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 […]

3 Lessons From the 2020 Bear Market

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 […]

Will The Massive Stimulus Trigger Inflation?

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 […]

Why Are Small-Caps Outperforming?

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 […]