Weighing the Week Ahead: Will a More Aggressive Fed Spark the Long-Awaited Correction?
We have a light calendar for economic data. The week’s focus will be the FOMC policy announcement on Wednesday. Given the resilience of the market rally in the face of various natural and human threats, the punditry will turn to a favored topic. Expect people to be asking: Will the Fed be the catalyst for a market correction?
Weighing the Week Ahead: What Can be Done to Create More Jobs at Better Pay?
We have the biggest data calendar of the year, climaxing with the employment report. It is right before the Labor Day weekend. It is a natural setup for politicians and pundits alike.
Weighing the Week Ahead: Is a Market-Friendly Policy Agenda in Peril?
Once again, the expected quiet summer week was instead filled with action. With analysts of all stripes analyzing every aspect of the changes in the Trump Administration, the financial punditry will do the same.
Weighing the Week Ahead: Will the North Korea Threat be the Catalyst for a Market Correction?
In a normal, quiet summer week we would be lazily considering consumer confidence and the Fed minutes. Instead, the escalating war of words between the U.S. and North Korea has claimed the agenda.
Weighing the Week Ahead: Time to Raise Price Targets?
With President Trump taking vacation at the same time as Congress and a light data calendar, what will the pundits feast upon? Corporate earnings results and new stock market records mean that the price targets at the start of the year are now obsolete.
Weighing the Week Ahead: How Strong is the Labor Market?
A holiday-interrupted week is loaded with important economic data. Since many market participants will skip Monday to stretch their weekend, the action will focus on Friday’s employment situation report.
How Strong is the Labor Market?
A holiday-interrupted week is loaded with important economic data. Since many market participants will skip Monday to stretch their weekend, the action will focus on Friday’s employment situation report. People will be asking: Just how strong is the labor market?
Is it Time for New Leadership?
What worries me…Lack of compromise in government. Many believe that gridlock is good. Not so. We will need bi-partisan compromise to deal with the big issues like growing government debt and entitlement programs. Growing tension with Russia, and within Russia.
Is the Bond Market Sending a Message for Stocks?
While it is true that each asset class is always part of a relative comparison, the overall valuation in any asset reflects inflation expectations. Moreover, the long-term relationship between stocks and bonds is positive. Viewed in this way, we should not be surprised by Friday’s trading, or by similar reactions.
Will a Big Week for Data (finally) Bring Volatility?
Expected earnings are increasing nicely – now at a double-digit pace. These have been better predictors than any of the oft-cited bearish valuation methods. The chance of a recession, the biggest historical threat to markets, remains very low. The list of “geopolitical concerns and headwinds” does not translate into an impact on earnings.
Will the Fed Change Course?
The Fed story may well command attention. I classify it as an important story, but not an urgent one. I have some strongly-held viewpoints:
- The exact timing of rate hikes is not important for long-term investors. The Fed has been following a policy of rate increases in line with economic data. While many do not believe this, the data are supportive. Tim Duy on recent strength.
- That said, the rate increases have second- and third-order effects. The perception of the pace of hikes impacts exchange rates. The weaker dollar affects major corporate earnings – in both directions. This makes the Fed news worth watching.
- Current data are stronger than widely thought, but much depends upon how one views the Q1 softness—meaningful or aberrant. Recent Fed speeches suggest a moderation in the rate-hike path.
- Rates will be increased more slowly, but the balance sheet will be reduced.
Should Investors Fear Another Watergate?
We have a very quiet week for economic reports. The housing data are quite important, but it will be a Tuesday story without legs. The White House drama will be compelling for the media. Whether investors like the idea or not, we should expect another week of news that is mostly political.
Weighing the Week Ahead: What is the Message of the Market?
We have a quiet week for data. The ObamaCare drama is finished for now. The Fed meeting is over. Earnings season is past the peak. Don’t worry! The punditry will find something new. Analysts will look deeply into the charts and ask: What is the message of the market?
Weighing the Week Ahead: Time to Rebuild the Wall of Worry?
As some market worries have been put to rest, there is a growing appetite for new ones. Pundits who say that things look OK are not very exciting. Last week we saw a shift in attention. Despite healthy earnings and good economic data.
Weighing the Week Ahead: Will an Earnings Surge Revive the Stock Rally?
Are you ready for some real news? How about corporate earnings? While there is some economic data on tap, the Q1 earnings season starts in earnest this week. With questions about economic strength, the dollar and the Fed in mind, pundits will be looking for fresh data.
Weighing the Week Ahead: What Can We Learn from the Trump-Xi Meeting?
We have a big economic calendar and potential Fed news. Those stories will take a back burner this week. My safest prediction is that we are about to see a new rash of China experts both in print media and on CNBC!
