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Stocks haven't made a lot of headway since the February peak despite a lot of volatility. But Powell's promise of continued "easy money" certainly didn't hurt. The question that financial markets wanted answering was just how much of a decline in asset prices the Fed will tolerate bef...
So far, 2021 isn’t looking too different from where we ended 2020. But we see the second quarter bringing greater economic re-awakening, underpinning our constructive outlook for U.S. stocks. While future rate-related panics are likely, we expect rates to remain low for some ti...
Since the end of last year, the "value" rotation finally did get underway, with the energy sector leading the charge. Historically, when rotations to "value" have occurred, it has accompanied significant market reversions and a break of the previous "bullish" psychology. The accom...
Are interest rates on long-term bonds rising because of expectations of post-Coronavirus Recession growth? Or are they rising because the specter of inflation is becoming a real problem? The Federal Reserve, for its part, announced on Wednesday, 17 March, 2021 that it would keep the s...
This past week, we got to observe Fed Chair Jerome Powell and the US stock market and the US bond market do everything I said they would do in their complicated shuffle of ships-and-icebergs. While bond yields had already begun to rise and compete against stocks, the Fed stayed the co...
Even as we see US rates making an orderly retracement away from record lows, we are struck by the angst this is causing many investors. In our view, rising interest rates should not of themselves be a cause for alarm. For equity investors, and especially those investing in value secto...
Last week, the latest US fiscal stimulus was signed into law, delivering $1.9 trillion of aid to a wide range of people and groups, as well as other non-COVID related spending. We know from the prior two COVID aid bills that direct aid can make a substantial economic impact. While...
The latest forecast for S&P 500 earnings in the first quarter of 2021 suggests a stronger rebound for earnings than the forecast from the Fall 2020 snapshot. Every three months, we take a snapshot of the expectations for future earnings in the S&P 500 at approximately the midp...
The addition of Tesla this week to the S&P 500 index has lowered S&P 500 estimates and raised the benchmark's P/E. The S&P 500 earnings yield fell to 4.29% vs. last week's 4.34%. The "forward EPS curve" for the S&P 500 took a little whack this week with the Tesla a...
There is a new strain of the coronavirus, and this one seems to be moving through populations at an alarming pace. Is it possible that this new rapidly spreading strain is in the U.S. already? Major parts of Europe are under strict lockdowns for the holiday season. By the time...