I don't know how many times I've seen blog posts or articles or Tweets about negative consumer sentiment over the last year. These articles rightly point out that the University of Michigan consumer sentiment survey is sitting near (or at a few months ago) 50 year lows. This fact is taken as a negative for the economy and therefore stocks. [...]
Note: This will be my last full commentary for 2022. I will spend the month of December on research for next year, visiting with family, and taking some much-needed time off. I will still be watching markets, as will all the other members of the Alhambra team and if something happens which requires me to communicate, I'll certainly do that. [...]
When we think about the challenges facing an investor today, the big problems, the things we worry about that could cause a lot more harm than some interest rate hikes, are mostly outside the United States. China is prominent this weekend because of demonstrations against their zero-COVID policies. The Chinese people appear to be pretty well fed up with the [...]
Is the US economy on the verge of recession? Is it already in recession? We have several indications that the US economy is slowing and at least one that points to recession soon and maybe now. From the Conference Board's release of its Leading Economic Indicators last week: “The US LEI fell for an eighth consecutive month, suggesting the economy [...]
One thing I can tell you for certain about last week's big rally on Thursday and Friday: there were a lot of people who desperately wanted a good excuse to buy stocks. And buy they did after a better-than-expected CPI report Thursday morning, pushing the S&P 500 up nearly 6% on the week with all of that coming on Thursday [...]
Jerome Powell has said repeatedly that the Fed's goal is to get rates higher and leave them there for an extended period of time. He believes that the mistake of the 70s was that once higher rates snuffed out inflation, the Fed cut rates too quickly and the inflation returned. I think the mistake of the 70s was that, by [...]
The FOMC met last week and did what everyone expected them to do - raised the Fed Funds rate by 0.75%. The bond and stock markets reacted not to this action but to the commentary provided by the committee in its statement and by Chairman Jerome Powell at his post meeting press conference. The former had a new phrase, a [...]
I have often been accused over the years of being too optimistic and I will plead guilty to having a little rose-colored tint in my glasses. I am an optimist by nature and I search constantly for good things to write about. There are more than enough people out there willing to tell you the world is coming to an [...]
With inflation recently hitting a high not seen since 1981, it is now apparent that the factors that drove the disinflation trend of the last four decades are coming to an end. Globalization and demographics, the two big factors that combined to hold down prices and wages for so long, are reversing, and so too is the downtrend in prices, wages, [...]
Did Jerome Powell blink last Friday? It was just before the market open Friday and interest rates were jumping higher, as they had all week. The 10-year Treasury yield was up to 4.33%, another 11 basis points higher than the previous close and 32 basis points higher than the previous week's close. Then, "the article" hit the front page of [...]
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