Sunday, July 31, 2022

Stock Market Snapshot (video)

Note: At 6:46, where I refer to "oversold" territory, meant to say "overbought."

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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.

Economic Snapshot (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, July 27, 2022

Stock 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: Fed to remain undeterred 'for now' by markets...

In yesterday's note I opined:
"While Powell may indeed come off tough tomorrow, his tenure thus far has been synonymous with the term “pivot.” And, make no mistake, pivot he will (but not tomorrow mind you) when he and his crew are staring down whatever breaks first..."

In terms of that "whatever" breaking; while one would think it'd be the credit markets the Fed fears the most, when we're talking investor opinion, suffice to say that all eyes are presently on the equity market. 

Tuesday, July 26, 2022

Morning Note: Hey, they're only human...

Fed chair Powell is believed by many to have held off on going after inflation while he awaited word that he’d have another 4 years at the helm -- as hiking interest rates and roiling markets would risk him losing favor with his anointers. Indeed, once confirmed, he did seem to suddenly come under the spell of a Mr. Hyde-esque mood of sorts.

Ah, human nature… politics… self-interest… Even amid the rapid rise of the worst inflation in some 40 years, one who could ostensibly do something about it was presumably frozen by abject self interest.

Monday, July 25, 2022

Morning Note: In Our Sights

In last Friday’s video commentary I mentioned that it’ll be a “target rich” macro environment in the years to come. The following entry to our internal market log touches on just one of the areas we have in our sights:

Sunday, July 24, 2022

Quote of the Day: So Why Bother?

Video viewers have heard me repeatedly pronounce that, in my humble view, despite the tough talk, Jerome Powell and company do not aim to purposely wreck the economy and the financial markets (as unavoidable as that may be) in order to halt the wrecking ball that is present day inflation. 

Friday, July 22, 2022

Quote of the Day: Mexico Gets It

Mexico is benefitting from policies that seem so utterly obvious, yet, when it comes to the developed world.. well... let's just say that the fiscal response to Covid and the monetary response to the ensuing inflation has been utterly blundered: 

"CPI inflation in Mexico is still surprisingly below US and Canadian inflation on a YoY basis. Banxico's head start to the tightening cycle and the government's fiscal restraint are two factors contributing to this lower inflation profile."

"Growth is resilient despite deteriorating global growth and liquidity. The peso is one of the top performing currencies this year." 

--Variant Perception

Economic and Stock Market Snapshot (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: Big Money Betting on Big Volatility

JPMorgan notes that there's some not-small money making some not-small bets that volatility's going to be rising in not-small fashion over the coming months:

Thursday, July 21, 2022

Morning Note: Another 'Think' Coming...

I get the strong sense that the stock market is sniffing out some fear among Fed members. For sure, those who trade Fed funds futures expect Powell and company to turn tail and, of all things, begin cutting interest rates as soon as next spring. 

And I get it, particularly when you consider the housing market of late. We touched on last month's read on single family starts and permits (lower), and abysmal homebuilder sentiment. And yesterday's disappointing -- to the tune of 200k below expectations -- existing home sales for sure says the economy's already slowing down, amid the Fed tightening up.

Wednesday, July 20, 2022

Stock Market Snapshot (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: Playing Devil's Advocate...

Wow! What a rally yesterday! Clearly, investors are beginning to see blue skies ahead, right?

Well, while we're not ready to sound the all-clear right here, I will say that the latest data that instruct our views are offering up some legitimate less-bearish signaling that we need to not hastily dismiss. 

Tuesday, July 19, 2022

Quote of the Day: Scary -- in a good way...

Per yesterday morning's essay, there may be emerging developments that could have the most ardent bear reexamining his/her dire thesis right here.

Morning Note: A Long Ways From Mass Affordability...

Suffice to say that homebuilders aren't feeling so good about their prospects these days.

Here's from July's NAHB Housing (homebuilder sentiment) Index (HT Peter Boockvar):

Monday, July 18, 2022

Morning Note: Those Bullwhipping Bears

It makes sense that, as many are predicting, Q2 earnings are going to come up short of Wall Street expectations, and that to this point the bear market has been all about multiple contraction (valuations coming down). The next shoe to drop has to be earnings. Add that to growing recession risk and tightening monetary policy and our 3500 SP500 target is looking pretty thin (but, then again, read on).

Some smart macro thinkers are pointing to the above, and to what they call the bullwhip effect.

Friday, July 15, 2022

Economic and Stock Market Snapshot (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: Encouraging Data

Some interesting, if not encouraging, data out this morning...

Retail Sales for June came in better than expected, with net positive revisions to the May numbers:

Thursday, July 14, 2022

Morning Note: Shaking Loose the Sellers...

I'm thinking about what folks are thinking about this morning. 

