July 2022 Monthly Letter
The stock market’s July performance was the living embodiment of the notion that the stock market is not the economy. Yes, they are related and even positively correlated over very wide time spans (years) but their moves are often diametrically opposed when viewed in daily, weekly and monthly time periods. The reason is simple to […]
Sorry to Say Good-bye To July
July 29, 2022 Good morning, Financial news broadcasters and headline writers alike are flummoxed over the equity optimism rolling on this morning (Futures + 0.5%) in the face of broad economic pessimism. Even more perplexing is the massive beat from European GDP figures this morning and the irony of European growth crushing that in the […]
Fed Day
July 27, 2022 Good morning, Overnight Futures are up about one percent and indicate the S&P 500 Index is virtually unchanged from where it started the week. There’s no surprise there, this is a Fed Week, and little was expected from the markets ahead of today’s announcement. It seems like a virtual certainty that the FOMC […]
Funday
July 25, 2022 Good morning, It’s a Fed week this week (Rate hike and Chair comments Wednesday afternoon), and evidently it is starting on an optimistic note, judging by the bounce in equities and bond yields early this morning (Futures +.5%). I’m not sure the next 48 hours of market action for stocks and bonds […]
Trust But Verify
July 22, 2022 Good morning, We have talked about the possibility of a rally unfolding in front of us in the market for the past few morning notes, and that there would have to be ample evidence, primarily in the way of multiple breadth thrusts, to characterize the rally as anything other than the bear […]
Chart Day
July 20, 2022 From last Thursday’s intra-day low through yesterday’s closing high, the S&P 500 Index is up 5.8% and broke above its declining 50-day moving average (dma). The track record of buying upside breaks of the 50-dma is spotty, and worse than that when the 50-dma is several standard deviations below the declining 200-dma […]
No One Is Bullish – It May Not Matter … Yet
July 18, 2022 Good morning, Persistent “sticky” inflation, the Fed’s higher for longer rate hikes to combat it, and the likelihood the economy falls into a recession as a result, if it isn’t in one already, is the only narrative on investors’ minds currently. And yet, the equity market (in S&P 500 terms) rallied 2% […]
A Little Relief At Least
July 15, 2022 Good morning, On Wednesday morning, a stronger than expected CPI number dropped equities a few percent at the opening of their market. As the day progressed, equity prices marched back up and retraced a large portion of the initial morning sell-off. Yesterday morning before the equity market open, JP Morgan and Morgan […]
Peaked
July 13, 2022 Good morning, If rising inflation fear has been the primary fuel for this year’s bear market, then this morning’s June CPI release would normally be another log on the fire. Economists expect another high for year over year change of the CPI at 8.8% – 8.9%. However, markets look ahead, and […]
Combining Macro with Technical This Morning
July 11, 2022 Good morning, It would not be unreasonable to suggest that the Fed’s tightening cycle to combat unexpectedly high inflation is at the top of the list of reasons for the current bear market. With the caveat that a multitude of factors will determine how the market proceeds from here, the Fed and […]
June 2022 Monthly Letter
It was another difficult month and quarter for markets. This is now the worst first half of the year for developed market equities in over 50 years. To make matters worse, government bonds have also been hit hard so far this year, failing to provide the protection that investors usually look to them for. Rarer […]
A Ray of Sunshine?
July 5, 2022 Good morning, The second half of the year begins in earnest this holiday shortened week, and markets this morning are tracing out price action that has become oh-so-familiar thus far in 2022; weaker equities (futures down a percent), higher Treasury yields (US 10yr +5bps to 2.92% from 2.87% early this morning), and […]