Friday, December 31, 2021

PWA Year-End Letter Part 6: A Major Theme for Years to Come -- And -- In Summary -- And -- Our Ultimate Purpose!!

Over the years I've devoted volumes herein and elsewhere expressing my concerns (well... complaining) over the folly of government intervention into the functions of the economy.

Well, I suppose it's all fine and good to educate folks on (complain about) how the misallocation of resources (via government diktat) impacts the economy and the markets, in the end, however, our job here at PWA is to see the forest for the trees and, in the process, protect and grow our clients' wealth.

Morning Note: "Looming Mismatch"

Here's a teaser for the upcoming finale to our year-end message:

Thursday, December 30, 2021

Morning Note: "Sizeable Price Increase"

With the aim of finishing up our year-end message by the weekend, I'll simply quote from economist Peter Boockvar's morning note, on inflation, offer up a quick comment, and, as usual, report the morning numbers.

Wednesday, December 29, 2021

PWA Year-End Letter Part 5: True Diversification

Our US sector weightings (expressed primarily within our portfolios by their respective tracking ETFs) in order of prominence are: Materials, Industrials, Consumer Staples, Energy, Financials, Healthcare, Tech and Utilities.

Morning Note: The Latest on Covid -- And -- Our Propensities That "Define Finance"

While virologists we're definitely not, for obvious reasons we need to stay intimate with global developments around Covid-19.

Tuesday, December 28, 2021

Morning Note: Huh? Record Chip Shipments??

After posting our not-short Year-End Letter Part 4 yesterday (with a part or two left to come), I'll keep this morning's note short and sweet.

First, one more for those who believe the severe shortage of certain essential stuffs (such as chips for all manner of technology, including cars) over the past year has been all about COVID.

Monday, December 27, 2021

PWA Year-End Letter Part 4: More on the Outlook (probabilities) for US Stocks, And Exploring Our Top Holdings

As clients and regular readers have no doubt gathered, we presently see real long-term opportunity in specific asset classes, sectors and regions of the world.

Now, that said, as we alluded to in Part 3, when it comes specifically to US equities in the aggregate, well… not so much; as the present general setup is, in our view, not one that supports the underlying bullishness that has them (growth stocks in particular) trading at or near their all-time high levels. 

Morning Note: Quick Look at General Conditions -- And -- There's Some Hedging Going On

Our own general conditions index rose 2 points last week, thanks to our score for consumer confidence going from negative to neutral, along with a pick up in truck tonnage. The only negative mover among our 48 inputs was the sectors/SP500 ratio; back to negative, after just a week in the plus column:

Thursday, December 23, 2021

Morning Note: Prices Pass Through to Willing Consumers -- And -- Words to Invest By

The strategists who are bullish on stocks heading into next year make the legitimate case that $2+ trillion in consumer savings accounts makes for not-small support for corporate earnings growth -- as those flush-feeling consumers consume well into 2022.

Tuesday, December 21, 2021

Morning Note: Lo and Behold -- And -- "Enjoy Being in the Minority"

Yesterday morning we credited the then equity market selloff to a dire headline related to COVID and a market-rattling one suggesting President Biden's bill was kaput.

Monday, December 20, 2021

PWA Year-End Letter Part 3: Being Opportunistic, Yet Taking Nothing for Granted

Before we explain what the first graph below represents, have a look at its price action during the 90s tech-fueled bull market:

Morning Note: Imagine If

Two headlines catch the blame for this morning's selloff across asset markets:

Saturday, December 18, 2021

Macro Update: Beware the Convenient Inflation Narrative

110k more than expected housing starts and a generally better look to our sectors/SP500 ratios (financials, materials and energy outperforming the broader average of late) were offset by weakening small business expansion plans and a notable outperformance of consumer staples over consumer discretionary stocks (muddies the sector/SP500 results). Therefore, our PWA Macro Index broke even on the week:

Friday, December 17, 2021

Morning Note: Yes, Prices Pass Through

Like we said in Part 2 of this year's year-end letter, we don't see inflation (nor commodity prices) rising in a straight line going forward. Nor does FedEx's Chief Operating Officer.

Thursday, December 16, 2021

Morning Note: It's Either Belief in the Fed or Myopia and Seasonality -- And -- The Nature/Incubation of the Politician

Well, Jerome Powell threaded the needle beautifully yesterday. That is, if his objective was to acknowledge that inflation is indeed worthy of the Fed's attention, without at the same time cracking the equity market.

