Weekly Market Commentary January 30, 2023 The Markets The vicious cycle of inflation. Last week, we learned that pay increases at central banks in many parts of the world won’t keep pace with inflation. As a result, their employees may not be able to maintain the standards of living they had before inflation began rising. For example, at the United States Federal Reserve (Fed) the maximum pay incr...
Weekly Market Commentary January 23, 2023 The Markets “It’s hard to be a contrarian for very long these days because the consensus seems to change so quickly,” opined Ed Yardeni via LinkedIn last week. We’ve certainly seen a shift in investors’ preferences during the first few weeks of this year. Despite widespread expectations that markets would move lower early in 2023, major U.S. stock indices...
Weekly Market Commentary January 17, 2023 The Markets Bullish or bearish? After last year’s geopolitical turmoil, economic malaise, and tumultuous stock market decline, many financial professionals – from investors to asset managers – have strong opinions about what will happen in 2023. Some are bullish. While individual opinions are quite nuanced, in broad terms, bulls tend to think the Federal R...
Weekly Market Commentary January 09, 2023 The Markets It’s being called the “Goldilocks” report. Last Friday, we learned that demand for workers in the United States remained strong in 2022. The unemployment rate dropped to 3.5 percent in December. (It was 3.7 percent in November.) That brought U.S. unemployment back to where it was before the pandemic – at the lowest level in more than 50 years,...
Weekly Market Commentary January 03, 2023 The Markets It’s finally over. 2022 was a dismal year for financial markets. Major United States stock indices moved lower, trimming or eliminating the previous year’s gains. The Standard & Poor’s 500 Index, which had gained about 27 percent in 2021, dropped almost 20 percent in 2022. The Nasdaq Composite Index, which had gained more than 21 percent in...
Weekly Market Commentary December 27, 2022 The Markets What a year! In some ways, it feels as though we lived through several years in 2022. The onslaught of events included, “The first major European war since the 1990s, unprecedented sanctions, energy-price mayhem, bail-outs, global interest rates rising at their fastest pace in four decades, a faltering Chinese economy, an overheating Am...
Weekly Market Commentary December 19, 2022 The Markets Bad news is bad news, once again. For months, investors have cheered bad economic news. When the United States economy showed signs of weakness, stock markets often reflected investor enthusiasm. The thinking was that bad economic news would persuade the Federal Reserve to slow the pace of rate hikes. Inflation would slide lower, and recession...
Weekly Market Commentary December 12, 2022 The Markets What comes next? The U.S. stock market tends to be a forward-looking vehicle. Investors make decisions today based on what they think may be ahead for the economy, and how economic change may affect the companies they’re considering for investment. Currently, key questions include: Will inflation be lower in 2023? Will Federal Reserve (Fed) po...
Weekly Market Commentary December 05, 2022 The Markets What will it take to slow this economy down? In 2001, railway workers slowed a runaway train in Ohio by latching a second engine to the back of the locomotive and applying the brakes. In all, the train traveled sixty-six miles over two hours, decelerating from a maximum speed of 47 miles per hour to 10 miles per hour before workers regained co...
The Markets There was a shift in the winds of monetary policy. Last week, it became clear the Federal Reserve (Fed) had softened its hawkish stance. The minutes of the central bank’s November policy meeting indicated the Fed was likely to slow the pace of rate hikes soon. There was a caveat, though. The minutes noted: “…with inflation showing little sign thus far of abating, and with supply and de...