One More Hike and Then a Pause?

Global financial markets have moved past the shock from the abrupt failure of Silicon Valley Bank and a few other banks as well as the forced takeover of Credit Suisse. There will be lingering fears of additional fallout, since many financial institutions are sitting on portfolio losses arising from the cyclical rise in bond yields, […]

What Will the Fed do Next?

The key economic question for 2023 is whether central banks will be able to bring down inflation to acceptable levels without a recession. Beyond the inflation dynamic, we remain concerned about potential political and economic shocks that could impact the U.S. and global economy via higher uncertainty and/or tighter financial conditions. The most significant reason […]

The Roller Coaster Ride Continues

Risk assets attempted to rebound last week from deeply oversold levels on hopes that central banks will soon tone down their hawkish rhetoric. Equities started the fourth quarter on an upbeat note after one of the worst Septembers on record due to oversold technical conditions, negative sentiment, and the hope (probably misplaced) that the Fed […]

The Long View

Given the extraordinary downside volatility affecting both equity and bond prices this past quarter, we felt an early commentary might be appreciated. We’ll cut to the chase – Our longer-term view for your portfolios is much more positive than what is currently being discussed in the financial press because we own some of the best-run-companies […]

War and Inflation = A Nasty Cocktail

Investor attention has pivoted over the past few weeks from the war in Ukraine back to the accelerated unwinding of global monetary accommodation. While the war could still pose further threats to economic growth, global bond markets have struggled as central bank policy rate expectations move higher. As the war settles into an apparent stalemate […]

2022 Outlook?

Monetary and fiscal policies certainly helped jump-start the current economic expansion—as is customary in the aftermath of every recession. But expansions also become self-sustaining, which is why policy juice eventually ends. In our view, this recovery has an abnormally large number of “sustainable forces” that are likely to keep the expansion healthy long after monetary […]

Significant Crosscurrents Prior to Q3 Earnings

Equity markets have been struggling with a number of short-term risk factors.  None at this point (hopefully) seem to threaten the big-picture outlook of a solid global economic recovery. But when markets significantly front-run positive fundamentals (as they have), even modest risks can cause temporary setbacks.  We remain short-term cautious, and expect the recent correction […]

A Correction Is Healthy

A host of factors have recently been pressuring the stock market. The S&P 500 Index has nearly doubled from its bear-market low in March 2020, signifying one of the strongest 16-month gains in post-war history! After such a robust, uninterrupted advance, it simply feels overdue for a correction. Moreover, compared to historical norms, valuation measures […]

The Reopening

Over the last year, we witnessed policymakers’ experiment with ways to force the economy out of its steepest dive since the Great Depression, applying massive fiscal and monetary stimulus at light speed. The Fed used the power of its record-setting $7.6 trillion (and growing) balance sheet while Congress voted $5.5 trillion of fiscal stimulus to […]

Thank God It’s 2021

2020 will go down in history as a year we all wish we could forget, but never will. The unprecedented coronavirus pandemic changed everything. While the economic and earnings recession was short but deep, the humanitarian crisis remains devastating. The U.S. alone has already seen more than 15 million cases (over 75 million globally) and […]