12/1/2020 It’s a new high, but not dissimilar to celebrating say, 29,999 as a new peak, although the odd number didn’t receive the same level of media attention. These round market levels, whether it be the Dow Jones Industrial Average, Nasdaq, or others, tend to generate high visibility (especially in…Continue Reading How important is the Dow reaching 30,000?
11/23/2020 Whether or not an asset class is in a bubble is difficult to answer in real-time, since sentiment can change course as quickly as a few weeks, or take years. In hindsight, these things are always more obvious. The question can be viewed through a few different perspectives: (1)…Continue Reading Are bonds expensive? Are they in a bubble?
11/9/2020 The election results may have surprised some forecasters (and certainly pollsters), as the predicted ‘blue wave’ of Democrats capturing both the Presidency and Senate fell short. Democrats did retain the House of Representatives, as anticipated, although more seats than expected were lost. Looking at results broadly, the electorate remains…Continue Reading With the election being over, what comes next?
9/21/2020 In many ways, policies to expect would likely be similar to what’s in place today, and largely opposite of those proposed under a Biden administration discussed a few weeks ago. At the same time, Trump’s policies have not followed ‘traditional’ Republican ideologies from decades past in a variety of…Continue Reading What would be the impact of a Trump Presidential reelection for a second term? How important is the President on financial markets anyway?
9/8/2020 The impact of a potential new President on stock market returns is always a key question in the weeks prior to a general election. It’s important to keep in mind that, despite frequent worries around this time of year, and that financial markets may react in the shorter-term term…Continue Reading What would be the impact of a Biden Presidential election win, potentially including a Democratic takeover of the Senate?
9/8/2020 There often isn’t a concrete reason. It’s important to remember that stocks trade in a market like any other good: when there are more buyers than sellers, prices move higher; when buyers dry up, this can reverse quickly. It’s been argued that certain large cap growth stocks have become…Continue Reading What causes sudden market declines like we saw this week, seemingly out of nowhere?
7/13/2020 Although they may appear to be disconnected on the surface, and near-term outcomes are impossible to predict, they’re likely no more disconnected than usual. One of the more important considerations to keep in mind about financial markets is that they’ve always been forward looking. Economic data, by its nature…Continue Reading Are the financial markets (‘Wall Street’) and the real economy (‘Main Street’) disconnected?
6/15/2020 As was the case during the financial crisis 12 years ago, the Fed is essentially out of ammunition at the short end of the yield curve (unless rates go negative, which continues to be seen as unlikely). There remain robust tools, such as buying of debt to push rates…Continue Reading What more can the Fed do at this point?
5/26/2020 With U.S. short-term interest rates again reaching the zero bound (fed funds rate of 0.00-0.25%), debate has surfaced again about moving the target range further—to below-zero territory. Several developed nations, mostly in Europe, moved down this path years ago, and now remain entrenched in it, with global slowing causing…Continue Reading Are negative interest rates again being considered as a viable option for the U.S.?
5/18/2020 This is never simple to evaluate, as current prices for rates and risk assets have a behavioral component, and appropriate price levels may only be obvious in hindsight. In past cycles, equity bear markets and subsequent recoveries have unfolded over months, not weeks. This more recent volatility event was…Continue Reading Have some financial asset prices bounced back too far and too fast?