much money chasing too few goods and services" – but that doesn't mean every period of higher inflation is going to look exactly the same. What is unique about this inflation cycle and...
Read MoreThe targets for employment have been the locus of change
The Full Employment and Balanced Growth Act of 1978 gave the Fed a “dual mandate” – to promote maximum sustainable employment and stable prices. That would mean strong vibrant employment and low inflation. Over the...
Read MoreThe big risk for the next couple of years is an upward surge in inflation...
Those of us who are concerned about inflation increasing faster than the Federal Reserve anticipates are focusing on the rapid increase in the M2 measure of the money supply. This measure has soared since COVID-19 hit the US, up about...
Read MoreThings are looking up for the US economy now but the overstimulation has long-term risks
The press is trying to tell you that the economy is in trouble and that COVID will be a problem till Christmas. The facts do not support either theory. Things are looking up for the US economy. Later this week we’ll get an update...
Read MoreWe would never say that anything is certain, or that a correction won’t happen, but...
Ever since the stock market bottomed in 2009 during the financial crisis, people have been coming up with reasons why the bull market was about to end. We heard every reason – Brexit, the end of Quantitative Easing, too much debt...
Read MoreImmunity to COVID-19 is closer than you may think
I would like to share with you a report that was prepared by First Trust Advisors L. P., and reflects the current opinion of the authors. This report will ease your mind about the virus and how close we are to immunity: While the US...
Read MoreA perfect recipe for inflation!
I have some very interesting facts to share with you, particularly since Congress is so quick to spend almost 2 trillion dollars and does not know where they will get that money other than burrow from our future. I apologize for my...
Read MoreThe Game Stop Growth
For those of you that are intrigued by the Game Stock growth, I wanted to go into more detail. For the majority, my last commentary will suffice, but for those that want to understand the intrigue allow me to explain. Last week, the...
Read MoreNot limiting investor access to markets is one thing Ted Cruz and AOC can both agree on!
Yes, 2021 is starting as crazy as 2020. They don't agree on the Green New Deal or Socialism, but Ted Cruz and AOC both agree that limiting investor access to markets is a mistake. In case you missed it, last week, Robinhood, a new...
Read MoreFollowing Modern Monetary Theory has never worked before, but that's a long term problem
The budget deficit for the fiscal year 2020, which ended 9/30/2020, was $3.1 trillion, the highest ever on record in dollar terms, and the highest relative to GDP since World War II. This year the deficit will be even larger. Before...
Read More“stimulus” will lift the economy in the first quarter but don’t let that fool you, it's borrowed
The double-dip recession so many feared didn’t arrive in the fourth quarter of 2020, and it certainly doesn’t look like it will happen in early 2021, either. That is good news for those still looking for a job. It’s...
Read MoreIt's finally over... and tax policy is likely to change in some significant ways
The seemingly endless election of 2020 is finally over, with Democrats winning both Senate seats in Georgia. As a result, President Biden will have slender majorities in the House and Senate. These slender majorities limit many...
Read MoreWhat a ride! A 2020 market year in review...what will 2021 bring?
I thought it might be helpful to summarize what happened in the economy and markets in the year of COVID 2020. I remain bullish on the markets and bearing any surprises, I still believe we could see a 15% return on Stocks. We need to...
Read MoreThe Georgia senate race and how that will affect your investments
“God does not call the qualified, He qualifies the called.” Sounds like a good message in these stressful times. I just wanted to respond to the Georgia senate race and how that will affect your investments. Now that the...
Read MoreWhen it comes to attracting people, jobs, and businesses, some states are just better than others
When it comes to attracting people, jobs, and businesses, some states are just better than others. While the total US population increased 6.5% from 2010 to 2020, it increased 17.1% in Utah, 16.3% in Texas, 16.3% in Idaho, 16.1% in...
Read MoreThe US has been in pickles before, but we always “work the problem.”
Before and during the French Revolution Charles Dickens wrote a Tale of Two Cities. In it, he said, “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch...
Read MoreAll Eyes on Georgia and it looks like economic relief is on the way
Backroom deals in Washington, DC always die and come back to life, over and over, again. And, even though a “COVID shutdown rescue package” seems like a no brainer, it’s been caught up in politics for months....
