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.