Monday, November 29, 2021

Morning Note: "We can only hope" -- And -- A Microcosm

As I type, the Dow's shaved a 300-point opening rally by two-thirds, while metals and materials (and their related companies) and global equities, while generally higher, lag notably... US consumer staples, industrial and financial stocks are actually in the red so far this morning.

Sunday, November 28, 2021

Macro Update, Teeing Up Our Year-End Letter -- And -- Finding 'Investing' Comfort in an Uncomfortable World (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Friday, November 26, 2021

Market Update: Today's Selloff, Thinning Ice -- And -- Really? Bitcoin is Digital Gold? -- And -- Patient (while hedging) With the Go-Forward Setup (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Wednesday, November 24, 2021

Morning Note: Data Highlights -- And -- Milton Friedman on Alcoholism and Inflation...

While you'd expect quiet on the day before Thanksgiving, well, definitely not -- in terms of the number of data releases -- on the economic front.

Here' I'll try to sum much of it up:

Tuesday, November 23, 2021

Morning Note: Junk Bonds Rumbling -- And -- A Telling Quote

As clients and long-time readers know, we do a great deal of deep ongoing analyses in our effort to ensure that our client portfolios reflect what we believe, in the aggregate, is the best overall risk/reward setup. That process -- which includes both fundamental and technical analysis across asset classes, sectors, regions, politics, geopolitics, etc. -- over the years has led us to creating proprietary indicators in areas such as the macro economy, financial stress and investor sentiment. 

Monday, November 22, 2021

Market Update and Setups (video)

Note: I recorded this morning's video commentary mid-session. Editing it down to hopefully a palatable length made it a little choppy in spots.

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: Stocks and Bonds Disagree...

The Biden Administration announced this morning the re-nomination of Fed Chair Jerome Powell. In that, as they say, equity markets detest uncertainty, headlines suggest that Powell's extension entirely explains a nice pop in the US major averages so far this morning.

Saturday, November 20, 2021

Macro Update (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Friday, November 19, 2021

Quote of the Day: "Lordy" Indeed!

From our morning note:

"...suffice to say that a truly healthy market setup is generally one where most boats are rising with the tide. Poor breadth suggests that a given index is being propelled by a concentrated group of members. I.e., stress in a single stock, or a mere handful of stocks, can send an entire index reeling. Which was a much-documented phenomenon that preceded the bursting of the late-90s tech bubble."
Just ran across this from Semper Augustus President and CIO Christopher Bloomstrand:

Morning Note: Seasonality Looks Good, But the Breadth!

While there's much macro in the world to touch on, we'll save it for this weekend's update and focus briefly this morning on the recent troubling trends in stock market breadth. 

Let's just say that while seasonality right here inspires legitimate near-term bullishness, the breadth readings pose a headwind to that sentiment.

Thursday, November 18, 2021

Highlights

Judging by the volatile level of hits volume we're seeing on our daily blog posts it's clear that catchy titles and/or tantalizing teasers tend to capture far more attention than those that come across more or less ho hum. Thing is, it's often those with less-enticing titles/teasers that contain some of the most important messaging that we really want clients taking in.

So, with that in mind, we're going to make a weekly habit out of offering up highlights (with links) from the prior 7 days of messaging that capture what we believe to be the important point(s) of the prior week.

Here you go:

Morning Note: A Bullish Lean, More Stinky Breadth, and "two warranted prices for a share" of stock...

Along with our own macro and financial stress indices we maintain another barometer that tracks investor sentiment. Long-time clients and readers will recall many "side-of-the-boat" references made herein over the years. I.e., we try to discern when there's a crowding on either the bull or the bear side of the boat, as, when either nears an extreme, there's heightened risk that the boat will begin to take on water, sending the crowd, in a blind panic, sprinting to the other side.

Wednesday, November 17, 2021

Morning Note: Quick Update and a Brief Technical Look at Stocks, Silver and the Dollar (video)

Overnight and early morning data releases show a generally mixed overall macro setup that we'll tackle in this week's macro update. 

In the meantime, here are your morning numbers followed by a telling technical market update that I shot last night:

Tuesday, November 16, 2021

Morning Note: It's Way Different This Time! -- Or -- Something's Gotta Give -- Or -- Striking a Chord?

Here's the monthly change in consumer revolving debt. Note the big jump in credit card usage over the past few months vs the 2 years+ of frugality following the 2008 recession:

Sunday, November 14, 2021

Morning Note: "The Key to Retail Sales"

Here's Bespoke Investment Group's intro to their market commentary this morning (I'll bold the part that jibes with the macro update I sent out over the weekend):

Saturday, November 13, 2021

Macro Update: Positives, Negatives, Uncertainties -- And -- Consumers are Curbing Their Enthusiasm (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Friday, November 12, 2021

Morning Note: A Brief (technical) Look at Japanese Equities, Gold and Silver

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Thursday, November 11, 2021

Morning Note: Like Wayne Gretzky (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Wednesday, November 10, 2021

Morning Note: Tech, Inflation, Gold, etc. (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Tuesday, November 9, 2021

Morning Note: "Elevated Pressures" (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Monday, November 8, 2021

Morning Note: Friday's Yield Move??? (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Saturday, November 6, 2021

Macro Update: Sentiment Improving Despite Ongoing Challenges...

We'll update you on the macro in quick and easy fashion this week.

Our proprietary index gained 2.08 points, for an overall score of +20.83:

Friday, November 5, 2021

Quote of the Day: Japan's Fiscal Largesse

In yesterday's technical market update, subtitled "Why We "Technically" Like Japan Right Here" I suggested that we'll likely see increased fiscal activity in Japan going forward.

Here, coincidentally, is BCA Research making that point today:

Morning Note: The Mind Boggliness (and policy implications) of Current Household Net Worth -- Or -- Simply Can't Have the Porridge Hot!

This morning's job numbers did not disappoint!

Thursday, November 4, 2021

Technical Market Update: US Equities, Breadth, and Why We "Technically" Like Japan Right Here (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: That "Forward Guidance" Tool

In a technical look at the market video I shot yesterday morning (sending the finished product to you shortly), I mentioned the bullish seasonality that takes us to the end of the year, then intimated that the calendar turn may usher in a more difficult period for stocks.