Read MoreThe COVID-19 Recession is the weirdest we've ever had
The COVID-19 Recession is the weirdest we've ever had. There is no way anyone could have forecast it. It did not happen because the Fed was too tight. It did not happen because of a trade war. It was self-inflicted, caused by COVID...
Read MoreProfits and interest rates drive stocks...not politics, not fear, not greed…just math.
In December 2019, we made a year-end 2020 forecast of 3,650 for the S&P 500. With the index closing Friday at 3,638, that looks like a very good call. I’d be lying if I didn’t admit to the volatility that we had to go...
Read MoreWho's in charge of fiscal policy?
Remember the bit by Abbot and Costello, “Who’s on first?” Well, today it is “Who's in charge of fiscal policy?” That's the real issue behind the recent dispute between Treasury Secretary Steve Mnuchin and...
Read MoreGive Thanks! The US economy continues to heal...
Give Thanks! The US economy continues to heal. Payrolls keep growing, unemployment claims - though still elevated - are shrinking, key measures of the manufacturing and service sectors remain well into positive territory, and, as this...
Read MoreAmerican voters do not want a radical shift in economic policy... and that is good news for stocks
While the election is still not certified, and court battles will drag on, it appears that we can draw two firm conclusions from the 2020 election. First, the pollsters were horribly wrong again. Second, American voters do not want a...
Read More545 vs. 300,000,000 People...Charley Reese's final column for the Orlando Sentinel in 2001...
Following is Charley Reese's final column for the Orlando Sentinel in 2001... He was a journalist for 49 years, but passed away May 2013He was retiring and this was HIS LAST COLUMN. This is about as clear and easy to understand as it...
Read MoreSurprise... the election is not over! but a divided congress answers our tax questions
I waited to write this until after the election. Surprise... the election is not over! The good news is no matter who emerges as the president, it is a divided Congress. As a result, the tax increase will not happen. That is a key...
Read MoreThursday we expect the government to report a huge and virtually unprecedented, surge of a 33.4% ...
To reiterate, this Thursday morning we expect the government to report a huge and virtually unprecedented, surge of a 33.4% annualized growth rate in real GDP growth for the third quarter. There are still a few monthly reports due this...
Read MoreSome were doubting the ability of the economy to bounce back in a V-shaped recovery
You should be well aware that the third-quarter earnings and GDP are stellar. Some were doubting the ability of the economy to bounce back in a V-shaped recovery, but it is indeed happening. It's important to keep in mind that even...
Read MoreAmerica is strong and will continue to be strong no matter who gets elected
Please read this and pass it on. As the election approaches, I have tried to convince you that corporate America is strong and will continue to be strong no matter who gets elected. This commentary will help you understand why. COVID...
Read MoreShouldn’t the markets be down with all the bad news of last week?
Despite the miserable debate, the mediocre employment numbers, the final figure for the GDP for the second quarter, and the president getting COVID, the markets were up last week. What is going on? Shouldn’t the markets be down...
Read MoreFor a self-sustaining recovery to fully catch hold, it is reopening, not additional stimulus needed
With the presidential election just over a month away, prospects for another round of fiscal stimulus seem to be dwindling. The recent death of Justice Ginsburg and the rapidly approaching election have shifted the Senate's gaze and...
Read MoreQ1 and Q2 look to be the mother of all contractions and rebounds
The second quarter of 2020 was the mother of all economic contractions. Real GDP shrank at a 31.7% annual rate, the largest drop for any quarter since the Great Depression. However, based on the economic reports we've seen so far, it...
Read MoreHow Elections Move Markets in 5 Charts
Below is an article written by the Capital Group that summarizes 5 facts about how the markets can predict an election. I thought you might find this interesting How much do elections impact the stock market and portfolio returns?...
Read MoreIt will be a very strong quarter and what to watch for with the Fed and inflation this week
As we near the end of the third quarter, key economic reports will be released that will influence our forecast for third-quarter real Gross Domestic Product, (GDP). It will be a very strong quarter. The expectation is for a 25%...
Read MoreWorried about tax changes after the upcoming election? Here is a great non-partisan resource
Mr. Biden's Tax plan: from taxspeaker.com Former Vice President Biden’s election website is www.joebiden.com . I went through every posting on the site and have not found a formal income tax policy plan, guide or summary, nor...
Read MoreWhen the government forces businesses to close (even if it is for a pandemic), it’s a “taking”
I don’t know what you think of the shutdowns of the economy to “protect” us from the virus. There are opinions both ways and I tend to side with those that have proven that the shutdowns were not necessary, but the...
