Q1 2023 The rebound of growth and tech
In the aftermath of dismal year 2022 due to the well known reasons (FED, Ukraine, Covid/supply chains) and of the end of year tax selling we observed a strong reversion towards the mean long term returns The ACWI appreciated by 7.4 pct. The NASDAQ outperformed the S and P 500 and the barely positive DJI as […]
A simple summary on recent Equity Valuations
The USA, as well as the world, equity markets are at very important crossroads. They are heavily dependent on volatile inflation, interest rate and on earnings prospects. Geopolitical factors and Economic data heavily contribute to the instability of markets. On the Geopolitical front the war in Ukraine and the ‘zero Covid policy’ of China affect the […]
Markets in view of Q4 2022 : Can investors endure more losses? Will they be rewarded?
Can investors endure more losses ? Will they be rewarded ? Can investors endure more losses ? Will they be rewarded ? Can investors endure more losses ? Will they be rewarded ? Can investors endure more losses ? Will they be rewarded ? ‘It gets very dark before dawn’ A number of issues at […]
How can this Bear market end ? A summary
The FED missed the inflationary situation calling it for a long time a transient phenomenon. It was a structural one. The war in Ukraine exacerbated the supply shocks in agricultural products and energy. With its very delayed reaction, the FED is attempting to use Demand policies to solve mainly supply shock problems . The continuous abrupt interest rate increases, after […]
FED resolution to fight inflation: The short and medium term
A)The expectation of FED chairman Powell speech at Jackson Hole was that it would provide a determination to fight Inflation at the expense of employment and growth. B) The reaction to the speech was obviously a short term disappointment. The market participants interpreted that the FED is more hawkish than anticipated. As the trading day […]
Perfect storm and patience
Perfect storm The FED made a major mistake underestimating inflation. Interest rates should have increased earlier. Now it is tightening aggressively. We experience the worst inflation in 40 years. Covid resurfaced in China. It is the worst pandemic in 100 years In addition, have a war in Europe after 75years. A painful coincidence! Have markets […]
Inflation and the Supply curve
Inflation and the Supply curve A few thoughts on the markets : Negatives : A) Waited to comment on the April inflation numbers. Higher at 8.3 pct for the CPI than the forecasts at 8.1 pct. Core inflation also 0.2 pct higher. Inflation appears persistent and markets are disappointed. B)Markets fear that persistent inflation will probably necessitate more interest rate […]
Market Comment August 2021
The effects of the pandemic on the economy have continued to diminish, but risks to the economic outlook remain. Progress on vaccinations has limited the spread of COVID-19. However, the pace of vaccinations has slowed, and the “delta” strain of the virus is spreading quickly in some areas.
Interest rates and Earnings : March 2021 experience and Tactical Investment ideas
I) The reason growth stocks suffer more with abruptly rising interest rates. The valuation of every investment should correspond to the present value of future cash flows . If we invest in a house, in education or in a stock we expect positive cash flows for several years and should compare them with the cost of Investment
Year 2020 in Retrospect
2020 in retrospect ….It was a very difficult year ! Indeed, it was a very difficult year (to paraphrase the song) for mankind, personal lives, relations, business and the stock market. Some Lessons We experienced an extreme shock, not witnessed since 1918, in early spring as the virus started spreading and led business activity ro be seriously […]
The Virus through our Investment Lenses
Our Specific Experience In early 2020 we had a unique traumatic experience not seen for over a century : the deadly pandemic of COVID 19. Society, life, the economy and financial markets were shocked. Real pain and fear ruled supreme.
Early July 2020 thoughts
A) The stock market started the second half of 2020 strongly as the economies are reopening and medical news are fluctuating. B) The markets are clearly linked to the COVID-19 statistics.
Market Comment May 2020
Don’t bet against America; you can still buy the dip as the market rebounds History has shown that the SPX has returned to growth after significant drops many times. For example, the index decreased by 34% within a month after the Dot-com bubble burst in 2000, started rebounding in 2002 and had surpassed the dot-com high by 2007
2019 in Retrospect
A) We noticed the ‘reversion to the mean’ principle. This observation characterizing many natural phenomena took place again in the stock market. After a dismal 2018, especially at the end of the year, we enjoyed one of the best years ever for the stock market in 2019.
December 2019
A) December 15 is approaching. The decisions and comments on tariffs can lead the Market either higher or substantially lower. Tactically we reduce portfolios Betas
Market Comment Q3 2019
Global equity markets have been strong over the first three quarters of 2019, with the Federal Reserve and other central banks easing policy in a coordinated fashion, and solid macroeconomic data in the USA.
May 2019-Be fearful when others are greedy
Equity markets rallied strongly in the first part of 2019, with the S&P 500 staging a 26% rally from its low on Christmas Eve to the recent peak on May 1st, but failure to resolve US-China trade disputes has somewhat dampened investors’ optimism.