Weekly Commentary

China is in an economic air pocket with the associated turbulence. The property market, which makes up over 60% of the wealth of the Chinese consumer, is in a deflationary spiral. Property prices in key markets have been dropping. 1 Wages have flattened, with income increases matching income decreases. 2 Inflation in China is non-existent […]

One of my customs is to read at least twenty and perhaps closer to thirty earnings reports a quarter. The management commentary is a literal treasure trove of great macroeconomic data as CEO’s and CFO’s often comment on their business and what’s helped and what’s hurt. One thing I’ve noticed missing recently from earnings reports […]

The Wall Street consensus call for a recession appears to have faded. Various investment banks have been changing their calls as of late: Goldman Sachs: “The probability of a U.S. recession in the coming year has declined, as recent economic data signal that bringing inflation down to an acceptable level will not require a downturn” […]

The Federal Reserve raised interest rates for the eighth time in the last twelve months. Going from 0% to 5.5% is now the fastest and highest rates have been in 22 years. We should be at, or near, the very end of the Fed’s rush to raise rates in an effort to combat inflation. 1 […]

Second quarter earnings season kicked off with a slightly weaker set of results than expected. According to FactSet, 18% of S&P 500 companies have reported results so far. These companies have posted a blended earnings per share decline of 9% on a year-over-year basis, compared to an expected decline of 7%. 1 The weak start […]

It’s been a long slog for those of us living in the “inflation is transitory” camp.  We’ve gone a little quiet over the last year as inflation persisted and actually accelerated.  The “base effect” or year-over-year change from 2021 to 2022 didn’t provide any relief. Finally, we are seeing transitory take center stage, once again, […]

I don’t put much weight into forecasts especially when it comes to long-term investing. Even those with the most access to the best data get it wrong. That point is made abundantly clear by our friend and bestselling author Morgan Housel. Take a quick look at this very short video to see what he’s talking […]

The second quarter ended with strong equity performance across most equity indexes. 1 Take a look at how we see the coming quarter by clicking on this link to our Q3 2023 Look Ahead. Inflation continues to moderate, with prices for food, energy, and rent declining. Contrast this against producer prices which are also slowing, […]

The world continues to provide a multi-crisis economic backdrop, making equity investing challenging. The biggest news has been the instability in Russia, the largest nuclear power in the world. 1 Assuming cooler heads prevail as domestic instability in Russia unfolds, the real focus should be on the second largest economy in the world, China. 2 […]

During the earnings quiet period investors tend to focus their attention on a host of other issues. The most recent focal point is the Fed’s interest rate pause/skip decision last week. For the sake of simplicity and brevity they signaled another 50 basis points of rate increases in the coming months after a brief pause. […]