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The stock market is stuck between a growth scare and rising long-term interest rates, but I see no recession on the horizon. The labor market is much too strong and shows no signs of weakening. Consumer cash flows and balance sheets are a fortress. The expansion should continu...
After reaching a new low for affordability in March 2022, the median new home in the U.S. became even less affordable for the typical American household in April 2022. April 2022's median household income was just 17.4% of the value of the median new home sold during the month. By thi...
High energy prices will be a major political problem in both the European Union and the United States, especially if we get to $150 this summer. Any move in bond yields above 3.20% will be a major problem for the stock market. A slowdown in construction and improved supply to the ...
The US consumer price index (CPI) has risen by over 8% in the past year, similar to Europe’s 7.4% increase. In the US, higher retail gasoline prices have historically led to higher expectations of inflation, leading to higher actual inflation. Going forward, achieving a div...
The good news is that President Biden said that tackling inflation is his “top domestic policy.” The bad news is that the burden of fighting inflation falls mostly on the Fed raising key interest rates, which could depreciate asset values like homes and stock prices. Eur...
The fundamentals for lumber, like a lot of commodities, had been favorable. Supply bottlenecks and persisting pandemic plight would limit how much production could make it to market, inelasticity taken for granted as somewhat permanent/durable, thereby constantly susceptible to what other...
The investment marketing world urges that every day is a valuable buying opportunity and fear of missing out is a formidable bait. After a decade of ‘easy money’ policies aimed at inflating asset prices at all costs, mean reversion is a much-needed value-restoration forc...
If you are an investor and sell every time your perception of uncertainty rises, you will avoid risk, but you will also miss opportunities. Our heightened state of awareness about uncertainty has us focused on the negative outcomes, assuming the worst-case scenarios will be realized. ...
Periods of low volume and relatively small moves are normally comforting and allow us to avoid making decisions. My biggest concern is that I may not see enough that is important and draw the wrong conclusions. I am increasingly concerned that several others, including some well-known...
Central banks have primed markets to expect too many rate hikes in the face of persistent inflation, in our view. This keeps us neutral on stocks in the short run. The U.S. added 390, 000 jobs in May - a number that was matched by new entrants to the labor force. This shows the labor ...