The Most Important Thing We’re Yet to SeeStocks are rallying as bond yields and the dollar index are pulling back. But I would temper any enthusiasm - this remains a very bearish market. Why earnings expectations need to come down.
Things Starting to Look a Little BetterMarkets are slowly but surely starting to look better. Yes - they are 25% off their highs - but that's a healthy development. The way we make money is buying well. And with a little patience - we hope they go lower. My S&P500 target remains around 3200...
Druckenmiller Warns of 2023 ‘Hard Landing’There are few smarter in the investing world than Stan Druckenmiller. For 30 straight years he averaged a 30% CARG whilst not having a single losing year. It's unparalleled. He is warning that stocks are still over-valued (despite a 24% correction) and a hard-landing is likely by the end of 2023
Forget Stocks… It’s All About Bond YieldsWhere bonds go - so go equities. As bond yields surge to new highs - with the 2-year yield now well above 4.0% - stocks are almost certain to trade lower.
The Only Way is UpIs 75 the new 25? Fed funds futures are now pricing in a nominal rate of 4.5% to 4.75% for February 2023, with the first interest rate cut coming in November 2023. Markets are now slowly coming to accept this new reality...
Markets Waking Up to Fed RealityThe market continued to work its way lower this week - waking up to the reality of the road ahead with respect to higher rates and inflation. However, some believe the Fed should pause immediately...
Fed Faces a Long Fight with Sticky InflationCPI and Core PCE continued to rise over August. Core PCE - the Fed's preferred measure - was more than double expectations and 3x the Fed's target rate. Rates are to remain higher for longer.
A Foolish ForecastThe business of forecasting is very difficult... what I think is a fool's errand. But when it comes to forecasting the economics of 330M people - their behaviour - and the specific impact on stock prices - it's near impossible.
Tech May Catch a Short Term Bid – But It’s ExpensiveStocks look set to rally a little in the near-term from oversold levels. However, act with caution, as they are looking expensive given the environment of expected EPS decline.
Wage Growth of 5.2% to Strengthen Fed’s ResolveThe US economy added 315K jobs in August. Good news. However, wage inflation ripped higher at 5.2% YoY. Based on this, it's likely the Fed will continue with a period of 'unusually high' rate hikes to reduce demand and wage inflation.
