Markets See Looming Recession – The Fed Sees “Softish” Landing

Market volatility in spades this week!  On Tuesday, markets were all a-twitter (oops, can’t use that word!) over the large and unexpected rise in April’s retail sales (+0.8%).  That sparked a +2.0% rally in the S&P 500.  What market commentators neglected to mention was that, when adjusted for price increases, the “real” number was negative […]

When (Why) Bad News IS Good News

When (Why) Bad News IS Good News It was another volatile week in the financial markets.  While there were up days, like Friday (May 13), the trend continues to be down.  The table shows the weekly movements in the major indexes and the downdrafts from their nearby peaks.  Note that the Nasdaq and Russell 2000 […]

Blame It on the Fed – Part I: The Brewing Recession

For the past month, everybody has hated bonds; now they hate stocks too!  The table shows the percentage fall in equity prices for the week ended April 22, and from their nearby highs.  Note that the Russell 2000 has now entered “Bear Market” territory (down more than 20%), and Nasdaq is precipitously close.   Week […]

Using 2020 Hindsight: The Emerging “New Normal” Picture

Using 2020 Hindsight: The Emerging “New Normal” Picture The year finally ended, and, as has been typical, the latest data continued to be downbeat. Despite the weak economic data, the equity market ended the year at all-time highs.  The S&P 500, at 3,576 was up 10.5% for the year after falling 34% in the February/March […]

Inflation Expectations Rise Even as the Economy Cools

It has now become clear, and mainstream, that the economy weakened significantly in November, and that such weakness will carry forward to year’s end, at a minimum.  The weakness occurred primarily in the services sector as the virus’ resurgence caused some governors to mandate new or additional service business restrictions. As a result, jobless claims […]

Mr. Market Won’t Let the Grinch-Like Economy Steal This Christmas!

The employment data for November were downbeat, and those surveys were taken prior to many newly imposed restrictions including stay-at-home orders. Other economic data, including Black Friday-Cyber Monday spending, and manufacturing and service indexes also disappointed.  Pessimism also showed up in the Fed’s recent Beige Book, its survey of business sentiment. Yet, despite all the […]