One of the differences between the latest correction and previous market setbacks in this bull market has been the return of system risk. Many of the system risk indicators we follow are bond market relationships and we have written about them in this blog from time to time. One of those measures is called the…
With the disappointing IBM and Texas Instrument earnings announcements last night, the S&P 500 opened sharply lower this morning. It seems that the market is now very concerned with companies that miss revenue targets and we could be setting a theme for this quarter’s earnings. However, as we returned to the office after a gorge…
System risk, or the risk that the entire financial system will cease to work, is on the minds of many of our clients who invest with the intention of preserving capital and earning enough of a premium over inflation to achieve their financial goals. Rick and Carl mention worries about system risk in our current…
This week’s barrage of economic data included several updates on the inflation front. Separate reports on import prices, producer prices, and consumer prices were all released. Import prices and producer prices came in below expectations, while consumer prices matched expectations by declining a little from the prior month. The current message from the latest round…
The S&P 500 has bounced over the past several trading days, gaining a little more than 8% from its intraday low of 1,011 reached on July 1st through its close at 1,096 today. The latest move isn’t totally surprising, since the market was oversold on many measures at its recent low. However, technical damage was…
The latest book on my summer reading list is The Big Short, Inside the Doomsday Machine, Michael Lewis’s amazing book about the hedge fund investors who managed to find a way to bet against the U.S. subprime mortgage market before it blew up in spectacular fashion. If you are looking for a book that simplifies…
It’s Friday and the sun is shining bright, so here are some charts to analyze. Rick and Carl are writing the quarterly outlook which will provide more color on the charts, but the basic gist is leading indices are signaling a slowdown ahead.
Last June, every financial station on TV heralded the Golden Cross. This is the term that describes the 50 Day Moving Average, which is the average price of the last 50 closing prices of a security or index, crossing above the 200 Day Moving Average. That was a good moment for bulls because it is…
After much recent agonizing over intra-day market moves, the market finally closed below 1040, which will trigger the stop loss in our portfolios. Yes, it makes us feel like tossing our cookies to sell right here, but we believe it is an important trade from a risk management standpoint.
The trend in income growth carries a lot of weight in our process under normal circumstances. Recently, it’s been elevated even higher. The reason for that is that we (and others) believe that if employment picks up, and thus underlying incomes, it could be the critical piece that allows the economic recovery to continue and…
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