Have Speculators Reached a Fever Pitch?

2023-05-31T19:55:22+00:00May 31st, 2023|Categories: INVESTMENT|

Executive Summary Recent market movements attributable to “AI” (artificial intelligence) are reminiscent of the 1990’s “.com” era. Recently, Nvidia, a graphics processor manufacturer, reported a fiscal first quarter earnings drop of 20% (year-over-year) with revenue down 13%. Yet the stock soared (see first chart below) because of [...]

Has the Bear Market Ended?

2023-05-23T18:36:40+00:00May 23rd, 2023|Categories: INVESTMENT|

Executive Summary After losing around 34% throughout 2022, the Nasdaq 100 index has bounced nearly 30% off the lows. Most of this ramp is due to eight stocks, listed below with their corresponding P/E ratios, along with the return of fear of missing out (fomo). These stocks [...]

How is the Consumer Faring?

2023-05-16T23:57:14+00:00May 16th, 2023|Categories: INVESTMENT|

Executive Summary After over a decade of zero-interest rate policy, a pandemic, and massive government stimulus, inflation finally arrived with a vengeance on consumers.  In the first graph, the University of Michigan Consumer Sentiment Survey reveals consumers do not feel good about the economy. It is at [...]

Has the U.S. Entered a Vicious Circle?

2023-05-09T21:19:25+00:00May 9th, 2023|Categories: INVESTMENT|

Executive Summary Last week’s Federal Funds Rate increase of .25% brings the rate over 5%, all part of the Federal Reserve’s fight to reduce inflation. The second graph shows the corresponding increases in Treasury Security rates. With the U.S. National debt now at $31.7 trillion, interest expense [...]

Is the Stock Market Strong?

2023-05-02T17:28:00+00:00May 2nd, 2023|Categories: INVESTMENT|

Executive Summary While the S&P 500 has recovered some of its 2022 losses, do not be fooled into thinking all is well. Eight stocks including Facebook (Meta), Apple, Amazon, Netflix, Google (Alphabet), Microsoft, Nvidia and Tesla are responsible for 100% of the positive return so far this [...]

Can Inflation Erode One’s Savings?

2023-04-25T15:54:26+00:00April 25th, 2023|Categories: INVESTMENT|

Executive Summary When inflation is running below 2% annually, it does not get much attention. However, last year when it hit 9%, it was on everyone’s mind. This issue looks at how inflation impacts the purchasing power of one’s savings. High inflation combined with market cycle downturns [...]

Are Investors Falling Prey to “Short-termism”?

2023-04-18T16:39:39+00:00April 18th, 2023|Categories: INVESTMENT|

Executive Summary Due to technological advances, stock market data and trading are both more available and much faster. This leads investors to think things will immediately improve or anything negative is short-term. Take inflation, which is caused by either rising energy prices flowing through costs of products [...]

Is the Optimism Warranted?

2023-04-11T16:13:21+00:00April 11th, 2023|Categories: INVESTMENT|

Executive Summary Recently stock markets have appeared optimistic, even though financial data does not agree. In the first graph below, one can see banks are tightening lending standards, which is consistent with prior recessions. In a debt driven society, reduced lending results in lower demand and smaller [...]

Featuring Wolf Richter: Services Inflation Rages at Worst Rate since 1984, Keeps “Core PCE” in High Range. Energy & Goods Cool

2023-04-04T16:37:30+00:00April 4th, 2023|Categories: INVESTMENT|

Executive Summary This week I wanted to share a guest article from Wolf Richter. This article reflects on trends that we typically use to measure our economic position - services, goods, energy, or groceries - and how they pertain to consumers, and how their current positions can [...]

What Could Be the Next Shoe to Drop?

2023-03-28T17:47:08+00:00March 28th, 2023|Categories: INVESTMENT|

Executive Summary During the COVID pandemic, many companies implemented work-from-home strategies, resulting in the realization of needing less office space. The impact of reduced occupancy (see first graph) could be an issue for owners and financiers of commercial real estate. Much of which is highly leveraged with [...]

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