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The Markets “It’s hard to be a contrarian for very long these days because the consensus seems to change so quickly,” opined Ed Yardeni via LinkedIn last week. We’ve certainly seen a shift in investors’ preferences during the first few weeks of this year. Despite widespread expectations that markets would move lower early in 2023, major U.S. stock indices have trended higher. Year-to-date through January 20, 2023: The Standard & Poor’s 500 Index, which is comprised of 500 of the largest publicly traded companies in the United States, was up 3.5 percent. The Nasdaq Composite, which is comprised of [...]

The Markets Bullish or bearish? After last year’s geopolitical turmoil, economic malaise, and tumultuous stock market decline, many financial professionals – from investors to asset managers – have strong opinions about what will happen in 2023. Some are bullish. While individual opinions are quite nuanced, in broad terms, bulls tend to think the Federal Reserve (Fed)’s rate hikes will slow soon since headline inflation has been trending lower. Some bulls anticipate an economic recession in the United States and expect the Fed to reverse course and begin lowering rates to pull the country out of recession. Lower rates, in [...]

The Markets It’s being called the “Goldilocks” report. Last Friday, we learned that demand for workers in the United States remained strong in 2022. The unemployment rate dropped to 3.5 percent in December. (It was 3.7 percent in November.) That brought U.S. unemployment back to where it was before the pandemic – at the lowest level in more than 50 years, reported Megan Cassella of Barron’s. “Hopes the Federal Reserve can tame inflation without widespread job losses mounted Friday after a government report showed robust hiring and a historically low unemployment rate paired with a cooling in wage growth. [...]

The Markets It’s finally over. 2022 was a dismal year for financial markets. Major United States stock indices moved lower, trimming or eliminating the previous year’s gains. The Standard & Poor’s 500 Index, which had gained about 27 percent in 2021, dropped almost 20 percent in 2022. The Nasdaq Composite Index, which had gained more than 21 percent in 2021, lost about 33 percent in 2022. The Dow Jones Industrial Average, which had gained about 19 percent in 2021, fell almost 9 percent in 2022. It’s performance reflected the improved performance of value stocks. Bond markets didn’t fare much [...]

The Markets What a year! In some ways, it feels as though we lived through several years in 2022. The onslaught of events included, “The first major European war since the 1990s, unprecedented sanctions, energy-price mayhem, bail-outs, global interest rates rising at their fastest pace in four decades, a faltering Chinese economy, an overheating American one, housing markets looking peaky across the rich world, [and] a crypto blow-up for the ages…,” reported Hamish Birrell in The Economist’s Money Talks newsletter. The impact of these events was felt around the world. Global inflation averaged 10 percent, and global stock markets [...]

The Markets Bad news is bad news, once again. For months, investors have cheered bad economic news. When the United States economy showed signs of weakness, stock markets often reflected investor enthusiasm. The thinking was that bad economic news would persuade the Federal Reserve to slow the pace of rate hikes. Inflation would slide lower, and recession would be avoided. Last week, there was a shift in attitude. On Wednesday, the Federal Reserve raised the federal funds rate by half a percent, as expected. Over the course of this year, the fed funds rate has risen from near zero [...]

The Markets What comes next? The U.S. stock market tends to be a forward-looking vehicle. Investors make decisions today based on what they think may be ahead for the economy, and how economic change may affect the companies they’re considering for investment. Currently, key questions include: Will inflation be lower in 2023? Will Federal Reserve (Fed) policies change? When will they change? Will economic growth remain strong next year? Or will it slow or contract?  Opinions about the answers to these questions vary, and that’s one reason markets have been volatile lately. For example, some think the U.S. economy [...]

The Markets What will it take to slow this economy down? In 2001, railway workers slowed a runaway train in Ohio by latching a second engine to the back of the locomotive and applying the brakes. In all, the train traveled sixty-six miles over two hours, decelerating from a maximum speed of 47 miles per hour to 10 miles per hour before workers regained control of it, according to CNN. Throughout 2022, the United States Federal Reserve has been trying to slow inflation by putting the brakes on the U.S. economy. So far, the Fed has raised rates six [...]

The Markets There was a shift in the winds of monetary policy. Last week, it became clear the Federal Reserve (Fed) had softened its hawkish stance. The minutes of the central bank’s November policy meeting indicated the Fed was likely to slow the pace of rate hikes soon. There was a caveat, though. The minutes noted: “…with inflation showing little sign thus far of abating, and with supply and demand imbalances in the economy persisting…the ultimate level of the federal funds rate that would be necessary to achieve the Committee’s goals was somewhat higher than [Fed officials] had previously [...]

The Markets Thanksgiving and football go together like turkey and stuffing. For some families, though, this year may be more like a turducken, stuffed with American football and the sport the rest of the world knows as football (soccer). The men’s World Cup, which is played every four years for national glory, the Jules Rimet trophy, and millions of dollars in prize money, began on Sunday and will end on December 18. During the tournament, researchers may track the influence of sentiment on markets. According to Mark Hulbert of MarketWatch, previous research has found that a team’s performance – [...]