The Weekly Edge

Congress’s gridlock and battling is a lot like two bucks fighting. Most of the time the party disputes carry manageable market risks, but occasionally this gridlock has the potential to wreak havoc on the U.S. economy and financial markets.

Don’t fight the Fed. Fighting the flow of Fed-related liquidity is like trying to swim against a powerful river current: you can swim as hard as you can, but you will make little forward progress if the flow of the current is working against your efforts.

The return of Bruce Springsteen to New York City last weekend reminded us of his 1978 song “Prove it All Night”, which he has said conveys the message “success requires sacrifice”. This is a fitting analogy for the coming U.S. corporate earnings season, which kicks into gear next week with some of the largest index constituents and economic bellwethers reporting first quarter results on April 14th.

The Technology sector seems to have it all going on these days…

Whatever the market narrative, Tech appears to be the answer, offering sanctuary to investors in any scenario.

The Fed’s response to regional bank woes, and the resulting expansion in the Fed’s balance sheet, has led many to hope that the Fed’s “villainous”, liquidity draining days are numbered, and that they will soon emerge as a market hero once more, supporting prices with added liquidity.

“Brain Damage” feels particularly appropriate to describe a week of frightening headlines and tumultuous markets that surprisingly finished with the S&P 500 higher.

We all heard the phrase “when the Fed raises rates, something breaks” so much in the past year that this aphorism nearly became stale, mostly given the backdrop of renewed calm and optimism in markets to start 2023.

Be runnin' up that roadBe runnin' up that hillBe runnin' up that buildin' - Running Up That Hill, Kate Bush We have Netflix and TikTok to thank for the youthful pop culture resurgence of the 1985 classic Kate Bush song “Running Up That Hill”, but it’s a great,...

  Note: This piece is not about friendly adolescent dinosaurs going on a Hero’s Journey, but it is a great pun to talk about the limitations of recent debates about economic “landings”. In the span of just two months, the dominant market narrative has shifted from...

In this week’s Edge, we are taking stock of the recent earnings trends and guidance provided by U.S. companies, and then asking ourselves if these measures and management expectations justify the prices investors are paying today?