The financial markets were volatile in the final quarter of the year as investors worried about the trade negotiations with China, the Fed raising rates too aggressively and the potential for a slowing global economy in 2019. Interest rates fell sharply the last three months of the year; the 10-year treasury started the quarter yielding 3.07% and finished the quarter at 2.69%. The Barclays U.S. Aggregate Bond Index was up 1.6% [...]
Last Week: The holiday-shortened trading week started with a doink (yes, I’m still mourning the Bears loss) as the IMF cut its forecast for world economic growth in 2019 to 3.5% from 3.7%, leading to a 1.42% loss in the S&P 500, the largest market decline since Christmas Eve. Most of those losses were recouped by Friday’s close, driven by reasonably good corporate profits reports and a deal to reopen the [...]
Last Week: The market continued its recent rebound, as the narrative has shifted to include a more dovish Fed policy as well as a positive resolution of the trade war with China. The momentum-based trading models (are there any other trading models these days?) all flashed “buy, buy, buy!” leading to a 2.9% gain for the week and a 6.5% rise for 2019, which is its best start since 1987. For [...]
Last Week: December 2018 was one of the worst months in history for the stock market, with the toxic combination of tax-loss selling and momentum trading driving stock prices down relentlessly. So far, the “January effect” in 2019 has been dramatic, as beaten down shares have bounced handsomely, recouping about half of the losses from December. There were no narrative-changing developments during the week, as fed policy remains data dependent, trade [...]
Last Week: Alongside the Chicago Bears, the Wall Street bears were major losers this week. It was the best of times, as there was news that moderated the bear market narrative driven by concerns over the economy, fed policy, and the trade war. As for the economy, job-growth surged in December, as nonfarm payrolls increased by 312,000 -- the strongest reading since February. As to fed policy, in a panel interview [...]