3Q Estimate Being Revised Higher Marginally Up until this point, the earnings discussion has largely focused on technology and AI capex, but one thing we noticed this past earnings season is that a “beat and raise” is not always enough to push a stock higher. Expectations are already quite high, and the bar continues to rise. Looking ahead to the third quarter, we are seeing estimates continue to be revised upward. Since the beginning of the third quarter, the consensus estimate has increas… View More
Federal Reserve Chairman Kevin Warsh used his Jackson Hole speech last week to lay out his views on monetary policy. Two things jumped off the pages of his speech. First, "Fedspeak" may be making a comeback. Former Fed Chairman Alan Greenspan became famous for phrases like "irrational exuberance." One section of Warsh's speech, titled "Preparing for Future Policy Conjunctures," felt like a throwback. "Conjunctures," really? Greenspan would be proud. Second, the narrative about Warsh is that he… View More
Will Higher Interest Rates Threaten Equities? Long-term Treasury yields continue to face upward pressure as economic growth remains solid, inflation stays sticky, and government finances deteriorate. While the Treasury’s efforts to support longer-dated bonds may provide some relief, they are unlikely to reverse the forces driving yields higher. Meanwhile, financial markets continue to benefit from rising corporate profits and supportive monetary and fiscal policies. Could higher rates and… View More
Headline CPI rose just 0.1% month-over-month and core CPI 0.2%, taking some pressure off the Fed to raise rates. But inflation remains sticky amid easier lending standards, stronger loan growth, and a growing money supply. Meanwhile, oil prices remain well below this year’s peak, with progressively less impact on financial markets, while bond yields continue to grind higher. Is a return to low and stable inflation really in the cards? Key Takeaways 1 . Headline CPI rose 0.1% m/m and 3.4%… View More
Is the ‘High-Risk Bull Market’ Getting Riskier? Stocks just posted their strongest week since April, thanks to exceptional earnings and renewed momentum in technology. The global economic expansion should continue to roll on, although U.S. and global equity markets remain heavily concentrated in technology/AI. For now, strong earnings are winning the tug-of-war against mounting market risks. The question is, for how long? Key Takeaways 1. July nonfarm payroll employment fell 23,000, m… View More