Read MoreWith government benefits ending is it time to get cautious?
I have been getting questions on the stock market and that it is being propped up by government benefits. With those benefits going down, do we now get cautious and get conservative? At the end of 2019 we made the same exact forecast...
Read MoreBiden's tax hike agenda and the markets...what to expect
Before I go into my commentary, I wanted to inform all of you with REITs in your portfolio, that I am currently researching all of them and talking to representatives of the companies. I should have a review to send out by early next...
Read MoreIt's going to take years but last week's key reports on the economy clearly show we're recovering
I have said this in past weeks, but I am saying again that it is going to take years to fully recover from the Covid-19 and economic shutdowns. Only when unemployment reaches 4% will we be fully recovered and I don’t expect that...
Read MoreThese days, pretty much everything is hyper-political, including GDP
These days, pretty much everything is hyper-political, including death rates from disease, wearing masks, opening schools, whether some demonstrations are "mostly peaceful" or "violent," and now GDP. Late last week, plenty of headlines...
Read MoreI don’t like bad news... but I promise I will help you understand why the future still looks bright!
I don’t like bad news, but after giving you this information, I promise I will help you understand why the future still looks bright! The markets like to look forward 3 -6 months rather than backward. Thursday’s initial...
Read MoreIt's time to study supply and demand
All right, it is time to study supply and demand and how it is behaving in our economy as a result of COVID. I think we can all agree that “there is no such thing as a free lunch.” It’s been attributed to many...
Read MoreWho are the real beneficiaries of student loans for higher education?
It's time to think about something other than COVID, statues, the election, and defunding the police. How about higher education? Specifically, student loans and grants. Just like the bipartisan efforts to making housing more...
Read More
Wall Street appears to know better
A resurgence of new Coronavirus cases around the country has created uncertainty for investors. Stock markets fell last week, not because of the virus, but because investors fear another round of economy-killing, government-mandated...
Read MoreEntrepreneurs have their work cut out for them
Turning off the global economic light-switch, and then turning it partially back on, has sent shockwaves through economic data that, while anticipated, have been jaw-dropping in both directions. For example, US retail sales plunged a...
Read MoreThe recovery has begun
The one key takeaway from last week's Fed meeting is that monetary policymakers are set to keep short-term interest rates near zero for as far as the eye can see. Not forever, but at least until 2023. Keep this in mind in the week...
Read MoreKey takeaways going forward with the markets
Key takeaways going forward with the markets: Because this economic decline is policy driven, a solid recovery is likely as lockdowns end. Easy monetary policy, aggressive fiscal policy and zero-bound interest rates should continue to...
Read MoreNot a good day for the stock market!
Not a good day for the stock market. The Dow Jones Industrial Average plunged more than 1,800 points today and was on pace for its worst day since the March sell-off as coronavirus cases increased in some states that are reopening up...
Read MoreThe recession is over
The recession that started in March is the sharpest downturn since the Great Depression. As it turns out, it was also the shortest. Friday's employment report should leave little doubt that the US economy has already hit bottom and is...
Read MoreRegular continuing unemployment claims see the first drop since the end of February
A full recovery from the COVID-19/Shutdown Crisis is going to take a long time. We don't anticipate reaching a new peak for real GDP until the end of 2021; It is now hard to believe that we will see 4% unemployment rate until 2024....
Read MoreCapitalism is not evil - an opinion piece
During this pandemic, we are seeing the seeds of socialism. Do you understand why capitalism, albeit not perfect, is the best economic system ever created and America is the model of how to use it? The reason I can confidently manage...
Read MoreAmericans are now desperate for sensible policymakers who have the courage to rely on facts
“The tragedy of the COVID-19 pandemic appears to be entering the containment phase. Tens of thousands of Americans have died, and Americans are now desperate for sensible policymakers who have the courage to ignore the panic and...
Read MoreThe coronavirus kills, everyone knows it, but is the world is confusing "scary" with "dangerous."?
The coronavirus kills, everyone knows it. But this isn't the first deadly virus the world has seen, so what happened? Why did we react the way we did? One answer is that this is the first social media pandemic. News and narratives...
Read MoreThere Are Signs of Economic Life
This year’s experiment with government-imposed lockdowns has been a fiasco. We should have been focused on sealing-off nursing homes and limiting mass indoor events, while the vast majority of businesses that were shut down could...
