Jan
12
Another theme we expect to play out in 2023, and possibly beyond, is the outperformance of value stocks over growth stocks.First, let’s get definitions out of the way. As the name itself implies, growth companies are expected to grow their revenues and earnings at a faster clip than that of...
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Jan
11
Three things to note on non-USA stocks: After a long and painful period of relative underperformance, non-USA equities relative and absolute level of valuation is very attractive. A weakening US dollar + China better + emerging market equities better + US small caps better is often the path to a...
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Jan
10
One of the major stories – if not THE major story – for the capital markets during 2022 was the overall tardiness of the Fed in responding to rising levels of inflation. Despite inflation spiking everywhere in late 2021/early 2022, the Fed continued to pursue a policy of accommodative quantitative...
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Jan
06
The headline jobs number this morning was +223K which was roughly in line with the +200K estimate. Revisions to prior months job gains were relatively minor. Leisure and hospitality industries accounted for +67K new jobs last month while the healthcare sector added +55K. Unemployment rate stubbornly low at 3.5% but...
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Jan
05
One of the silver linings of the type of volatility that’s occurred over the past year is that it also creates opportunities amidst the carnage. An area that we believe is shaping up to be one of those opportunities is US Small Cap stocks, for several reasons. The first is...
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Jan
04
We’ll be putting out a list this week of our major investment themes for 2023 and beyond. Theme #1 is the abnormal, low, weak level of investor sentiment as we enter the new year. 2022 was the first time in the proud 35y history of the AAII investor sentiment survey...
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Jan
03
Here’s the report card on capital market asset classes for 2022: What worked: very, very little. Oil (either flavor, brent or WTI), energy equities, MLPs, and silver was up modestly. Gold (allegedly the inflation hedge) was flat in the fastest inflation environment in 50 years. Most major equity markets (including...
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Dec
15
Whenever Fed chair Powell goes in front of a microphone or a podium, I get slightly nauseous. Powell never misses an opportunity to miss an opportunity. Powell’s pledge yesterday to fight inflation is a valiant oath but one that is coming too late. Inflation is already going down and going...
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Dec
13
The broad market backdrop continues to play out as we await the Fed’s 50bps rate hike on Wednesday. Inflation is elevated but coming down very quickly. The US economy is highly likely to be in recession in 1H23 because financial conditions got very, very tight. Investor sentiment remains very weak...
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Dec
08
Market convention is to quote the shape of the UST yield curve by looking at 10Y UST v 2Y UST. Every bond trader and bond trading desk does it and in the institutional fixed income world this is what you quote in conversation about the shape of the yield curve....
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