Recession Has Arrived

Depth and Duration Dependent on the Fed After a horrible June for equities, July’s first full week was positive (see table), no doubt reversing some of the oversold conditions brought on by the June swoon. In addition, markets have been somewhat more buoyant on the mistaken belief that Recession has been avoided, pointing to the […]

The Recession: It’s Here

Inflation Prognosis: Lower Equity investors just endured the worst first six months of any year since 1970. This occurred despite a “Bear Market” rally in May. For the month, the S&P 500 was down -8.4% (see last column of table) as was the Russell 2000, with the Nasdaq down -8.7% and the DJIA -6.7%. All […]

As the Fed Fiddles, the Economy Burns

A Powell Failure The Fed tightened its administered Federal Funds Rate (the rate banks pay to borrow reserves) by 75 basis points (bps) (0.75 pct. points) to 1.50%-1.75%, a rate hike not seen since 1994.  The issue here is that, for the first time in its 109 year history, the Fed is tightening into the […]

Wall Street Narratives Distort Reality

A Deep Recession Is Rapidly Approaching Volatility remains the major feature of financial markets.  You are correct if you interpret the word “volatility” to include a downtrend in equity prices.  This is the kind of action one normally sees in a “Bear” market.  The table below shows the changes in the major U.S. indexes from […]

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 […]