Broker Check

Weekly Market Commentary

September 13, 2021

The Markets

The Delta variant could take a toll on economic growth.

There was some good news last week. The 7-day moving average of COVID-19 cases in the United States declined. The bad news was that the rate of infection remained about 99 percent higher than it was one year ago.

As Delta variant infections surged across the United States, expectations for economic growth dropped more sharply than anticipated. Lisa Beilfuss of Barron’s reported on changes to third-quarter forecasts for U.S. gross domestic product (GDP) growth.

Read More

September 7, 2021

Stagflation isn’t trending, but it was mentioned in quite a few headlines last week.

Stagflation is a portmanteau of ‘stagnation’ and ‘inflation.’ It occurs when a country experiences slow economic growth along with high inflation and high unemployment. In the United States:

  • Economic growth was strong during the second quarter; 6.5 percent year-over-year, according to the Bureau of Economic Analysis. However, some forecasts for third quarter’s economic growth have been revised downward. Economists at one large investment bank lowered their estimate from 9 percent to 5.5 percent, reported Lindsay Dunsmuir of Reuters 
  • Inflation is the rise in prices over time. The Federal Reserve prefers to measure the rise by looking at median Personal Consumption Expenditures (PCE) inflation. Median PCE was up 0.29 percent from June to July 2021, and up 2.2 percent over the past 12 months. The Federal Reserve’s target for inflation is 2 percent.
  • Employment showed a solid increase in August, although the gains were less robust than many expected. Unemployment ticked lower (5.2 percent), the labor force participation rate remained unchanged (61.7 percent), and average hourly earnings ticked higher ($30.73).

The culprit behind slowing growth, rising prices and recent unemployment levels is COVID-19. The spread of the Delta variant created a new wave of parts and labor shortages. Demand for goods is rising as many people appear to be less concerned about the virus. Shortages of goods coupled with high demand for those goods have pushed prices higher.

Read More

August 30, 2021

“Raise your words, not your voice. It is rain that grows flowers, not thunder,” advised the Persian poet Rumi.

Last week, Federal Reserve (Fed) Chair Jerome Powell’s words helped grow the week’s equity market returns. In his speech at the Economic Policy Symposium in Jackson Hole, Wyoming, Powell confirmed that the United States economy had made substantial progress toward the Fed’s maximum employment and price stability goals. Consequently, the Fed is likely to slow and eventually stop the bond purchases that have been ensuring smooth market functioning during the pandemic.

Powell also offered assurance that the target range for Federal funds rate, which is one of the Fed’s tools for influencing short-term interest rates, will remain unchanged until “…the economy reaches conditions consistent with maximum employment, and inflation has reached 2 percent and is on track to moderately exceed 2 percent for some time.

Read More

August 23, 2021

Markets were shaken last week by a potent cocktail of central bank tapering and economic growth concerns mixed with coronavirus and a splash of the new Chinese privacy law.

On Wednesday, the minutes of the United States Federal Reserve’s Open Market Committee Meeting were released. They confirmed the Fed could begin tapering – buying fewer Treasury and U.S. government agency bonds – sooner rather than later, reported Jack Denton and Jacob Sonenshine of Barron’s. While that wasn’t new information, investors startled like cats surprised by cucumbers, triggering a broad sell-off.

In the United States, economic data was mixed. The U.S. Census reported that retail sales declined in July, suggesting weakening consumer demand. Normally, that’s not great news because consumer demand drives U.S. economic growth. However, with inflation at the highest level in more than a decade, lower demand could help relieve upward price pressure.

Lower consumer demand was accompanied by improving supply. Lisa Beilfuss of Barron’s reported, “…business inventories rose in June at the fastest clip since October as wholesalers and manufacturers posted solid increases and retailers saw inventories rise for the first time in three months. From a year earlier, inventories across American businesses rose 6.6%, compared with a 4.6% pace a month earlier.”

