Perspectives

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

Three major releases landed in the past five trading days, and in each one the headline number and the underlying composition told different stories. Second-quarter GDP missed badly. Corporate earnings beat estimates by the widest margin on record. Manufacturing hit a four-year high this morning while survey respondents sounded miserable. Don’t let the headlines distract you from the data — the composition is where the useful information sits.   Growth: A Weak Headline Over the Strongest … View More

Peak Profits & Margins? One of the biggest questions facing the market today is whether we are approaching peak profits. Capital expenditures have remained robust, and they continue to be a primary focus for investors. However, the prospect of peak profits could present an even greater challenge for the markets moving forward.   Peak Profits and Margins Have To Be Top Of Mind Earnings season is in full swing, and expectations for profit growth continue to move higher. Consensus earnings… View More

Stocks Major U.S. indices finished the week lower in a tech-driven pullback. The S&P 500 declined ~1.5%, the Dow Jones fell ~0.8–0.9%, and the Nasdaq dropped ~2.5–2.9%. Semiconductors and AI-related stocks faced pressure amid concerns over high capital spending, Chinese competition in open-source models, and questions about near-term returns on massive data center investments. Broader rotation favored value, energy, and defensive sectors. Geopolitical tensions in the Middle East added … View More

In 1852, Karl Marx said "Men make their own history, but they do not make it as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered and transmitted from the past." He obviously knew about the Magna Carta (1215) and the English Parliament’s Bill of Rights (1689), which created a separation of powers between the King and elected representatives. What he didn’t pay much attention to was how the United States broke with history… View More

However, it is a bit challenging due to increased regulations and interest rates.     This year’s Homebuyer Insights Report survey data reveals meaningful changes in attitudes toward homeownership. The study finds that for the first time since 2023, more Americans favor buying a home (53%) over renting or moving in with family (47%).   Even as attitudes shift, prospective buyers increasingly point to affordability as the top barrier to homeownership, with expensive home prices (58%, … View More

A deal to extend the ceasefire in the Middle East has finally been agreed, allowing energy prices to decline further and risk-asset markets to resume their pre-war bull run. The history of the Middle East points to inevitable bumps ahead. A lasting peace has not been achieved, and some of the players are not agreeing to stop at this juncture. Should investors expect setbacks ahead?   Summary Equities were higher last week with the DJIA and Russell 2000 hitting record highs, while the S&P… View More

With what appears to be a deal with Iran taking shape and the reopening of the Strait looking increasingly likely, the two most important questions we are asking ourselves are: 1) How will global inflation expectations respond, and 2) will markets revert to the trends and themes that were working before the conflict began?   Easing Inflation Expectations to Provide Rate Relief The direction of global inflation expectations will be one of the most important variables to monitor in the coming … View More

The job market was surprisingly strong in May, with non-farm payrolls growing 172,000, beating even the strongest forecasts for the month. As a result, the futures market is now pricing in a quarter-point rate hike later this year and, more likely than not, another quarter-point rate hike sometime in 2027. But we think a rate hike would be ill-advised and unlikely. First, this is a good employment report, but not a “barnburner.” Barnburner job growth is 300,000 to 400,000 per month. Even Ke… View More

Loud Headlines, Intact Fundamentals   It was a loud few days. On Friday, the Nasdaq Composite fell 4.18% — its worst single day since April 2025 — as a violent selloff in semiconductor and AI-related shares dragged the major indexes lower, with the Philadelphia Semiconductor Index down 10.26%, its steepest drop since March 2020. Over the weekend, the conflict in the Middle East escalated again, and South Korea’s market, heavily concentrated in memory chips, opened sharply lower to start… View More