• First Word
Wed November 23

The conviction that the US is hurtling towards/or already in a recession is ubiquitous. Many can cite a litany of statistics such as:inverted curve,Fed hikes so fast and so high, it is going to break something,plunge in PMIs,collapse in CEO sentiment,commodity price movementsinflation will take...

Escalation over the weekend, while negative, potentially raise odds 1H low is in.  Strengthens case for BEEF
  • US Policy
Mon November 21

Fed Minutes and Lame Duck Congress

While Wednesday may be a slow news day as investors and everyone else make final preparations for putting turkeys in the oven, for financial markets it is a big day as the Federal Reserve releases the minutes from the November Federal Open Markets Committee (FOMC) meeting.  As I have written...

  • Your Weekly Roadmap
Fri November 18

Markets Down for The Week on Tough Talk From Fed But Bounce on Friday

“Whenever you find yourself on the side of the majority, it is time to pause and reflect.”- Mark Twain There’s a lot of complex jargon and intimidating math associated with markets, as there should be. When someone’s managing many billions of dollars, obviously you’re going to attempt to get the...

  • US Policy
Mon October 31

Fed Day Wednesday and Elections one week to go

After a month of discussion about the next move by the Fed’s Federal Open Markets Committee (FOMC), decision day comes this week. The FOMC starts to meet on Tuesday and around 2:00 PM on Wednesday the Fed will announce the rate move. A 75pbs increase is widely anticipated. In my...

  • US Policy
Fri October 28

Fed and election focus of week ahead

After weeks of guessing what the Fed’s Federal Open Markets Committee (FOMC) may do on interest rates, Wednesday is decision day, and the all-important post-meeting press conference by Chair Powell happens around 2:30 pm ET on Wednesday. As Chair of the Fed, Jay Powell has been consistent in wanting to...

  • First Word
Wed October 26

S&P 500 ~30% loss in "real terms" staggering, leaving room for rally. Not priced for perfection. Since 1930, median P/E when 10Y 3.5% to 4.5% is 19X, and 18.5X when Fed tightening.

Stocks have continued to strengthen, and in our view, this is more than just a "dead cat bounce" (aka bear rally) as we have outlined in multiple prior reports. But even if this proves to be a "bear rally," the ingredients are in place for a rally far stronger than...

  • First Word
Mon October 24

Inflation less of a "blackhole of pain" and Fed sees that = why risk assets YE rally could exceed June +23 days/+16% meaningfully.

In the past week, risk assets staged one of the best gains in 2022. Over that same time frame, there was little "hard" economic data and 3Q2022 earnings season has been largely uneventful (74% beating). But there was far meaningful change in Fed commentary and a far more favorable set-up...

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  • Your Weekly Roadmap
Fri October 21

Markets Rally on Hopes for Fed Pause, Earnings Have Been Mixed

Markets had their best day since June in a furious rally that was led by Materials, Financials and Technology. This was the third positive week in a row, and the first three-week winning stretch all year. A Wall Street Journal article by Nick Timiraos renewed hopes that the Fed would...

  • US Policy
Fri October 21

Elections and Fed

The days are counting down as the November 8th midterm elections approach. Polls over the last few weeks seem to indicate a shift of momentum to the Republicans. In the House, with 435 races, it is hard to forecast as polling is scarce and local issues that don’t register on...

  • First Word
Fri October 21

Fed speak this week shows Fed see supply-chains and commodities behind inflation = progress there supportive of possibility of post-Dec "pause"

In our multiple conversations with investors this week, the main question is why should any investor expect equity prices to stage any meaningful gain from here, in the midst of a Fed tightening cycle and in the midst of great uncertainty around the Russia-Ukraine war, increasing stress in financial markets...

  • First Word
Wed October 19

As markets ponder a possible Dec "Fed pause," 4 reasons a pause drives significant asset allocation change

Earlier this week, we noted that a number of investors were citing the growing probability of a Fed "pause" of sorts after the December hike (+50 to +75bp) -- by then, Fed funds will be 4.5-4.75% and sufficiently restrictive for the Fed to be allowed to take a look around.and...