Wednesday, November 3, 2021

Morning Note: What About the Roots? -- And -- Expect Syrup

So, we've been hearing, seems like day after day, that the stock market -- i.e., the Dow or the S&P 500, or both -- keeps hitting new all time highs. Client after client during our review meetings mention it, with most (our clients are by and large a "mature" bunch) following with a concerning "something's gotta give", or words to that effect...

Tuesday, November 2, 2021

Morning Note: Manufacturers Challenged, Yet Upbeat

A few key highlights from the ISM's October Purchasing Managers Survey:

“Business Survey Committee panelists reported that their companies and suppliers continue to deal with an unprecedented number of hurdles to meet increasing demand. All segments of the manufacturing economy are impacted by record-long raw materials lead times, continued shortages of critical materials, rising commodities prices and difficulties in transporting products.

Monday, November 1, 2021

Morning Note: Really Liking This Chart! -- And a Must-Read Quote

Japan, whose equities occupy ~60% of our developed Asia-Pac exposure -- and who presently represents the top foreign country weighting in our core portfolio -- saw election results yesterday that preserved an outright majority for its recently minted Prime Minister Fumio Kishida. Consequently, the country's stocks rallied 2.61% overnight.

Saturday, October 30, 2021

Macro Update (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Friday, October 29, 2021

Morning Note: "No Way They'll Do That To Us"

Clearly, all markets aren't all in on the Fed and the ECB's (European Central Bank) stated view that the present level of inflation, while not abating as soon as they had anticipated (prayed), is "transitory." Rate hike odds -- more and sooner than previously priced -- are being priced in to a degree that is beginning to play havoc with yield curves.

Here's our chart of the 2yr/10yr treasury yield curve:


While it's presently a long ways from a recession-signaling inversion (where the 2yr yield is higher than the 10yr), a rolling over denotes anticipation of a weaker economy going forward, which "the market" believes would be the case were the Fed to begin raising rates as it's currently pricing in.

Stock markets, on the other hand, ain't buying it. They're saying "no way they'll do that to us!" And, frankly, I think they, for the moment, have the present players in the Fed's and the ECB's numbers.


That said, however:

Asian equities struggled overnight, with 9 of the 16 markets we track closing lower.

Europe's a mess this morning, with all but 2 of the bourses we follow in the red, as I type.

US major averages are down to start the day as well: Dow down 30 points (0.08%), SP500 down 0.32%, SP500 Equal Weight down 0.09%, Nasdaq 100 down 0.58%, Nasdaq Comp down 0.54%, Russell 2000 down 0.08%.

The VIX sits at 16.92, up 2.36%.

Oil futures are down 1.24%, gold's down 1.09%, silver's down 0.81%, copper futures are down 1.89% and the ag complex is down 0.39%.

The 10-year treasury is up (yield down) and the dollar is up a big  0.62%.

Led by solar stocks, water stocks, bank stocks, metals miners and utilities -- but dragged by uranium miners, oil services stocks, MP (rare earth miner), Latin American equities and base metals futures -- our core portfolio is off 0.52% to start the session.


Once again, from my all-time favorite book:
"The big money was not in the individual fluctuations but in the main movements that is, not in reading the tape but in sizing up the entire market and its trend."

 --Jesse LIvermore


Have a great day!
Marty


Thursday, October 28, 2021

This Week's Message: Highlights

Once again, we'll devote this week's main message to the highlights from the past week's key messaging:

Morning Note: "The Greatest Way to Optimize"

So, US GDP for the 3rd quarter came in at 2.0%, thanks to a build in inventories. Were it not for inventories, growth would've been nada. 

Wednesday, October 27, 2021

Technical Market Update (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: "Are Equities Overlooking a Bigger Issue?"

As I've noted herein a few times heading into this earnings season, we've been keenly concerned with the forward guidance companies might issue in the face of persistent bottlenecks in virtually all things input, including, apparently, labor.

Tuesday, October 26, 2021

Morning Note: Good Breadth, But Not Everywhere -- And -- A Quote for the Young to Heed

I've seen several blurbs of late on how positive breadth readings are for the S&P 500 Index, particularly the comparison between advancing and declining members.

Monday, October 25, 2021

Charts of the Day: Style Shift Due?

In this morning's note I suggested that a "regime" change may be in the offing. It's always interesting to track style relationships over a few market cycles.

Morning Note: Don't Hold your Breath -- And -- Regime Shifts Are Tough!

Well, the very short-term SP500 technical setup, while not as bearish as it was bullish (as I pointed out in this video) heading into the month, doesn't look all that constructive as we close out the month.

Saturday, October 23, 2021

Weekly Macro Update (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Friday, October 22, 2021

Morning Note: The 'S' Word

The opening sentence from this week's release of the Fed's Beige Book* echoes the story we've been telling of late. That is, recession risk remains low, but growth is slowing:

Thursday, October 21, 2021

Quote of the Day

The following blurb from BCA Research yesterday comports to a virtual T with our go-forward macro thesis related to equities and, per the last sentence (although for add'l reasons), the dollar -- and, thus, with our present on balance positioning:

Morning Note: Managing Positions

Like I said yesterday, the setup for inflation, and, nearly by default, commodities, is resoundingly bullish well into the foreseeable future. I also said that as investors embrace that sentiment, related markets will get ahead of themselves and correct, at times "violently."

Wednesday, October 20, 2021

This Week's Message: Recent profit-taking notwithstanding, we remain long-term bullish on inflation, energy, and the rest of the commodities complex...

As clients and regular readers know, our under-the-surface view of global general conditions has it that inflation going forward will be, let's say, more than it's been the past several decades.

Morning Note: Whole Lotta Hedging Going On

As you may have noticed, September was relatively tough on the stock market:

Tuesday, October 19, 2021

Technical Stock Market and Dollar Update (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.


