Wednesday, November 30, 2022

Brief Stock Market Snapshot (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: The Tilt

While seasonality continues to support the bulls right here, one has to wonder if it can indeed hold up through Christmas -- given generally weakening conditions, souring consumer sentiment, and a Fed narrative that remains notably more hawkish than market actors, in the aggregate, seem to believe credible, on, say, a 7-month time horizon.

Tuesday, November 29, 2022

Morning Note: Retail Sales, So Far... Meh

Before you go celebrating the higher (record breaking!) retail sales numbers for this holiday season vs last, know that we're talking nominal, as opposed to real, terms (i.e., not counting vs counting inflation).

Monday, November 28, 2022

Morning Note: VIX Approaching Interesting Territory

As I stressed in Friday's video (worth watching), while we're open to the notion that a new bull market is in the near-term offing, it's still not our base case, per the general conditions backdrop and the technical indicators I continue to illustrate.

Friday, November 25, 2022

Economic Update and Stock Market Snapshot: When Consumers Get Covid Relief out of Their Systems (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.

Chart and Quote of the Day: Recession Looms, However....

This week's "Flash" (preliminary) Composite Purchasing Managers reading dipped further into contraction territory, supporting our thesis that odds favor recession vs continued expansion in the coming months.


However, as I've stated numerous times herein, our current assessment is that any recession here would likely be mild, by historical standards -- due to existing and developing factors of both a domestic and an international nature. 

Wednesday's Wall Street Journal article titled Global Economy Slows, but Seems to Be Faring Better Than Feared agrees with our thesis... The areas I bolded will sound familiar to regular video watchers:
"Business surveys released Wednesday pointed to declines in output across the U.S. and Europe’s largest economies in November. But the figures and other economic readings pointed to a mixed outlook, with some parts of both economies continuing to show resilience despite high inflation and rising interest rates.

In China, the world’s second-largest economy, the outlook is highly uncertain as the country faces a surge in Covid-19 cases. Economists expect a rebound in growth next year as Beijing attempts to ease tough pandemic policies.

A tight U.S. labor market and still strong household balance sheets are supporting consumer spending, the economy’s main engine. A healthy consumer helped power retail sales in October and could keep the world’s largest economy growing at the end of this year. The U.S. outlook depends in part on how it weathers the Federal Reserve’s interest-rate increases aimed at cooling inflation that is running near a 40-year high.

Europe is experiencing less economic disruption from Russia’s decision to limit energy supplies than analysts earlier feared. Many households and businesses in the region are adapting by, for instance, cutting back on energy consumption, said Adam Posen, president of the Peterson Institute for International Economics. European governments also distributed larger-than-anticipated sums of fiscal support to households to help address rising energy and food costs, he added.

“We’re going to end up with more than 75% of the world’s economy actually doing pretty well,” Mr. Posen said. The U.S. and European Union “are likely to have relatively short, not terrible recessions and return to growth possibly by as early as the fourth quarter of 2023.”

Wednesday, November 23, 2022

The General Setup and a Brief Stock Market Snapshot (video)

This morning's message comes to you by way of video... My monologue on current conditions takes up the bulk of the presentation, although pay close attention to my volume analysis on the daily chart, as it presents a picture somewhat at odds with the price action of this very nice Q4 rally to this point.

All of us here at PWA wish you and yours the best of Thanksgivings!

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.

Tuesday, November 22, 2022

Morning Note: The Market's Thinking Doesn't Quite Jibe With the Fed's

In yesterday's note I casually offered up 5 reasons for bulls to be, well, bullish on equities right here, I then proceeded to turn each on its head to justify a bearish stance... With regard to the bull's narrative, clearly, the presently most telling aspect is the somewhat softer tone emerging from Fedheads of late.

Question then being, are traders prudent in bidding up stocks based on, for example, the Fed walking back its earlier threats to hike by .75% come December 14th?

Monday, November 21, 2022

Friday, November 18, 2022

Economic and Stock Market Snapshot (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: Key Highlights

Here are some key highlights from the past week of messaging herein:

Thursday, November 17, 2022

Morning Note: The Fed Doesn't Relish Rallies Right Here!

In yesterday's note I quoted myself from Tuesday's note... Now, here's me, today, quoting myself quoting myself from yesterday:

"In yesterday's blog post I suggested that the Fed isn't quite yet ready to welcome, nor support, rallying markets:
"It’ll be interesting to see (amid softening inflation reads) the degree to which Fedheads push back against what amounts to a market-induced loosening of financial conditions.""

In yesterday's Wall Street Journal, James Mackintosh pounded home the notion that the Fed indeed does not relish market rallies right here.

