There is a feeling of apprehension in markets. I can sense it in the questions I receive. I continue to get more run-of-the-mill queries such as: “Are stocks still overvalued at current levels?” But then there are the new questions, which reflect deeper concerns. Most of the election-related questions I have received are like none I have gotten before in my career.Comments Off on Five questions we’re hearing from investors
In mid-June, we began cautioning that the high-velocity, v-shaped recovery in stocks from their March lows was producing tactically overbought conditions, raising the likelihood of a near-term pullback.1 Fast-forward to early-September and the S&P 500 Index began what now appears to be an abrupt risk-shedding event, centered on the high-flying growth and technology stocks.Comments Off on U.S. election year seasonal effects and low interest rates support stocks
The first debate between President Donald Trump and former Vice President Joe Biden will take place on Sept. 29 — the first of three debates scheduled to take place before Election Day on Nov. 3. The first debate in an election season leaves an indelible impression on voters, especially in regard to the challenger. And often, this impression has nothing to do with substance on the issues and everything to do with optics and presentation. In short, Biden needs to show voters that he is strong enough and competent enough to hold the office. How he presents side-by-side with Trump will be determinative, in our view.Comments Off on Our guide to watching the presidential debates
It’s back to school season, and that invariably reminds me of my own education and all that I enjoyed learning when I was in school. One class that I found particularly thought-provoking was a business school class on the history of entrepreneurship. Interestingly, the curriculum started with Joseph Schumpeter, the economist who introduced the concept of “creative destruction,” which Schumpeter developed based on the theories of Karl Marx. Not surprisingly, I have thought a lot about Schumpeter’s views throughout the pandemic.Comments Off on What will arise from today’s ‘creative destruction’?
It feels like investors have been on a wild ride over the past week as tech stocks plunged, dragging down major global indexes with them. A few factors contributed to the fall: The first was Senator Mitch McConnell’s comments that a U.S. fiscal stimulus deal may not come to fruition in the next few weeks. Then, concerns rose about the potential for a contested election in the U.S. presidential race if no clear winner is declared on election night. Add to that concerns about frothy valuations in the tech space — the result was a very substantial sell-off for tech stocks with reverberations in global markets.Comments Off on Three reasons why this isn’t another ‘tech bubble’
After almost doubling since its cycle low in December 2015, the price of gold witnessed a violent shakeout of over 7% in early August. Has the fundamental outlook for the yellow metal changed or should investors buy the recent dip? To answer those questions, we study some of the major drivers of gold prices, starting with sentiment.Comments Off on Fire is the test of gold
Last week brought some major headlines with a new inflation target policy from the Federal Reserve, news of a leadership change in Japan, a decline in US consumer sentiment, and spikes in COVID-19 cases. What are the implications of these events for investors?Comments Off on What could the Fed’s new policy mean for investors?
It’s August in New England for the Hooper family, which means hot summer days, barbecues, and lots of time in the water. Every year at this time, my thoughts turn to the iconic movie “Jaws,” which, as regular readers of this blog may remember, is another summer tradition for me. The book came out when I was still a toddler, and the movie soon after, so I must confess that I have never felt comfortable swimming in an ocean in my entire life. In fact, I recall reading the book as a child in the car as we drove from New York to Florida for a beach vacation — and declaring after a particularly frightening chapter that I was ready to turn around and go home.Comments Off on Staying on guard against overconfidence
The global financial crisis of 2008 has become a blueprint for how policymakers are acting today to smooth the negative growth and inflation shock from the ongoing health pandemic. Many global central banks have been forcefully pushing liquidity into markets to foster economic stability. Collapsing domestic demand and falling inflation has enabled an environment of co-operation between central banks and governments to ensure liquidity remains abundant and activity levels can be sustained without interruption.Comments Off on Global central banks – The permanent actor
To assess whether a prolonged “risk-on” environment has emerged, it is important to focus on what we know about market cycles. While no two market cycles are identical, they tend to follow similar patterns. This time has been no different, the global pandemic notwithstanding.Comments Off on Today’s “risk on” environment may be here for the long term
Last week, I laid out five things to watch in the month of August. Over the past seven days, we’ve seen new developments in each one. This week, I offer a quick update to each of those five issues, and then highlight positive news for U.S. jobless claims and vaccine development.Comments Off on Optimism persists despite U.S. stimulus stalemate
We are officially in the “dog days of summer” (in the Northern Hemisphere, anyway). This nickname comes from the rising of Sirius (the “Dog Star”), but it has become synonymous with the uncomfortable heat of late summer. Technically, the “dog days” end on August 11, but most people apply the term to the entire month. This week, I look at five issues that I expect to impact markets throughout the sweltering “dog days” and beyond.Comments Off on Five things to watch in August
Last Friday, my oldest child graduated from high school. Late July is not normally associated with graduations, but we are living in a time of COVID, and so what was supposed to occur two months earlier in the New York area was postponed and rescheduled. We were incredibly grateful to our son’s high school for putting on five separate graduation ceremonies in the course of a day to comply with New York State regulations that allow a maximum of 150 people to attend gatherings. Given the need to fit in five ceremonies in one day, the event felt like one part important milestone and one part fast food drive thru — which made it the first high school graduation I ever attended that was efficiently run and ended before you actually started wishing it could end. I was struck by the commencement speaker and his very honest words to the graduates. He told them that he couldn’t imagine having to miss out on the many important senior-year milestones that the class of 2020 missed because of the pandemic. He told them that this year has created a wound that will take years to heal.Comments Off on The pressure is growing for the U.S. economy
In the months since the initial coronavirus outbreak, we saw the economy and markets teeter on the brink of collapse, only to recover quickly. I recently sat down with my colleague and Investment Strategist, Talley Leger, to discuss the sustainability of this recent recovery.Comments Off on The two-sided recovery: A conversation about the markets and economy
When I was in high school, we read Henry James’ “The Europeans” in our English Literature class. A major theme in the novel is the contrast between Europeans and Americans, with Americans in the “New World” somewhat ironically portrayed as conservative, traditional and more focused on money, while Europeans are portrayed as less traditional, more progressive and more emotional. I have thought about that book a lot in the past week.Comments Off on EU passes stimulus package while U.S. lawmakers continue to negotiate
We were joined recently by clients for a discussion about global investment opportunities, in the context of technically overbought conditions in US stocks. In this blog, we share our views regarding where we see risks and opportunities in international stocks.Comments Off on Answers to pressing questions from investors