Weekly Commentary

  The world seems a bit confusing to the average investor. Generally, if the US economy is expanding you would anticipate inflation, especially if you consider all the money sitting on the Federal Reserve’s balance sheet. Inflation (dotted line) leads to higher interest rates (solid line) in most cycles.[i] It’s a bit counterintuitive to see […]

  While scanning several economic indicators this week, one indicator had a small hiccup, which gave me a bit of indigestion. Auto loans appear to be increasing in delinquency. The data suggests we are seeing acceleration in delinquency rates not only from Q2 2014 to Q3 2014 of 18.4%, but also 2013 to 2014 of […]

  One of the best returning asset classes this last year was the US Dollar.[i] It’s no surprise with so many things looking so good for the US Economy: Interest rates and inflation remain low. Consumers have more money to spend thanks to savings from low oil prices. Consumer sentiment is at an 8-year high.[ii] […]

  After declining during the first half of December, the Dow Jones and S&P 500 indices rebounded to close at new highs on December 26th, providing a nice holiday gift to investors. Historically, the month of December has performed very well with the S&P 500 averaging a 1.79% return over the 21-year period from 1990-2010 […]

  I know we have opined on the price of oil for the last couple of weeks and perhaps the topic is getting a bit tired. However, when the price of any asset class drops as precipitously as oil has, the topic merits continued examination. Those joyfully absorbed in the holidays perhaps haven’t realized the […]

  It appears market participants are growing more concerned about global deflation rather than focusing on the benefits of cheaper energy prices. Across the spectrum of commodities you can see noticeable drops in prices.[i] As most of these are industrial commodities, their prices certainly forecast a global slowdown. The steep price decline in oil, about […]

  The recent employment report released on Friday gave us the strongest sign of the year that the US macro-economic picture is looking very strong. The US economy added 321,000 jobs in November of which 314,000 were in the private sector.[i] This is the best year for employment since 2000 based on the annual change […]

  It’s been well over 4 years since we wrote about the need for the return of the self-fulfilling economic cycle, one where the consumer earns and spends. In turn, US companies earn, hire, and produce, which drives more income earners to spend. It’s a “virtuous cycle” or a complex chain of events with a […]

  This week the European Central Bank President (Draghi) signaled what we had been anticipating for quite some time. He stated at a banking conference on Friday, the ECB would “do what we must to raise inflation and inflation expectations as fast as possible.”[i] It’s no wonder when looking at how very low inflation is […]

  The Q3 earnings season ended with a report from Walmart last week. When we kicked this season off, expectations were very low but gradually improved. S&P 500 companies were expected to grow earnings by 1.3% at the launch of the season and they produced a whopping 6.9% growth.[i,ii] Amazing! Unfortunately, investing requires you to […]