Wednesday, November 16, 2022

Stock Market Snapshot (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: Signs the Consumer's Pulling Back

In yesterday's blog post I suggested that the Fed isn't quite yet ready to welcome, nor support, rallying markets:

"It’ll be interesting to see (amid softening inflation reads) the degree to which Fedheads push back against what amounts to a market-induced loosening of financial conditions."

News from Target this morning, however, is, frankly, what the Fed is after:

Tuesday, November 15, 2022

Morning Note: China, A Not-Small Positive Going Forward

Last night's log entry:

11/14/2022

I listened to all of Lael Brainard’s Bloomberg interview today… As expected she was notably dovish relative to several other Fed members, including Powell… The equity market action (up) while she was talking confirmed her relatively accommodating tilt… Nevertheless, stocks rolled over late in the session, closing notably lower.

Monday, November 14, 2022

Morning Note: Powell's Problem

My dialog yesterday evening with our well-tutored, deep-thinker on markets, on the economy and on history, friend/client Sam is timely and instructive enough to use as this morning's main message.

Sam offered up an accurate depiction of the rate environment of the late-70s/early-80s:

Friday, November 11, 2022

Economic Update: Equity Sector Signals Positive (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.

Stock Market Snapshot (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: Perpetual Works in Progress

While skimming financial gurus' postings on twitter last night, I -- and please pardon my condescension -- found it somewhat comical reading the bears angry, if not disdainful commentaries with regard to yesterday's incredible rally, alongside the celebratory sermons of the bulls.

Thursday, November 10, 2022

Morning Note: Acute Myopia and Acute FOMO

Last night's entry to our internal market log:
11/09/2022

Today’s equity market drubbing, if one believes the headlines, was more about an implosion in crypto than it was about looming uncertainty over mid-term election results.

Wednesday, November 9, 2022

Stock Market Snapshot and the Good and the Bad (for markets) of Gridlock (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: Clarity Yet to Come

As you'll see if you catch this morning's yet to be produced technical update video, the short-term setup for stocks is a little suspect right here.

As for sentiment, traders and investors, on balance, lean somewhat more positive than they were, say, early October, which, frankly, is having me a bit short-term hesitant right here... Although the latest scoring of our own fear/greed barometer still reads net fear, which, in a contrarian sense, is still net bullish. 

Tuesday, November 8, 2022

Morning Note: Key Highlights

While markets await mid-term election results tonight/tomorrow/?, and CPI on Thursday, I'm thinking today's a good day to touch on some key highlights from our recent messaging herein:

Monday, November 7, 2022

Morning Note: 'For Now' Investors Buying the China Rumor...

Friday saw quite the rally, particularly in asset classes and regions that sit prominently in our core portfolio mix.

While the jobs number was billed to be a big needle-mover come last Friday, the rally -- across primarily commodities and foreign equities -- in our view can be mostly explained by persistent rumors that China is diligently crafting a plan to exit its economy-stifling "covid-zero" policy over the next few months.

Well, at a press conference Saturday, Chinese health officials pushed back aggressively by vowing to "unswervingly" stick to the country's zero covid approach.

Saturday, November 5, 2022

Economic Update and Last Week's China News Effect (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 4, 2022

Stock Market Snapshot (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 Report Not a Needle-Mover

According to the Bureau of Labor Statistics, the US economy created 261k new jobs (vs 195k expected) in October... The unemployment rate rose .2% to 3.7%... Leisure/hospitality up by 35k (surprisingly low), manufacturing by 42k (surprisingly high)... Average hourly earnings were up .4% month-on-month...

Of course, given how the market's trading of late, the issue for traders is how today's report influences the Fed... As I type, equity futures, after going from green to flat on the news, have quickly turned back around and are now trading nicely in the green.

Thursday, November 3, 2022

Morning Note: Mixed Messaging From the Fed

Interesting action yesterday... While listening to the official statement issued along with the announcement that the Fed funds rate will be bumped by .75%, Nick and I agreed that stocks should indeed be rallying, as they were at that moment.

Reason being this (new) language in the statement:

Wednesday, November 2, 2022

Stock Market Snapshot (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: Equity Market Conditions Remain Negative (beyond the short-term) for now...

Here's from last month's post where I reported on the then score of our "PWA Equity Market Conditions Index."

Tuesday, November 1, 2022

Morning Note: It's All About the Vicinity of a Break

So, what to write about on day-1 of the Fed policy meeting?

How about p/e ratios relative to interest rates, or interest rates relative to inflation, or earnings prospects relative to recession risk, or mild recession risk vs deep recession risk, or interest rate differentials among countries vs their respective currencies (and if that's forever the be-all-end-all of what drives them), or the fact that Powell can't do a Volcker given the present-day debt setup, or that the Fed can't slay inflation without hiking rates significantly higher, or the fact that the Fed can't raise rates significantly higher without seriously breaking something in the credit markets (again, can't be Volcker), and, by extension, the equity markets, or yada, yada and yada.