Market Update

Market Update – January 2023

There are ample reasons for an enthusiastic welcome to a new calendar year after a long list of challenges marred 2022. Investors in volatile financial markets may be anxious to put the worst year for U.S. equities since the financial crisis, and one of the worst years ever for bond investors, in the rearview mirror and not look back.

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Market Update – December 2022

Fed Chairman Jerome Powell’s comments after the release of the Federal Open Market Committee’s latest meeting minutes, followed by further dovish remarks at the Brookings Institute, made progress toward appeasing the grizzled bears on Wall Street. The majority of Fed officials leaning into the idea of a pause on rate hikes in the new year moved major stock indices further away from recent bear market lows.

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Market Update – November 2022

After months of tricky-to-maneuver volatility in the stock market, equity investors were afforded a fall treat just in time to load up on (higher-priced *) Halloween candy. Equity volatility remained above historical long-term averages during the month, but fortunately the rapid move in stock prices in the later part of October was to the upside.

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Market Update – October 2022

Avid readers of this newsletter may recall an introduction to the acronym “TINA” (There Is No Alternative), popularized at a time of rock bottom interest rates on fixed income instruments and coined by market pundits to describe the rationale for focusing attention entirely on equity investments. The rapid rise in short-term rates has made “lending” capital (purchasing bonds and other fixed income instruments in return for a set interest payment) both attractive and profitable again. Enter “TARA”, the newest cocktail party acronym… “There is A Reasonable Alternative”.

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Market Update – September 2022

Planning a trip to Europe anytime soon? You may find that your dollar stretches further than it has in the past when you exchange your greenbacks for euros. Last month, the U.S. dollar and the euro reached 1:1 parity for the first time since the early days of the euro in 2002.

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Market Update – August 2022

It seems that if you aren’t happy with something, you can attempt to simply redefine it. Take the dreaded word “recession” for example. Per the textbooks I studied and with the guidance of my excellent professors, I have always stuck to the basic definition – two consecutive quarters of negative real Gross Domestic Product (GDP). The nuances of labeling the stages of a business cycle, however, are not quite that simple.

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Market Update – July 2022

Asked and answered. U.S. stocks closed in a bear market last month, driven down further by fears of sustained inflation, aggressive Fed tightening and economic slowdown. Although it has been a bear of a time for investors for much of this year, it is now official and in the books.

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Market Update – June 2022

The Bear, or Not the Bear, that is the Question – As perhaps a Shakespearean soliloquy might ponder… Whether ‘tis nobler in the mind of the investor to suffer the 20% closing decline known as a bear market and move on, by means of slings and arrows in the pursuit of opportunistic fortune, or to merely approach such chasm and never gain the menacing label of sold off markets past?

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Market Update – May 2022

I expect some readers will recall an electronic board game called “Operation” from their youth. Despite knowing the artificial “jolt” would eventually come it was uncanny how the human reaction was to jump with each eventual failure. This reaction comes to mind when considering the response of fixed income investors to the first rate hike in the monetary tightening cycle which began in March.

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Market Update – April 2022

The Federal Open Market Committee (FOMC) raised short term rates in March for the first time since 2018. Maintaining their proclivity for transparency, they quickly announced expectations for the possibility of six more hikes this calendar year (with the market already pricing in more) to slow the pace of rising inflation.

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Market Update – March 2022

Russia’s invasion of Ukraine overshadowed all other news in the final trading week of February.  The initial panic selling on Wall Street turned around quickly on the day of the military attack.

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Market Update – February 2022

The stock market was incredibly volatile in the first month of 2022, reflecting fears of Fed policy tightening. Higher interest rates meant lower stock prices, as investors able to earn higher yields on risk-free U.S. Treasury bonds were less interested in buying technology stocks with questionable profitability.

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