April 2023 Monthly Letter
Economies: growth was as surprising in April as it has been since the start of the year – economic data showed that it was another positive month for the global economy, with growth remaining remarkably resilient in the face of higher interest rates. U.S., Eurozone and UK Purchasing Managers Index (PMI) surveys all beat expectations. […]
March 2023 Monthly Letter
The first quarter of the year is in the books (chart below, YTD). Against an almost uniform bearish consensus, for the first half of the year at least, global growth generally surprised to the upside all quarter. Lower energy and oil prices probably played an important role in the improvement in business sentiment, along with […]
February 2023 Monthly Letter
Helped by falling inflation and hopes of an imminent end to the global monetary tightening cycle, the year got off to a strong start in January. However, resilient economic data in February led to a move higher in bond yields and a decline in equity markets. Markets have been infatuated with the Fed’s plan […]
January 2023 Monthly Letter
As this month’s report is a little later than usual (with apologies), there isn’t too much to write that has not already gotten to you through my Morning Notes. January’s black in the chart below says all you need to know about the start of the new year and its stark departure from last year’s […]
High Potential for High Volatility This Week
January 29, 2024 Good morning, For all the daily headlines of new all-time highs for U.S. stocks lately, you wouldn’t be faulted for thinking that the stock market was on fire and that you were missing out. For all the bluster, the S&P 500 was up a whopping +1.05% last week. Headline distortion is what […]
Opposing Forces May Lead to a Grind
January 25, 2024 Good morning, Yesterday’s market action may have been a forerunner of market action for weeks ahead. Treasuries fell (lower price/higher yield) after U.S. Purchasing Managers’ Index data surprised to the upside, adding to concern that the economy is too hot for a Federal Reserve rate cut any time soon. Stocks initially rose […]
Where Is It Rallying To?
January 22, 2024 Good morning, Last week’s economic data eased some recession concerns, eased market expectations for March rate cuts, and, on Friday, decoupled the direction of equity prices from the direction of bond prices for the first time in almost 3 months. Bonds were down hard last week, off almost -1%, which is a […]
Correction #2
January 18, 2024 Good morning, In December, we talked about a battle between narratives that is developing early this year. That battle between the bond market investors, pricing in rate cuts at every Fed meeting this year beginning in March, and the Fed, who think the market’s easing schedule is too dramatic, began early this […]
The Fed Pushes Back
January 16, 2024 Good morning, For the first two weeks of the year, stock and bond market prices have moved sideways and traders are still hunting for that elusive 2024 investment theme – apart from the conviction that central banks are going to slash rates. That overarching conviction took a hit over the weekend when […]
Quieter Market / Gundlach Highlights
January 11, 2023 Good morning, The equity market has worked steadily higher so far this week, erasing much of last week’s decline. The S&P 500 Index is sitting right on top of its all-time high. Volatility is off its peak and things have quieted down from that blistering year-end pace. Market wise, there isn’t much […]
Strong Tapes Are Why First Corrections Are Normally Light
January 8, 2024 Good morning, The first week of the year was a down one for stocks, bonds, oil, and gold. Only the dollar and volatility moved higher. The S&P 500 Index was off -1.52% for the first down week since October. Yikes, that’s a long stretch and that sentence underscores the technical strength the […]
Meeting Notes Had No Effect On The Gap
January 4, 2024 Good morning, Following a blistering last two months of the year, with oversold sirens blaring, investors of all kinds were bracing for a correction to welcome in the new year. Perhaps that’s why the -1.36% decline on the S&P 500 Index so far this year feels so much worse than its absolute […]