Midterm election years have historically been the most volatile year for stocks in the four-year presidential cycle. The average intra-year decline for the S&P 500 in a midterm election year is 19 percent, much higher than the 12-13 percent average in the first, third, and fourth years of the cycle. We would argue that monetary policy is generally tighter in a midterm election year and presidents pursue anti-growth policies to rally their bases. Today’s equity market fits the historical pa… View More
Numbers do not lie, and the inflation numbers for August were released this morning. Today’s Inflation (CPI) numbers show Inflation in August went up from the previous month. The market is selling off today because the bond market is adjusting to the prospect of the Federal Reserve raising rates at their next meeting by at least 75bps. With inflation at these levels, the FED will need to continue to raise rates to stem off inflation making the prospects of a soft landing fade. The U.S. CPI ro… View More
U.S. equities rallied this week (S&P 500 +3.7%) to break three-straight weekly declines. The gains were driven by factors including oversold conditions, some more traction in the peak-inflation narrative, and firmer labor market data. Treasuries sold off sharply with the curve flattening. Best sectors were consumer discretionary (+5.6%) and materials (+5.0%); worst sectors were energy (+0.7%) and consumer staples (+1.9%). Source: Bob Doll Chief Investment Officer Crossmark Investments C… View More
2023 Earnings Decline Paused For Now After falling roughly $9 during the 2Q reporting season, the 2023 earnings estimate has stabilized at approximately $243.50, with 2023 earnings growth expected to be about 8%. However, we continue to believe that earnings estimates for 2023 are too high, and expectations will once again be revised down during the 3Q reporting season. Financials & Discretionary Expected To Increase Their Contribution In 2023 Considering the sector contributions for 20… View More
The Dow Jones Industrial Average fell more than 1,000 points last Friday, caused apparently by Fed Chairman Jerome Powell’s attempt to use a brief speech to channel the ghost of Paul Volcker. Obviously, this was part of the market’s worries, but the stage was set when the Biden Administration announced a student loan forgiveness program last week. The more we learn about this, the worse it looks. The executive order would send an already very bad student loan system – a system designed mo… View More