When I sat down to write this week's commentary, my intention was to write - again - about the valuation of the stock market and particularly the S&P 500. And even more specifically about the top 20 stocks, which make up 42% of the index, and trade for an average forward P/E of 27.5. It is an expensive bet on [...]
The 10-year Treasury Note yield fell 13 basis points last week, a move that would not normally rate any mention whatsoever, but the path of that small decline does. From Monday to Thursday, the yield fell, from high to low, by 34 basis points, a move that added 1.3% to bond prices (Aggregate bond index) in four days. In a [...]
We got the latest report on economic growth last week and it surprised most everyone. Real GDP expanded by an annualized 3.3% in the fourth quarter, well above the consensus estimate of 2%. Nominal GDP expanded an annualized 4.8% quarter to quarter and 5.8% year-over-year. The annualized quarter-to-quarter change is exactly the average annual change since 1990. Real GDP grew [...]
The financial commentariat first started to worry about recession in April of 2022 when the spread between the 10-year Treasury rate and the 2-year Treasury rate turned negative - the yield curve inverted. It subsequently righted itself to positive territory until July of 2022 and has stayed inverted ever since. Since an inverted yield curve has preceded almost every recession [...]
It's an election year and you know what that means. Yes, every four years we gather as a nation, a democratic nation, to decide which of the two candidates for President available to us is the least offensive. It isn't very democratic with just two options but that is the system that the politicians built to benefit...themselves and it's all [...]
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