As we have mentioned over the last few months, we expect market volatility to increase in 2022. There are a number of reasons for our concern such as the long running bull market, real Inflation for the first time in more than 20 years and rising interest rates. Maybe our largest concern was the midterm elections while our other concerns are playing out. Midterm elections tend to have larger equity market corrections compared to non-midterm election years with an average intra-year decline of 19… View More
The first quarter of 2022 is slowing. There’s a clear shock to demand (eg, closures for schools, flights, cruises, etc). U.S. initial jobless claims rose to 286,000 in the Jan 15th week, with existing home sales dipping -4.6% m/m in Dec. However, not all the U.S. data were negative, with the Philly Fed index rising to 23.2 in Jan (offsetting the plunge in the NY Fed manufacturing index earlier in the week). Housing starts rose month over month in Dec and the NAHB housing market index remained … View More
Increased Market volatility absolutely has to do with inflation and all eyes are looking on how the Fed can catch up from recent mistakes. It has been claimed that the first casualty in any war is the truth. In the fullness of time, historians of future generations will be charged with determining whether this maxim was accurate when it came to the all-out war waged by policymakers against COVID-19. Certainly, in addition to the tragic loss of life due to the virus, there have been other public … View More
4Q Earnings Season Could Be Choppy If Friday was any indication of how the earnings season will pan out, it could be a choppy one for investors. Earnings growth is largely expected to be robust along with sales growth. However, the headline figures are deceiving because energy is expected to recover significantly, propping up the S&P figure. Ex. Energy earnings growth is expected to be closer to 15% - still a respectable number. NTM EPS Still Marching Higher From a macro perspective, we w… View More
In our Monday reports, we always strive to first highlight what is most important for clients, but frankly, we debated what exactly that should be this morning. There was a long list of contenders… the breakout in global yields, the subtle weakness in USD, the momentum surge from the Banks, the strength out of the Energy stocks, the outperformance of Staples vs. Discretionary, the weakness in Software, the persistent selling of the market’s most speculative corners, or the breakdown in small… View More