Bob's Journal
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European Central Bankers Rattle the Markets
Do you remember the Taper Tantrum? Europe had its own version this week. Back in 2013, Fed Chairman Ben Bernanke caused a panic when he casually stated in a congressional hearing that at some point the Fed would stop its quantitative easing and reduce the assets on its balance sheet. Many investors thought the change […]
The Next Bear Market
It is time to plan for the next bear market and recession. I’m not predicting that either is imminent. In fact, the reliable lead indicators of recessions aren’t issuing any warning signs yet. The best time to plan for bear markets and recessions is when they don’t seem to be on the horizon. Most people […]
The Outlook for Earnings
What’s the outlook for U.S. corporate earnings and what does it mean for stocks? Earnings were in a recession, even while the economy grew, from 2014-2016. Earnings for most companies declined year-over-year during that period. Late in 2016, we finally saw positive and even robust earnings growth. Analysts generally expect such strong earnings growth to […]
Understanding the Latest Employment Reports
Last week’s Employment Situation reports disappointed some investors and analysts. They’re misinterpreting the data. The government reported only 138,000 new jobs created. Also, last month’s reported 211,000 new jobs were revised down to 174,000, well below the numbers of the past year, thus raising concerns among some observers about reduced growth. In addition, average hourly earnings increased […]
Sell in May and Go Away?
Investors who followed the old adage to sell in May and buy again in November missed some nice gains in the last month. The S&P 500 rose 1.40% for the month of May and is up 8.62% for the year to date. The Dow Jones Industrial Average returned 0.71% for the month and 7.41% so […]
Investing and Political Uncertainty
How do you invest in a time of high political uncertainty and volatility? We had to deal with that issue several times in the recent past, and most investors handled it the wrong way. After months of very low volatility and what I’ve been calling complacency, investors had a wake-up call last week. A special […]
The Roots of Today’s Growth
Remember the global panic of early 2016? The recent economic growth and market strength had their roots there. You might remember that in late 2015, investors started to see warning signs in China. China’s stock markets had a very strong 2015, largely because regulators had changed the rules to allow more leveraged investing. As 2015 […]
Hard Data versus Anecdotes
There are significant inconsistencies between the major economic reports, and it’s important to resolve them. I’ve pointed to the inconsistencies several times in these weekly updates. Sentiment surveys and anecdotal reports have been extremely positive. The Small Business Optimism Index and consumer sentiment surveys surged to multi-year highs a few months ago. While they’re below […]