Morning Note: So Far So Good

One of our concerns heading into this earnings season was the extent to which rising input costs would do a number on corporate bottom lines and forward guidance, and, thus, on stock prices.

Monday, October 18, 2021

Morning Note: The Fed's Well-Founded Fear

The 2-year treasury yield (in orange below) -- a presumed harbinger of Fed funds rates (white line) to come -- is suggesting that the Fed is not far away from doing more than simply tapering its monthly bond purchases:

Sunday, October 17, 2021

Macro Update: Sentiment, Sectors, Metals and More (video)

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

*CFO Survey charts courtesy of Bespoke Investment Group...

Friday, October 15, 2021

Morning Note: Friendly for stocks, not so much for bonds -- And -- The trouble with trying to time cycles...

Please pardon my cynicism, and we do like banks right here, but when the powers that be engage in what ultimately amounts to the pumping of unthinkable liquidity into the financial system (read markets), well, yeah, you're going to see news lines like this following a Goldman Sachs' earnings announcement:

Thursday, October 14, 2021

This Week's Message: Highlights

We'll make this week's main message a highlight fest from our past week of messaging:

Morning Note: Producer Prices Please, However... -- And -- "Systems Thinkers"

Positive earnings news and lower than expected jobless claims, along with tamer than expected producer price inflation has equities adding onto what was already a strong rally in the futures pits.

In terms of the economic data, the jobless claims of course make perfect sense; remember, the U.S. presently sports over 10 million job openings. As for the producer inflation data, well, that's a bit more nuanced.

Wednesday, October 13, 2021

Morning Note: Yeah, inflation...

Inflation, per this morning's CPI print, is running hotter than economists predicted, but certainly not hotter than you and I are feeling. But, hey, maybe not... I mean J. Powell did say inflation is concentrated in just a few select areas.

So, if we ex-out, umm, well, like everything, we're good. 

Tuesday, October 12, 2021

Morning Note: Sentiment is Waning -- And -- Flexibility is Key!!

Suffice to say that, while we see low recession odds on the foreseeable horizon, overall economic sentiment is clearly waning.

On the global front, the IMF published its latest World Economic Outlook this morning.

Here's the intro:   emphasis mine...

Monday, October 11, 2021

Morning Note: Oil's Up, Japan's Cap Gains Tax Isn't -- And -- What Defines History's Best Investors

With the bond market shuttered and no major data releases or earnings reports this morning, there's not much to cover on this side of the pond.

Well, then again, there is the price of oil, which now fetches over $80/barrel! We've mentioned plenty herein how there simply won't be the expansion of fossil fuel production capacity that $80 and a growing global economy might otherwise inspire. That said, there are for sure plenty of existing wells that can be turned back on as, yes, there's money to be made at $80. Baker Hughes just reported the 5th week in a row of rising rig counts, and we should expect refining capacity to expand (come back) going forward, coming off of hurricane and, not to mention, COVID constraints. 

Sunday, October 10, 2021

Quotes of the Day -- And -- An Important Technical Market Update (video)

Yesterday evening I listened to the latest Grant Williams and Bill Fleckenstein "End Game" podcast; their guest was Simplify Asset Management's Harley Bassman.

While I didn't necessarily agree with all of Harley's assertions, I nevertheless found him to be an exceedingly sharp, very deep thinker on markets.

The following exchange resonated with me; i.e., with my view of present Fed policy and the hazardous setup it engenders:

Saturday, October 9, 2021

Macro Update: A Challenging Setup

An uptick in the JPMorgan Global Composite PMI (Purchasing Managers Index) has our macro index back above 20 this week (20.85).

Friday, October 8, 2021

Morning Note: At Second Blush -- And -- It's About What You're Wearing

At first blush this morning's jobs number looked like a big bust; 194k net jobs added vs 500k expected. 

At second blush, however, it was fine: 

Thursday, October 7, 2021

Quick Market Note

I'm unexpectedly on the road today, so I wasn't in a position to offer up the usual morning note.

As I suspect you noticed, equity markets staged a nice rally today that was essentially follow through on yesterday's bounce; that by all appearances was inspired by some political give on the debt ceiling. 

Wednesday, October 6, 2021

This Week's Message: Base Case Intact, Artificiality -- And -- Seasonality In Play

In yesterday's video commentary I finished with: 

"...we have huge opportunities relative to our longer-term weaker-dollar/inflationary thesis that we think are going to play out nicely over the next few years. Next few weeks and months? I dunno..."

I.e., while we fully anticipate intense (at times) volatility across, for one, our commodities exposures, our base case relative to what are slow supply responses to increasing pricing dynamics remains very much intact.

Morning Note: That "Distribution" Feel

Interesting action so far this morning. Overnight, as equity futures were melting down, headlines suggested it was all about rising interest rates and energy prices. However, before we made it to the cash session, interest rates turned negative and energy prices, nat gas in particular, utterly plunged. And, while off their lows (in the U.S.) stocks are still struggling notably.

Tuesday, October 5, 2021

Technical Market Update (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:


Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: There's Worry Afoot

In our portfolio discussion yesterday Nick and I pondered the coming earnings season. The key question: How are companies going to handle their forward guidance when so many are hamstrung by lack of necessary materials, components and such?

Monday, October 4, 2021

Morning Note: Q4 is largely about political calculation...

As we enter what is typically the best quarter for equities, market actors worry over the outcomes of what are, at this juncture, essentially little more than political calculations.

Friday, October 1, 2021

Macro Update: "Transitory" Losing Traction -- And -- Recession Risk is Not An Issue Right Here...

Quick update this week.

Our macro index moved down a titch with just one input (durable goods orders ex-transportation) changing score (positive to neutral).

Morning Note: Our Current Game Plan

Equities (in the pre-market) were looking to extend their selloff into October when Merck announced positive test results on its oral anti-viral COVID treatment. Apparently sparking a notable move from red to green in futures.

So, we'll see, the pattern of late for U.S. equities has been one of deterioration as the trading day wears on.