Read More

August 16, 2021

What is the most important driver of economic growth in the United States?

The most common way to measure economic output is Gross Domestic Product or GDP. It’s the value of all goods and services produced in our country over a specific period of time. GDP is a combination of the following:

  • Government spending
  • Business investment
  • Consumer spending
  • Net exports (Exports minus imports).

In June, U.S. GDP was almost $23 trillion, reported the Bureau of Economic Analysis.

A trillion is a difficult number to comprehend. Jerry Pacheco of KRWG explained the amount like this, “If you laid one billion dollars side by side like tile, they would cover about four square miles. A trillion dollars laid out the same way would cover approximately 3,992 miles, or 1,000 square miles larger than the states of Rhode Island and Delaware combined.”

Twenty-three trillion dollars would cover Rhode Island, Delaware, Connecticut, Hawaii, New Jersey, Massachusetts, New Hampshire, Vermont, Maryland, West Virginia and part of South Carolina.

Read more

August 9, 2021

Are we there yet?

For months, investors have wondered when the Federal Reserve (Fed) might begin to “normalize” its policies, a process that will eventually lead to higher interest rates. Last week, a better-than-expected unemployment report – showing a gain of almost a million jobs – sparked speculation about whether we’ve arrived at that point. It’s difficult to know.

When the pandemic arrived, the Fed adopted policies that stimulated growth. It cut short-term interest rates to zero and began buying Treasuries and agency mortgage-backed securities to keep long-term rates low, too. Low rates make borrowing less expensive for businesses and individuals, reported the Brookings Institute. That’s important in economically challenging times.

In late July, the Fed said it would continue to keep rates low and buy bonds until it saw “substantial further progress toward maximum employment and price stability [inflation] goals.”

Read More

August 2, 2021

 The Chinese dragon cast a shadow over free trade and foreign investment last week. 

For decades, investors have recognized the investment potential of China. Since the country opened to foreign trade and investment in 1979, its economy has grown rapidly. Through 2018, its gross domestic product (GDP), which is a measure of economic growth, increased by 9.5% a year, on average, according to the United States Congressional Research Service.

The country’s gradual economic development lifted millions out of poverty. In 2020, about 20 percent of the world’s middle class lived in China. China’s middle class has an appetite for goods and services that rivals that of America’s middle class, creating demand for a wealth of goods and services, reported the Brookings Institute.

Read More

July 26, 2021

The Markets

Shortest ever.

Last week, the National Bureau of Economic Research (NBER) finally announced the official dates for the recession that occurred in 2020. Economic activity peaked in February 2020 and bottomed in April 2020. That makes the pandemic recession the shortest in American history.

According to the NBER, “The recent downturn had different characteristics and dynamics than prior recessions. Nonetheless, the committee concluded that the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warranted the designation of this episode as a recession, even though the downturn was briefer than earlier contractions.”

Since then, the United States’ economy has accelerated like a sports car on the German Autobahn, leading the developed world in the race toward economic recovery. A gradual slowdown was inevitable. However, three obstacles in the road may result in a sharp deceleration, reported The Economist.

Read More

July 19, 2021

There was a gapers’ block in financial markets last week as equity investors slowed to see what the United States Treasury bond market was up to. 

U.S. Treasury bonds rallied last week. Yields on 10-year Treasuries dropped from 1.43 percent at the start of the week to 1.27 percent on Thursday. The rally was quite a surprise, reported Randall W. Forsyth of Barron’s. “After all, the economy has been booming, accompanied by rising inflation – exactly the opposite of what would be conducive to lower [bond] yields and higher [bond] prices.”

As 10-year Treasury yields reached the lowest level since February, stock investors took time to consider what might have caused yields to retreat. Lower yields often suggest slower growth ahead. There may be potential for global growth to slow if:

A new wave of COVID-19 swamps the global recovery. Twenty-four U.S. states saw the number of COVID-19 cases move higher by 10 percent or more last week, reported Aya Elamroussi of CNN. The Delta variant of the virus accounts for more than one-half of all new cases. Last week, the global death toll reached 4 million and Japan, host of the 2020 Olympic games, declared a state of emergency.

