Learn why I told CNBC Worldwide Exchange that I think taking out protection against a deeper correction is a good idea at this point in an interview today, June 25.
June 25, 2014
Learn why I told CNBC Worldwide Exchange that I think taking out protection against a deeper correction is a good idea at this point in an interview today, June 25.
January 13, 2014
Listen to Brad’s interview on MarketWatch, where he discusses the stock market’s behavior in the first weeks of 2014.
January 7, 2014
Every year, I struggle with the notion of preparing an outlook—I won’t use the term forecast—for the following year. Every year, I point out, to no avail, that it would be much better to do a forecast for the previous year: better data, much more context, and certainly greater accuracy. I’ve had no more success this year than usual, so I’m preparing my outlook as you read this.
The reason I call it an outlook, rather than a forecast, is that forecast implies a level of certainty that, even in principle, simply isn’t achievable. I used the simile the other day that the Fed’s job is like trying to repair a Seiko watch based on a Timex manual, using a sledgehammer operated by a robot controlled from the next room, in the dark, and I stand by it.
December 31, 2013
2013 is over. There was a lot of good (have you looked at the stock market?) and a lot of bad (think Washington, DC). There were lots of highs—the stock market again—and lows, such as the EU’s decision to hit Cyprus depositors. Overall, it was a pretty typical year in many respects, although of course we get different highs and lows every year.
2014 will be different. 2013 started with angst and a broken budget; 2014 starts with a smoothly negotiated (if rather minimal) budget deal. 2013 started with worry about fiscal collapse and an exploding deficit; 2014 starts with the deficit projected to decline to below the growth rate of the economy. 2013 started with zero growth; 2014 starts with the most recent quarterly growth figures above 4 percent.
December 24, 2013
I have always loved Christmas. But as I grew older, as much as I loved it, I think I lost much of the spirit. Now that I have a four-year-old son—who is wrestling with the stress of being good under the eye of the “Elf on the Shelf,” eying presents under the tree, and baking cookies with his mom—I find myself recovering much of what I had lost. This is wonderful, but, as a father, I also find myself reaching deeper into the meaning of the holiday.
The idea of sacrifice is at the heart of both Judaism and Christianity, and the notion of a father sacrificing his son is fundamental. Christmas itself, where the Christ child is born into the world, is the start of just that sacrifice. I literally cannot fathom making that kind of sacrifice—of giving up my son. At the same time, I understand just how much I would sacrifice for him.
After writing about how growth could slow going forward, based on my own analysis and supported by several even more pessimistic analysts, notably Jeremy Grantham and Professor Robert Gordon of Northwestern, I have been spending some time thinking about how the argument is wrong.
December 17, 2013
The last time that the Federal Reserve (Fed) was widely expected to start reducing, or “tapering,” its bond purchase program, earlier this fall, interest rates increased and the market tanked. Widely referred to as the “taper tantrum”—a term I wish that I had invented—the drop was quickly reversed when Fed officials came out and reassured the market that, in fact, they had no intentions of pulling back, ever. Really.
That was then. Since that time, the economy has shown improved growth, interest rates have ratcheted back down, and the stock market has recovered and powered up to new highs. With the recent good economic news—much higher levels of GDP growth than expected, higher employment figures and lower unemployment, and very positive business surveys, among other highlights—the Fed is at a point where a taper pretty much has to start soon. Maybe not this week, but soon. The budget deal in Washington also makes a taper more likely because the last reason for the Fed to continue its stimulus was worry about fiscal policy disruption.
December 9, 2013
I’ve been working on gathering my thoughts for the market in 2014. This is a very useful exercise, in that it forces us to really think about what goes into stock prices, what those assumptions should be, and how they interact.
There are three key variables here: the growth rate of the economy as a whole and the level and change in profit margins (which together will determine corporate earnings growth), and the level of price multiples (or how much investors will pay for a given level of earnings). The fourth variable, what happens in Washington, DC, factors in as well, of course, but that’s a subject for another day.
Mag 7 must perform 'incredibly well' to justify valuations.
Yahoo! Finance, 07/24/2024
Buffer ETFs Provide Comfort at A High Cost, Advisors Say.
Financial Advisor, 07/11/2024
Traders hesitant to make directional bets ahead of Fourth of July holiday
MarketWatch, 07/01/2024
Tech undergoing ‘continued growth story’ despite Nvidia drag. [video]
Yahoo! Finance, 06/24/2024
Raging Bull's Bishop: 'If this is not the top, we've got to be very close.' [audio]
Money Life with Chuck Jaffee, 05/24/2024
The information on this website is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.
Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets.
The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. All indices are unmanaged and investors cannot invest directly in an index.
The MSCI EAFE (Europe, Australia, Far East) Index is a free float‐adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of 21 developed market country indices.
One basis point (bp) is equal to 1/100th of 1 percent, or 0.01 percent.
The VIX (CBOE Volatility Index) measures the market’s expectation of 30-day volatility across a wide range of S&P 500 options.
The forward price-to-earnings (P/E) ratio divides the current share price of the index by its estimated future earnings.
Third-party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided on these websites. Information on such sites, including third-party links contained within, should not be construed as an endorsement or adoption by Commonwealth of any kind. You should consult with a financial advisor regarding your specific situation.
Member FINRA, SIPC
Please review our Terms of Use.
Commonwealth Financial Network®