The Weekly Edge

Currently, there is a splintering in financial markets and economic data that is likely to prove temporary, but as this splintering mends, markets could be singing Gin Blossoms’ “Follow You Down” along the way.

But oh, it's heavenNowadays “Nowadays”, Roxie Hart, Chicago the Musical It’s good, isn’t it? “Let me start by saying that we think the economy is in a really good place, and we think policy is in a really good place.” Grand, isn't it? “The economy is strong overall...

In the grand ranking of defeated and desperate pleas for love and acceptance, Fräulein Sally Bowles’ haunting “Maybe This Time” at the end of the first act of Cabaret takes the cake. In a close second comes Value stocks in 2024. Defeated, desperate, unloved, unaccepted, the Value factor/style might as well apply to jobs in the chorus line at the Kit Kat Club.

Our last Weekly Edge addressed the potential that we could see improving economic data in the wake of the U.S. election, reflected by more optimistic consumer and business survey responses. Since then, we’ve seen that effect materialize in some places (consumer expectations) but not others (services business sentiment).

While markets have been shaky over the past two weeks, the positive trends remain broadly similar to those in the final two months of 2016. Stocks could muster another lurch higher if business sentiment begins to reflect a more bullish outlook for 2025, perhaps due to a combination of lower expected tax rates or less stringent regulation.

Given this backdrop of a stronger USD, tariff uncertainty, and weaker earnings, we see reason for U.S. investors to continue to broadly pick my friends (domestic stocks) over you (non-U.S. stocks). 

The price action across equities, fixed income, and currency markets had many investors “remembering the first time” that Trump was elected in 2016, with the assumption that a similar playbook can be applied to today’s market.

“Everyone’s entitled to one good scare.” – Rounding up the Latest Economic News It’s officially November. The trick-or-treating is over, and the days of noshing on leftover candy have begun. As investors, the past several weeks made us feel a bit like a group of...

Last week, Goldman Sachs’ Portfolio Strategy Research team caused quite a stir when they evoked DeVotchka’s 2004 indie hit “How It Ends” (without lyrics the song is titled “The Winner Is” and provides the contemplative backdrop for the dysfunctional and endearing indie film Little Miss Sunshine. Take this as a sign to go ahead and eat the ice cream.)

If there is a GOAT (Greatest of All Time) title for “Famous Last Words” in financial market valuations, it has to go to Irving Fisher, who infamously quipped in 1929 that “stock prices have reached what looks like a permanently high plateau.” Of course, we know what happened after this not-so-reassuring statement: the Dow plunged 89% and took 25 years to make a new high.

The time to hesitate is through “Light My Fire” – The Doors As equity markets enter the final quarter of 2024, treading cautiously and digesting the best start to an election year on record, investors are hoping third-quarter earnings results will, as Jim Morrison...

The first Friday of each month brings with it new information about the single most important piece of economic data anywhere in the world: the state of the U.S. labor market.