China’s banking system is in trouble. There was another surprise last week. “…China’s central bank announced a half a percentage point cut to banks’ reserve ratio requirements, potentially increasing the profitability of their loans but also stirring concerns about the health of their balance sheets following a debt-fueled property boom,” reported Naomi Rovnick, Thomas Hale, and Francesca Friday of Financial Times.

U.S. economic growth falters as monetary and fiscal stimulus recede. “…the bond market is now adjusting to the prospect of more moderate growth in the second half, with reduced fiscal largess and no $1,400 or $600 stimulus checks. And it’s looking ahead to the eventual prospect of the Federal Reserve throttling back its securities purchases, which currently pump $120 billion a month into the financial system,” reported Barron’s.

Read more

July 12, 2021

There was a gapers’ block in financial markets last week as equity investors slowed to see what the United States Treasury bond market was up to. 

U.S. Treasury bonds rallied last week. Yields on 10-year Treasuries dropped from 1.43 percent at the start of the week to 1.27 percent on Thursday. The rally was quite a surprise, reported Randall W. Forsyth of Barron’s. “After all, the economy has been booming, accompanied by rising inflation – exactly the opposite of what would be conducive to lower [bond] yields and higher [bond] prices.”

As 10-year Treasury yields reached the lowest level since February, stock investors took time to consider what might have caused yields to retreat. Lower yields often suggest slower growth ahead. There may be potential for global growth to slow if:

A new wave of COVID-19 swamps the global recovery. Twenty-four U.S. states saw the number of COVID-19 cases move higher by 10 percent or more last week, reported Aya Elamroussi of CNN. The Delta variant of the virus accounts for more than one-half of all new cases. Last week, the global death toll reached 4 million and Japan, host of the 2020 Olympic games, declared a state of emergency.

 

 

Read More

July 6, 2021

The world is about halfway back to normal.

The Economist developed the Global Normalcy Index (GNI) to measure the post-pandemic return to normal. In March 2020, the GNI was 35 overall, with 100 being the normal pre-pandemic level. At the end of the second quarter, the worldwide GNI was 66, or about halfway back to normal.

Activity in the United States has been recovering faster than in other nations. The U.S. GNI was 72.8 on June 30. However, recovery in the U.S. has been uneven. For instance,

Employment is improving, but more slowly than anticipated. Last week’s jobs report showed a better-than-expected gain of 850,000 jobs in June. However, April and May jobs reports were below economists’ expectations, reported Randall Forsyth of Barron’s. In June, the unemployment rate was 5.9 percent, which is an improvement on the double-digit pandemic unemployment rate, but above the pre-pandemic level of 3.5 percent.

Read More

June 28, 2021

What begins with the letter “I”?

Infrastructure is essential and sometimes taken for granted. Pipes carry drinking water to our homes, offices, and healthcare facilities, and carry away sewage and wastewater. Highways, airports, railroads, waterways, roads, and bridges make efficient transportation of goods and safe travel possible. Energy systems and transmission lines keep the lights on and the stove cooking. Broadband data transmissions systems assure high speed internet access.

On Thursday, President Biden and a bipartisan group of senators announced that progress had been made on the framework for a bipartisan infrastructure plan. Investors were happy to hear it. Randall Forsyth of Barron’s reported:

 

Read more

June 21, 2021

Is that a hawk?

The Federal Reserve Open Market Committee (FOMC) met last week. They get together eight times a year to review current economic and financial conditions, assess risks to price stability and economic growth, and adjust monetary policy accordingly.

When the Federal Reserve raises the fed funds rate to keep inflation and economic growth in check, it is ‘hawkish’. When the Fed lowers the fed funds rate to encourage inflation and economic growth, it is ‘dovish’.