Read MoreA lesson in government debt
How about a lesson in government debt, particularly this year that the amount the government is accumulating is historical? The largest federal budget deficit since World War II came back in 2009, as slower growth and increased...
Read MoreHome builders most certainly have short-term challenges
Home builders most certainly have short-term challenges. People have been locked in their houses, unemployment has skyrocketed like never before and nobody knows exactly when life will get back to normal. In this environment, a lot of...
Read MoreEconomic Forecast Update
In December 2018 the S&P 500 was at 2,500. I forecast that the markets would be up 20% by the end of 2019. Then I wrote in May that I thought my forecast was low. I pushed my forecast that stocks would be up between 25% and 30%. The...
Read MoreFEAR and What Wall Street Knows
Like you, I am ready for this pandemic to end and for us to go back to our lives. While talking to my daughter, I began to understand the fear that permeates most both young and old. It is not just the press focusing on the negative,...
Read MoreHow Bad Is It? Light At The End of the Tunnel
Before I get into the economic data for the week, I want you to know that the Dow at its high was 29,568. It dropped to 18,263 with the news of the pandemic. That was a 38% drop. Today the market is at 24,000 or down 19%. That is a...
Read MoreAre stocks overvalued with corporations having a difficult time with earnings?
Some of you may be asking the question, are stocks overvalued with corporations having a difficult time with earnings? Despite the stock market's 34% plunge between February 19 and March 23, the S&P 500's cyclically adjusted...
Read MoreIs The Market Telling Us To Be More Optimistic?
We’ve seen some dramatic market action over the last two months in the stock. A nearly 11-year bull market (based on traditional models) turned into a bear market in less than four weeks, the fastest on record. From its high on...
Read MoreHold Onto Your Hats!
The Labor Department reported another 4.4 million Americans filed for unemployment claims last week, as massive job losses caused by the coronavirus pandemic continued to grow. The new report, which covers the week ending April 18,...
Read MoreSpeaking of Scary
Speaking of scary, four Sundays ago, a man in Colorado named Matt Mooney went to a park near his house to throw a ball with his wife and his 6-year-old daughter. The park was deserted, which meant the Mooney's were essentially standing...
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Beijing’s cover-up of the coronavirus outbreak is the scandal of the century
Beijing’s cover-up of the coronavirus outbreak is the scandal of the century. Its unconscionable malfeasance launched a global plague, hobbled the international response, and crashed the world’s economy. James Carafano has...
Read MoreWhat we need to do to save the democracy that we cherish
I was so impressed with this article by the president of Hillsdale College that I had to share it with all of you. It is insightful and frankly right on point about our government, the agencies within our government and what we need to...
Read MoreHave the experts been wrong about their predictions of the impact of COVID-19 on health and wealth
If you missed our live webinar on this topic please see the recording Here Have the experts been wrong about their predictions of the impact of COVID-19 on global health and wealth? From what I have read the answer is a clear yes....
Read MoreThe faster the economy opens again, the less the long-term damage
What I am about to talk about may offend some, yet it needs to be discussed if our country is to get back on its feet and people get back to work to pay bills and support their families. When the economy opens back up is one of the...
Read MoreMarch 2020 will likely be known as the month our economy fell into recession. The circumstances are
Our economy is facing unprecedented challenges. As I have said before, we have likely entered a recession in March of this year with this major economic decline. Policymakers have acted fast, delivering sizable fiscal and monetary...
Read MoreThe state of the economy and how to move forward
Do you remember Captain Sully whose plane, full with passengers, lost both engines due to a flock of birds hitting them at a low altitude? Under extremely stressful conditions, the pilot did the right thing, safely landing in the...
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The sharpest decline in economic activity since the Great Depression...don't panic...READ ON!
Due to fears about the Coronavirus – more specifically, the forceful government measures designed to halt its spread, the US is on the front edge of the sharpest decline in economic activity since the Great Depression. Please...
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The best time to buy is when your natural emotional response is to sell
I want to drive home is that the bounce when this is over is going to be fast and big! We all need to be prepared for that bounce and not panic or sell.
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Welcome to the coronavirus shutdown
Welcome to the coronavirus shutdown. We all know when you shut down airports, restaurants, bars that the economy is going to have a contraction. January and February were very strong economic months with over 270,000 new jobs each...
