The stock market has been posting solid gains of late, with the S&P 500 rising +4.4% in March and up +6.2% for the first quarter. Massive liquidity measures – courtesy of the Federal Reserve and federal government stimulus – are supporting higher prices, as are rising expectations for strong earnings and GDP growth in 2021.1 […]
The Covid-19 bear market ended just over a year ago, on March 23, 2020. Needless to say, the twelve months that followed delivered no shortage of economic and political twists and turns. But for equity investors who kept a steady hand and a long-term mindset, it also delivered a +75% return on the S&P 500 […]
The recent passage of the $1.9 trillion American Rescue Plan – and the trillions of dollars in stimulus that came before it – have revived inflation fears. Many readers remember the period of double-digit inflation in the 1970s and early 1980s, which culminated in a major, global economic recession. With all the current spending, some […]
Small-cap stocks are having a very strong 2021 so far. Through the first two months of the new year, small-caps have been outperforming large-caps by the largest margin in over two decades. And when I say large margin, I mean really large margin – year-to-date through March 16, small-caps have outperformed large-caps by 15%.1 There […]
U.S. Treasury bonds have been locked in a six-week selloff, with yields moving steadily higher as prices fall. The 10-year U.S. Treasury bond yield started 2021 under 1%, but it has marched upwards ever since. The yield crossed 1.5% by the first week in March.1 Looking ahead, all signs point to even more upward pressure […]
Coronavirus hospitalizations and deaths have been falling throughout 2021, and most health experts agree the worst of the pandemic is now behind us. I think we’re at a point where we can confidently look forward to economic and social ‘normalization,’ with restrictions gradually falling away. I’m bullish, but I’m also cautious. Let me explain the […]
Broad equity markets have rebounded strongly from last year’s pandemic-induced recession, but they’re not the only asset class seeing strong gains.1 Commodities are on the upswing, too. As of last week, the Bloomberg Commodity Spot Index was up over 60% from the pandemic lows touched last March, and even still, many individual commodities have not […]
Growth stocks have been on a tear. Over the last 10 years (through 2020), the Russell 1000 Growth Index has delivered an annualized return of around +17%, while the Russell 1000 Value Index has annualized about +10% over the same period. Strong performance in both categories, but a clear winner in growth. Many readers know […]
The unpredictable nature of the pandemic and vaccine rollout have complicated economic forecasting models in 2021. Consumer behavior is very difficult to predict, and corporations are reluctant to overcommit to earnings forecasts in 2021. Indeed, over the past six months, CEOs have been all over the map in statements about when the economy could normalize […]
Readers of this column are likely aware of some of the bizarre events transpiring in the equity markets today. Among them, stories of Reddit chatrooms driving short squeezes and massive single-day moves (in both directions) in companies with relatively weak fundamentals. If parts of the environment feel like the 1990’s dot-com bubble to you, I’m […]