Last week, the FOMC appeared to veer toward a more hawkish policy.

 

Read More

June 14, 2021

It’s transitory. It’s not transitory. It’s transitory. It’s not transitory.

Media analysts were plucking the inflation daisy petals last week. On Thursday, the Bureau of Labor Statistics released the Consumer Price Index Summary, which showed prices were up 5 percent year-to-year.

“Investors are debating whether the surge in prices at both a producer and consumer level will prove transitory, as the U.S. Federal Reserve believes, or become entrenched. Much of the angst over medium term inflation pressure becoming hotter is fueled by the backdrop of aggressive fiscal and monetary policy. This potentially combustible mix has a policy additive from a Fed prepared to tolerate a higher pace of inflation beyond its target of 2 percent for an unspecified period,” reported Michael Mackenzie of Financial Times.

Read more

June 7, 2021

The Markets

Pulling the economy out of the shed.

If you’ve ever stored tools or machinery in a shed or garage for an extended period of time, you know they often need some care and repair to function properly. The same appears to be true of the pandemic economy.

Economic growth in the United States is on the rebound. The latest report shows real gross domestic product, which is the value of all goods and services produced in our country, was up 6.4 percent annualized during the first quarter of 2021, an improvement from 4.3 percent in the fourth quarter of 2020. Also, pandemic restrictions have been lifted. Americans have begun to spend more and save less, and there is high demand for goods and services.

The economy appears to be primed for stronger growth, but there are some glitches in the system – namely labor and supply chains.

Read more

June 1, 2021

Are we at a tipping point?

One side effect of the pandemic was a collapse in demand for oil, which led to “the largest revision to the value of the oil industry’s assets in at least a decade,” reported Collin Eaton and Sarah McFarlane of The Wall Street Journal.

Last week brought another reckoning for big oil as a court ruling and shareholder influence made it clear companies need to revisit their strategies for emissions reductions and clean energy. Here’s what happened:

Read More

May 24, 2021

What do markets hate?

They hate uncertainty, and recently there has been plenty of it. Some of the questions plaguing economists and pundits include:

Why aren’t people returning to work? Americans, like people in other parts of the world, have not been rejoining the workforce at the pace many had anticipated. One of the most frequently cited theories was explained by The Economist:

“In America businesspeople, almost to a pinstripe, are convinced that the $300-a-week boost to unemployment insurance explains the shortages. However, pundits do not agree on whether stimulus handouts really lead people to shirk. The evidence is hazy elsewhere, too…Australia ditched its job-protection scheme in March, and shortages have worsened.”

 

Read more

May 17, 2021

Uncle Inflation is here. Will he overstay his welcome?

Ever since the financial crisis, central banks have pursued expansionary monetary policies to encourage reflation and avoid deflation. Well, it’s taken some time, but inflation is finally here.

Last week, major stock indices in the United States moved lower after inflation, as measured by the Consumer Price Index (CPI), was four times higher than anticipated, reported Ben Levisohn of Barron’s.

 

Read more

May 10, 2021

Like a gender reveal gone wrong, last week’s employment report delivered an unexpected surprise.

Economists estimated 975,000 new jobs would be created in April. The United States Bureau of Labor Statistics (BLS) reported there were just 266,000. That’s a big miss.

Economists, analysts, and the media offered a wealth of theories to explain the shortfall. These included:

 

Read More

May 3, 2021

It’s Spring and economic recovery is in the air.

Last week, the Bureau of Economic Analysis reported the U.S. economy grew at a 6.4 percent annualized rate for the first three months of 2021. While that’s good news for companies and workers, asset managers are checking their expectations.

The stock market reflects what investors think may happen in the future. During the past year, major U.S. stock indices moved higher as investors anticipated vaccines and economic recovery, reported Patti Domm of CNBC. Since its March 2020 low, the Standard & Poor’s 500 Index has gained 88 percent.

