A One-of-a-Kind Economic Recovery

The current economic recovery – which can now be deemed an economic expansion, in my view – has no historical precedent. All economic recoveries and expansions look different, of course. But we have never seen such a deep economic collapse followed immediately by a boom of this magnitude. It’s a first-of-its-kind event. Take the economic […]

Corporate Earnings Should be the Key Investor Focus

The U.S. economy is growing, vaccination rates are slowing but remain elevated, and restrictions are falling away quickly. Pandemic risks are falling, and corporations are posting very strong earnings numbers.1 Yet, even still, we keep hearing about inflation concerns, labor market shortages, supply chain bottlenecks, too much government spending, and frothy asset classes. Don’t get […]

Should You Fear the Fed Tapering?

A high percentage of financial commentary these days tends to focus on inflation worries, Fed tightening, and government spending. Most of the commentary is negative. One of the worries I read about quite a bit are concerns surrounding Fed “tapering,” which is the term used to describe a reduction in bond purchases (QE). Many see […]

The American Consumer is the Key to This Recovery

The U.S. labor market had a weak April. Many economists were caught off guard – the consensus was for the economy to produce 1 million new jobs, and instead, we saw a seasonally adjusted 266,000. To make matters more tenuous, U.S. consumer prices jumped 0.9% from March to April, marking the biggest monthly inflation increase […]

Busting the “Sell in May” Myth

The tulips have bloomed and warmer temperatures are here, which means it’s time for the “Sell in May and go away” punditry to flood the financial news media. Don’t buy into it. Many readers are likely familiar with the ‘Sell in May’ adage, which says that investors should ditch stocks at the end of April, […]

Are We Overdue For A Market Correction?

U.S. stocks have been trending solidly higher for over a year, with very few episodes of sustained downside volatility. From the bottom of the March 2020 Covid-19 bear market to the end of 2020, the S&P 500 charged +68% higher. In Q1 2021, the index rose another +6.2%, again with no material pullbacks. I don’t […]

Economic Risks Are Falling, But What About Market Risks?

There is an interesting dynamic happening in the current environment, in my view: economic risks are falling, while market risks are rising. The two usually move in tandem. Within the context of economic risks, I think we’re in an environment where risks are falling. I see many economic fundamentals pointing to “green shoots” and improving […]

3 Reasons 2021 Looks Good for the Banking Sector

Around this time last year, the outlook for U.S. banks was tenuous at best. The global economy was shutting down, and virtually no one understood the implications for credit, loans, liquidity, mortgages, and other avenues for banking revenue. Banks went into full defense mode. For years, banks had been preparing for another crisis, and here […]

Inflation Worries May be Overstated

The just-passed $1.9 trillion stimulus plan—combined with the $3.3 trillion in government spending that came before it—have been key factors driving the inflation conversation. Fears of rising inflation are not unwarranted. Much of the Covid-19 stimulus has been direct payments to American businesses and households, and M2 money supply is growing at a 25% year-over-year […]

The Perils of ‘Get Rich Quick’ Investment Ideas

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 […]