What Does the Health Care Decision Mean for Stocks?
There is plenty of “upside risk.” Earnings growth is improving, even in the environment of modest growth. The recent market strength could go on for years without any policy changes. If some of the Trump agenda (probably with Democratic support) becomes law, it could mean a spike in both economic growth and profits. We already see improved business and consumer confidence.
Weighing the Week Ahead: Will a More Aggressive Fed Derail the Stock Rally?
The economic calendar is light until the Friday employment report. Most of the punditry are still digesting the more aggressive talk in the recent speeches from Fed participants. With many observers expecting a correction and looking for a catalyst, pundits will be asking: Will a more aggressive Fed derail the rally in stocks?
Weighing the Week Ahead: Have Stock Prices Lost Touch with Reality?
It is a big week for economic data and the first address to Congress from the new President. Most of the punditry is engaged in a collective head-shake about overbought conditions. Even if the data flow remains strong.
Trump V. Yellen Round One
I expect to see little change in Fed policy. The new President will wind up appointing people with traditional credentials, but perhaps with different policy viewpoints. He will not reappoint Yellen, although people forget that the Fed Chair is often appointed by Presidents of both parties.
Weighing the Week Ahead: Is Market Optimism Justified?
We have a rather light week for economic data. The biggest reports came last week. Earnings season continues. Everyone is keeping a close eye on President Trump, wondering what might happen next. Meanwhile, stocks are at all-time highs and interest rates have stabilized.
Weighing the Week Ahead: Will Policy Uncertainty Increase Stock Volatility?
We have a normal calendar for economic data. There will be important news will come from corporate earnings reports. Since this earnings season is part of an inflection point – the end of the earnings recession– it is special.
Will Q4 Earnings Confirm Recent Economic Strength?
My scorecard for earnings season will look for the following company characteristics: Confidence. I expect most to have a murky outlook, with no reason to set the future bar very high. Important trade relationships – imports or exports. Comments on these fears may create some buying opportunities. Concern about a stronger dollar. Everyone is teed up to watch for this, and we should as well.
Digging Down on the Trump Effect
Some sort of fund repatriation will be part of the package. All else equal, that suggests a bias to companies that might gain the most. The Atlanta Fed provides some hard data. Expect tax cuts, probably including some nods to Democrats. This will represent fiscal stimulus. Cyclicals continue to show strength, partly from the expectation noted above. (Eddy Elfenbein). The trade war is likely to be a bargaining approach. It is an error to over-react on speculation. The health care issue is far from settled. Early symbolic repeal? Yes. Real changes? Unclear.
Profitable New Year’s Resolutions for Investors
As part of my preparation for 2017, I asked how I could be most helpful for individual investors. The suggested resolutions are a combination of expert investment methods and avoiding the most common investor mistakes. They may be difficult to follow. If you can, you will find them profitable.
Weighing the Week Ahead: Santa Rally Trumped?
2017 begins with plenty of economic data crammed into a short week. While most expected at least a touch of Dow 20K last week, it did not happen. The conversation quickly shifted to why the rally stalled out. In the coming week, the punditry will be asking: Should we expect a weak start to 2017?
Weighing the Week Ahead: New Year, New Highs, and a New List of Worries
There is a normal dose of economic data this week, but we are entering a quiet, pre-holiday period. As the rally faltered a bit, the Dow 20K talk yielded to a discussion of what could go wrong.
Weighing the Week Ahead: Time for a Portfolio “Transition?”
There is some important data on the schedule for this week, along with earnings and the expected doses of FedSpeak. None of that will attract much attention. Instead expect “all Trump, all the time”.
Weighing the Week Ahead: Time for Some Clarity?
The possible election results are not binary. There is a wide range of possible outcomes, listed below from bearish to bullish. Please note that I am not opining about who I want to win or how you should vote. I am reporting how the market will probably react under differing circumstances, with some references for you to start your own research.
Weighing the Week Ahead: When Will the Trading Range Be Broken?
We have normal week for economic data, including the first estimate for Q3 GDP. There are also important earnings reports. Election stories have become even more intense. Meanwhile, the market has been pretty quiet.
Weighing the Week Ahead: Has the Market Rotation Begun?
We have normal week for economic data, and a big week for earnings reports. The last Presidential debate will grab headlines. We have been monitoring these factors for weeks, but something new is showing up in the data.
Weighing the Week Ahead: Is this the End of the “Earnings Recession?”
We face a modest week for economic data. While equity markets remain open, bonds will not trade on Monday (Columbus Day). Yom Kippur begins Tuesday at sundown and extends through the next day.