 

Read more

April 26, 2021

It wasn’t just the price of pork chops.

Last week, as investors weighed the news, strong corporate earnings were offset by higher grocery prices and rising numbers of global coronavirus cases.

Solid corporate earnings weighed favorably.

So far, 25 percent of the companies in the Standard & Poor’s (S&P) 500 Index have reported first quarter earnings, and 84 percent said profits grew faster than expected, reported John Butters of FactSet. The blended earnings growth rate for the S&P 500 (which includes estimated earnings for companies that have not yet reported and actual earnings for companies that have) was 33.8 percent last week. For context, the 5-year average earnings growth rate (actual earnings) for the S&P 500 was 6.9 percent as of last week.

Read More

April 19, 2021

Where are Treasury bonds going?

The direction of bond yields is influenced by investors’ expectations for economic growth, among other factors. When economic growth is expected to weaken, bond yields tend to move lower. When economic growth is expected to strengthen, bond yields tend to move higher.

Last year, U.S. Treasury yields began to climb higher on optimism that vaccines, in tandem with fiscal and monetary stimulus, would strengthen economic growth. The yield on 10-year Treasuries rose more than 1 percent in just a few months, from 0.54 percent at the end of July 2020 to 1.75 percent at the end of March 2021.

Last week, Treasury yields moved lower. Ben Levisohn of Barron’s explained it’s “…possible that after yields nearly doubled to start the year, investors were simply waiting to see that the move higher was over before buying again. Of course, nearly everyone was predicting a 2 percent yield on the 10-year, while often forgetting that rarely does anything in financial markets move in a straight line.”

 


Read more

April 12, 2021

Investors didn’t stumble over inflation last week. Why not?

Inflation – rising prices of goods and services – can be measured in a variety of ways. For example, the Consumer Price Index considers changes in the amount consumers pay for goods and services – a bag of carrots, a gallon of gas, or a doctor’s appointment. The Producer Price Index (PPI), on the other hand, considers changes in the amount producers – such as farmers, manufacturers, or physicians – charge for goods and services.

Last week, the Bureau of Labor Statistics reported the PPI increased by 1 percent month-over-month in March 2021. It was twice the increase forecast by economists. On a year-over-year basis, the PPI was up 4.2 percent, which was the biggest gain since 2011, reported Reade Pickert of Bloomberg.

It’s important to pay attention to comparisons. The year-over-year PPI reflected prices from last March, after the pandemic had affected demand and prices dropped lower. Bloomberg explained the phenomenon may continue for several months:

Read More

April 5, 2021

Zoom, zoom, zoom.

Big economies tend to recover from recessions about as quickly as semi-trucks accelerate from stop lights. In other words, recovery tends to be slow. That may not be the case this time.

“Everything in this economic cycle is happening at great speed. That is in part a reflection of the scale of economic stimulus, and not only from the [Federal Reserve]. One big fiscal package seems set to follow another. A $1.9trn package has barely passed and a $3trn infrastructure bill is mooted,” reported The Economist.

Economic recovery has helped push stock prices higher, and concerns about inflation have pushed bond yields higher. Here are a few highlights from the first quarter of 2021:

Read more

March 29, 2021

Last week, unemployment claims were looking good and consumers were feeling good.

The number of Americans applying for first-time unemployment benefits declined. Just 684,000 people filed claims during the week of March 20, down 97,000 from the week before, according to last week’s report from the Labor Department.

Granted, that’s a large number – higher than the highest number of first-time claims during the Great Recession – but it’s the smallest we’ve seen since the pandemic began, according to Christopher Rugaber of the AP. He wrote:

“Economists are growing more optimistic that the pace of layoffs, which has been chronically high for a full year, is finally easing…Still, a total of 18.9 million people are continuing to collect jobless benefits…Roughly one-third of those recipients are in extended federal aid programs, which means they’ve been unemployed for at least six months.”