Wednesday, December 15, 2021

PWA Year-End Letter Part 2: Inflation's Perfect Storm

We subtitled our May 13th of this year message "Our Present Inflation Narrative -- and the Potential For Something 'Long-Term' Special In Commodities."

In it we bullet-pointed what we view to be the key factors amid today's evolving global general conditions that have us presently in the structurally rising inflation camp.

Morning Note: Quite the Pickle

Fed Chair Jerome Powell finds himself in quite the pickle this afternoon: In his post-meeting press conference -- after the delivery (at 2pm Eastern) of a decision to keep the Fed funds rate pegged between 0 and .25% for the time being and (odds favor) to speed up the pace at which their tapering back monthly asset purchases -- he'll be efforting to not crack the equity market with his newfound resolve to tackle (well, let's say to "address") inflation.

Tuesday, December 14, 2021

Morning Note: A Quick Look at the Technicals

Just a quick look at the technicals and a report on the early-session action across markets this morning. My plan is to get Part 2 of our year-end letter out to you by the weekend.

Monday, December 13, 2021

Chart of the Day: PWA Index up a smidge, and more fuel for the inflation narrative...

Just performed the weekly scoring of our PWA Macro Index (was out of the office late last week), and, thanks to an uptick in commercial and industrial (C&I) loans, our general conditions barometer rose 4.18 points on the week:

Morning Note: Justifiable Worry Right Here -- And -- "Keep Moving", Says an Incredible 79-Year-Old Skier

If indeed stock market bulls are fretting (they indeed are) over the prospects for the Fed reducing its level of monetary accommodation during the months to come, one might think that two more reported studies suggesting that presently available vaccines are notably less effective against the Omicron variant would have them somewhat sanguine in the face of this week's Fed policy meeting.

Thursday, December 9, 2021

Morning Note: A Little China-Induced Angst, Maybe?

Just a quick one this morning, as I'm technically out of the office till Monday, physically so right after I send this note. ⛷ 😎

Woke up this morning to news that weekly jobless came in at an amazingly low 184k! Clearly, employers who remain starved for workers are keeping the ones they have, and, make no mistake, paying them more for the privilege.

Wednesday, December 8, 2021

Morning Note: The Everyday Investor Remains All In on Stocks!

In their market-wrapping commentary yesterday the folks at Bespoke Investment Group found themselves a bit perplexed over yesterday's action in the stock market.

They pointed to notably bad news coming from the first study on vaccine effectiveness versus the Omicron variant:

Tuesday, December 7, 2021

Morning Note: What Probabilities Favor in the Years to Come --And-- Beware the Crowd!

On several occasions herein we've illustrated what we believe to be the go-forward (long-term) unsustainable outperformance US equities have enjoyed over the rest of the world this past decade.

Monday, December 6, 2021

PWA Year-End Letter: Part 1, Smart-Investing Metaphors

As has become our custom in recent years, we'll devote the beginning of our 2021 year-end message to a metaphorical look at how we view what we do.  

Morning Note: Soft News is Good News

In yesterday's video commentary I pointed to a technically constructive immediate-term setup for US stocks.

Looks like, at least at the start this morning, it's playing out as the charts suggested. 

Sunday, December 5, 2021

Technical Analysis Updates: The very near-term setup looks decent for US stocks, intermediate-term not so much -- And -- Silver, Gold, Japan and General Equity Market Conditions (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.

Saturday, December 4, 2021

Macro Update: Consumers Are Spending While They Got It, Low Recession Risk -- And -- The Reflexive Risk of Equity Markets (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.

Thursday, December 2, 2021

Morning Note: We've a Long Ways to Go -- And -- Allowing Clarity to Emerge

Here are a couple of key tidbits from yesterday's release of the Fed's Beige Book (an assessment of conditions across Fed districts):   emphasis mine...

Wednesday, December 1, 2021

Charts of the Day: Media Needs An Excuse...

Just sayin, media needs an excuse, and it matters mostly short-term and at the margins.


Morning Note: Sudden Sanguineness, Or..?. And a Look at the Charts

Whether the positive market action this morning implies sudden sanguineness around the new variant, or comports with our view that -- change of tone aside -- the Fed has backed itself into a corner that really doesn't allow it to come out swinging on inflation, or the fact that on average Decembers are very good (simple seasonality), this morning's bounce in equities makes some sense.