Good morning. We hope everyone had a great Mother’s Day. No rest in Washington this weekend with: (1) US-China trade talks leading to a 90-day reprieve of most tariffs ($300bn reduction annualized); (2) The first provisions of the tax bill released showing increases in the child tax credit, small business deduction, and estate tax exemption; (3) The middle-ground Medicaid changes taken in the first draft of the tax bill; (4) Trump readying his plan to impose large price controls on pharmaceut… View More
Many clients ask us why we manage our portfolios the way we do. Our management style is that of active managers, meaning we will overweight or underweight the companies represented by the S&P 500 index, considering certain fundamentals. These fundamentals include free cash flow, price-to-earnings ratio (PE Ratio), and increasing shareholder value like increases in dividends or stock buybacks that favor the shareholder. On the other hand, passive investing is investing in the indexes as they… View More
To the extent to which forecasts on the financial markets have largely been reduced to our collective reactions to utterances of policymakers who may or may not know any more than the rest of us, we’ve decided to keep things simple – presenting our base case as well as some facts we believe you should know: Base Case: Recession odds are 45% in 2025 due to increased uncertainty regarding global trade and concomitant impact on capital spending/deal-making Unemployment claims (low), co… View More
We’ve expected a recession for more than a year now. Simply put…the Era of Easy Everything is Over. Expanding deficits and easy money (that have lifted the economy since COVID) are no longer with us. At the same time, tariff negotiations have created an unbelievable amount of uncertainty. Add it all up and we expect 0.3% real GDP growth in the first quarter. Consumers and businesses were front-running tariffs in Q1, trying to get as many goods as possible into the country as soon as possibl… View More
Before the long weekend, we wanted to share additional thoughts on: Can the US avoid recession, and can the stock market deliver positive returns in 2025? Consumer Confidence If so much good news exists, why is the market down? What about China and the tariffs? Won’t that cause hyperinflation? Isn’t the US alienating its allies and trading partners? Won’t this open the door for China to step in? Because there is much to cover here, we’ve divided it into sections so you can ju… View More