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Those who sell now are likely to regret it.
Back in July 2008, then-Treasury Secretary Hank Paulson said he wanted a "bazooka" to deal with financial threats to Fannie Mae and Freddie Mac. Paulson wanted Congress to give him an unlimited credit line for these enterprises. This...
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How fast can a market recover?
I thought in addition to all the talk about how to invest during this coronavirus and the various comparisons to 1987 etc. that it might be helpful to look back at the market and how fast it typically recovers and what we should expect...
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We are in a perfect storm! What to do in the midst of fear
This week I am going to be sending you a few commentaries in order to calm the fears and to put a perspective on all that is happening. If you are fearful, I am not surprised. With all that we hear about coronavirus, we all fear for...
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With the markets moving down past 20%, we are in correction territory... and bears repeating
With the markets moving down past 20%, we are in correction territory. I think some of the economic data that I voiced last week bears repeating. But before that review, I want to feel with each of you as you look at all the gains you...
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How much will the Coronavirus impact the US economy?
By the time you read this, you will have noticed the market down 7% just today. No one knows with any real certainty how much, or for how long, the Coronavirus will impact the US economy. What we do know is that it will have an impact....
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These growth rates suggest short-term interest rates should be higher, not lower!
By the time you read this, the Fed has already have cut rates by 1/2 %. That is the situation we find ourselves in given the recent correction in equities, which were at a record high only eight trading days ago but were down 12.8%...
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Fears Surrounding The Coronavirus
I felt this week that I should write a second commentary due to the fears surrounding the Coronavirus. This morning the markets are up sharply after two days of almost a 7% downturn in all the market. These drops wiped out all the...
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Enough To Give You Indigestion... But Not Enough To Panic
As I write this commentary the markets are down 5% for Monday and Tuesday. The amount of the downturn for the DOW is 1500. That is enough to give you indigestion, but not enough to panic. Understand that downturns that are caused by...
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Fear of A Rising Power in Asia... It’s deja vu
Thirty years ago, many in the US were in fear that a rising power in Asia was on the verge of eclipsing the US. Now it’s China, back then it was Japan. Back in the late 1980s Japan had become the second-largest economy in the...
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The job market and the economy look strong... and the electoral college explained
In January, US payrolls expanded by 225,000, not only beating the consensus forecast, but also forecasts from every single economics group. Since January 2019 (12 months ago), both payrolls and civilian employment – an...
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Fears about the coronavirus knocked down equities last week
Fears about the coronavirus knocked down equities last week, while a flight to safety brought the yield on the 10-year Treasury down to 1.51% at the Friday close versus 1.69% the week prior and 1.92% at the end of 2019. The consensus...
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New Legislation Offers Significant Retirement Income Planning Changes!
The Federal Reserve is set to make its first policy statement of the year on Wednesday, so this is as good a time as any to reiterate our view that the Fed is likely to keep short term interest rates steady through 2020 and, while...
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January is looking like a very positive month for stocks
Back in mid-November, the highly respected GDP forecasting model from the Atlanta Federal Reserve Bank (also known as “GDP Now”), estimated that real GDP would only grow at a 0.3% annual rate in the fourth quarter, which,...
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Most analysts and pundits expect a noticeable slowdown in 2020; not a recession
"This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness....
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We attribute the acceleration to a combination of better regulatory policy and lower tax rates
At the beginning of last year, the economic pundits were talking about a crash in the market and a deep recession. Despite their best efforts, the longest economic recovery on record continues, with January being the 128th consecutive...
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What A Year!
What a year! As of the close on Friday, the S&P 500 was up 29.2% in 2019. At the end of 2018, I forecasted a return of 20% to 25% this year. At the time, this appeared very aggressive. Then I added 5% to my numbers at mid-year, lifting...
Read MoreGreedy Innkeeper or Generous Capitalist?
I published last year as an expression of the Christian message on Christmas from First Trust Economic department: The Bible story of the virgin birth is at the center of much of the holiday cheer this time of year. The book of Luke...
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For 2020 I remain bullish... here is why
A year ago, I projected the S&P 500 would hit 3100 at the end of 2019. In spite of the downturn in equities in the fourth quarter of last year, we didn’t see a recession coming and our model for estimating fair value for the...
