Will Interest Rates Stay Higher for Longer?
By John Lau May 1, 2024 – One of the narratives that has fueled the rally in risk assets since the October 2023 lows is the expectation for interest rate cuts by the Federal Reserve. The only issue here is that most recent statistics surrounding inflation, employment, and broader business activity continue to indicate a […]
Is Roth Conversion Right for You?
Roth IRAs can be a great way to turn your retirement assets into future tax-free income. Since the money inside the Roth has already been taxed, you don’t have to pay taxes on qualified distributions, and you don’t have to take Required Minimum Distributions. When markets experience a down or volatile year and your portfolio […]
Stocks Surge to New Highs to Start 2024
By John Lau April 1, 2024 – The rally in the first quarter of 2024 was a positive combination of stable economic growth, falling inflation, impending Fed rate cuts and ever-growing enthusiasm towards artificial intelligence (AI) propelling stocks higher, as the S&P 500 rose above 5,000 for the first time and hit new all-time highs. […]
Is the S&P at 5,100 Sustainable?
By John Lau February 29, 2024 – The S&P 500 has surged to all-time highs near 5,100, thanks primarily to the NVDA earnings explosion. That performance reinvigorated AI enthusiasm and that, in turn, helped to propel stocks higher across the board as the rally has continued to broaden out beyond just the Magnificent Seven. With […]
Why Did Stocks Drop Yesterday?
It’s Not Because of What You May Think By John Lau February 14, 2024 – Stocks dropped sharply yesterday when the CPI numbers came in “warmer than expected”. But yesterday’s CPI did not really show any signs of reversal on disinflation. Instead, it simply reminded us that the S&P 500 at 5,000 is priced for […]
Bullish Assumptions Updated
By John Lau February 2, 2024 – In my January market letter, I wrote “… I want to start 2024 clearly defining what I see to be the five most important assumptions investors are making right now, because it’s how these events occur vs. these assumptions, and not absolute values, that will determine if stocks and […]
AI Enthusiasm and Rate Cut Expectations Power Stocks Higher in 2023
By John Lau January 2, 2024 – What a difference a year makes. At this time last year, the S&P 500 had just logged its worst annual performance since the financial crisis, the Fed was in the midst of the most aggressive rate hike campaign in decades, inflation was above 6% and concerns about an […]
Bullish or Bearish: My Analysis
By John Lau, CPA, CFP® December 4, 2023 – In a call with a long-time client yesterday, he asked where I thought the market is heading, and whether I am bullish or bearish going forward. I think this may be a question in many people’s minds, so I want to take this opportunity to address […]
Why Tech Is Driving the Selloff and What Can Stop This Selloff?
By John Lau, CPA, CFP® October 31, 2023 – The S&P 500 fell to fresh five-month lows last week thanks not to rising yields (they fell), or geopolitical concerns, but instead because of earnings, as the number of companies reporting some sort of “miss” (whether on EPS, guidance, revenue, or margins) continued to grow. Notably, […]
Higher Interest Rates Weigh on Stocks in the Third Quarter
By John Lau,CPA, CFP® October 2, 2023 – The S&P 500 started the third quarter largely the same way it ended the second quarter – with gains. Stocks rose broadly in July thanks primarily to “Goldilocks” economic data, meaning the data showed solid economic growth but not to the extent that would have implied the […]
Why Have Markets Suddenly Become Volatile?
By John Lau September 1, 2023 – The S&P 500 managed a solid gain last week, but volatility continued to rise. One reason why markets have suddenly become volatile is, for the first time in months, economic data and earnings commentary implied there are some risks to the “Three Pillars of the Rally” (Soft/No Landing, […]
“TOO HOT” OR “TOO COLD” DATA CAN STILL UNDERMINE OR END THIS RALLY
By John Lau July 31, 2023 – The stock market rallied to new 2023 highs last week on strong earnings and a largely as expected Fed decision before hot economic data saw volatility pick up into the weekend. Unlike the January-through-May advance in the S&P 500, the rally since June hasn’t been driven primarily by […]