Thursday, September 30, 2021

This Week's Message: Cause for Optimism, But... and Highlights From This Week's Messaging

Is there cause for optimism around equities heading into the fourth quarter? Sure. Is there nevertheless some serious risk in the overall setup? Yes. Should we, even if the optimists have it right, anticipate some serious volatility in Q4? Absolutely!

Ironically, much of the stuff that allows for optimism is the stuff that defines much of the risk as well.

Morning Note: Well, sure...

Rising jobless claims (362k this morning vs 351k last week vs 335k the week before) fly directly in the face of evidence that says the economy's expanding. 

Well, actually, maybe not.

Wednesday, September 29, 2021

Tuesday, September 28, 2021

Quote of the Day: One of the Reasons We Like Ag Going Forward

Our agriculture futures ETF now occupies a not-small position in our core portfolio. An article published this morning by Bloomberg titled The Country That Makes Breakfast for the World Is Plagued by Fire, Frost and Drought tells of why unpredictable weather patterns (disrupting production/sparking higher pricing) are a key part of our thesis:

Morning Note: Sound Familiar?

So equity markets are feeling the jitters this morning. Question is, over what?

Well, in DC, well, it's a mess... Here's Bespoke Investment Group summing it up in their morning note:

Monday, September 27, 2021

Morning Note: Massive Overcompensation

 Here's a snip from our July 14th of this year post (oil was $54 a barrel that day):

"As clients and regular readers have noticed, we remain bullish (long-term) on energy -- and I'm not talking just renewables right here.
In a nutshell, fossil fuel markets have seen massive capital expenditure reduction of late -- with the expectation of more cuts to come. I.e., we're talking less capacity to produce to an extent that we think massively overcompensates for the go-forward reduction in demand due to the adoption in renewables."

It's $74 this morning!

Saturday, September 25, 2021

Macro Update: PWA Index 6 Points Higher -- And a Quick Look at Stocks, Gold, the Dollar and a Few Portfolio Tweaks (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

 

 Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Friday, September 24, 2021

Morning Note: Testing Support

Quite the week for stocks!

While the S&P 500 has rebounded impressively from Monday's dive, it's still just flirting with breakeven (white line) on the week.

Thursday, September 23, 2021

Morning Note: "The Twilight Zone"

The latest Grant Williams Podcast featured Prerequisite Capital's Daniel Want. The following from that conversation speaks volumes about the unique market landscape we find ourselves presently traversing:

Wednesday, September 22, 2021

This Week's Message: Uncertainty's Certainly Thick, But What Do We Indeed Know for Certain?

So it's September, the only month of the year that over the long-run sports a negative average annual return for the S&P 500 Index. And, so far, September 2021 hasn't disappointed.

Morning Note: I'm 'Just' Wondering About Single-Family Housing 'Production' Right Here

Monday's release of NAHB's monthly homebuilder sentiment read had builders feeling a bit better about their current setup and essentially the same regarding future expectations, in comparison to the previous month. 

Tuesday, September 21, 2021

Morning Note: The Critical Investing Skill

In this week's main message I'll be touching on the China property bubble saga, the toppiness of U.S. equities, incentives (or constraints if you will) with regard to policy makers' approach to the financial markets and, amid palpable uncertainty, a few things we know for sure. Time permitting, it'll hit your inbox sometime later today or early tomorrow.

Monday, September 20, 2021

Brief Market Update (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

 

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Friday, September 10, 2021

Quick Macro Update

Well, this'll likely be the last you'll hear from me for the next week or so. Heading out soon for my annual trek to Montana to do a little fly fishing with a buddy and my dear friend Matt, the fishing guide whom I introduced you to a few years ago. I believe that blog post holds the all-time record for most hits. Linking it to last September's rendition. Note that this year I'll be out of the office Monday through Friday.

As for our weekly macro analysis, I'll keep this one brief.

Morning Note: Unsavory

As we've stressed herein over the past year, the present state of financial markets, by itself, does not allow the Fed to get, let's say, consequential, in terms of combating inflation going forward. 

Thursday, September 9, 2021

Wednesday, September 8, 2021

This Week's Message: Unique to Our Lifetimes -- And -- No, Inflation's Not So Concentrated...

Eight times each year each Federal Reserve Bank interviews key business contacts, economists, analysts, etc., in their respective districts to assemble what we can view as a real-time general conditions snapshot for the U.S.

Morning Note: Too Much Prevention??

I ran across the following Robert Oppenheimer quote while listening to a recorded lecture yesterday and got to thinking about how the desperation of policymakers, elected and appointed, to circumvent the painful (yet essential) stages of cyclical economic and market phenomena grows -- as do the tools they bring to bear -- with each cycle:

Tuesday, September 7, 2021

Morning Note: Belaboring the Labor Topic

This morning's action in treasuries, and the dollar, has me belaboring just a bit the labor topic (touched on it here, here and here Friday and Saturday). 

Saturday, September 4, 2021

Quotes of the Day: Sticky or Not...

We touched on employment conditions yesterday (here and here), and, again, I'm in the camp that believes the latest is not about a slowing economy at this point, it's about the obvious:

Friday, September 3, 2021

Macro Update: Terrible Auto Sales, Disappointing Jobs Number, Weakening Consumer Confidence, But Context Right Here is Key! (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust.

 

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: Jobs Number Missed, But Don't Hold Your Breath

Generally-speaking, the initial market reaction to a bit of news or data doesn't always end up reflecting what ultimately becomes the, let's say, enduring market reaction. This morning, however, with regard to the July jobs data, I think the market's impulse is on the money.

Thursday, September 2, 2021

Morning Note: "Good decision processes" are key...

There's virtually nothing in the morning data worth getting excited about. Jobless claims were a bit better than expected, the trade balance was as well, auto sales were abysmal but there we're talking lack of inventory, unit labor costs were up (productivity down) but there we're talking increased working hours, factory orders were a hair better than expected and the final durable goods number shows a 1% month-on-month decline. One could make a stink over European producer prices popping by 2.3% month-on-month, but no, as I type our Eurozone ETF is right there with the S&P 500 this morning, up a smidge.

