Perspectives

In the aftermath of the first Internet stock-market bubble of the late 1990s, the economy went into a relatively shallow recession starting in 2001. That recession was precipitated by a tight monetary policy, with the Federal Reserve setting short-term interest rates consistently above the pace of nominal GDP growth (real GDP growth plus inflation). In that sense – as a result of tight money – the 2001 recession was like the recessions of 1970, 1973-74, 1980, 1981-82, and 1990-91. Since tha… View More

February was a relatively quiet month for markets — the S&P 500 slipped -0.9%, the Nasdaq fell -3.4%, and the Dow edged up +0.2%. Then everything changed on February 28, 2026, when the United States and Israel launched joint military strikes on Iran. Within days, the Strait of Hormuz — the narrow waterway through which approximately one-fifth of the world's daily oil supply normally flows — was effectively closed to shipping. The questions we've been hearing from clients are understan… View More

Summary Stocks declined for the second straight week (S&P 500 -1.99%; its worst performance since October). The war in Iran hit equities and other risk markets hard last week. The ratcheting up of geopolitical tensions added to pre-existing investor nervousness about excesses in AI-related equities, mounting strains in private credit, and high valuations. This triggered widespread selling pressure as investors rotated to cash. Best sectors were energy (+1.00%) and technology (-0.35%), worst… View More

Over the weekend, Israel and the United States launched an attack on Iran. Retaliation from Iran followed with missiles targeted at US military assets in the region and Israel. The Houthis have announced the closure of the Bab el-Mandeb Strait in the Red Sea with the intention of targeting US and Israeli ships. As we have noted repeatedly, the US does not move this level of military assets into a region to bluff. The placement of the USS Gerald R. Ford aircraft carrier and F-22 Raptors in the r… View More

The Trump Tariffs are dead - long live the Trump Tariffs? As we expected, the Supreme Court struck down most of the new tariffs President Trump had imposed since taking office thirteen months ago. While Congress granted the President “emergency” powers to regulate trade in a 1977 law, the Court ruled 6-3 that the statute does not explicitly authorize the use of tariffs under those powers. As a result, many of the recently imposed tariffs exceeded the authority Congress delegated to the exec… View More

Q4 Earnings Reporting ~75% Complete & 4Q Growth Being Reported As Strong With roughly 75% of S&P 500 companies having reported earnings, results are coming in strong. Earnings growth is once again tracking in the double digits for a fifth consecutive quarter, an outcome that’s somewhat unusual at this stage of the economic cycle. The impact of AI-driven capex is clearly showing up in the numbers. The strongest growth rates are concentrated in the Technology, Communications, and Indust… View More

Market Multiple Has Fallen Below Its 3 Year Average For the first time since Liberation Day, the S&P 500’s multiple has fallen below its three-year average, a level that over the past several years, has typically been associated with a resumption of multiple expansion. One of the more surprising developments so far has been the strength of corporate earnings alongside continued stock selloffs. Notably, the prospect of increased capex spending, which was viewed positively last year, is no … View More

It could have been anything… we’re of course referring to Silver’s spectacular -40% decline over the last 72 hours, and the broader selling in Precious Metals. We’ve read countless attempts to come up with the reason “why” over the past few days –it was the Warsh nomination, the Yen is to blame, an options squeeze, etc. etc. etc. – but the reality is when a parabolic move grips the tape and emotion takes over, it can literally be anything that triggers a sudden shift to the preva… View More

The Fed meets on Wednesday to discuss the direction of monetary policy. With the futures market pricing the odds of “no change in rates” at 97.2%, no one should expect a rate cut at this meeting…or, we think, anytime soon. Some, including the Trump Administration, might complain about steady short-term interest rates and say Fed Chief Jerome Powell is playing politics. The claim about playing politics may be accurate, but for now, Powell has the data on his side. The economy looks solid, … View More

Love him or hate him, President Trump will likely be remembered as a consequential president. His historical shadow may overwhelm all but a few. Setting aside the current tensions in the North Sea, the Trump Administration’s market report card is quite good – stocks up, bond yields down, and mortgage rates and retail gasoline prices lower. The most significant blemish is the decline in the US Dollar. The broader economic picture has also shown relatively steady results, with real growth han… View More