Market Commentary

Newsletter – Quarter 1, 2021

Only in the mercurial world of the stock market would good news be greeted with such turbulence.  While the prospects for economic and corporate earnings growth have become much rosier in recent months, this optimism has been accompanied by an increase in long-term interest rates that has created some additional market volatility.

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Newsletter – Quarter 4, 2020

It is finally over.  With apologies to President Lincoln’s War Secretary Edwin Stanton, now 2020 belongs to the ages.  Who would have predicted during the dark days of spring that stocks and bonds would end the year at near-record levels, having endured one of history’s shortest bear markets? 

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Newsletter – Quarter 3, 2020

Unlike most amusement parks during the Covid-19 pandemic, Mr. Market’s Wild Ride has remained open for business.  Following the fastest fall in history from a record high to a bear market over the course of February and March, the S&P 500 staged its quickest-ever rebound from a bear market to a new record high, which was reached in August.  The entire whirlwind round trip took place in just 126 trading days.  To put that into perspective, a typical peak-to-peak recovery takes an average of more than 1,500 trading sessions, equivalent to about six years.  The market’s rally is even more striking when set against the backdrop of an economy that is attempting to claw its way back from one of the sharpest recessions in U.S. history stemming from a pandemic that has yet to be contained.

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Newsletter – Quarter 2, 2020

In the world of investing, we are often told to be cautious when we hear market participants use the phrase “this time is different.”  The phrase is often used to justify some excess in the market.  For example, during the Dot-Com bubble of the late 1990s, the phrase was used by investors to justify paying sky-high prices and valuations for money-losing businesses.  Eventually, economic reality returned and left many of these investors holding the bag.  

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Market Update

Over the past two months, the coronavirus brought with it many economic “firsts” for investors.  For example, for the first time:

  • Significant components of the economy were forced to shut down;
  • The US government began purchasing corporate investment grade debt and a subset of high yield debt;
  • Weekly jobless claims were in the multi-millions for four consecutive weeks; and
  • The price for a barrel of oil went negative as storage has become increasingly scarce.
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Newsletter – Quarter 1, 2020

And they said March Madness was canceled.  While the college basketball postseason was indeed shut down, the coronavirus-induced chaos that has upended our lives, our economy, and our financial markets has, unfortunately, continued.  We’ll do our best to make some sense of the latter two in this limited space.

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