Wednesday, September 1, 2021

This Week's Message: The Trade That Keeps On Ticking -- And -- Status Quo Bias

The trade that keeps on ticking is large cap U.S. growth (read big tech). And the latest data, frankly, couldn't offer more support.

Morning Note: Coming Off the Boil -- And -- A Pet Peeve

Global PMIs overnight confirmed that economies are indeed coming off the boil. Whether it's a natural come-down from what we'll deem an overdose of government stimuli or it's more about the delta variant, or a bit of both, remains to be seen. 

Tuesday, August 31, 2021

Morning Note: The Correct View of the World

US equity index futures left rally mode overnight to come into today's session slightly red. The overnight data and related news was all over the place.

Monday, August 30, 2021

Morning Note: U.S. Seeing Hotter Inflation... Hmm....

Despite the present tumults of Afghanistan, Ida and Delta, markets are relatively quiet to start the week. 

Friday, August 27, 2021

Macro Update: "Narrow" and "Transitory" Inflation Fantasy (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.


Morning Note: "A Man Hears What He Wants to Hear and Disregards the Rest" -- And a little music 😎

Traders were sanguine this morning ahead of Fed head Powell's speech due to start at 10am ET. Which is interesting since, without exception, the five Fed members (only one a voting member) who've granted interviews yesterday and today said they're ready to begin cutting monthly bond purchases much sooner than later.

Thursday, August 26, 2021

Morning Note: Taper Talk Tomorrow -- And -- A Key To 'Long-Term' Investment Success

Tomorrow is setting up to be an interesting day for markets. Fed Chair J. Powell gives his keynote speech in Jackson Hole; a speech that was, at one point, clearly meant to confirm that indeed taper (cutting a bit back on monthly bond purchase) was coming, and to offer up the timeline. 

Thing is, during the time between the recent lining up of Fed board members to each give their public nods to taper and today, the delta variant has reared its very ugly head -- seeding doubt around Powell sounding the alarm come tomorrow. 

Wednesday, August 25, 2021

This Week's Message: Why European Equities -- And -- Highlights From a Week's Worth of Messaging

In last week's macro video I featured a clip of an interview where an analyst made a case for European stocks that comports with our own long-term thesis. I also reiterated that much of the rest of the outside world's equity markets offer a unique relative (to the U.S.) value proposition as well.

Morning Note: It (the setup) Is Way Different This Time!

I'll cut quickly to the chase this morning after a few quotes from my own morning reads (although don't skip this one, the book quote at the bottom's a good one). A more substantial weekly message will follow later today.

Tuesday, August 24, 2021

Morning Note: Optimism and Inflation Remain -- And -- At the Mercy of Expert Test-Takers (and Mess-Makers!)

We'll devote this morning's message to yesterday's release of IHS Markit's August U.S. Flash (preliminary) Manufacturing and Services Purchasing Managers Indices (PMI). They say a ton about current conditions.

Monday, August 23, 2021

Morning Note: Markets are Snapping Back, but why? -- And -- Happy People Spend Money

Weekend news says Korean exports for the first 20 days of August surprised to the upside, and Japan's and Australia's latest manufacturing PMI surveys held up fine. Their respective services PMI surveys, however, contracted notably (covid fears and restrictions). Eurozone services PMI's held up much better (higher vaccine rates and notably fewer restrictions, if any), while manufacturing PMIs continue to denote a mix of optimism, supply constraints and inflation.

Sunday, August 22, 2021

Rough Week, Concentrated Tech, EM (etc.) Prospects (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

 

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Friday, August 20, 2021

Macro Update: Big Drop in Our Conditions Index -- And -- The Bullish Long-Term Case for European Equities (video)

Early in the video, where I show the history of our index against the S&P 500, I remind the viewer of what I was anticipating back in the day -- that when our index turns red and we turn cautious, in all likelihood the market will rally a bit further. 

I forgot to explain why that might occur: It's simply because the very same data that would have us cautious would spook policymakers into taking measures that would likely boost equity markets in an attempt to inspire the sort of reflexivity that they'd hope would avert an impending economic slowdown. 

Attention First-Time Homebuyers: Careful What You Wish For!

Rick Palacios Jr., director of research for John Burns Real Estate Consulting just posted a most-telling thread on the current state of the residential real estate market (see below). 

Morning Note: "Average" Stock Correcting Hugely -- And -- Patience is Key!

Yesterday, I touched on the resoundingly negative breadth that conflicted with positive moves in the major averages. While this morning's breadth is a touch more tolerable, it's still nothing to write home about.

Thursday, August 19, 2021

Breadth Doesn't Match Today's Action (so far) -- And -- A Preview to a Simple Cynical Market Narrative

As I type, the S&P 500 Index has clawed its way back to a 4 point gain, while the Nasdaq Composite is now up an impressive, all things considered, 0.24%.

So the U.S. stock market's back from a messy couple of days! Well, not so fast. As I type, literally 60% of the S&P 500's constituents are down on the morning, while just shy of 70% of the Nasdaq's members are currently bleeding.

Morning Note: Feels a bit like Q4 2018

At roughly the two-minute mark in last weekend’s video commentary I mentioned the seeming sanguineness of a most-respected macro analyst around how equity markets would react to the Fed tapering its monthly bond purchases. I then said the following:

Wednesday, August 18, 2021

This Week's Message: A Snapshot of What We Think We're In For -- And -- Brief Narratives on Gold, Ag and Non-US Equities

For this week's main message I'll share an excerpt from my latest internal log entry, where I briefly update our theses on individual positions. Specifically, non-US equities, gold and ag futures. But first, my thoughts on today's market reaction to the release of the Fed's latest meeting minutes.

Morning Note: Housing Hurting

As we've previously discussed herein, folks (survey respondents) think it's, frankly, an awful time to go buying a house. That, by the way, was confirmed in the latest from the widely followed University of Michigan Consumer Survey.

Tuesday, August 17, 2021

Supposed to be weird right here...

