Weekly Commentary

This past week was filled with market-moving surprises. First, Facebook announced slower growth ahead and lower margins due to increased spending on security and data integrity.  Following this announcement, the company lost approximately $120 billion of their market cap in a single trading session, marking one of the largest single-day declines for the stock. Facebook […]

  A few times a year I like to call out some bad behavior, but not the normal, everyday type of bad behavior. I’m talking about the bad behavior of investors. You might wonder what behavior has to do with investing.  Investing is simple: buy low and sell high. That’s easier said than done.  If […]

The last couple of weeks of trade war rhetoric has turned decisively real.  Our view was, and still is, much of the trade war talk is overplayed.  However, we are now seeing the first phase of implementation. [i] Consistent with the chart above, the United States has begun its first round of tariffs on China […]

“The Fed’s High-Wire Act” Today marks the start of the first full week of trading for Q3 2018.  We’d like to take this opportunity to present you with our Q3 2018 Look Ahead. For a PDF presentation, click here. For a narrated video presentation, click here. Below, we’ve highlighted three key themes from our Q3 […]

The Federal Reserve got the green light to continue raising interest rates as May inflation reports [x] showed it had finally reached its 2 percent target inflation rate after five years of waiting. [i] [ii] [iii]   Given that the Fed has met its inflation objective, I don’t see any reason that would warrant any […]

The trade war rhetoric has heated up, although we continue to maintain our view that this is more of a food fight than an actual fight. With trade war tensions dominating news headlines for the better part of 2018, the U.S. large-cap indices have shown low- to slightly-negative returns, whereas the indices in China—Hang Seng […]

U.S. equity markets have remained relatively flat year-to-date, despite the phenomenal corporate earnings we’ve seen this year.  Just consider this: The S&P 500 index is up 3.33 percent.  [i] All the while, earnings per share growth in Q1 came in at more than 20 percent. [ii] The outcome from this combination of low price appreciation […]

Last week the Federal Reserve reported U.S. household net worth had crossed over the $100 trillion level for the first time. [i] [ii] That is astonishing, particularly when you consider that U.S. household net worth was under $100 trillion as recently as Q4 2017, and since then we’ve experience only muted stock market returns. [iii] […]

  Donald Trump’s economic agenda looks to be gaining significant traction.  While U.S. GDP growth came in at 2.2 percent for Q1 2018, the underlying metrics look strong, especially consumption and fixed investments. [i] For Q1, consumption added 0.71 percent to the total GDP Growth of 2.2 percent, and fixed investments added 1.05 percent. [i] […]

We are fast approaching the longest economic expansion in recorded U.S. history. [i] The visceral reaction would be to think that this amazing economic run must be coming to an end soon.  That very well may be the case.  However, before making that determination, we should ask ourselves; why can’t this expansion continue, and set […]