The equity markets closed on a surprisingly robust note this week despite some high-profile earnings blowups.  Google and Amazon were hit, but Meta Platforms (the old Facebook) really stands out.   The stock was lost -25% on Thursday and is now down -70% YTD.  Meta has now underperformed the S&P 500 since it came public back in 2012. On the economic front, the headline report was 3rd quarter GDP – or at least the first of…
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No real surprises on the economic or market front this week.  But politics was entertaining.  It’s not every year a newly installed leader of a country is ousted only weeks after taking power.  More on the mess in the U.K. shortly. Let’s touch on the economic news first.  Probably the main report for the week was existing home sales.  No surprises here – they were down again.  Turns out close to 7% mortgage rates will…
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“Only when the tide goes out that you discover who’s been swimming naked.” This statement has been around so long it almost makes me cringe to use it. It’s attributed to Warren Buffett, but who really knows for sure? I don’t remember what I had for lunch yesterday, so I’m sure he doesn’t know if he came up with the statement on his own or heard it somewhere back in the mists of time. But…
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It was all about inflation this week. Tuesday’s CPI report was basically more of the same, but the reaction to it was…maybe pronounced is the word? Out of proportion? I’m not so sure about that. Violent? Almost certainly. Now it’s not like the reported numbers were massively above expectations. The year-over-year change for August came in at +8.3% – expectations were for +8.1%. The month-over-month change was +0.1% versus expectations of -0.1%. What’s a couple…
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The markets spent the week trying to find a narrative to believe.   On the one hand, every Fed speech this week focused on the need for another 75bps hike in the funds rate in a couple weeks…...
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  Market Recap   All week it felt like we were in a holding pattern waiting for Fed Chairman Powell’s comments at the Jackson Hole meeting that kicked off today. A collective holding of breath so to speak. He didn’t say much new, as we cover below, but it was enough to trigger a sell-off on Friday and push most of the indexes into the red for the week.   In terms of economic data,…
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  Market Recap   All the markets cared about this week was inflation. How high is it? Is the growth rate slowing? What’s it mean for policy? I’ll try and keep this quick!!   This week we had the consumer price inflation (CPI) report, the producer price number, and a report on import prices. All told a similar story, so let’s use the CPI report as the example. The headline year-over-year growth number came in…
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  If you are confused about what to worry about, join the club. One day the market freaks out about the recession that we are meant to be either in or is coming up quickly. The next day growth is too strong and inflation is the fear du jour. Just look at the performance of long-term Treasury bonds this week – the numbers below show the price change in the iShares 20+ Treasury Bond ETF…
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  Market Recap   Markets can be a counterintuitive animal. If by some magic you had this week’s major economic news headlines a week ago (I’m channeling Back to the Future here), how would you have bet on the markets? Fed hikes rates to battle inflation, economy is close to, if not in recession, corporate earnings coming in generally on the soft side. Odds are you wouldn’t have bet on a 4+% rally in stocks….
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