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
The leaders of the House and Senate have come up with a new budget deal, and many people aren’t happy. It still needs passing by January 19th, or else the government, evidently, may shutdown. We doubt that this will happen, but the fight over government spending seems to drag on year after year after year. It’s not hard to understand why. Non-defense spending by the federal government (including entitlements like Social Security) has climbed dramatically. 10% of GDP in the 1960s 14.8% o… View More
Each year we like to check out our friend Bob Doll's annual predictions. He is right more than wrong, but last year's markets left Bob's predictions with an unusually mixed bag. Let’s see what Bob thinks is in store for 2024: The main focal point for 2024 will likely be whether or not investors can enjoy a Goldilocks environment; namely, further significant progress on inflation, decent economic growth, and double-digit earnings growth ... Source: Bob Doll Crossmark Investments … View More
Across Wall Street, on equities desks and bond desks, at giant firms and niche outfits, the mood was glum. It was the end of 2022 and everyone, it seemed, was game planning for the recession they were convinced was coming. Over at Morgan Stanley, Mike Wilson, the bearish stock strategist who was rapidly becoming a market darling, was predicting the S&P 500 Index was about to tumble. A few blocks away at Bank of America, Meghan Swiber and her colleagues were telling clients to prepare for a … View More