The past several years have made many investors complacent about inflation. That complacency served bond bulls well.
A memorable part of President Trump's inaugural speech pointed to mothers and children trapped in poverty, rusted-out factories, a flawed school system, and crime and gangs and drugs. He described these problems as "American carnage" and stated emphatically that it "stops right here and stops right now."
Animal spirits are back!
Keynes thought a free market economy should be managed: in fact, needed to be managed. His ideas flourished in the 1930s when the US was in the Great Depression. Keynes believed that a lack of consumer demand was the culprit to economic problems and government should spend to boost jobs and economic activity.
President-elect Trump wants a Race Horse Economy, not a continuation of the Plow Horse we've had for the past several years.
The Bible story of the virgin birth is at the center of much of the holiday cheer this time of year. The book of Luke tells us that Mary and Joseph traveled to Bethlehem because Caesar Augustus decreed a census should be taken.
The Federal Reserve unanimously decided to raise rates in 2016 – finally! – by a quarter of a percentage point earlier today, as the markets expected. The federal funds rate is now set to hover between 0.50% and 0.75%.
Since the presidential election, the S&P 500 is up 8.4%, the Russell 2000, a small cap stock index, is up almost 20% and the Dow is closing in on 20,000. Financial stocks have surged.
If there's one theme tying together many of the policies President-Elect Trump and Congress will try to enact, it's making the US a better place to invest.
According to the Merriam-Webster dictionary, a Populist is, "a member of a political party claiming to represent the common people." The opposite of populist is elitist. We don't think Mr. Moore was calling President Reagan an elitist, so what was he saying?
We agree that higher tax rates, more regulation and increased government spending are wet blankets on economic growth. We also think these policies hurt the very people they're designed to help.
The S&P 500 hit a low of 666 on March 6, 2009 and was up 213%, excluding dividends, through November 4, 2016. Since then, the S&P 500 is up another 4.6%, and closed just 0.5% from a new all-time high last Friday.
Elections have consequences and the impact on U.S. economic policy of last week's election will be enormous.
As election results rolled in last night, Dow futures fell as much as 800 points. The knee jerk reaction was that a Trump victory was bad for the financial markets. We disagree. Mr. Trump has the opportunity to cut the burdens of government, which could turn the US economy from a plow horse back into a race horse.
In the movie "Saving Private Ryan," multiple brave soldiers give their lives to save one (the last-surviving of four brothers) in World War II. During a final, chaotic and riveting battle scene, Ryan is miraculously saved, but with tremendous loss of life.
Through Friday, in spite of very good earnings reports from companies, the S&P 500 was down nine days in a row, the longest negative streak since 1980.
The Federal Reserve has laid the foundation for a December rate hike.
It's not like we all don't know that certain media outlets favor certain candidates. Some outlets seem "more fair" than others, but some go to absurd lengths to spin the news.
Real GDP has been soft in the past year, growing only 1.3% in the year ending in the second quarter. In the four quarters before that, however, real GDP grew 3%.
Two weekend articles, in major US newspapers, left us shaking our heads. The Washington Post wrote that "economic growth actually kills people," while The Wall Street Journal published a piece saying, ironically, we should get used to slow growth - it's normal.
One of the key excuses for the Federal Reserve to hold off raising rates again and again, and to raise them very slowly, is that inflation remains extremely low.
