When policies are anti-growth, sell the rallies and buy the dips
The equity markets are generally forward-looking. That’s why you have price movements that seem incompatible with the latest economic (backward-looking) data. The equity market today, as seen through the eyes of the S&P 500, has been flirting with all-time highs while the economic data indicate that the economy continues on feeble legs. So, just as […]
Market Correction, or Something More Sinister?
It was another ugly week in the equity markets, with most of the damage done on Friday, January 15th. The S&P closed the week down 2.2% on top of its 6.0% fall on the first 5 trading days of the year. According to Wall Street Economist David Rosenberg, of 51 global stock indexes, 19 are […]
Economic predictions for 2016
As the year ends, it is customary to write a column that attempts to forecast the major economic trends of the new year. Looking back, five of my six predictions last December were spot on (only missed the continuing weakness in manufacturing). I hope the forecasts that follow do as well. Jobs, jobs, jobs Jobs […]
Awash in Liquidity, Part I: Why Interest Rates Are Falling
First published at Minyanville.com http://www.minyanville.com/business-news/the-economy/articles/Awash-in-Liquidity-Part-I-Why/5/27/2014/id/55107 And why, in the short-term, increased market volatility will result. Despite a generally stronger economic outlook for the US economy, interest rates in May moved significantly lower, as if expectations were for an oncoming recession. This has confounded many macroeconomists. In this first installment of a two-part series, I will […]
What’s Behind Falling US Interest Rates?
Federal Reserve policy and signals from the ECB have each played a part in the declining US yield curve. After being range-bound between 2.6% and 2.8% for most of 2014, the yield on the 10-year US Treasury broke out of the range last week and, for a brief time, was several basis points below 2.5%. […]
In the new normal, risk is par for the portfolio
How much risk are you taking in your portfolio? Given the lack of return in the fixed income market and investors’ reach for yield, many are taking more risk than they should. It is traditional financial advice that the risk profile of funds set aside for retirement should vary inversely with one’s age, i.e., the […]