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)....
Weekly Commentary
Monthly Commentary
List of Services
After AI jitters took down technology stocks and with them the S&P 500 two weeks ago, sentiment reversed this week and that sector led to the S&P 500 recovering most of those losses. Meanwhile, the fundamental trend in the economy led to more gains in those sectors most sensitive to the economy. The key to those trends seems to be more evidence of a rebound in manufacturing. Also, inflation fears remain subdued from good news....
A week of solid economic news is just what the doctor ordered for a market tiring of the AI trade. The AI stress came in the form of a threat to software companies whose subscription services might be usurped by AI applications. However, the focus shifted to a strengthening economy from a newly resurgent manufacturing sector. Meanwhile, the services sector remained solid and the consumer proved.....
Who thought Greenland would roil financial markets? President Trump unleashed a wave of controversy by threatening to put a 100% tariff on some European countries if they would not agree to let the US buy Greenland. That unleashed a “sell America” trade resulting in a significant decline in US Equities and the Dollar. The next day, he walked back that threat and suggested there was a deal to be......
The optimism at the start of the year for the economy in 2026 continued to drive market action. The actual economic news provided further support for that optimism with solid rebounds in manufacturing surveys, a solid bounce in housing activity and steady business sentiment expressing itself with extremely low levels of job layoffs. Several inflation reports suggested that inflation has stabilized....
Optimism for the economy in 2026 was in full view during this first full week of trading. The economic data releases did not dissuade that view. The Services side of the economy is still steady and solid. Although the December Jobs Report had a modest 50,000 new jobs versus 56,000 the prior month, the unemployment rate ticked down to a positive reading at 4.4% versus 4.5% the prior month. Moreover, other jobs reports showed employers continuing.....
Despite the shortened holiday week, traders found time to give the AI trade one final push up for the year. Once again, good news became bad news. The Q3 GDP came in at a surprisingly stronger than expected 4.3% versus 3.8% the prior quarter. That raised concerns that a hotter economy might drive up inflation and dampen the chances for further rate cuts in 2026; bad for economically sensitive Small Cap and Value Stocks, good for Large Cap Growth Stocks.....
The week saw a deluge of previously suspended (due to the government shutdown) economic data releases. There was room for some interpretation challenges due to missing prior month’s data. However, on balance it was more of the same. Manufacturing is still muddling forward, housing is muddling along and the consumer is holding steady. Release of the November CPI provided some relief with......
The much expected .25% interest rate cut from the Fed arrived on cue Wednesday. However, it was renewed concerns over AI capital expenditures that drove a continued selloff in technology stocks, which dragged down the S&P 500. Further improvements in inflation and a steady job market further improved the economic outlook, which benefited US Small Cap stocks. Overseas, Germany reported further improvements....
With the air coming out of the Artificial Intelligence (AI) trade, the focus for further stock market gains is returning to an old favorite, the likelihood of a Fed rate cut next week. Optimism returned and helped the stock market eke out a gain. Meanwhile, the economic news, once again flowing on schedule with the reopening of the government, displayed an economy holding firmly in moderate growth. There were several inflation indicators that seemed to suggest....
Monthly Commentary
The month started out with a bang with US Small Cap Equities far outperforming US Large Cap based upon bullish sentiment for the US economy and expectations for further rate cuts from an incoming new Federal Reserve Chairman in May. The economic data supported that bullish sentiment. Manufacturing looks to be at the beginning stages of a rebound. The services economy remained steady.....
Two themes dominated financial market action throughout the year. It started out with a sell off in technology stocks tied to the Artificial Intelligence (AI) trade, prompted by the announcement of Chinese company DeepSeek’s new AI technology. With AI stocks priced for perfection, they were vulnerable to any challenges to their future assumptions. Then in March, talk of tariffs resurfaced with the upcoming Liberation Day unveiling of Trump’s new tariff policy, which promptly....
After months of warning signals about a potential bubble from the announcements of escalating Artificial Intelligence (AI) investments (Cap Ex), technology stocks finally sold off. Interestingly, another bubble concern sold off with crypto currencies suffering double digit losses. Perhaps the extended government shutdown provided the catalyst for the sell off. Meanwhile, the economy continues to move forward...
More Artificial Intelligence (AI) deals were the primary driver of the US stock market’s rally for the month. The second catalyst was a better than expected September CPI report. The Federal Reserve did cut its Fed Fund rate at the end of the month by the widely expected 0.25%, which propped up the AI rally but did little for the rest of the market. Overseas, two new trade deals were announced on October 29th with South Korea and China, perhaps too....
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......
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.....