The eleven-year US bull market ended abruptly in March, yet another victim of the novel coronavirus. The US has responded with two significant steps: Congress has passed a $2.2 trillion stimulus package (equal to 10% of the economy) and the Federal Reserve has made up to $4 trillion (18% of the economy) in liquidity to […]
Continue Reading ›February 2020 Economic Dashboard
Last month’s letter mentioned the coronavirus’ potential to infect global supply chains. February showed the risk materializing along with more widespread impacts on travel. The Federal Reserve’s 0.50% rate cut on March 3rd did little to assuage investors, highlighting the limitations of monetary policy tools in “treating” the virus. Nevertheless, consumers are enjoying the benefits […]
Continue Reading ›January 2020 Economic Dashboard
One month into 2020 and the market has already had two major unexpected events thrown its way. Stocks shrugged off US-Iran hostilities quickly but have encountered additional volatility during the recent coronavirus outbreak. We’ll leave the health debate to the virologists, but it is important to consider the economic implications for China, and more importantly, […]
Continue Reading ›December 2019 Economic Dashboard
The S&P 500 is coming off one of its best years of all-time, with a price return of 28.9%. An initial reaction might be to take gains in anticipation of a pullback. History tells us such a response would be unwise, as the market has performed well following big up years. The graph below shows […]
Continue Reading ›November 2019 Economic Dashboard
In announcing their third rate cut for 2019 earlier this quarter, the Federal Reserve signaled that they believed this latest cut would be enough to support moderate growth and a continued buoyant job market. With the federal funds benchmark rate back down to a range of 1.5 percent to 1.75 percent, the focus now turns […]
Continue Reading ›October 2019 Economic Dashboard
Much has been in the news and on the minds of investors about a weakening US economy. Several developments in October helped to temper these fears, leading to a 3.3% rise in the S&P 500. Trade talks showed some signs of positive momentum, with the US and China announcing a “phase one” trade agreement. Better […]
Continue Reading ›June 2019 Economic Dashboard
The stock market continued the rally from the Christmas Eve low that marked the end of the fourth quarter “mini” bear market. Stocks at that time fell due to fears the Fed would continue to increase short-term interest rates to levels that would lead to a recession. The Fed has since held the line on […]
Continue Reading ›May 2019 Economic Dashboard
Rising trade tensions with China and a surprise threat to impose tariffs on Mexico (related to the migrant crisis on the southern border) derailed the stock market in May. Indeed, the Dow Jones 30 Industrials ended the month on its longest weekly losing streak in eight years. Investors are fearing the multi-front trade disputes will […]
Continue Reading ›April 2019 Economic Dashboard
The stock market rally continued in April, with the Dow Jones 30 gaining 2.7% and the S&P 500 up 4.0%. The tech-heavy NASDAQ was the winner for the month with a gain of 4.7%. Better-than-expected corporate earnings in April, a decline in inflation pressures and an excellent GDP report late in the month were among […]
Continue Reading ›March 2019 Economic Dashboard
The stock market’s rebound has been strong and consistent since making a low on Christmas Eve. It has been marked by a high percentage of stocks of all sizes and most industry groups moving higher in unison. This pattern has been a hallmark of past bull markets. The underlying economy is still growing, albeit at […]
Continue Reading ›February 2019 Economic Dashboard
The bear market in US stocks that occurred in the fourth quarter of 2018 was triggered by a fear that the Federal Reserve would keep increasing interest rates to fight off incipient inflation pressures building in the US economy. Given the incredible US jobs growth machine, spanning 100 straight months of gains and counting, better […]
Continue Reading ›January 2019 Economic Dashboard
US stocks posted their best January performance in 30 years. Following the worst December since 1931, investors can rightly breathe a sigh of relief. Our December Dashboard outlined the havoc caused by Fed Chair Jay Powell’s ill-advised remarks in October regarding future interest rate policy, as well as poorly-received follow-up statements about overall monetary policy […]
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