Read more

March 22, 2021

What are professional asset managers thinking?

Bank of America recently published the results of its March global asset managers’ survey, which polls 220 professional investors responsible for about $630 billion in assets, reported Julia La Roche of Yahoo! Finance.

Many of those surveyed were optimistic about 2021. During the next 12 months:

  • 91 percent of those polled expect the economy to strengthen (that’s a record high)
  • 89 percent anticipate global profits will improve
  • 52 percent expect value stocks to outperform growth stocks

 

Read More

May 15, 2021

Investors had a lot to be enthusiastic about last week.

Major stock indices in the United States soared, finishing the week higher and setting new records along the way, reported Al Root of Barron’s. There was plenty of good news to fuel investor optimism:

  • The $1.9 trillion American Rescue Plan was signed into law. The plan provides $1,400 payments to most Americans. It also delivers child-tax credits, health-insurance subsidies, and extends unemployment benefits into September, reported NPR. Funds also were made available for schools, states, and vaccination efforts, as well as tax relief for people receiving unemployment benefits.
  • The spread of the coronavirus appears to be slowing. The 7-day average number of cases in the United States dropped 11.2 percent week-to-week, reported the Centers for Disease Control (CDC). More than 20 percent of Americans have received a first dose of a COVID-19 vaccine and more than 10 percent have been fully vaccinated. As circumstances have improved, a number of states have begun easing lockdown restrictions.
  • Inflation remained low in February. For the 12 months through February 2021, the Consumer Price Index rose 1.7 percent, reported the Bureau of Labor Statistics last week. That’s well below the Federal Reserve’s usual target of 2 percent. However, food and energy prices increased significantly more than the index average.


Read more

March 8, 2021

Neanderthal DNA may make people more – or less – susceptible to COVID-19, reported The Economist. It all depends on whether you have the genes and, if you do, which DNA string you inherited.

No matter what your gene sequence looks like, vaccines can help fight the virus. So far, all of the vaccines available in the United States have proven to be effective in preventing hospitalization and death from coronavirus, according to the Centers for Disease Control (CDC).

We saw the economic effect of accelerating vaccinations last week when the number of new jobs created in February exceeded expectations. The Bureau of Labor Statistics reported there were 379,000 new jobs, primarily in the leisure and hospitality sector, which was hard hit by the virus and lockdowns.

 

Read More

March 1, 2021

Students of financial markets may have noted a historically unusual event last week.

On Thursday, the yield on 10-year U.S. Treasury notes briefly matched the dividend yield for the Standard & Poor’s (S&P) 500 Index. This type of convergence is uncommon. In normal times, the yield on 10-year Treasuries tends to be higher than the dividend yield of the S&P 500. Felix Salmon of Axios explained:

“The 10-year Treasury note is a risk-free asset: If you hold it for 10 years, you know exactly how much it's going to return…The S&P 500 dividend yield is normally lower than the risk-free rate. Investors earn less in dividends than [they] would holding the same amount of money in Treasury bonds, but they hope that rising stock prices will make up the difference.”

 

Read More

February 22, 2021

It’s a contrarian’s dream come true.

Contrarian investors like to buck the trend. They buy when other investors are selling and sell when others are buying.

Last week, Bank of America (BofA) delivered a contrarian’s dream. BofA’s monthly survey of 225 global asset managers, who are responsible for $645 billion in assets under management, showed the managers were almost fully invested, according to CNBC.

The survey showed asset managers’, “…cash levels at the lowest since March 2013, global equity allocations at a 10-year high, and a record number of respondents reporting taking a ‘higher than normal’ level of risk,” reported Randall Forsyth of Barron’s.

 

Read More

February 16, 2021

Way back, when radio disk jockeys played 45-rpm vinyl singles, the A-side of a disk was the song the record company was promoting and the other side – the flip side – held a song that sometimes had an equal or greater impact. For instance, the flip side of Queen’s We Are the Champions was We Will Rock You.

