Is Some Hope Creeping In?

Don't look now fans, but there might be some hope creeping into the stock market. With just 23 trading days left in the year, there seems to be some hope that we've seen the bottom of the recent pullback.

To be sure, two consecutive green bars on the charts of the major indices does not a trend make. And with the S&P 500 a mere 1.5% off the lows of the move, the bears contend that they are by no means out of the game.

But, unless you've been sleeping in a cave, you know that there are three primary driving forces of the current market move. The first two appear to be the main factors affecting the near-term action, while the third is the longer-term issue traders are wrestling with.

  • Fear the Fed will overshoot (and drag down the economy in the process)
  • Fear the Trade War will escalate (and drag down the economy in the process)
  • Fear that both economic and earnings growth will slow more than expected

The good news, and the primary reason behind the recent green on your screens, is that there seems to be some hope developing on the first two points.

How Far From Neutral?

On the Federal Reserve front, the question of the day is how far away the Fed is from the so-called "neutral" zone for Fed Funds rates. Referred to as "r*" by U.S. central bankers, the general thinking is that Fed Funds will need to reach the 3% range in order to be considered neither restrictive nor stimulative.

At issue is the FOMC's "view" on how much more rates need to rise. Recall that Fed Chair Jerome Powell sent the markets into a tizzy in October when he said that the current target range of 2% to 2.25% is ...

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2018: A Tough Row To Hoe

For most investors, 2018 is turning out to be a tough row to hoe. Suddenly, nobody is talking about global synchronized growth, low inflation, the benefits of tax cuts, and 20% earnings growth. No, all that is now so 2017. ...

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Near Term - It's All About The Headlines. Longer-Term - It's About...

A busy few days of entertaining family in Colorado provided a reprieve from the keyboard and the markets over the weekend. Thus, I'm going to let the indicators do most of the talking to start this holiday-shortened week.

Briefly, the ...

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The NEW Daily Decision for 11.19.18 - Near-Term: It's All About The Headlines. Longer-Term: It's About...


The State of the Markets:

A busy few days of entertaining family in Colorado provided a reprieve from the keyboard and the markets over the weekend. Thus, I'm going to let the indicators do most of the talking to start ...

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The Straws Breaking The Market's Back

Monday was another volatile day on Wall Street as the Dow Jones Industrial Average plunged 602 points. Granted, problems at Apple (AAPL) and Goldman Sachs (GS) accounted for 170 of those points. And yes, the machines were clearly at work ...

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Understanding the Current Earnings Game

When stocks enter a corrective phase, the main question investors tend to ask themselves is, has anything changed from a macro point of view?

One of the problems with trying to answer this question is that corrections generally are born ...

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The NEW Daily Decision for 11.12.18 - Understanding the Current Earnings Game


The State of the Markets:

When stocks enter a corrective phase, the main question investors tend to ask themselves is, has anything changed from a macro point of view?

One of the problems with trying to answer this question is ...

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The NEW Daily Decision for 11.9.18 - Portfolio Update


Today's Portfolio Review

Despite the recent "bounce," we continue to maintain a modestly defensive position (net long exposure currently stands at 89% and each of the strategies holds some cash) at this time. The reason is simple. Historically, when the ...

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The NEW Daily Decision for 11.5.18 - Garden-Variety So Far, But...


The State of the Markets:

I've got an early meeting (who's idea was it to schedule a board meeting for 7:00am on a Monday??) and I am traveling the rest of the week, so I'm up early and would like ...

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The NEW Daily Decision for 11.2.18 - Of Jobs, Apple, and Trade


Portfolio Strategy Update:

As long-time members know, we don't spend a lot of time (almost none, actually) touting our views on the market or making "calls" about what to expect next. In our more than 40-years of combined market experience, ...

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The NEW Daily Decision for 10.30.18 - Two Ways To Improve The Mood


The State of the Markets:

There can be no denying that we've got a nasty market on our hands. A market where the venerable Dow Jones Industrial Average can be up 300 points one moment and down 600 the next. ...

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The NEW Daily Decision for 10.29.18 - How Low Can It Go?


The State of the Markets:

Are we having fun yet? To be sure, the recent stock market correction has created some angst as the bears have knocked -7.55% off the DJIA, -9.63% off the S&P 500, -12.60% off the NASDAQ ...

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