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Look For The Preponderance Of The Evidence, Don’t Rely On One Factor

The headline on my LinkedIn page on Friday (October 4th) read: “Jobless rate reaches half-century low, HP plans to cut up to 9,000 jobs…” Is this good news about jobs, or bad? I’ve learned many times over the years to rely on the preponderance of the evidence, and not on any single indicator. The jobs numbers, themselves indicate that the economy is still expanding. But, the lower level of job creation, along with …Read More

The Goldilocks Labor Report: “Just Right!”

It isn’t ever a good sign when markets become manic. August was quite volatile with five days out of 22 (23%) where the S&P 500 intra-day market swings exceeded 2%, and three days when the market closed down more than -2.5% from the prior day’s close. (We haven’t seen such price volatility since 2011!) While, so far, September has been less volatile, the market is still susceptible to tweets. For example, news about the …Read More

The Deer in the Headlights

The big event of August, the one that was going to move markets, was supposed to be Jay Powell’s remarks at the KC Fed’s annual symposium at Jackson Hole.  Turns out, his speech was a non-event! The Powell Non-Event The media made it their purpose, prior to his speech, to spotlight the fact that the FOMC members, the Fed’s rate setting committee, are very divided on the appropriate policy, given …Read More

Key Indicators Have Peaked; Markets Hope for Soft Landing

The National Bureau of Economic Research (NBER), a private sector company, is the entity responsible for officially labeling recession start and end dates. As a rule of thumb, the financial markets use two consecutive quarters of negative GDP growth as the marker. But, that is not the way the NBER sees it. According to their website, the NBER defines a recession as: “a significant decline in economic activity … lasting more than …Read More

Markets Have Recovered, But Charts Look Like Niagara Falls

In January, the equities markets bounced from significantly oversold conditions at the end of December, on the hopes that a) the Fed stopped it tightening cycle in time, and b) the halt to the government shut-down occurred in time to avoid negative Q1 GDP growth. As I have stated in prior blogs, “hope” is not a good investment strategy. But wait! The “hope” regarding the Fed doesn’t even make sense. …Read More

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