Weekly Commentary

Our Q3 2022 Look Ahead is available for review. The video link is here and the PDF version is here. In this post, we highlight some key themes we see in the coming quarter. We think we are in the midst of a growth cycle detour. 1 We believe we will have a period of […]

The Fed wants to orchestrate a “soft landing” for the U.S. economy, one in which job losses, wealth destruction, and credit contractions are minimal while inflation reduction is impactful. How do we frame this and measure this? The good news is the Bank of International Settlements recently publish a report that does just that. The […]

It’s easy to get lost in the day-to-day pain of demand destruction. Living through economic cycles is a discipline of its own for investors. One thing that helps is to reflect on the cause, as it generally provides the path to a solution. In our current case, the cause resides in good intention. 1 During […]

It’s been a nasty year for portfolios, especially those traditionally considered conservative like the 60/40 stock/bond portfolio. 1 Much of the portfolio headwind is being driven by raising rates and the Fed’s policy to combat inflation. Bonds typically act as an anchor to falling stocks, but not during rising rate periods. The recent report on […]

For many months I have been focused on the tension between inflation and a recession, with the principal actor being the Federal Reserve. Can the Fed skillfully land a 23 trillion-dollar economy in a soft spot while fighting 8% inflation? It’s clear some don’t believe that’s possible. Much smarter people than me suggest big trouble […]

Transitory might just rear its head again as a way to describe inflation. In the most recent reading of the Personal Consumption Expenditure (PCE), the Fed’s favored inflation gauge; inflation continued to ease ever so slightly. 1 Perhaps this is why we are seeing a small uptick in equities and a down tick in fixed […]

Last week’s market activity took an even darker turn, with the S&P 500 falling for the seventh consecutive week. 1 The S&P 500 touched bear market territory, if only briefly, down 20%. 2 Bear markets are just part of the cycle and that’s the risk we accept when we need equity like returns to meet […]

It’s such a challenging time for investors with so many issues swirling around: rising interest rates, a ground war in Europe, inflation, recession fears, COVID lockdowns in China, Fed policy errors, the list goes on. The S&P 500 is down almost 16% this year. From my experience, it’s around this time in the cycle that […]

Last week’s incredible market volatility is likely to repeat in the coming weeks. The Dow Jones had a +900 point up day followed by a down day of over -1000 points. 1 This follows six consecutive weeks of negative market performance. 1 It’s clear that investors are much more focused on factors other than strong […]

The U.S. economy shrank by -1.4% in Q1 and set up the possibility for recession in 2022. Perhaps Fannie Mae was right in their latest economic report (link) in calling for a possible recession this year. 1 The gap in growth was attributed to a massive amount of imports vs. exports, a decline in government […]