Market Analysis

A Deeper Look at Valuation Levels

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At the end of each quarter J.P. Morgan puts out their so-called “Guide to the Markets,” which includes a wealth of information about the market and economy. The information isn’t the most timely, but it helps investors wrap their arms around many key data points.

There are a handful of charts that I’d like to discuss today, but before we do that let’s take a quick look at the technical condition of the stock market.


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Posted in: Earnings Economy Interest Rates Stocks Taxes Valuations

Market-Based Stabilizers Kicking In

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Anyone who’s ever taken a cruise before knows that the seas, though often calm, can quickly turn treacherous. Those like myself who are prone to bouts of seasickness therefore appreciate the inclusion of stabilizers on each side of a ship’s hull.

These stabilizers (see image below) act like flaps on an airplane, deflecting water as needed to minimize the rocking and rolling motion of the vessel. The end result is a steadier voyage, with fewer passengers needing to unload the contents of their stomach orally.


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Posted in: Dollar Interest Rates PMI Data Yield Curve

Could a Bad 2018 Yield a Better 2019?

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The final quarter of each year is often a seasonally strong period for stocks, but not so this year, as the market found itself in a seemingly endless freefall. This culminated with the final month of the year being the worse December since the Great Depression, a rather unnerving fact.

But is it possible there’s a silver lining to 2018 that could, in the long run, actually be a net positive? Using some mental gymnastics (which I’m quite good at), I think the answer may actually be yes.


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Posted in: Federal Reserve Interest Rates PMI Data Psychology Volatility Yield Curve

Setting Longer-Term Expectations

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Today’s note is going to focus on what to expect over the long-run in terms of economic growth – and the implications for asset prices. But first, let’s take a quick look back at the treacherous year that was 2018.

Last year really was a year of extremes. We began the year with global growth on solid footing, and optimistic investors pushed the S&P 7% higher in January alone to a crescendo high.


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Posted in: Economy Global Growth Interest Rates Recessions Volatility

Short Xmas Note

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Amidst the carnage in the markets I hope you all are enjoying a wonderful holiday season. Today's note will be a bit shorter than normal as I write from beneath the Giant Sequoia trees in Yosemite National Park.

We know there are a variety of uncertainty-inducing events hanging over the market, and that, combined with thinly traded holiday markets, has made for a rather unnerving end to the year. But things are not as bad as they may seem.


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Posted in: Corrections Dividends Earnings Interest Rates

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