Investment Management

Overview Equity markets rallied last week across the world.  The S&P500 rose 1.8%.  International equities rallied as well with Japan/Nikkei (+3.6%), France/CAC (+2.6%), and Canada/TSX gaining 2.5%.  The dead zone is ending, and the 3rd quarter earnings season has begun with bank earnings last week. This will be followed by a restarting of stock buybacks…

News or Noise: Is a 1970’s style energy crisis coming to the United States? Source Articles : https://www.reuters.com/world/china/china-energy-crunch-triggers-alarm-pleas-more-coal-2021-09-28/ https://www.axios.com/energy-crises-europe-china-gas-power-electricity-aa877c09-b0f3-4057-af10-6ccebdeaf654.html Governor of Jilin province urges more coal imports Environmental checks, surging prices sap electricity generation Fears as power cuts hit traffic lights, 3G networks, factories State Grid Corp seeks to reassure residents on winter heating News or…

Overview Equity markets rallied last week, as debt ceiling concerns were relieved, and economic data was generally better than expected. The S&P 500 rose 0.8% on the week, with energy and financial stocks leading the advance as long term rates rose mildly. Both sectors have broken out to all-time highs. Defensive stocks lagged, along with…

News or Noise: Would Regulation of Social Media Companies Hurt Their Profitability? Source Article: https://www.cnbc.com/2021/10/05/facebook-whistleblower-testifies-before-senate-committee.html Facebook whistleblower Frances Haugen testified before a Senate panel Tuesday, telling lawmakers they must intervene to solve the “crisis” created by her former employer’s products. Haugen unmasked herself Sunday as the source behind leaked documents at the core of a…

Overview The S&P 500 dropped 2.2% in a volatile week and is down about 4% from its September 2nd high, finishing the 3rd quarter roughly flat. This broke a seven-month winning streak for its worst monthly return since March 2020, amid fears of political gridlock leading to a US debt default and supply chain disruptions…

Does political fighting about the Federal Reserve impact the performance of the stock market?  Source Article : https://www.cnbc.com/2021/09/28/sen-warren-calls-fed-chair-powell-a-dangerous-man-says-she-will-oppose-his-renomination.html Elizabeth Warren charged that Fed Chairman Jerome Powell has led an effort to weaken the nation’s banking system, and she will oppose his renomination In remarks made during a Senate hearing, the Massachusetts Democrat cited several instances where…

Overview Much to the chagrin of doomsayers trying to warn of an impending Lehman moment on a large, but obscure, Chinese real estate developer, the S&P 500 managed to finish up a modest 0.5% on the week, led by banks and energy. The week started with an aggressive sell-off on Monday, with an intraday low…

Is China’s Evergrande real estate property developer defaulting on their debt their version of a “Lehman moment”? Source article: https://www.cnbc.com/2021/09/20/chinas-evergrande-crisis-could-inflict-pain-on-the-world-economy.html Chinese officials are expected to stem the spillover from liquidity issues at Evergrande, the country’s largest property developer, before it slams the banking system and bleeds into foreign financial centers. But strategists also say Beijing…

Equity markets dropped toward the end of last week into option expiration Friday as we sit in the “deadzone” of the 3rd quarter. Overnight, the S&P 500 futures are down about 1.5% on China property developer Evergrande worries. The S&P 500 index fell 0.6% last week to lower its YTD gain to 18.0%.  Energy rose…

Are Democrats having internal party-issues regarding their $3.5 trillion social-economic makeover spending program? Source Articles: https://www.washingtonpost.com/us-policy/2021/09/07/democrats-reconciliation-bill-budget/ https://www.cnbc.com/2021/09/12/sen-joe-manchin-says-theres-no-way-to-pass-budget-bill-by-september-27.html https://www.wsj.com/articles/manchin-pelosi-biden-3-5-trillion-reconciliation-government-spending-debt-deficit-inflation-11630605657 The fate of President Biden’s $3.5 trillion economic agenda hinges on work that’s slated to resume on Capitol Hill this week, as Democrats attempt to overcome their internal divisions and craft what could be the largest spending…