Many readers are likely concerned about recent escalations between the United States and Iran. Geopolitical tensions and even war are, unfortunately, inevitable over time. An investor’s job is to constantly assess and re-assess how each conflict may ultimately affect the global economy – or whether it will disrupt growth at all. In times when politics […]
From an economic and capital market standpoint, 2019 might best be remembered as a year where the trade war dealt some light blows to business investment and overall growth, while dovish monetary policy supported a surge in stock prices. Investors who kept their cool at the turn of last year – when downside volatility ripped […]
In the wake of the 2008 Global Financial Crisis, the U.S. government was pulling all levers to try and stabilize the economy and get growth back on track. In addition to unprecedented bailout programs like TARP and liquidity-boosting schemes like QE1 and QE2, the Federal Reserve also effectively lowered interest rates to zero. In all, […]
In 2015, weak growth numbers in China were worrying investors. There was also China’s decision to devalue their currency, which sent equity markets into a brief tailspin. China was posting weaker-than-expected manufacturing and export figures, and the currency devaluation felt like a desperation move to revive growth.1 In 2016, investor fear shifted to the second […]
In my weekly columns, I frequently point out that widely-known information does not have much pricing power in the equity markets. If you read a story in the newspaper or hear it on the news, you can rest assured that this information is not very valuable to future price movements. It’s already baked into stock […]
There are always risks in the equity markets. To many readers, it may feel like risks are currently high and on the rise. But of all the risks that are increasingly grabbing people’s attention today – the trade war, impeachment, recession, etc. – none of them are actually the biggest risk to long-term investor returns, […]
Investing in the equity markets means confronting a constant barrage of economic, political, and financial information – with most of it tilting to the negative. Then there are times when prominent commentators up the ante and start to talk of “Armageddon” scenarios, forecasting economic ruin and using phrases like “the death of equities.” Many investors, […]
A few weeks ago, I wrote in a Mitch on the Markets column that I’d been observing a notable rotation in the equity markets. I saw a significant shift away from cyclical sectors and towards defensive sectors. I noted in the column that in Q3 2019, the traditionally defensive Utilities and Consumer Staples sectors had […]
Many readers remember the sudden and sharp S&P 500 declines around this time last year. 2018’s fourth quarter was harsh, to say the least. From the S&P 500’s highs in early October through Christmas Eve, the index dipped into bear market territory with a near perfect -20% decline.1 Technical market watchers would rightfully label this […]
Two months ago, the yield curve ‘inversion’ was one of the most cited data points for recession worries. And for good reason – sustained yield curve inversions have preceded nearly every recession in the post-World War II era. Considering that pockets of U.S. macroeconomic data were showing weakness around the same time as the inversion, […]