Clearly, there's lots (LOTS!) going on in the world for the equity market to get the jitters over. There's also, as I mentioned in our recent technical look at gold and U.S. equities, seasonality:

Morning Note: Retail Sales Miss -- Do or Don't Do China? -- And -- How the "Big Money" is Not Made

Our October 30, 2020 Macro Update was subtitled "Pulling Forward." Here's a snippet:

Monday, August 16, 2021

Morning Note: Inflation's Doing a Serious Number on Sentiment -- And -- Narratives (for sure!) Drive Markets

A Chinese data miss, the delta spread and the disheartening scenes from Afghanistan has global equities (save for India's) heading south to start the week.

Saturday, August 14, 2021

Macro Update: Shipping #s Off, Sector Action Bullish -- And -- Why Washington Might Love a Correction Right Here (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:


Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Friday, August 13, 2021

Morning Note: It's Either Higher (price) or Lesser (quantity), Or Both -- And -- It's Constraints That Count

Lots to parse in our weekly macro exercise today, so I'll keep this morning's note short and sweet.

So, according to an Evercore ISI survey, retailers are presently able to pass higher costs onto the consumer:

Thursday, August 12, 2021

Morning Note: The Mark Twain Trade

It's probably safe to say that reports of the death of the reflation trade have been greatly exaggerated. Of course our longer-term base case firmly supports that notion. The past few days have seen growth (read tech) give way (notably) to the likes of industrials, materials, financials and so on.

Wednesday, August 11, 2021

This Week's Message: The Inconvenient Truth About Today's Bond Market Signal...

I’m reading lots of commentary these days from macro players who still see the bond market as a legitimate signal of general conditions.

They tend to also see inflation right here as transitory phenomena; believing that once covid-driven bottlenecks are relieved we’ll see the costs of goods and services descend to notably lower levels, and/or we’ll see the future rate of inflation slow, and meet right back down with that sub-2% trend.

Morning Note: Good luck moving OPEC...

So, inflation remains hot, but presumably not as hot as some expected this morning's CPI report to print, and word has it that the Biden Administration is urging OPEC to open the oil taps a bit more. 

With regard to the latter, the message is, help us out here, we're going to be spending hugely* and we need to get the inflation bug off our back...   

Tuesday, August 10, 2021

Morning Note: Jobs Galore! -- And -- "A Messy Multipolar World"

From last Tuesday's morning note:
"Presumed noble intentions notwithstanding, and while, indeed, the Delta variant may represent heightened deterrent for the careful would-be job-seeker, aggressive government intervention can't help but lead to market distortions; labor market included..."

Monday, August 9, 2021

Gold and Stocks Technicals -- And -- Long Term Trends (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:


Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: About Last Night -- And -- "Paradigm Shifts" That Matter

Last night was something to behold during the Asian session. The volatility was notable in equity futures, in tech in particular, but it was extreme in the precious metals space. Here's Peter Boockvar's take:

Saturday, August 7, 2021

Macro Update: Car Sales Tanking, Jobs Numbers Rising -- And Will Inflation Last? Well, It Better! (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:


Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Friday, August 6, 2021

Morning Note: Why Our Approach

So ya'd think on a morning when the official jobs number comes in just shy of a million that the stock market would be screaming higher, wouldn't ya?

Thursday, August 5, 2021

Morning Note: A Dangerous Ethos

Per this week's main message, pundits who believe we're to revert right back to the inflation setup (none to speak of) of the past several decades point to the signals of a bond market that is anything but a legitimate market/economic signaler these days. It, in a sense, signals whatever the Fed desires it to signal -- which would be that inflation this go-round is "transitory" and, therefore, the Fed's free to print at will, to suppress interest rates ad infinitum and to essentially fund federal deficits as far as the eye can see.

Wednesday, August 4, 2021

This Week's Message: The One Thing (the only thing) I Absolutely Know

Sharing my latest entry to our internal log as this week's main message:

8/2/2021
Interesting; reading all the commentary around the economy, inflation, financial markets, etc. Credible macro players who sit in the deflation camp are understandably pounding their chests with “see, the reflation trade is already dead” as the 10-year yield sinks below 1.2%.

Morning Note: Presumed Noble Intentions Notwithstanding

ADP's jobs number whiffed expectations by a mile this morning, seeing bond yields lower and the gold price higher on the news.

Tuesday, August 3, 2021

Morning Note: Inflation's A Must

Fed Chair J. Powell suggested in last Wednesday's press conference that inflation was concentrated in select areas of the economy.

Here was my take last Thursday morning:

Monday, August 2, 2021

Morning Note: Feeling Copper

15 of the 24 July global manufacturing purchasing manager's indices that were posted overnight showed declining sentiment readings (vs June's). With presently covid-stricken areas of Asia of course faring the worst. 

Sunday, August 1, 2021

Quotes of the Day: The Ongoing Commodities (and producers) Setup

While, like all tradable markets, the commodity space will absolutely see its share of volatility* (down and up) in the months and years to come, as we've firmly stated herein, in our view the longer-term setup remains historically-attractive.

Saturday, July 31, 2021

Macro Update: Flat (but telling), Latin American Cats -- And -- My Latest Musings

Mixing it up a bit, we'll do this week's macro update in writing...

For starters, our own general conditions index scored no change on the week, with an overall macro score of  29.17:

Friday, July 30, 2021

Quote of the Day: That's Risky

"Even though the S&P's hitting new highs I'm hard-pressed to find people that are really enjoying this and that are excited about this move. Most people that I know, professional traders, are all holding their heads down and complaining about how this is hurting and how nothing's working."

Morning Note: "Lean Into the Future"

Of all the companies to miss revenue expectations, in this environment, Amazon... Hmm... Its stock price this morning (off nearly 7%) says traders were caught a bit off guard. 

Of course it's not that Amazon is suffering in the least, it's that the operative word above is "expectations." And human nature being what it is, there's that "recency bias" (always anticipating more of the latest) that forever rocks markets as economic and market regimes begin to change... More on that in our upcoming macro update...

Thursday, July 29, 2021

Wednesday, July 28, 2021

This Week's Message: Immediate and Intermediate-Term Conditions

This week's main message comes from my most recent entry to our internal market log:

7/25/2021 Immediate and intermediate-term conditions:

Morning Note: The Trader's Ultimate Challenge

Three heavyweights (to put it mildly) -- Apple, Microsoft and Google -- per their after-the-bell earnings releases yesterday scored knockouts. I.e., they soundly beat analysts' estimates.

