Economists have predicted nine of the past five recessions. If that statement doesn’t make sense to you or appears to be wrong, it’s meant to. The quote is attributed to Paul Samuelson, the first American to win the Nobel Prize in economics. The quip was meant to imply that economists aren’t very good at predicting …
Category: Economics
Conflicting Signals?
Year-to-date, the S&P 500 is up about 11.5%. Over the same time period, interest rates, as measured by the U.S. Treasury 10-year yield, have declined nearly 13% to 2.47% (as of 3/22/19). This trend appears to be sending mixed signals as rates historically have increased when stocks were on the rise in a typical business …
Economic Growth and the Housing Market
Sluggish GDP growth has been a concern for the past 10 years, following the last recession. Many papers have been written and many opinions have been offered. Academic studies demonstrated that overhangs after financial crises can lead to below average economic growth for a number of years. Additionally, high debt levels relative to a country’s …
Recessions & the Stock Market
The Expert Who Cried Recession Lots of people have been talking about the next recession and it’s not even here yet (as far as we know). Most have been trying to read the tea leaves and project the year of commencement of the next recession…the second half of 2019, 2020, 2021, etc… In this day …
State of the Markets
Once again we find ourselves in a bizarre market environment with a lot of noise and very few signals. I feel like this is going to be the case for the foreseeable future. These types of environments are dangerous as many narratives surface that appeal to our innate desire to want to be able to …
CEO Confidence
Interesting chart plotting CEO confidence vs. the year-over-year percentage change in the S&P 500. This is interesting in conjunction with our post from earlier in the week plotting global CFO’s perceptions of major economies. Unless we see a turnaround in CEO confidence, looks like it could be another rough year for US markets.
Global Perceptions
A chart from Deloitte’s quarterly CFO survey courtesy of Axios Markets. Interesting to see the enthusiasm for growth conditions waning considerably in 2019. Also of interest, is the continuing decline in North American CFO’s perception of current growth (although it remains considerably higher than European and China counterparts.
Perspective
As a follow up to yesterday’s post, I wanted to direct readers to a write-up Ray Dalio posted on LinkedIn just after Christmas. As always, Mr. Dalio does a tremendous job of putting what’s happening in the real world into a meaningful perspective. I highly recommend everyone read it.
So The Sky Isn’t Falling
The fourth quarter was certainly a tumultuous time for investors. With the new year, the sun appears to be breaking through all of the clouds of doom and gloom. Of course a more dovish Federal Reserve, at least in word, and what appear to be positive developments on the “trade war” front have helped. However, …
It’s Tempting
With increasing negative sentiment and what appears to be fear, it probably feels tempting to many of us to sell now to stave off further losses within our beloved and perfectly constructed portfolios. Who wants to incur further losses after the worst start to a December since 1980? Between rate increases, a trade war, a …