Remain Vigilant When Adding Risk

Over the next few weeks we will hear how US companies navigated a difficult Q2. More importantly, we will also receive guidance looking forward. This will lead to analysts lowering their earnings targets... something the stock market is yet to price in.

JP Morgan Warns of ‘Negative Consequences’

There's a very good reason why inflation is likely to come down next year... the dramatic slowing of (M2) money supply growth. However, we will have uncomfortably high inflation for at least 6-9 months yet.

CPI Exceeds 9% YoY – Fed to Stay the Course

CPI for June was a white-hot 9.1% YoY. But should that be a surprise? Not really. What it does suggest is two consecutive rate hikes of 75 basis points... however most of that has been priced in.

Negative Impact of Labor Costs on Earnings

There are three things I want to see before I utter the words "the bottom is in". One of those three are Q3 earnings revisions... they are coming and this is one big reason why...

Sell this Bounce… and Why NZ is Worth Watching

We are in the midst of a bear market rally - but I don't trust it for three reasons. Separately, is New Zealand a canary in the coal mine regarding the impact of raising interest rates?

Recession: The ‘Cost’ of Unwanted Inflation

Today the Fed reminded us they have one objective (and only one): to bring inflation back to its target level of 2.0%. However, the unspoken narrative was sacrifices will need to be made (i.e. expect a recession)

Here’s What We Still Need to See

There are three primary things we still need to see before we can confidently claim we are close to a market bottom in 2022... the first is a pivot from the Fed.

Worst 6-Months to Start a Year Since 1970

It's becoming increasingly likely we will see a recession next year (maybe before). And there's one thing that every recession has in common post 1950 -- aggressive Fed tightening into a slowing economy.

What Did We Learn from NIKE?

NIKE's disappointing earnings today warned us a recession looms. And whilst the stock is 43% off its highs - it's not yet a buy. It's going lower.

Will Falling Commodities Help Drive Inflation Lower?

Commodity prices are well off their peaks. In theory, this should lead to lower CPI in coming months. But is this more an indication of a recessionary risk? I think so...

Market Poised to Rally… But Tread Carefully

Bear market bounce or market bottom? For me, it's the former. Two things: (i) we still need to see earnings revisions come down; and (ii) the market has a large technical hurdle it's yet to clear...

Bear Market Lessons… and is Property About to Plunge?

Be careful of any bear market rally - they are usually quite sharp. This post looks at the numerous "10-20%" rallies we saw during 2000 and 2008... and outlines what we need to see to know the bottom "is in"