QuickTakes

The most concise analysis of the key variables driving the global economy and financial markets.

Short-form takes on current market events.

The Man With The Midas Touch

It was a slow day on Wall Street for almost everybody except for Donald J Trump. It was make-DJT-rich-again day. His social media company jumped more than 50% immediately after it began public trading under the ticker DJT this morning, making

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Performance Derby

The stock market rally should continue to broaden as investors realize that the MegaCap-8 are not bulletproof. Tesla has competitors such as China’s BYD , which on Monday lowered the starting price of its Seal electric sedan to just

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Market Call: The Fed Put Is Back

Last week, the FOMC released its latest quarterly Summary of Economic Projections (SEP) for March. Compared to December’s SEP, the committee’s participants raised their 2024 median forecasts for real GDP (from 1.4% to 2.1%) and for the core PCED

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The Economic Week Ahead: March 25–29

The most important economic indicator for the week ahead will be February’s PCED inflation rate, which comes out on Friday. The Cleveland Fed’s Inflation Nowcast shows the headline and core rates rising 0.4% and 0.3% m/m and 2.5% and 2.8%

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Moon Shot

The S&P 500 rose to yet another record high today, closing at 5241.53 (chart). We wrote the following last year on July 19 in our Morning Briefing: “The S&P 500 is now almost at [our yearend target of] 4600. It closed

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Powell & Co. Remain Dovish

Powell & Co. were more dovish today than we (and stock investors) expected. The FOMC’s Summary of Economic Projections (SEP) still implied three 25bps cuts in the federal funds rate (FFR) this year (table). That’s the same projection as in

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Stock Market Has Discounted Lots Of Good News

Nvidia was up a measly 1% today despite the exciting presentation, after Monday’s close, by CEO Jensen Huang about the company’s future in the AI ecosystem (chart). He announced a new generation of GPU chips and software for running

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The S&P 500/400/600 Performance Derby

The S&P 500 LargeCap stock price index is up 44.0% since the end of the latest bear market on October 12, 2022. The S&P 400 MidCap and S&P 600 SmallCap are up 29.5% and 17.8% since then. The S&P

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The Economic Week Ahead: March 18–22

While Nvidia’s AI lovefest during the first three days of this week and the FOMC meeting on Tuesday and Wednesday might move the stock market, it’s a quiet week for economic indicators. It will be interesting to see whether the Philly Fed’s regional business survey

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The Pause That Refreshes Spooks Investors

The stock market’s vertical momentum rally that started on October 27, 2023 seems to be losing some of its momentum. Maybe. That’s OK with us. We would rather see our 5400 S&P 500 target achieved by year-end than by

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Yikes: Everyone is Bullish!

During the week of October 11, 2022, the Investors Intelligence Bull/Bear Ratio (BBR) fell to a cyclical low of 0.57 (chart). The previous bear market bottomed the next day on October 12, 2022. The BBR reading back then was

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Core CPI Continues To Moderate

February’s CPI was a touch hotter than expected. That didn’t cool stock investor’s exuberance for AI-related stocks. Nvidia was up more than 7% today, erasing nearly all of the drop over the previous two days. The company will be

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Broadening Bull

The S&P 500 market-weighted stock price index is up 43.2% since the current bull market started on October 12, 2022 (chart). The equal-weighted version of the index—with the 500 stocks assigned an equivalent weighting regardless of their market capitalization, allowing us

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Market Call: The Front-Cover Curse Already?

The front cover of this week’s Barron’s shows the horns of a bull apparently charging through a big white sheet of paper. Only the horns are visible in the picture. Usually, a bull appearing on the front cover of a major

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The Economic Week Ahead: March 11–15

The coming week starts with a couple of key inflation indicators. Both were probably boosted by rising gasoline prices. The retail pump price is up 9.1% since the last week of January. This bounce might have boosted February’s reading

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New Risk: Powell Stoking Risk-On Trades

Fed Chair Jerome Powell’s dovish congressional testimony yesterday and today stoked the hot trades in the financial markets from Nvidia to bitcoin to gold: “We’re waiting to become more confident that inflation is moving sustainably at 2%. When we

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We Have Nothing To Fear But Nothing To Fear

Fed Chair Jerome Powell was very reassuring during his congressional testimony today. He said the economy is fine, inflation is moderating, and interest rates have probably peaked. He also said the Fed is likely to lower interest rates but won’t

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Two Of The Magnificent-7 Get Shanghaied

Two of the so-called Magnificent-7 stocks (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) are now less magnificent. That’s because China is in a recession and Chinese consumers are buying fewer of Apple’s iPhones and Tesla’s EVs. These two

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Market Call: Dalio’s Bubble Trouble Meter

In a February 29 LinkedIn post, Ray Dalio wrote that his bubble gauge for the overall stock market is at a mid-range reading of 52 (chart). He concluded that the stock market “doesn’t look very bubbly.” His meter is

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The Economic Week Ahead: March 4-8

The week ahead is jam-packed with employment indicator releases. We expect that January’s JOLTS report (Wed) and February’s employment report (Fri) will confirm that the labor market remains strong. That’s based on weekly initial unemployment claims remaining just north

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Goldilocks Without The Bears

Every now and then, the economy is widely described as a “Goldilocks economy.” Like Goldilocks’ preferred porridge, it is considered neither too hot nor too cold, but just right—and therefore bullish for stocks. We’ve often agreed with that assessment,

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Too Many Happy Bulldogs?

We have nothing to fear but nothing to fear. The Fed is done tightening. The economy is doing fine. Inflation is moderating. The stock market is hitting record highs. So what’s wrong with this picture? Nothing other than it

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50 Shades of Bright Colors

The economic picture remains bright. The Atlanta Fed updated its GDPNow model today. Q1’s real GDP is tracking at a 3.2% annual rate, up from 2.9% on February 16. Real GDP was up 4.9% and 3.3% during Q3 and

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Why Is The Nikkei Soaring?

Japan’s Nikkei stock price index just rose to a new record high. It’s been a long time coming given that the previous record high occurred on January 3, 1990 (chart). Perversely, the new high coincides with Japan falling into

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Market Call: Bull Market Gets No Respect

Like comedian Rodney Dangerfield, the S&P 500 bull market gets no respect. Dangerfield often bemoaned that he got no respect. His jokes included, “I went to a freak show and they let me in for nothing.” The S&P 500

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The Economic Week Ahead: February 26–March 1

The economic week ahead is jam-packed with important economic indicator releases. The ones for January—New Home Sales (due out Mon), Durable Goods (Tue), and Personal Income (Thu)—were probably weakened by the month’s bad weather. The February indicators should show

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Higher For Longer

We’ve been in the higher-for-longer camp regarding the outlook for the federal funds rate (FFR) since the end of last year. That outlook was confirmed by the release of January’s FOMC minutes yesterday and today’s speech by Fed Vice Chair Philip Jefferson. The

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Market Call: Investing Is For Teenagers

Contrary indicator alert! On Sunday, the WSJ posted an article titled “These Teenagers Know More About Investing Than You Do: Custodial investment accounts for minors have surged in popularity.” According to the article, the kids are all buying technology stocks: “Brokerage executives say that

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The Economic Week Ahead: February 20–23

It’s a slow, holiday-shortened week for economic data up ahead. It will start on Tuesday with the release of January’s Index of Leading Economic Indicators (LEI) and Index of Coincident Economic Indicators (CEI). Regarding the LEI, we are reminded

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