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A Perspective on Market Volatility

In my last several writings, I emphasized that, after the long tranquil up market in 2017, 2018 markets would display a great deal more volatility. No doubt I was correct on that call. Today’s increased volatility could be symbolic of a healthy correction in an ongoing economic up cycle. It also could be a prelude to something more sinister. Measuring Today’s Volatility Looking back at 2017, there was only one …Read More

Get used to heightened market volatility

The sentiment surveys indicate that the economy continues to perform well. The underlying data say otherwise. People take their cue from the stock market when it comes to assessing economic health. And, as long as the stock market is near dizzying heights, the sentiment surveys will say the economy is doing well. The hard data  January’s data showed negative retail sales vs. December, negative real weekly income, negative aggregate hours …Read More

The Fed’s new bubble – Part 2

In part I of this two part series, I discussed the possible rush for the exits and market volatility in what I saw as a long overdue correction. The violence of the correction and the extremes of volatility that I worried about have now actually appeared. As I rewrite the introduction of this part II, conventional Wall Street wisdom has now become that the correction and volatility are due to the …Read More

2018 Preview and Assessment

Market valuations are high.  Current consumption is being financed by debt.  The housing data is mildly positive, but has been impacted by “rebuild” issues in the wake of natural disasters.  Corporate balance sheets are strong and laden with cash.  The world’s major economies are doing well and central banks are beginning to tighten policy led by the U.S.’s Fed.  Q4 real GDP growth looks to come in above 3% (third …Read More