Warmer Weather Ahead?

By |2016-12-21T14:34:31-04:00December 21st, 2016|Categories: Global Market Update|Tags: , , |

What’s the forecast? Source: NOAA The short answer is, no one really knows. There were very few prognosticators that predicted a Trump victory, and even fewer who thought a sweep by the Republicans would lead to a major stock market rally and bond market selloff. But that’s where we find ourselves. Stocks are up in the US in the low teens—almost 10% more than most folks expected a year ago. Interest rates are up modestly. A year [...]

Chinese Fortunes

By |2016-11-17T15:40:50-04:00October 3rd, 2016|Categories: Global Market Update|Tags: , , |

What’s happening in China? Forbidden City in Beijing. Photo: Saad Aktar. Source: Wikimedia Anyone who wants to understand the global economy needs to have a sense of what’s happening in China. China has the second largest economy in the world--almost 2/3rds the size of the US. Last year they grew more than the US and Europe combined. They’re essentially tied with Canada as our largest merchandise trading partner, providing 15% of our imports and exports--$300 billion worth. [...]

Two Steps Back, Two Steps Forward?

By |2016-11-17T15:46:41-04:00July 5th, 2016|Categories: Global Market Update|Tags: , , |

“Never mind.” Source: Road Traffic Signs That’s what I thought when I saw that US stocks had almost totally recovered. The S&P 500 is now within 1% of its pre-Brexit level. UK stocks are actually higher than they were—spurred on by a weaker British Pound. To be sure, other European stock markets are lower—those in Germany, France, and Italy. To be sure, the Pound and Euro are still down. And interest rates around the world are a [...]

Failing Upwards

By |2016-11-17T15:49:48-04:00May 27th, 2016|Categories: Global Market Update|Tags: , , |

What drives US markets? Source: Bloomberg Over the years the stock market in the US has generated significant real returns – better than most other markets around the world. Since 1994, US equity markets have returned 5.4% above inflation, while the rest of the world has averaged only 2.3%. Why? One reason has to do with the way we treat failure. The US has a very liberal bankruptcy regime. When companies can’t pay their debts, we allow [...]

Winter of (Dis)content?

By |2016-11-17T15:56:17-04:00March 8th, 2016|Categories: Global Market Update|Tags: , , , , |

Is this winter the best ever, or the worst? Photo: Viktor Hanachek. Source: Picjumbo For most people, this has been a pretty mild winter. Apart from the massive snowfall that hit the east coast about a month ago, there have been relatively few winter storms. A year ago, Boston was buried under over 9 feet of the white stuff. The record cold and record snowfall seemed to never end. Now, the streets are clear and home buyers [...]

Let There Be Markets

By |2016-11-17T16:06:21-04:00October 28th, 2015|Categories: Global Market Update|Tags: , |

Is there a “unified market theory”? Source: Wikipedia In the late 1800s, James Clerk Maxwell sought to understand how electric and magnetic fields interact. He formulated the Maxwell Equations to explain them. Ever since then, physicists have sought a unified theory to tie all the forces in the universe together. Einstein tried—and failed--to connect electro-magnetism with gravity. But other forces—the nuclear weak force, the sub-nuclear strong force, and light—have been joined. But there’s no way to pull [...]

Known Unknowns

By |2016-11-17T16:08:23-04:00September 29th, 2015|Categories: Global Market Update|Tags: , , |

“I know something you don’t know.” © MGM 1987. Source: IMDB In The Princess Bride one of the characters smiles during an epic sword fight as he is forced back, step-by-step, towards the edge of a cliff. When his assailant asks why, he says that he knows something the other doesn’t: he’s not left-handed. As he changes hands, the tide of the fight turns. As the market struggles with fears of a Chinese economic slowdown, concerns about [...]

Moment of Truth For Non-U.S. Markets

By |2016-12-01T15:44:55-04:00May 22nd, 2015|Categories: Technical Perspective|Tags: , , |

Image Source: Philip Brewer, Flickr The FTSE All World Ex-US index (VEU) is testing multi-year resistance in both dollar and gold terms. (See Chart 1)  Dollar-based investors are obviously interested in dollar thresholds, but why monitor relative strength in gold terms?  Because gold provides an alternative base “currency” that measures confidence in the institutions of money and credit.  A market making higher highs versus gold is exhibiting organic strength independent of local-currency devaluation or unsound credit expansion [...]

Of Morals and Markets

By |2016-11-17T16:40:18-04:00July 28th, 2014|Categories: Global Market Update|Tags: , , , |

Are markets ethical? The short answer would seem to be no. After all, money doesn’t care who owns it. Money is a tool, like a knife. It can be used to heal or to harm. The effect of any instrument depends of the plans and intentions of the person who uses it. But there are folks who would say that the market is deeply immoral. By focusing on shareholder returns, markets would seem to incent people to [...]