When it comes to the economy and financial markets, flip sides can have significant impact, too. For example:

  • Stock market performance. Last week, major stock indices in the United States – the Standard & Poor’s 500, the Dow Jones Industrial, and the Nasdaq Composite – finished at record highs. That was happy news for investors.

The flip side:

Concern that share prices may not be sustainable. “The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior…this bubble will burst in due time…,” wrote asset manager Jeremy Grantham of GMO in January 2021.

Read More

February 8, 2021

It’s not a black diamond ski run yet, but the yield curve for U.S. Treasuries is steeper than it has been in a while.

A yield curve is the line on a graph showing yields for different maturities of bonds. Yield curves provide insight to bond investors’ perceptions about the economy. There are four basic types of yield curves:

  • Normal: The slope is upward because short-term bond yields are lower than long-term bond yields. A normal curve for U.S. Treasuries has a yield gap of about 2.3 percent between 30-year Treasury bonds and 3-year Treasury bills, according to Fidelity. On Friday, the difference was 1.78 percent.
  • Steep. The upward curve is unusually steep. This may occur when an economic expansion is underway, demand for capital pushes interest rates higher, and inflation rises.
  • Flat: There is no curve because short- and long-term bonds have similar yields. Flattening yield curves can be a precursor of economic slowdown and lower interest rates.
  • Inverted: The curve slopes down. Long-term bond yields are lower than short-term bond yields. Some believe an inverted yield curve is a signal that recession is ahead.

Right now, the steepening of the U.S. Treasury yield curve is positive news, according to a source cited by Ben Levisohn of Barron’s:

Read more

February 1, 2021

They say people watching the same event often see different things. That seems to have been the case last week when share prices of a few companies experienced tremendous volatility.

Some cast the events as a David vs. Goliath morality tale, however, Michael Mackenzie of Financial Times saw it differently. He wrote, “…a speculative surge from retail investors using borrowed money…has in the past signaled a frothy market top.” (In financial lingo, a market is ‘frothy’ when investors drive asset prices higher while ignoring underlying fundamentals.)

No matter how you characterize it, the events of last week were unusual. Felix Salmon of Axios explained, “Almost never does a stock trade more than twice its market value in a single day…It has happened 7 times this week already, and 20 times this month…What we've seen in the past month, and especially the past week, is certain companies becoming little more than vehicles for short-term gambling."


Read More

January 25, 2021

The Markets

Last week, as COVID-19 vaccination efforts continued, there was speculation about stock market corrections and asset bubbles.

On Sunday morning, Bloomberg reported 63 million doses of the coronavirus vaccine had been administered across 56 countries. In the United States, 21.1 million shots have been delivered – about 51 percent of the vaccinations that were sent to states. At that point, the pace of vaccination in the United States was just over one million doses a day.

Improvements in the pace of vaccinations could lift market optimism, according to Ben Levisohn of Barron’s, but a market correction is still a possibility:

 

Read More

January 19,2021

Investors were rocked by economic data showing the economy hit the brakes hard in December.

Last week, major U.S. stock indices decelerated as investors gaped at the economic damage caused by the rising number of coronavirus cases around the world. There have been more than two million COVID-19 deaths globally, with more than 390,000 deaths in the United States. The spread has resulted in new lockdowns and restrictions and has hurt economic recovery.

Ben Levisohn of Barron’s reported:

“This past week – with the market looking ahead to the inauguration and what might be in store following the Capitol riots and Donald Trump’s second impeachment – was a terrible one for economic data. Whether it was small-business confidence, consumer inflation, or just about anything else, the numbers painted a picture of an economy that was slowing more rapidly than expected. Initial jobless claims, which spiked to their highest level since August, and retail sales, which fell 0.7 percent, were particularly frightening.”

Read More: