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December’s Petulant Children: Trump, the Fed, Markets

Surely, this was a December to remember, but due to financial pain, not joy. Prior to December, markets were uneasy, and this showed up in a downward pricing bias and significantly increased volatility. As measured by the intraday swings on the Dow Jones Industrial Average (DJIA) between high and low [(high-low)/prior close], volatility more than doubled between September (0.67% per day) and October (1.55% per day), as markets became concerned …Read More

Caution: Markets Are Forward Looking

This is the time of year to take stock of where the economy and markets stand and try to figure out what lies ahead. Markets are telling us something, and so is the underlying data. In what follows I will try to parse the signals the markets are sending, look at the data and the trends, and give you my view of what 2019 holds for investors. What the Markets …Read More

“Pause” Gave the Market Temporary Hope But Hope is not a Good Investment Strategy

The Dow Jones Average rose 618 points on November 28th as the market interpreted Fed Chair Powell’s speech as dovish and has assumed that the Fed will “pause” in its stated rate hiking plan. Then, on December 3rd, the Dow rose another 288 points, interpreting the 90 day “cease fire trade pause” between the U.S. and China as significant progress. The following day, the Dow plunged nearly 800 points on …Read More

Faster Growth Deceleration Prompts Increased Market Turbulence

Market volatility looks to have become the norm of late, with intraday swings of 500 points on the Dow Jones Industrials seemingly commonplace. The days of complacency and ever rising stock prices appear to be firmly in the rear-view mirror, now replaced by daily angst. And, with good reason. Markets have fully recognized that “synchronized” world economic growth has ended, that the U.S. economy is not an island, immune from …Read More

Main Street Boom Frightens Wall Street

On Friday, November 2nd, the Dow Jones Industrials ended down 110 points in a wild day in which the index swung over 500 points from its intraday high to its intraday low. This occurred despite one of the most stellar employment reports in recent memory, a report that raised hopes that the economy would continue to grow in the 3% range, and a report that put smiles on the faces …Read More

Heightened Volatility! Blame the Fed

Volatility returned to financial markets with a vengeance in October. In the 12 market sessions between October 4th and October 19th, eight were negative (a total of -2,324 Dow Points) while four were positive (+940). In those 12 sessions, seven were triple digit; unfortunately, five of those triples were negative. Why the sudden turn and burst of volatility? Wall Street is abuzz with worries about decelerating economic growth (a theme …Read More