Key Highlights From Our Latest Log Entries

5/21/2025

Consistent with our view that the recent rise in yields has everything to do with the proposed federal spending package, the 10yr treasury yield just popped to above 4.5%, and the 30-year to 5.01% on news that an agreement was reached to raise the state and local tax deduction to 40%.

Again, fiscal stimulus, and expanding the budget deficit, at this juncture, virtually has to be viewed as inflationary... Like I keep saying, while clearly they sense urgency as economic weakness brews under the surface, pumping the gas before the hard data roll over will likely prove to be yet more problematic for the bond market, and ultimately equities (at these valuations).

What's Driving Rates? And What Does it Portend?

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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.

Technicals Improving, Competing CEO Narratives, Tariff Ramifications, 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.

The Fed's Conundrum, Long Term Momentum and Macro Warning (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.

Certain Uncertainty (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.

Softer Soft Data and Highlighting Headline Driven Markets (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.

Stinky Breadth

Just a quick follow up to last week's "Curb Your Enthusiasm" post.

Days like these can be dangerous for unsuspecting investors... As, per the below, those who only see the headline prints on the US major averages could be thinking all's well and we're back in business.

Tariffs About To Start Biting, And the Potential Irony of Stimulus If It Comes Too Soon

The following entry(s) to our internal log will serve as this week's mid-week message:

The below from Bespoke, and commentary out of BCA this morning, on the number of outgoing vessels from China declining notably to virtually all destinations, suggests that the global economy is indeed slowing right here:

Sentiment, Sector Rotation, Bond "Yips", Beyond Tech Talk, And A Quick Look At Markets (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.

Curb Your Enthusiasm (just a bit)

All appearances are that the equity market is having a whale of a day!

Well, not so fast... As I type, a bit before the close, while the major averages are up impressively, the overall sector breadth says this is anything but an all-in, back-up-the-truck day in the stock market.

"The Times We're In", And A Quick Look at Stocks (Up), Gold (Down), 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.

Would A Rate Cut Help? Questioning Dollar Assets & A Quick 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.

Careful What You Ask For & Gold Getting Stupid (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.

Quotes of the Day

Following up on Wednesday's post where I suggested that the Fed will step in, as aggressively as needed, should the credit market "need" it.

Here's Peter Boockvar suggesting that -- from the horse's mouth -- that's all (or the first) we should expect, at the moment:

The 2025 Concern(s)

Here's from our April 11 log entries:

4/11/2025

As/if the data worsen, and the market continues to wane, the inflection point for the administration to do a dramatic turn in rhetoric and start talking up great conversations and trade deals in the works may come sooner than later.

The 2025 concern is the potential for negative momentum (recession risk) to gain steam and, thus, see that typical 40+% (recession) hit to equities before it's over.

Along the way we’ll no doubt see some massive rallies, that -- if indeed this is a bear market -- will sadly suck in unsuspecting fomo-(fear of missing out)-ridden retail investors... Only to break their hearts during the next leg down.

Tariffs, Stress, Sentiment, and The Go-Forward Probabilities (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.

What Really Went On Wednesday (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.

What Typical Bear Markets Look Like (video)

Yet another must-watch for clients!

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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.

Recession Odds Rising, And Rallies (likely head fakes) 'Ultimately' In the Offing (video)

FYI: I shot this video Sunday afternoon as equity and commodity futures were tanking, and as treasuries and the yen were rallying... Who knows where markets will be by the time you clients receive the link... In the long-term scheme of things, and for our purposes, it (short-term volatility) makes zero difference... Our goal here (in these video updates) is to simply keep you abreast of our thinking as present conditions play out, and to have those of you who watch this stuff daily gauge your expectations accordingly.

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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.

More (Quick) Thoughts on the Present Market Setup (video)

Another must-watch for clients.

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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.

Peak Uncertainty (for the moment), and Thoughts On What's To Come (video)

Clients, please be sure and take this one in when you have a few minutes.

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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.

Tariff Angst, Recession Risk, and Stock Market Technicals (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.

Chart of the Day

Here's an old-school-thinking chart (that we've been updating for many years) that illustrates the utter lack of breadth of the last few year advance in the US major large cap equity indices...  I.e., small cap and transportation stocks are essentially flat since late-2021, while the Dow and the S&P have gained notably... As you trace it back you can see how such set ups don't often end well.

The Impacting Narrative, Its Ramifications and The Technical 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.

A Rally Right on Cue, Although Not Much Has Changed (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.

"Mag 7 Dominance is Over," Chips Rolling Over, and How to Live With Volatility (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.

Quite the Departure

This entry to our internal market log will serve nicely as this week's mid-week message.

3/17/2025

Like I said in Thursday’s video, the US equity market was due for an oversold bounce, which we saw on Friday… That was largely a massive short-squeeze (sentiment was in the gutter), which of course included options dealers covering their short-put hedges big time.

Technically-speaking, despite the big thrust down through the 200-dma, it would be highly unusual to not see a retest, perhaps several (i.e., Friday’s rally could easily bleed through to the next few days/weeks), even if this is the beginning of something more severe to the downside… The 50-DMA slope has now turned decidedly bearish:

High Yield Signal, Small Businesses Boosting Prices While Investing Less, and A Quick Look at the Technicals (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.

