In this week’s Monday Market Insights, we discuss the pause to Johnson & Johnson’s (J&J) vaccine, the recent uptick in inflation, and how bond positioning has become extreme. Our Charts of the Week illustrate the stark difference in the stimulus from recent and proposed legislation. Finally, we look at how the Hospitality sector is trending as U.S. vaccinations continue.
If you close your eyes, it probably doesn’t take much effort to recall the emotions you felt in March 2020 – confusion, anger, fear, to name a few. As we pass the first anniversary of the COVID-19 market low, you may find yourself on the opposite end of the emotional spectrum – hope, optimism, and the fear of missing out have taken center stage. All it took was the quickest 30% decline in the history of the S&P 500 (22 days – with the runners up all having occurred in and around the Great Depression), followed by a 78% rally over the next 12-months to take investors from optimism, to complete despair, to non-fungible digital tokens selling for $70 million. What a ride.
In this week’s Monday Market Insights, we discuss the breadth of the current market advance, our expectations for higher earnings, and the implications of President Biden’s tax agenda. In the chart of the week we look at the changing dynamics of “momentum,” and how that will serve as a further headwind for the technology sector. We end with more discussion on the valuation differential between growth and value stocks.
In this week’s Monday Market Insights, we highlight the recent decline in long-term interest rates from peak levels, provide an overview of the Biden Administration’s recently announced spending plan, and discuss why we think the economic environment will continue to benefit cyclical sectors. In our Chart of the Week, we examine the market prospects during the second year following a rapid rise in stock prices. Finally, in the Commentary section, we address the topic of investor stock concentration.
In this week’s narrative, we discuss the passage of the $1.9 trillion American Rescue Plan. We also review the best-performing stock sectors since the November election, along with the recent correction within the NASDAQ. We then discuss the massive flow of monies into bond funds since 2009, and the meager amount of monies added to stock funds over that same time period. Finally, in light of the February jobs report, we review the employment picture in general, and more specifically, within the Leisure & Hospitality industry.
In this week’s Market Insights, we cover last week’s FOMC meeting and what it means for bond yields; recent lackluster consumer spending data that is expected to bounce back as stimulus checks are being distributed; and the benefits to municipal issuer fundamentals from the recent signing of the American Rescue Plan. In our Chart of the Week, we discuss the disconnect between the Federal Reserve’s and investors’ expectations for policy rates through 2023. Finally, we highlight the recent widening in credit spreads but continue to believe an overweight to corporate bonds is appropriate.
In this week’s Monday Market Insights, we discuss Johnson & Johnson’s vaccine, the sell-off in tech stocks, and how fourth-quarter earnings shaped up. Our Chart of the Week highlights the resilience of the U.S. housing market throughout the COVID-19 crisis. Finally, we look at how economic activity indicators are trending around the globe.
The increased interest in Bitcoin is not surprising to us. When any asset experiences a meteoric price rise, it is hard not to notice. Google search trends for “Bitcoin” have recently jumped along with the price. We saw a very similar pattern develop in 2017.
In this week’s Monday Market Insights, we discuss Bitcoin, the recent rise in interest rates, and one area of the market that we believe is being underappreciated. In the Chart of the Week, we dive further into the rise in interest rates and the historical relationship between rising interest rates and stock market valuations. We end with more discussion about how rising interest rates may impact the stock market.
In this week’s Monday Market Insights, we highlight the performance of small-cap stocks, examine the FOMC minutes, and review favorable recently released economic data. In our Chart of the Week, we examine the recent decline in COVID-19 cases and the economic and financial market implications going forward. Finally, in the Commentary section, we address the topic of investor complacency.
In this week’s Market Insights, we cover equity market performance, the weak labor market and potential for fiscal stimulus, and the recent low in junk bond yields. In our Chart of the Week, we discuss the steepening U.S. Treasury yield curve. Finally, we highlight increasing inflation expectations and monetary policy.
Over the last ten years, technology stocks have been the undisputed winner. Whether it’s Apple, Amazon, Microsoft, or any of the mega-cap tech names, investors likely have a bad case of buyer’s remorse holding just about anything else. For context, the tech-heavy Russell 1000 Growth index outperformed the Russell 1000 Value index by about 7% per year on average over the last ten years. This is a 2-standard deviation spread, last seen during the late 1990s. In our opinion, tech’s reign of relative dominance has come to an end…at least for now.