Rewind two or three months and, as I recall, the sentiment vibes I was picking up during discussions with clients and acquaintances leaned somewhere between sanguine and optimistic. I.e., "It's ugly out there, but the market always comes back." And/or "Is it time to buy?"

Wednesday, July 13, 2022

Market Snapshot (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: Beware "the swinging of conditions"...

In Monday's morning note I suggested the following:

"...when it comes to "headline" CPI, we may see very little, if any, relief, even in the monthly number, given that energy prices ramped higher in June. The "core" number, which excludes energy, is more likely to reflect any recent letup in inflation."

Well, suffice to say, we did not see "any relief" in the headline number. In fact quite the opposite:

Tuesday, July 12, 2022

Morning Note: The 'long-term' setup for foreign equities outperformance...

Making this morning's note quick and easy with an update of the bare-bones basics as to why we -- in general -- presently find better long-term setups among non-US equity markets (vs US) going forward.

Not that we don't see pockets of long-term opportunity in certain sectors within the US market (we do), it's just that in a broader sense.... well... take a look:

Monday, July 11, 2022

Morning Note: Never that easy...

Well, folks, earnings season is upon us. And as we, and many others, have pointed out, margins have to be getting majorly squeezed due to significantly higher input costs. More so, perhaps, than what Wall Street has priced into their still optimistic earnings expectations.

Now, that said, it's never that easy. Here are a couple things to consider:

Saturday, July 9, 2022

Economic and Stock Market Snapshot (video)

As I reviewed today's video before sending, it occurred to me that I left out a few factors with regard to market probabilities that could move the needle in either direction. As you'll see, I attempted to answer the "when" question for stocks by drawing trendlines on the weekly and monthly SP500 charts. 

For starters, I want to make very clear that there'll likely be nothing linear about the path between here and the ultimate low (assuming we've not reached it yet) for the current bear market in stocks, despite the drawings I offered up. 

With regard to potentially needle-moving factors, there are of course always more than we could possibly know (i.e., anything can happen), but we're aware of a number that would likely be measurably impactful -- such as, for example, a Russia/Ukraine cease fire, China abandoning (or claiming victory over the virus due to) its Zero-Covid policy, and the passing of the pending US "stimulus" package -- at least when we're talking short-term moves in global financial markets...

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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, July 8, 2022

Morning Note: Jobs Aplenty Amid Everybody's Favorite Recession Signal - OR - Hmmmmm....

This morning's jobs number was certainly not a whiff! Coming in at 372k (vs 265k expected), although the prior two months were revised down by 74k. The unemployment rate remained at 3.6%, average hourly earnings bumped up .3% on the month and labor force participation dipped .1% to 62.2.

The 2-year treasury yield jumped on the news, signaling that it's a go for another .75% rate hike come this month's Fed meeting.

Thursday, July 7, 2022

Morning Note: This'll Sound Familiar

We tackled copper a bit in yesterday's video commentary. Bottom line, while the correction the metal's seen of late certainly makes sense, we maintain our long-term bullish view.

Wednesday, July 6, 2022

Stock Market and Copper Snapshot (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: Recession Fears Rule, Although...

Yesterday's entry to our internal log covers a fair amount of important ground. Here it is in its entirety:

Note: Non-client subscribers please keep in mind that the following is shared for informational purposes only. Any reference to positioning relates only to the work we perform on behalf of our clients and are in no way whatsoever to be construed as recommendations to the general public. 

7/5/2022

An overnight rally in futures gave way to a sharp selloff in the cash session which gave way to a rally that took the SP500 back to the green (albeit barely) by the end of the session.

Tuesday, July 5, 2022

Morning Note: Hubris, Humility and History

Bespoke Investment Group began their latest weekly report with a riff:

“Been dazed and confused for so long, it’s not true...Lotsa people talkin’, few of them know...Don’t know where you’re going, only know just where you’ve been…” - Dazed and Confused, Led Zeppelin

Saturday, July 2, 2022

Chart of the Day: A lot less "stuff" being bought... but, then again...

While we remain very much in the inflation-will-be-higher-for-longer camp, we also see it coming off the boil a bit over the next few months.

At first blush, support for the latter is found in the latest data.

Note below that the only increase in consumer spending in May for goods (dark bars) occurred in energy and food. On a real basis (inflation adjusted), only household durables saw an increase in the goods space (HT BCA Research):


Now, while that's good news with regard to inflation pressures, one might say it screams recession. But one would be missing the green bars above, which measure spending on services. They increased by $72 billion in May, while goods spending decreased by $44 billion...

But wait! That last line brings the inflation worry (inflation of services costs, that is) right back to the fore, right? Yep!! That's why I said "a bit" off the boil...


Friday, July 1, 2022

Economic and Stock Market Snapshot (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: Seen Better Setups...

Last evening I performed the monthly scoring of our latest proprietary indicator, "The PWA Equity Market Conditions Index", and, well, I'll just say that I've seen better setups in my day.

Here's from our internal report: