February 2025: Looking Past the Pullback
As I write this note, the MSCI World Stock Market Index is down 3% from its all-time highs. For some reason, that has caused panic among investors. Year-to-date, the global stock market is up 1.6%. So, this week, we’d like to address the current state of fear and discuss whether it is justified. First we […]
February 2025: What Consumer Inflation Fears May Be Missing
Today was a tough day on Wall Street, but the market is basically back to where it was 10 days ago. So instead of addressing the stock sell off today, we’d like to discuss the outlook for inflation. The latest University of Michigan Survey of Consumers came out today with some worrying data on inflation. […]
January 2025: Earnings Hold Up Markets Amid AI, Fed, and Tariff Shocks
This week was full of bombshell announcements which spiked volatility and had investors rethinking many core assumptions. If you haven’t been paying attention here are a few of the major news items that rattled markets: Monday morning the world woke up to a renewed focus on the global AI war with the advent of DeepSeek. This […]
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 […]