Our general investment approach remains the same as depicted in last week’s commentary. U.S. interest rates continued to rise and the two-to-10-year yield curve generally steepened even as it remained inverted, much as we anticipated more than two weeks ago.
We continue to foresee financial market volatility and we maintain our conviction that equities should only be purchased on market downturns. Absent a severe U.S. recession, we view the significance of a “soft” Fed pivot as we have outlined, as enabling a long-term investor to be more “comfortable” buying selected stocks given the lessened probability of U.S. equities approaching the low levels of this year.
Weekly Summary: August 8 - August 12, 2022 Key Observations: U.S. inflation most likely peaked in July. Although we foresee a downward trajectory of inflation rates, we assume that they will come down in an erratic pattern and take quite some time before the Federal...
Weekly Summary: August 1 - August 5, 2022 Key Observations: A critical component of our “soft” pivot narrative for the Federal Reserve (Fed) expounded in last week’s narrative is our assumption that the U.S. economy continues to slow. The economic data we reviewed...
Weekly Summary: July 25 - July 29, 2022 Key Observations: We characterize the Federal Reserve’s (Fed) latest policy stance as relatively dovish, and we label this stance as a “soft” pivot. Given our assumption of peak headline inflation and our observations of a...
Weekly Summary: July 18 - July 22, 2022 Key Observations: All of the U.S. housing surveys disclosed this week continued to show a weakening housing market that was impacted by elevated inflation and higher mortgage rates that affected the “affordability” of buying a...
Weekly Summary: July 11 - July 15, 2022 Key Observations: Financial markets continue to price in a greater likelihood of recession risks, particularly in Europe. Higher-than-expected U.S. June CPI and PPI readings will put increasing pressure on the Federal Reserve...
Weekly Summary: July 4 - July 8, 2022 Key Observations: In general, the financial markets continued to reflect increasing risks of a recession over the next year. Weakening commodity prices and lower interest rates before their turnaround were reflective of...
Weekly Summary: June 13 - June 22, 2022 Key Observations: Last week’s declines in the S&P 500 of 5.79% and its energy sector decline of 17.16% were the worst weekly declines since March 2020. We view these declines as financial markets increasingly pricing in...
Weekly Summary: June 6 - June 10, 2022 Key Observations: The recent aggressive tightening of their monetary policies by many major central banks (CBs), along with their updated forecasts of higher rates of inflation and lower economic growth rates, leads us to...