Tuesday, July 27, 2021

Morning Note: The Essential Challenge of Risk Management

If you're the type who cares to follow day-to-day market gyrations.. well, like I said last Tuesday

"One thing's for certain, it's going to be one volatile summer for asset markets!"

While heavyweight earnings releases (Apple, Google and Microsoft today) can certainly move the equity market, a Fed policy meeting announcement (tomorrow) can move everything. 

Monday, July 26, 2021

Quote and Chart of the Day: "The minute the equity market stops rising..."

You've heard me make the point over and over again (as recently as this weekend's video) that the Fed simply can't let the stock market go (not suggesting they'll succeed indefinitely), as our economy is essentially levered to its continued rise.

Morning Note: We'll Take Brazil over Beijing Right Here...

As I record the year-to-date results of the world's major equity markets (part of our weekly macro exercise), two areas have been jumping out at me for the past several months, Asia (China in particular) and Latin America.

Saturday, July 24, 2021

Quote of the Day: We'll "be talking about big shovels"

Pulitzer Prize-winning author and economic historian Daniel Yergin is considered one of the world's most influential energy pundits. He was the featured guest in today's Smarter Markets podcast.  

As clients will note below, his commentary jibes to a virtual T with our long-term thesis (which we're expressing in our core portfolio) on the energy, and the mining, space:   

Macro Update: Conditions Continue to Wane (but no worries at this juncture) -- And -- "We're Not Very Correlated to the U.S. Market" Right Here... (video)

Bloomberg opinion columnist, Allianz Chief Economist, Ex-Pimco CIO and Queens College, Cambridge President Mohamed El-Erian is on the same page we are on inflation going forward:

"Inflation is not going to be transitory. I've been pretty certain in my mind about three prior calls (all were spot on). This is the fourth one."

"I have a whole list of companies that have announced price increases, that have told us they expect further price increases, and that they expect them to stick."

Among other things, I make mention of the latter in this week's video, below...

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:


Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Thursday, July 22, 2021

Morning Note: Yeah, Inflation is a Thing Right Now...

Hmm... there are 9.2 million job openings in this country and new weekly unemployment claims are up 3 weeks in a row (419k reported this morning; 69k more than expected). Somethin ain't right... ?

Well, according to the Wall Street Journal:

Wednesday, July 21, 2021

This Week's Message: What's Happened to the Inflation Trade/Setup? -- And -- Today's Key Questions...

Clients and regular readers know that our overall macro thesis includes a view that has odds favoring inflation running "hotter" well into the foreseeable -- beyond the present "transitory" rise in prices that was inevitable given the dead-stop/fast-rebound (pent-up-demand) nature of COVID providing cover for the most aggressive fiscal and monetary action the world has ever seen (including, on the monetary side, an utter breaching of the Federal Reserve Act of 1913 [forbids the Fed from buying corporate securities, which they did anyway], which of course, on top of taking personal incomes [via "stimulus" checks], in the aggregate, above prepandemic levels) -- takes the concept of moral hazard to a whole new level!

Morning Note: Builders Playing It Safe -- And -- "Resilience Lies in Expanding Our Awareness"

In yesterday's morning note I pointed to consumer sentiment around the present home buying impulse (non-existent) as an explanation for June's disappointing building permits number. In their evening note yesterday Bespoke Investment Group had the following take:

Tuesday, July 20, 2021

Morning Note: It's the materials, but it's becoming the sentiment as well (in housing)...

Housing data (starts and permits) were out this morning, painting a mixed picture. Starts exceeded expectations by 53k, although May was revised down by 26k. Single family accounted for 1.13 million of the 1.643 million total.

Monday, July 19, 2021

Market Commentary (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: Not Over-Thinking It Right Here -- And --- "Sitting Tight" is Fine, When...

COVID scares notwithstanding, per our latest technical analysis (recent videos), stocks have been looking heavy for quite some time. 

And while this morning's, and last week's downward volatility may seem unusual, actually, what's been unusual is the lack of any serious corrective action, given extended valuations, debt setups, geopolitics, bad breadth, and so on.

Wednesday, July 14, 2021

This Week's Message(s): Highlights From the Past Week

Well, your inbox is going to get a little skinnier over the next few days, as this will be my last post until early next week. Our youngest and I will be deep in the northern California woods, enjoying a little disconnection from the outside world.

Therefore, my shortened workweek has me making this week's main message an easy one. Call it main messages, or highlights, from the past week's commentary herein.

Morning Note: "The Necessary Maturity"

From yesterday morning's note:

Tuesday, July 13, 2021

Morning Note: Hot CPI, Hedging Oil -- And -- Successful Investors and Poker Players Think Alike...

We've made our case; that the Fed finds itself in the worst of corners, and its board members are not remotely willing to take measures that would actually fulfil their mandate of low, steady inflation. For, if they do, they'll catch the blame for popping the mother of all asset bubbles.

Monday, July 12, 2021

Morning Note: Bullish Themes -- And -- Redistribution Is Cyclical Phenomena

Four quotes from my weekend reading:
"U.S. Treasury Secretary Janet Yellen signaled she’ll prod multilateral development banks to rein in their lending for fossil fuels, part of a global effort to make the financial system greener. 
The remarks reflect an effort by finance ministers and central bankers around the world to push lending institutions to support goals for slashing greenhouse-gas emissions and stop money flowing into projects that add to pollution."

Sunday, July 11, 2021

Quote of the Day: There Just Isn't Enough Stuff Like Copper (that they can get to fast enough)

In this week's video update I finished my intro by saying:

"...so, unique opportunities, but not without volatility like we've seen the last 2 or 3 months."