Read MoreMedia attention on consumer spending can distort the view of the way the economy really works
During the next couple of days, you’re going to see lots of stories about the strength of consumer spending. Early reports say Black Friday on-line sales hit a record high, up 14% from a year ago, following a 17% increase on...
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What An Incredible time To Be Alive!
What an incredible time to be alive! We stand just five weeks from the end of a decade that saw prosperity spread far and wide. Some don’t see it that way, as pouting pundits and rancorous politics skew our visions. But, if we...
Read MoreStocks are still cheap, the economy is not slipping into recession
"This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness....
Read MoreWhy Less Government and Fewer Taxes? An Economic Parable
How about a lesson that demonstrates why we need less government and fewer taxes rather than more as some claim? One of my favorite economic parables is the Fish Story, from Paul Zane Pilzer’s 1990 book, “Unlimited Wealth...
Read MoreThe federal funds rate is the lowest it’s been since mid-2018
At the close of business on Friday, the futures market in federal funds was putting the odds of a 25 basis point rate cut on Wednesday at 90%, which would place the federal funds rate in a range between 1.50 and 1.75%, the lowest...
Read MoreWe’re sure you’ll hear plenty of angst about slow growth.
The government doesn’t release its initial estimate on third quarter real GDP for another nine days, but at this point we have enough facts and figures to make an educated guess that it’ll come in at right around a 1.8%...
Read MoreTrade disputes have been an ongoing soap opera since President Trump took office
Trade disputes have been an ongoing soap opera since President Trump took office. From steel tariffs to trade skirmishes with China, Japan, Canada, Mexico, South Korea, and the European Union, among others, it’s been hard to keep...
Read MoreWe are not in an economic downturn
In spite of all the fear-mongering about a recession, Friday’s employment report clearly showed we are not in an economic downturn. The best news in the report was that the unemployment rate fell to 3.5%, the lowest most...
Read MoreNever underestimate the ability of politicians to mess up a good thing.
Never underestimate the ability of politicians to mess up a good thing. They’re certainly trying in Washington, D.C. Unfortunately, many people are concerned about the wrong thing. Nice even numbers fascinate people, and through...
Read MoreWe are all Keynesians now...
“We are all Keynesians now,” is what is now being espoused as the new economics. While we won’t explain the entire theory of economics proposed by John Maynard Keynes, it was a “demand-side” belief system....
Read MoreThree dominant types of economic thought seem to analyze every data point and come to conclusions
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Read MoreLabor Day and the American worker... it's never been better
Labor Day is probably the best time to take stock of the American worker and, for them, it’s rarely been better. The unemployment rate is near the lowest level since the 1960s, job growth remains robust, and wage growth is in a...
Read MoreThe threat of a recession is on the minds of many investors
The threat of a recession is on the minds of many investors, predominantly due to irresponsible news articles that are inciting panic for investors who fear that they could lose money in stock or mutual fund investments. Shame on the...
Read MoreThe press is raving about the “inverted yield” curve
More than five years ago the European Central Bank adopted negative interest rates as a policy tool to address economic weakness in the Eurozone. Starting at -0.1%, eventually, the target short-term rate fell to -0.4%. In Europe, as...
Read MoreData should have moved the Fed away from a rate cut
I am not sure I understand why the Fed is acting the way they are. I am confused with their rhetoric. For the past several years, under the leadership of both Jerome Powell and, before that, Janet Yellen, the Fed claimed it was "data...
Read MoreThe latest debate is over real (inflation-adjusted) GDP
This Friday, the government will release its initial estimate of real GDP growth in the second quarter, and the headline is likely to look soft. At present, we're projecting an initial report of growth at a 1.8% annual rate. If our...
Read MoreA Correction May Be In Order
This Friday, the government will release its initial estimate of real GDP growth in the second quarter, and the headline is likely to look soft. At present, we're projecting an initial report of growth at a 1.8% annual rate. If our...
Read MoreThe Fed Has Become Irrelevant
Until recently, Fed Chair, Jerome Powell sounded a consistent theme: the Fed is data-dependent and will stay that way, unswayed by noise or pressure from politicians. When the FOMC released its rate decision last month, it got as...
Read MoreThe US economy doesn't need rate cuts
At the Friday close the market consensus was that the Federal Reserve would cut short-term interest rates by 50 - 75 basis points in 2019, with another 25 basis point cut in 2020. We think this is nuts. The US economy doesn't need...
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