What can breakeven inflation rates tell us about oil prices, energy stocks, and market direction? It turns out it’s a lot more than you think.
Despite media headlines, podcasts, and broadcasts suggesting “doom and gloom” lurks around the corner, investor bullishness has increased markedly since the October lows. This isn’t the first time we have discussed investor sentiment, which is often wrong at the extremes.
Recession odds have climbed considerably since Jerome Powell’s testimony before Congress and the latest FOMC meeting. However, the recent failures of Silicon Valley Bank (SVB) and Credit Suisse (CS), as higher rates impact regional bank liquidity, also added to the risks.
The market bottomed last October despite ongoing concerns about inflation, higher rates, recessionary risks, and a banking crisis. While the media headlines and youtube podcasts are filled with “crisis” headlines, as noted in “Analysts Raise Estimates,” expectations for growth and earnings are rising.
Despite an ongoing “banking crisis,” investors continue to chase stocks triggering several bullish buy signals.
Recession indicators are ringing loudly.
“QE” or “Quantitative Easing” has been the bull’s “siren song” of the last decade, but will “Not QE” be the same?
With the collapse of Silicon Valley Bank, questions of potential “bank runs” spread among regional banks.
Could the consensus view of a “no recession” scenario be wrong? As portfolio managers, this is the question we ask ourselves daily.
Warren Buffett defended stock buybacks in Berkshire Hathaway’s annual letter, pushing back on those railing against the practice he believes benefits all shareholders.
Gen Zers, according to a recent Magnify Money survey, are overly optimistic about being wealthy.
While there are certainly many complaints that “capitalism” is broken, such is not the case.
A recent Wall Street Journal article discussed how retail traders that made millions during the pandemic trading the market are now mostly wiped out.
Economically speaking, bullish bets are mounting on a “no landing” scenario, which suggests the economy will avoid a recession entirely.
Last week, we discussed why the more bullish technical formations were at odds with the many recession forecasts.
The market correction has started.
Bullish investors continue to “Fight the Fed,” hoping that a change to monetary policy will reignite the 12-year-long bull market.
Despite mounting evidence supporting recession forecasts, the stock market remains at odds with that outlook.
The most recent NFIB (National Federation Of Independent Business) is sending a strong signal of an economic recession.
From a contrarian investing view, everyone remains bearish despite a market that corrected all of last year.
Optimism is increasing on Wall Street, with investors hoping for a “soft landing” in the economy.
The “pain trade” is likely higher over the next few weeks.
Is the Fed trying to wean the markets off monetary policy?
The lag effect of monetary policy changes will surprise the Fed as the fiscal “pig” of stimulus begins to exit the economic “python.”
Home prices have started to correct as interest rates rose sharply in 2022.
For many investors who started their investing journey following the financial crisis, forward returns will be disappointing compared to the last decade.
Just recently, James Bullard, President of the St. Louis Federal Reserve, suggested the central bank might need to employ the “7% solution” to ensure the complete destruction of inflation.
With 2022 finally over, and not soon enough, such is an excellent time to review our “investor resolutions.”
Much ink has been spilled over the death of the 60/40 portfolio.
Extremely harsh weather conditions from winter storm Elliot resulted in thousands of flight cancellations last weekend.
Managing your portfolio has more to do with gardening than you might imagine.
The big question heading into 2023 is the dreaded “R” word.
In 2023, the math of valuations suggests returns will likely be challenging as markets remain difficult to navigate.
The key takeaway from Wednesday’s FOMC meeting: despite encouraging inflation news, the Fed believes they have a long inflation fight ahead.
Will a dollar decline be good for stocks? It is an interesting question, given that during 2022 there was a significant non-correlation between the dollar and the stock market.
Since the beginning of October, the market has performed better as a “Fed Pivot” bull case pushed investors into the market
Recently, Bank of America discussed the “5-Lessons From The Nifty Fifty.”
After 12 years of a liquidity-fueled, Fed-induced bull market, are the markets set to start another “secular” bear market?
Following the weaker-than-expected October inflation report, stocks surged on hopes the Fed will “pivot” sooner than later. As we discussed recently, a “policy pivot” is not necessarily bullish but instead suggests more bearish market action will come first.
Is a “hard landing” coming, economically speaking, as the Fed continues its most aggressive rate hike campaign in 40 years?
With the midterm elections behind us, does the market outlook improve given a now gridlocked Congress? Historically speaking, such is the case.
There was a time when a large portion of Americans belonged to the “middle class.”
Since June, the market rallied on hopes of a “policy pivot” by the Federal Reserve.
Are the FANG stocks dead?
October started strong and then slid to new lows but managed to rally back toward the month’s end.
The Fed’s next crisis is already brewing.
Is a “lost decade” ahead for markets? Stanly Druckenmiller believes that could be the case.
Last week, the FOMC published its minutes from the September meeting, confirming its recent stance that Fed rate hikes will continue until inflation is vanquished.
