Interest rates surged last week on the back of a hotter-than-expected inflation report that wasn't actually that bad (see below). Not that my - or your - opinion about these things matters all that much to the market. In the short run, all that matters is what the majority believes is the truth. What they believed last week was that [...]
The 10 year Treasury yield has been in an uptrend since the summer of 2021 which is obvious to anyone who can see. It has stalled a couple of times and moved sideways - consolidated in Wall Street technical speak - but the trend is obvious (see below). It seems only a matter of time before we break above the [...]
It appears we have started the third correction in stocks since the bottom in October of last year. The first one was in December and saw the S&P 500 fall about 8% from peak to trough. The second one was from February into mid-March and totaled about 9%. I don't know how far this one might carry but a pullback [...]
One of the toughest things about navigating this bear market and the widely anticipated coming recession is that we've had to differentiate between real and nominal economic and market variables like nothing in recent decades. There are very few market commentators today who have navigated an inflationary environment like the current one. I haven't either, of course, which is why [...]
I think everyone can agree that stocks and bonds sold off last year because interest rates rose. You might get some argument about why rates rose but the fact they did is sufficient to explain the drop in stocks and bonds. It doesn't matter if you think rates went up because the Fed raised their target rate on Fed funds [...]
Goodbye and good riddance to the third quarter of 2022. That was one of the wildest 3 months I've experienced in my 40 years of trading and investing. The quarter started off great with the S&P 500 rising 14% from July 1 to August 16 but ended with a 17% swan dive into the end of the quarter. And we [...]
Note: This update is longer than usual but I felt a comprehensive review was necessary. The Federal Reserve panicked last week and spooked investors into the worst week for stocks since the onset of COVID in March 2020. The S&P 500 is now firmly in bear market territory but that is a fraction of the pain in stocks and other [...]
Something very important happened last week. No, it had nothing to do with the stock market, at least not directly. There was a lot of volatility in stocks last week but in the end, the S&P 500 was down a mere 21 basis points (0.21%). Yes, growth stocks continued their march toward reality with the NASDAQ 100 down 1.25% but [...]
Well, that didn't last long. I wrote last week about the inversion of the 10-year/2-year term spread as the yield of the 2-year Treasury note rose above the yield of the 10-year Treasury note. Using end-of-day data, the curve inverted on Friday, April 1st, and stayed that way until....Monday, April 4th. The spread closed last Friday, April 8th at 19 [...]
Remember "The New Normal"? Back in 2009, Bill Gross, the old bond king before Gundlach came along, penned a market commentary called "On the Course to a New Normal" which he said would be: "a period of time in which economies grow very slowly as opposed to growing like weeds, the way children do; in which profits are relatively static; [...]
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