Why, man, he doth bestride the narrow world Like a Colossus, and we petty men Walk under his huge legs and peep about To find ourselves dishonorable graves. Men at some time are masters of their fates. The fault, dear Brutus, is not in our stars, But in ourselves, that we are underlings. Julius Caesar, Act I, Scene II The [...]
Stocks are now down from their late July peak by about 5%. It has been a very orderly pullback with most of the major averages shaving off about the same amount. The exceptions are the NASDAQ, which peaked a little earlier than the S&P, and REITs, both down about 7.5%. The NASDAQ is more volatile than the S&P so it [...]
The 10 year Treasury yield has been in an uptrend since the summer of 2021 which is obvious to anyone who can see. It has stalled a couple of times and moved sideways - consolidated in Wall Street technical speak - but the trend is obvious (see below). It seems only a matter of time before we break above the [...]
The stock market was down a little over 2% last week in what may be the start of a larger correction. Or not. Technically it is easy to make a case for a little more downside to the 50-day moving average, a total pullback of about 5%, and then a resumption of the uptrend. That's what happens in bull markets. [...]
You've probably heard the phrase "soft landing" a lot lately. It has, over the last couple of months, become the new economic consensus. The economy continues to perform better than expected despite the Fed raising interest rates steadily - and fairly rapidly - over the last year. The most recent hike was just this past week and put the Fed [...]
A few weeks ago, it appeared to me that stocks were starting a correction. I was clearly wrong about that as the S&P 500 and NASDAQ have moved higher since then and the rally has broadened out. And thank goodness since the things I own are mostly the parts of the market that benefitted from the broadening. Stocks tend to [...]
Why aren't we in recession yet? That's a question that has been asked often over the last year but with no real satisfying answer. I have my own beliefs on the subject, rooted in the distortions of COVID. (You can read about it in my latest Follow The Money piece) I think my explanation is a pretty good one but even [...]
It appears we have started the third correction in stocks since the bottom in October of last year. The first one was in December and saw the S&P 500 fall about 8% from peak to trough. The second one was from February into mid-March and totaled about 9%. I don't know how far this one might carry but a pullback [...]
I spend a lot of time thinking about what "everyone" else believes about the economy and markets. If you've been reading my weekly scribblings for any time, you know I have little faith in the soothsayers of this industry. No one knows what the future holds, least of all that group of crystal ball gazers known as economic forecasters. Most [...]
In order to get inflation to 2%, how much demand do you have to kill or how much does credit have to tighten to offset the new interest income in the economy and a 6.1% fiscal deficit per year for the next decade? Inflation will be higher for longer. The Fed by necessity will have a higher implicit if not [...]
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