December 2024: Bullish Fever: Record Sentiment
his week we want to briefly touch on the surging sentiment in the US stock market. This week the Euphoriameter reached the highest level in my career. In addition, the Consumer Board’s Consumer Confidence in the Stock Market Index also reached the highest level since the data set began. Needless to say, investors are “all-in” […]
November 2024: Election Odds: Market Expectations
Time to address the elephant in the room—the election is next week. Today we want to share with you the current probabilities for the election outcome. These probabilities are what are currently priced into the financial markets. If the results of the election materially differ from these odds, then expect to see financial markets […]
October 2024: Global Highs: US Dominance
With the global stock market at its all-time highs, we want to highlight the current valuation dynamic and a few of the forces driving US stock prices. The current forward price to earnings multiple of the MSCI All World Stock Index is 18x. This puts the present valuation ratio at the 93rd percentile—meaning that 93% of […]
September 2024: Global Rally: Renewed Optimism
As you know, last week the central bank cut the Fed Fund Rate by 50bps. This week we want to review how financial markets have reacted to this cut. As you might expect, the S&P 500 (US Large Cap Stocks) has increased by 2.5% since the Fed announcement. Investors have become more optimistic on […]
September 2024: Shifting Winds: A Period of Repricing
The Global Stock Market Index is down just over 3.5% this week. Why the sudden shift in momentum? Well, this week investors began to reassess their assumptions on the path of Fed rate cuts. Just three days ago, the Fed Funds Futures were pricing in a 25bps cut this month and potentially four cuts by […]
August 2024: Interest Rates: A New Phase
Federal Reserve Chairman Jerome Powell delivered a speech in which he said the following: “The time has come for policy to adjust… The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks… Inflation has declined significantly. The labor […]
August 2024: Market Volatility: A Healthy Reset
This week we want to touch on two topics: first, the current stock market pullback and second, our recent shift in public fixed income holdings. The stock market has had a rough couple of days, continuing its recent pullback since the middle of July. As of writing this note, the global stock market has fallen […]
June 2024: Interest Rates: A Temporary Peak
In the last few years there have been many economists and pundits arguing that we’ve entered a long era of rising interest rates. Recently James Grant, editor of the Interest Rate Observer, was asked his outlook and gave the following core reasons for his long-term expectation for higher rates. Persistently high inflation Significant fiscal deficits […]
June 2024: Chinese Equities: Value Beneath the Surface
This week we want to briefly discuss the Chinese stock market. Since the beginning of 2021, their stock market has declined by almost 50%. While China has the second largest economy in the world, their stock market now accounts for just 2.4% of the global stock market capitalization. Switzerland has a similar stock market capitalization […]
April 2024: Multi-Family Housing: A Resilient Asset
For about a year now, investors have been expecting a collapse in apartment values along with a corresponding decrease in rents. We’ve argued against this thesis, expecting rents to hold up and support multi-family housing prices. Today we’d like to share a few data points that highlight the resiliency of the apartment sector and show why […]