Is There Further to Go?

2022-09-27T18:46:59+00:00September 27th, 2022|Categories: INVESTMENT|

Executive Summary The Fed raised the Federal Funds Rate again last week by 0.75% in the fight against inflation. In  the second graph below one can see the estimated rates through 2025. In addition to interest rate  moves, the Fed is also tightening monetary policy by reducing [...]

Is the End Game Getting Nearer?

2022-09-20T16:40:34+00:00September 20th, 2022|Categories: INVESTMENT|

Executive Summary U.S. Federal debt outstanding totals about $31 trillion. From 2018-2021 (4 years) the debt grew as much as it did for the first 232 years (founding through 2007) combined! Now take a look at the math: U.S. Estimated Income Tax Revenue          [...]

What is the Impact of Inflation?

2022-09-13T15:45:17+00:00September 13th, 2022|Categories: INVESTMENT|

Executive Summary One Federal Reserve goal is maintaining an average of 2% inflation, which from around 2012 until the pandemic was a struggle (see first graph). Due to the massive government spending efforts and the supply constraints created from COVID19 and the Russia/Ukrainian war, inflation finally began [...]

Are Projected Corporate Earnings Overstated?

2022-09-07T18:31:41+00:00September 7th, 2022|Categories: INVESTMENT|

Executive Summary One indicator for determining stock market valuation is the Price-to-Earnings ratio (P/E). In this missive, I explain how the math (increases/decreases in numerator and denominator) impacts the ratio in changing market cycles. Generally, if price rises and earnings remain the same the ratio increases, and [...]

Is Fed Tightening Just Getting Started?

2022-08-30T17:59:02+00:00August 30th, 2022|Categories: INVESTMENT|

Executive Summary Between the 2008 Financial Crisis and the start of the pandemic, the Federal Reserve Bank increased its balance sheet from approximately $850 billion to about $4 trillion. From there the pandemic created a panic, and they further increased it to nearly $9 trillion (See first [...]

Is the Bear Market Rally Over?

2022-08-23T18:36:19+00:00August 23rd, 2022|Categories: INVESTMENT|

Executive Summary After falling about 23% for the year as of June 16th, the S&P 500 began a strong bear market rally of 17% (see first graph). Many pundits were calling the end of the bear, and the beginning  of a new bull market. However, as shown [...]

Does It Really Reduce Inflation?

2022-08-09T16:19:36+00:00August 9th, 2022|Categories: INVESTMENT|

Executive Summary On Saturday, August 6, the Senate passed what is ironically titled the Inflation Reduction Act, which outlines $485 billion in new spending. After massive stimulus packages during the pandemic (2020-2021), Federal deficits increased by 38% and inflation is now around 9%. The third chart below [...]

What Are Corporate Earnings Indicating?

2022-07-26T15:55:47+00:00July 26th, 2022|Categories: INVESTMENT|

Executive Summary Stock analysts’ earnings estimates tend to error on the optimistic side, as shown in first graph below 2023 estimates start at the peak and go up. Analysts often revise estimates down so corporate earnings will “beat” estimates, even when earnings decrease over prior year. During [...]

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