Perspectives

Dear Santa, We were largely good investors this year, remembering always and everywhere one of the cardinal rules of investing – “Don’t fight the Fed” either when it is easing or most especially when it’s tightening. We stuck with Energy and basic materials stocks. Ironically, we made more money on our longs than we did our shorts in a bear market. This was largely due to the lack of discipline and violating another investment bromide – never let a profit turn into a loss. After all… View More

The Fed downshifted to smaller rate hikes but isn’t close to done. In contrast to the 75 basis point rate hikes at each of the last four meetings, the Federal Reserve raised short-term rates by only 50 bps YESTERDAY, as expected. However, the Fed made it clear in its projections and at the press conference that it is tilted toward further rate hikes in the months ahead and more rate hikes than the markets have been pricing in. Today’s Fed statement was virtually identical to the one in No… View More

In January 2020 President Biden entered office and declared he was going to change the energy policy in America at a record pace. We were going green baby and Biden was the man to take us there in record time. Then a few months later in March of 2020 when the markets thought the world was coming to an end because of Covid-19 and the markets lost more than 50% of its value in a matter of weeks, one economic sector caught our eye. The energy sector has long been a bellwether but had not performed … View More

Below we have outlined a list of reminders as you consider your options for Annual Gifting.   Don't Forget to Give to Charity As the end of the year and the holiday season approach, we will all see an uptick in the number of charitable solicitations arriving in our mailboxes and by email. Since some charities sell their contributor lists to other charities, frequent contributors may find themselves besieged by requests from all sorts of charities with which they are not familiar. Watch Out … View More

The U.S. economy does not appear to be in a recession right now. But risks continue to skew to the downside, in our opinion. We believe there’s a 75% chance of a U.S. recession in the next 2 years. The employment situation continues to show a tight U.S. labor market. Despite some notable tech layoff announcements, U.S. nonfarm payrolls in November rose +263,000 m/m, with only small revisions to prior months. Workers who are fired seem able to get new jobs quickly (consistent with still-elevat… View More

Among the sad legacies of the prolonged use of quantitative easing to wash away the sins of the world is the difficulty among investors, businessmen, and labor alike to think of business cycles as anything other than “V-shaped” affairs. Unfilled job openings and excess savings may be enough to believe in the possibility of a soft landing in the economy in 2023. It may not be enough, in our view, to justify a market trading at 18x trailing earnings. Believe it or not, domestic equity mutual f… View More

U.S. equities fell last week (S&P 500 -0.6%) after the prior week’s strong gains. The equity decline was a function of hawkish Fed speak and further yield curve inversion. Best sectors were consumer staples (+1.7%) and healthcare (+1.0%); worst sectors were consumer discretionary (-3.1%) and energy (-1.9%). Source: Bob Doll, Crossmark Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of speci… View More

U.S. equities were higher last week (S&P 500 +5.9%) more than erasing the prior week’s declines. A major factor in the upside was an outsized Thursday rally in the wake of a softer-than-expected report for October CPI. The softer inflation report sparked a flurry of dovish-leaning Fedspeak. Best performers were technology (+10.0%), communication services (+9.2%) and materials (+7.7%); worst performers were utilities (+1.4%), healthcare (+1.8%) and energy (+2.0%). Source: Bob Doll, Cro… View More

With earnings season more than 80% complete, EPS growth is expected to be 4.3% which is just below expectations at the beginning of the reporting season. On sector basis the data was mixed with 7 of the 11 sectors exceeding initial growth estimates led by energy. Turning to sales, the estimate growth rate is expected to be 11% which is ahead of the initial estimates of 9.7% on Oct. 1st. 2023 EPS Estimate Down To $233, Growth Expected To Be 5.3% The biggest story from our perspective has been… View More

Equities were higher for the second straight week (S&P 500 +4.0%). Despite multiple megacap earnings disappointments, the market remained resilient. The market is embracing the idea that the Fed could soon begin to slow the pace of tightening. Best performers were industrials (+6.7%) and utilities (+6.5%); worst performers were communication services (-2.9%) and consumer discretionary (+0.7%). 3Q Earnings Season Turning Out To Be Underwhelming With the third quarter earnings season about h… View More