Saturday, July 10, 2021

Macro Update: Consumer Credit Up, Global Sentiment Off (a bit), Economists Surprised -- And -- Rotation or Consolidation? (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Friday, July 9, 2021

Morning Note: "The Summation of Wisdom"

Given China's posture lately toward its own (publicly listed Chinese companies seeing intense scrutiny and hamstringing restrictions), not to mention Xi's utterly belligerent tone toward the rest of the world of late, one might think that the country is suddenly willing to allow its securities markets (not to mention its economy) to suffer for the good of the empire.

Thursday, July 8, 2021

Morning Note: The Domain of Policymakers

So what's got traders hitting the sell button this morning? Is it the delta variant that, per last weekend's video, we believe has been playing a bit of havoc in non-US markets of late? Is it a weaker-than-expected recovery? Is it the lack of an agreement on infrastructure? Those would be the 3 most cited presumed catalysts by the media this morning.

Wednesday, July 7, 2021

Quote of the Day: Take That One to the Bank!

Just listened to a Bloomberg interview clip (with a former ECB Chief Economist) associated with today's announcement that the European Central Bank (ECB) will allow an "overshooting" of its raised inflation target going forward. I.e., they raised their target to 2% and, at the same time, stated that they'll allow inflation to exceed it going forward. 

Morning Note: An Unabashed Will to Spend Comes With Consequences...

We looked at the following graph in last weekend's video update:

Tuesday, July 6, 2021

This Week's Message: Seeing's One Thing, Sitting's Altogether Another...

My schedule the next few days has me bringing this week's main message to you early, and keeping it relatively brief. 

I can't tell you how many times, since late-summer 2019 I've been labeled a "bear" by clients and associates. All the while, when you consider our core asset mix, in late-'19, and since -- while it's evolved notably to comport with our general view of the world and concerns over certain areas of the stock market -- you certainly wouldn't say we've run for cover, we're just not all-in the stock market like we were, say, from the bottom in '09 to December '19.

Morning Note: Jittery

Traders seem a bit jittery as we start the week. Gold's rallying (+1.25%) and the VIX (goes up when options traders hedge, or speculate on, the downside) is up 6%. Oil futures were up bigly in the premarket -- on news that OPEC talks broke down over the weekend -- although they've done a complete 180 since (down 0.40% as I type). Emerging markets are taking a hit, as China hits its own tech sector for not toeing the China line, and rising COVID cases are clearly a concern. And, to aptly top it all off, the S&P 500 itself (with its highest weighting to tech stocks since 1999 [if not ever]) is barely lower while its individual losers lead its gainers by nearly 3 to 1 (oof!, if tech ever takes a serious breather)... The S&P 500 Equal Weight (treats all equally) was down 5 times the cap weighted index at the open.

Monday, July 5, 2021

Quote and Chart of the Day: Uncharted Territory...

Numerously herein of late we've stated that the debt and interest rate setup, and what we believe the Fed virtually has to resort to in their attempt to facilitate massive government deficits without piercing debt and asset bubbles, takes us to the 1940s playbook.

Sunday, July 4, 2021

Macro Update: June's Countertrend Market Action, Breadth, Valuation, and, Yes, Inflation (video)

This week's macro update runs longer than usual, so I thought I'd break it down for you, in case you'd like to skip the topics that we've more or less covered in earlier posts.

Friday, July 2, 2021

Morning Note: How "The Big Money" Is Made (and, frankly, not lost)...

So, if the headlines got it right on how good this morning's jobs number was, then our view of what's driving stocks these days says they should be tanking.

Thursday, July 1, 2021

Morning Note: Know (the mind of) your opponent...

All eyes will be on the June jobs print tomorrow, and, if you're a stock market bull, be careful what you wish for.

Wednesday, June 30, 2021

This Week's Message: Critical Thinking Is Critical, Right Here...

As I sit here staring at a blank screen, thinking that I've sufficiently (and some!) expressed our primary theme/thesis herein of late, I glance over at an adjacent screen featuring our core positions and notice today's top 10 performers, in the following order:

Morning Note: "As Expected", if you're not in the Roaring 20s camp...

Payroll company ADP's monthly private sector jobs report released this morning shows 692k net new jobs taken for June. That was 92k ahead of expectations, although, ironically, May's number was revised down by precisely 92k. As you might expect all but 48k occurred in the services sector, with more than half in the leisure/hospitality space.

Tuesday, June 29, 2021

Morning Note: Oddities Emerge...

"I've done a ton of research" was the phrase the young basketball player who sparked up a crypto conversation with me on Saturday kept repeating throughout our friendly, call it debate.

Monday, June 28, 2021

Morning Note: An Unlikely Source of Truth

Here's yet another quote that should sound familiar:

“Not surprised by high asset valuations, it’s tied to easy Fed policy.”

Sunday, June 27, 2021

Saturday, June 26, 2021

Macro Update: Risks, Opportunities and An Unusual Breadth Reading In Stocks (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Friday, June 25, 2021

Morning Note: Don't Drink and Invest!

While we're seeing a bit of choppiness, if not topiness, in US data of late (I'll be scoring our macro index later this morning), the global setup appears relatively solid for the time being.

Thursday, June 24, 2021

Morning Note: It Can Pay to Raise Interest Rates, for Some Countries

As we've reported, lip service aside, U.S. central bankers (as a voting majority) have zero desire -- or room, frankly -- to tighten monetary conditions for far into the foreseeable future.

Wednesday, June 23, 2021

This Week's Message: More On Inflation, On China-driven Inflation and A Few Timely Portfolio Tweaks

Gotta stick with the inflation theme, as, like I keep saying, getting that one (essentially the dollar) right over the next few years will we suspect be key to investment success.

This chart of the US Dollar Index will look familiar to video watchers:

Morning Note: Groceries

Quick note this morning; saving the good stuff for our main weekly message (coming today or tomorrow).

Tuesday, June 22, 2021

Morning Note: Appropriately Careful Right Here

Given last week's selloff -- sparked by what, in reality, amounted to utterly benign lip service (though sufficient to trip a few trading algos into sell mode) to those who believe the Fed should essentially do their job and allow interest rates to do their job with regard to rising inflation -- markets are a little on edge this morning awaiting J. Powell's testimony before the Select Subcommittee on the Coronavirus Crisis.