Perspectives

Friday’s employment report suggests the US economy may be slowing down faster than most investors think. Nonfarm payrolls increased by 142,000 in August, but revisions to June and July brought the net gain down to a modest 56,000. And the details were worse. We like to follow payrolls excluding three sectors: government, education & health services, and leisure & hospitality, all of which are heavily influenced by government spending and regulation (including COVID lockdowns and reope… View More

Stocks put in a mixed performance last week as the S&P 500 increased (0.27%) but the NASDAQ fell (-0.91%). Treasuries were weaker with the yield curve steepening. Discussion revolved around AI (especially Nvidia’s earnings) and the Fed’s attempt at a soft landing. Best sectors were financials (+2.95%) and industrials (+1.71%); worst sectors were technology (-1.47%) and communication services (-0.69%).   U.S. Q2 GDP growth was unexpectedly revised up to 3.0% from 2.8%. All the focus… View More

Stocks were higher last week (S&P 500 +1.47%) as all major averages gained. Most averages remained below the July all-time high. The big focus was on the Fed and Chairman Powell’s strong endorsement of lower rates. Best sectors were real estate (+3.68%), materials (+2.39%), and consumer discretionary (+2.10%); worst sectors were energy (-0.28%), technology (+1.08%), and communication services (+1.20%).   Chairman Powell stated clearly,"... the balance of risks to our two mandates has … View More

Our research provider follows inflation, which affects us every day. The Strategas Common Man CPI is comprised of items people must buy each day, week, or month – food, energy, shelter, children’s clothing, utilities, and insurance. Real wages may have started to improve recently, but the cumulative effects of inflation indicate that the “common man’s” standard of living has deteriorated in the last four years.   January 2021   January 2017 Source: Strategas   Chart ref… View More

Stocks were down last week (S&P 500 -0.02%), although they nearly recovered from a significant decline on Monday (worst day in two years). A weaker-than-expected payroll report ignited fears about a behind-the-curve Fed and a potential hard landing. Best sectors were industrials (+1.22%) and energy (+1.19%); worst sectors were materials (-1.68%) and consumer discretionary (-1.00%).   The cause of the sell-off included: escalating concerns about an economic slowdown in the U.S., heighten… View More

There are certainly pockets of the market more deeply oversold than others after the last few days, but on balance, we’d still stop short of calling this enough of a rinse to really lean into yet. It might be an easier call if it was October, but we frankly struggle to think of many markets that have put in their corrective lows in early August. Here’s a summary of our current thinking, but reach out with questions or requests—we’re available to help in any way.   On a scale of 1 to… View More

U.S. equities were mixed again last week with the S&P 500 (-0.82%) and NASDAQ lower (- 2.08%) and the small cap Russell 2000 (+1.77%). Big tech/momentum were the biggest decliners. Best sectors were utilities (+1.47%), healthcare (+1.41%), and materials (+1.37%); underperformers included communication services (-3.76%), technology (-2.44%), and consumer discretionary (-2.31%).   The preliminary release of Q2 2024 U.S. GDP surprised to the upside (+2.8%) with the two largest drivers of t… View More

U.S. equity indexes were mixed last week with the market largely rotating out of big tech/momentum/growth into value/cyclicals/small caps. The S&P 500 Index was down (-1.95%); the NASDAQ fell (-3.65%); and the Russell 2000 Index was up (+2.33%). Themes included soft-landing hopes, expectations for a Fed rate pivot, and a surge in the “Trump trade.” Best sectors were energy (+2.06%), real estate (+1.32%), and financials (+1.19%); worst sectors were technology (-5.14%), communication servi… View More

Stocks ended higher last week (S&P 500 +0.87%), with small caps and equal-weight S&P 500 strongly outperforming the other major indexes following the post-CPI rotation out of big tech. The best performers were real estate (+4.37%) and utilities (+3.90%); the only negative sector was communication services (-3.57%).   Headline June CPI declined 0.1% m/m (versus consensus of +0.1%) (up 3.0% y/y). It was the first monthly drop since July 2022. Core CPI was +0.1% m/m (+0.2% consensus) a… View More

In 1852, Karl Marx said "Men make their own history, but they do not make it as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered and transmitted from the past." He, obviously knew about the Magna Carta (1215) and the English Parliament’s Bill of Rights (1689), which created a separation of powers between the King and elected representatives. What he didn’t pay much attention to was how the United States had improved upon… View More