Macro Strategy—QT Kicks into Second Gear: Financial conditions are likely to remain under pressure as the Federal Reserve’s (Fed) quantitative tightening (QT) program kicks into a higher gear in September. A doubling of the run-off cap on the Fed’s balance sheet plus persistent hawkish rhetoric from Fed officials will likely keep downward pressure on economic…...
In 1987 shortly after Black Monday Peter Lynch was interviewed about the minimal hedging incorporated within the Magellan Fund: “Perpetually planning for downside in constructs that perpetually move higher is a puzzle to me also.” ~ Peter Lynch of Fidelity Magellan Fund If you would like to watch the weekly State of the Market video,…...
Chair Powell and the Fed make it crystal clear that their job fighting inflation remains unfinished. Ironically, while bonds took the message in stride, stocks seemed to be shocked by the messaging. The path for stocks from here will be determined by earnings, where we still see material downside. Unfinished business for theFed…While the Fed’s…...
With consecutive down weeks for the markets and the manner in which this past Friday played out for investors, dismay, pessimism, and doubt are likely to plague investor sentiment once again. On June 30, 2022, the S&P 500 (SPX) finished the first half of the trading year in bear market territory, down 20.58 percent. It…...
In bull markets, investors are blind to the risks. In bear markets, investors are blind to the opportunities ~ Brian Feroldi If you would like to watch the State of the Market video, please click the link provided. (coming shortly) Have a great trading week and be on the lookout for this weekend’s Research Report!…...
A 4-week winning streak has come to an end for markets. As reported in last week’s Research Report, this held a reasonable probability after a nearly 18% rally in the S&P 500 (SPX) and roughly 20% rally in the Nasdaq (COMP). “In the table/study below from Steve Deppe, we take a look at what just…...
If this were a Bear Market Rally then the S&P 500 gain of +17.19% off the decline of -23.55% would be the GREATEST bear market rally ever after an interim bear market decline of -27.77% or less. If this were a Bear Market Rally then the NASDAQ gain of +22.52% off the decline of -33.70%…...
Welcome back to our weekly Research Report cycle (3-weeks on, 1 week off). The markets are expressing a very consistent pattern that we’ve analyzed and outlined for several months, as the bear market cemented itself in 2022. The good news is that the bear market may have moved from cementation to culmination. The technical analysis…...
If we know that bad times are temporary and progress is undefeated, why is it so hard to stay invested when stocks fall? I buy the argument that there are some evolutionary things going on in our genetic makeup. Better to run first and ask questions later. But if we put that to the side…...
The rise in inflation and the Fed’s reaction to it has been a real headwind for valuations this year. However, it’s also been a tailwind for earnings. Now, we are on the other side of that mountain, and operating leverage is rolling over likely more than the consensus expects. Be careful what you wish for…Inflation…...