Chart of the Day: "Historic Shift"

This from Bespoke makes sense, jibes with our thesis, and partially explains our core allocation’s year-to-date resilience:

New EU Zeitgeist, Stocks Not the Admin's Worry Just Yet, A Tactical Shift Impacting the Dollar, 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.

Europe's Improving Setup (Save For the Tariff-Threat), Volatility, Uncertainty, Today's Technical Setup, yada yada (video)

Note: I recorded the video below on Tuesday 3/4, 30 minutes before the equity market close... I mentioned that commentary from the treasury secretary suggested that the stock market was not an immediate concern with regard to tariff policy(ies), and that, while I believe there is a market-induced pain-point that may inspire a different, more market-friendly narrative, it appears that we're not near there yet.

Well, as I type, 3:05pm PT, the following news headline hit the wires, and markets are liking it after hours:

"Commerce's Lutnick Suggests Possible Compromise on Trump Tariffs"

Although this is at odds with what the President said just a little earlier on Tuesday about hitting Canada even harder after Canada announced retaliatory tariffs on $20 billion worth of US goods.

Time will tell...

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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.

AI Concerns, Tariff Uncertainty, Record Wealth Effect, and Some Technical Flags (video)

Dear Clients, please be sure and take this one in when you have a few minutes.

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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.

The Stock/Bond Signal and Nvidia's Relevance

Very interesting action in the markets lately… I.e., bonds have been rallying bigly while stocks are, in chart-parlance, failing their recent breakout to new heights while the SP500 curls beneath its technically-significant 50-day moving average (green line below):

This morning’s bounce comes ahead of Nvidia’s earnings announcement due after today’s close… No doubt a good report there could do wonders for the index! A bad report, well… not so good!

The Fed's Fear, Etsy's Pain = Walmart's Gain, How To Grow An Economy, and It's Not About The Mag 7 Anymore (video)

FYI This week's video engaged just after the usual intro... It's your weekly updated, recorded 2/22/2025... And an important one, I might add. 😎

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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.

Highlights

A few highlights from our latest notes:

This jibes with recent evidence that the consumer is slowing down:

How the Market Sees the Tariff Threat, A Slow Going Fed, and Vibrating Stocks (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.

Charts, and Thoughts, of the Day

This morning’s reaction to January’s hot CPI number speaks to the somewhat precarious spot markets find themselves in.

As I type:

Quoting Buffett and Considering Scenarios (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.

Thought and Chart of the Week: Something's Going To Give

It’s unusual to see gold, stocks and the dollar experience such positive correlation (have since last October)... Gold is catching a bid on geopolitical angst and central bank buying… Stocks are riding momentum and bullish sentiment… The dollar is up on high relative yields and geopolitical angst.

I.e., Something’s going to give:

It's Not About the Fed 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.

The "AI Meltdown"

I was thinking this morning that if I didn't know what I think I know about markets, and my experience captured merely the past few months, I'd be convinced that whatever happens on a given day can be expected to be more-often-than-not reversed the very next.

Yesterday, for example, we watched the tech sector suffer -- what I'm sure too many investors deemed to be -- a meltdown; taking the Nasdaq 100 and the S&P 500 down with it... Interestingly, despite somewhat ugly action across our commodities exposures, we didn't feel it much, as places like consumer staples and healthcare saw sharp rallies... Our non-US exposure held up okay (relative to US tech) as well...

What Could Make For Another Leg Up In Stocks? (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.

Seeking Value in a Pricey Market, Decent Short-Term Technicals, Thoughts on Tariffs & The Thing About Stimulus '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.

An Important Look at Conditions, at Stocks, at Yields, at the Dollar, at the Yen and Gold (video)

Dear Clients, definitely take this one in when you have a few minutes... thanks!

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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.

That Minsky Feel, and A Peek at Stocks, Yields, Gold, the Dollar & the Yen (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.

On Human Nature, on Isaac Newton, and on Today's Mixed Picture

Well, if I've learned anything over the past 40 years doing what I do, it's that, at nearly every major turning point the majority of investors, and policymakers alike, tend to assume that the future is going to unfold essentially the same as the recent past.

As, alas, BCA analyst Davil Joshi pointed out in this morning’s chat,

“The winners of the old technology are never the winners of the new technology.”

His concern being that the market continues to, in his view, mistakenly bid up the companies that are essentially the winners of yesterday’s technology, that the true long-term winners of AI have yet to be discovered. 

Per Alan Watts (on human nature):

"We are driving a car, looking at the rear-vision mirror. The environment in which you believe yourself to exist is always a past one, it isn't the one you're actually in."

And that, in reality, waves and cycles are as inevitable in economies and markets as they are in nature:

“…there is no such manifestation as half a wave. We do not find in nature crests without troughs and troughs without crests.”

And that the longer the cycle, the more the crowd loses sight of this unalterable reality:

“The slower the wave goes the more difficult it is to see that the crest and the trough are inseparable.”

I.e.,

“Trough implies crest just as crest implies trough.”

Thus, call it human nature, recency bias, what have you, it's easy for markets to ultimately do what they do best.

I.e., the old Wall Street adage: