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
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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....
The market wanted an excuse to shed some of the froth from the last two months. A strong September Jobs Report provided the catalyst. Due to its strength, speculation fired up that there might not be another Fed rate cut in December. The highest-flying securities sold off the most, which included technology tied to the AI trade. The Dollar rallied even though Treasury yields declined marginally, which pulled down Foreign Equities and Bonds and most Commodities. Overseas,...
It was another quiet week for economic data with the government shutdown not ending until Wednesday evening. However, business went on with the US reaching a new trade deal with Switzerland that will see their tariffs reduced to 15% while Switzerland lowers their import duties on a range of US products. Switzerland also pledged to relocate manufacturing to the US and invest $200 billion in the US......
We believe the economic news indicates the economy is still moving forward with moderate growth, notwithstanding the ongoing government shutdown. However, the length of the shutdown may have been the excuse for a selloff in the overextended AI technology trade. Overseas, there was no change in the relative economic picture.....
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.......
Monthly Commentary
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.....