The economy remained in a steady, modest growth mode. Likewise, inflation, while not posting further declines, also is not rising despite ongoing concerns over tariffs. That left the door open for the real driver of the financial markets, a Fed rate cut. Though the 0.25% (aka 25 basis points or 25 bps) reduction was much anticipated, it stoked optimism for further rate cuts. Meanwhile, the momentum trade for artificial intelligence (AI)....
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Strong corporate earnings and a “better than expected" September CPI inflation report provided the impetus for a stock market rally. Other economic readings helped the optimism with a picture of an economy in steady, moderate growth. Overseas, the Eurozone reported further improvements in growth.....
Despite concerns over new reports of banks taking losses on recent business failures, financial markets moved higher. The reduced volume of economic data due to the government shutdown has led to an assumption that the Fed will lower rates again at its October 29, 2025, meeting, which we view as positive for the economy. The AI craze added more impetus for market enthusiasm......
It was just as well that there was a dearth of economic data released last week due to the government shutdown. Presidents XI and Trump provided all the fireworks with typical boxing antics in the warmup to their expected meeting next month in South Korea. Xi threw the first punch by announcing on Thursday China would place additional restrictions on rare earth minerals and magnets exports. Trump stood chin to chin and announced on Friday the US would.....
The week seemed to take a breather from the strong rallies during the month. Manufacturing remained subdued. However, the housing sector provided an upside surprise from August’s New Home Sales. They came in up 20% from July and 15% from a year ago and the overhang of unsold homes dropped down to a more normal level. There were no surprises in the August Personal Consumption.......
There was a lot of news showing manufacturing still in fits and starts for strengthening activity and housing still in the doldrums. The surprise was the August Retail Sales Report showing strength in both the month and year over year numbers. What was no surprise was the Fed announcement of a 0.25% cut in the Fed Funds interest rate. Notwithstanding the anticipated cut, it sent stocks on....
Good news on wholesale inflation kicked off a market rally on Wednesday from greater certainty for an upcoming interest rate cut from the Fed. The AI rally also received a big boost that day with more announcements of capital investment plans and the anticipated lower rates providing further support for IA-related stock prices. The AI rally extended to tech companies...
A shortened holiday week saw the manufacturing sector steady at a muted level and a services sector maintaining solid growth. However, it was the August Jobs Report on Friday that rocked financial markets. It reported a paltry 22,000 new jobs versus 79,000 the prior month. More importantly, the prior two months were revised down a net 21,000. That immediately.....
It was a busy week for economic data and financial markets liked what they saw. Inflation was the headliner, and the news was mixed but generally confirming still benign conditions. Manufacturing is still holding its sluggish pattern. Business sentiment improved and the consumer is still in solid condition as evidenced by the July Retail Sales and the still very low level of Weekly Jobless Claims...
Apparently, the last week of July was an Emily Litella moment (please email us if you remember this character, at the risk of dating yourself!). “Never mind”, that Trump Tariff Tantrum was 6 months out of date. Oh well, back on to optimism and a market rally. Ostensibly, the driver was strong earnings from Microsoft and Meta along with Apple’s commitment to invest an additional....
Monthly Commentary
The economy remained in a steady, modest growth mode. Likewise, inflation, while not posting further declines, also is not rising despite ongoing concerns over tariffs. That left the door open for the real driver of the financial markets, a Fed rate cut. Though the 0.25% (aka 25 basis points or 25 bps) reduction was much anticipated, it stoked optimism for further rate cuts. Meanwhile, the momentum trade for artificial intelligence (AI)....
The economic data showed the US economy holding steady with moderate growth. It also signaled further reductions in inflation have stalled, but we see no noticeable increase in inflation from tariffs. The big market moving news came courtesy of Fed Chairman Powell. In a speech on Friday August 22 from the Economic Policy Forum in Jackson Hole, Wyoming, he signaled the green light was on for rate cuts to begin in September. ....
It was a busy month for economic data. On balance it showed a steady economy, digesting the unfolding realities of tariffs. Any tariff inflationary pressures still had not shown up in any of the key measurements. However, tariffs took center stage again. Early in the month President Trump made clear that the August 1st deadline was a firm date. In the middle of the month,....
The month sure offered up enough headlines for everybody. Markets rallied on the announcement of a June 10, 2025 US/China framework to resolve trade issues. Then markets sunk with Isreal’s attacks against Iran’s nuclear and military facilities. Then they rallied with the successful US strike on Iran’s nuclear facilities and the ensuing Isreal/Iran cease fire. Meanwhile, the hard economic data continued......
From the April doom and gloom on tariffs, tariff headlines in May spurred a strong financial market rally. It started with the Mid-may announcement that the US and China suspended their triple digit tariffs for 90 days. Then, in the last week of May, the US Court of International Trade struck down many of the administration’s tariffs. Never mind the next day an Appeals Court put a stay on that ruling until....
There has been much concern in society at large, and the financial markets in particular, about the escalation of
geopolitical tensions between China and the US. These tensions have centered primarily around the increasing
rhetoric and saber rattling over Taiwan’s statehood status. Chinese equities remain.....