Perspectives

In the waning seconds of one of the most watched women’s college basketball games ever, a foul was called. The University of Connecticut was playing the University of Iowa in the semi-finals of the women’s NCAA championship tournament. Officials called a UConn player for an “illegal screen” on an Iowa defender, which helped Iowa win the game. This happened Friday night, and on X (formerly Twitter) the debate about this call still rages. Despite the debate, that game is over. On Sunday, … View More

Why has recession not happened? After all, the Fed raised rates the most and fastest in modern history, the yield curve inverted, and money growth turned negative. That severely curtailed bank lending, as it normally does. So where did the money come from to sustain economic growth? Source: Bob Doll Crossmark Investments   Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific inves… View More

​​​​​​Equities posted their best weekly performance this year (S&P 500 +2.31%). The rally was sparked by dovish takeaways from last week’s Federal Open Market Committee meeting. Best sectors were communication services (+4.78%) and technology (+2.94%); worst sectors were real estate (-0.38%) and healthcare (+0.40%).     We expect sticky consumer inflation and resilient economic growth to eventually force the Fed to pivot to a less dovish stance. Given recent data, it is … View More

Stocks fell last week (S&P 500 -0.1%) and bonds fell (the 10-year yield was up more than 20 bp) due primarily to a higher-than-expected CPI. Best sectors were energy (+3.8%) and materials (+1.6%); worst sectors were real estate (-2.8%) and consumer discretionary (-1.2%). Last week's inflation reports evidence that the glide path for a return to 2% inflation is not unfolding the ways the bulls and the Fed have been anticipating. Rather, in the case of the U.S., underlying inflation has level… View More

Why is the economy so strong? This seems to defy the normal and needed market cycles. The market came into 2023 expecting a recession, but one was nowhere to be found. The market went into 2024 expecting six Fed rate cuts. That assumption would defy normal market cycles and conditions because you should never ease conditions into an economy that is not underwater or slowing dramatically. So, how did the market get it so wrong? The answer is surprisingly easy to reach. Too much government interv… View More

We’ve had 3 soft landings -- 1967, 1985, & 1995 -- and many investors believe 2024 will be added to that list. In today’s Narrative, we compare this cycle to 1995 and 1967, drawing some cautionary conclusions. To have a soft landing in 2024, additional fiscal stimulus would be needed (such stimulus definitely kept the economy stronger, longer in 2023). And Congress definitely has new stimulus teed up. If they enact that fiscal support, will the eco backdrop resemble 1995 or 1967?   Ca… View More

Stocks advanced again last week (S&P 500+1.4%) as the S&P 500 closed above 5,000 for the first time and small stocks beat big ones for the fifth time in the past seven weeks. Earnings exceeded expectations and treasury yields increased. Best sectors were technology (+3.3%) and consumer discretionary (+1.5%) worst sectors were utilities (-1.9%) and consumer staples (-1.3%).   9. International stocks continue to lag the U.S., with the U.S. averages up 3-5% already this year. 10. Chin… View More

Most all his comments are speculative (Like Transitory Inflation was at the time), except the one on our national debt.   Is anyone in DC listening? Coming off a sizzling jobs report, which showed non-farm payrolls accelerating by 353,000 in January, investors tuned into the latest commentary from Jay Powell, who appeared on a 60 Minutes episode aired on Sunday. The Fed Chair was quick to highlight the robust U.S. economy and path towards a soft landing, as well as inflation that has come do… View More

 Albert Einstein once said the most powerful force in the universe is compounding. Compounding can be easily explained, but most people do not understand It and why it matters. The basis of compounding is that as forces become larger, compounding starts to gain speed. A penny a day doubled is 100% compounding daily and in the first few days if doesn’t seem like much. Day one 1 penny, day two 2 pennies, day three 4 pennies and so on. Not until day 15 does this start to become meaningful when y… View More

The economy slowed substantially in the last quarter of 2023 from the rapid pace of the third quarter, but, as we explain below, still expanded at a moderate rate. Some will take this week’s Real GDP report to confirm their prior view the recession is simply not in the cards for the US economy, but we still think a recession is more likely than not. Why do we still think a recession is coming? Because monetary policy is tight whether you like to use the yield curve, the “real” (inflation-… View More