The Only Fed Pivot that Matters
November 29, 2022
In April, we highlighted the tight correlation between the size of the Federal Reserve Balance sheet and the S&P 500 Index. Generally, when the Federal Reserve adds liquidity by expanding its balance sheet through Quantitative Easing, volatility is suppressed, and asset prices generally rise. The opposite was true when the Fed paused QE or removed liquidity through Quantitative Tightening, as […]
The Fed and Market Volatility:
YOU ARE HERE
April 21, 2022
Market volatility has been on the rise this year. At its worst levels, the S&P 500 Index was down more than 12% from the start of the year before cutting those losses in half by quarter-end. There are plenty of headlines to blame. Record inflation, the Russia/Ukraine conflict, and interest rate hikes are certainly contributing to the increase in volatility. However, […]
Risk levels are the highest in 140 years, are you prepared to Navigate What’s Next?
July 27, 2021
For Illustrative Purposes Only As of May 2021 the S&P 500 price is 169% above its historical trend line, this is the highest level in 140 years. Last time prices were at a historic high was the dot com crash in 2000 (123% above trend). Every time market prices have risen greater than 44% above the trend, the S&P 500 […]
Bear Market Road Map: What Happens Next
April 3, 2020
What Happens Next? Analysts, commentators, and managers are all taking turns making predictions about where financial markets will bottom. While modern markets have never faced a global health pandemic with the magnitude of COVID-19, history is filled with examples of unexpected headlines and “Black Swan” events that take analysts and investors by surprise. In fact, that’s how most Bear markets […]
Could a Fed Rate Cut Be Bearish?
June 13, 2019
The next Federal Reserve Open Market Committee meeting is set for June 19, 2019. Based on the Bloomberg World Interest Rate Probability screen (WIRP), markets are pricing in a 20% chance for a rate cut next week, an 84% chance in July, and a more than 94% chance of a rate cut in September. Bloomberg WIRP as of 6.12.2019 Beware […]
Peak Corporate Profits
June 4, 2019
The current rally that began in Q4 2016 has been fueled by earnings growth. Out of the eleven sectors that make up the S&P 500 index, Technology has been the standout momentum leader delivering nearly double the return of the broader S&P since the rally began. With 492 out of 500 S&P 500 companies reporting, first quarter 2019 earnings season […]