Dear Clients & Friends,
I think we're all thinking it; so long 2020 you won't be missed! However, if the first week of 2021 is an omen of what's the come this year, I'd prefer to unsubscribe. Q4 was generally speaking a very positive quarter, especially in light of the year most have had and the impacts from COVID on all of us. To the pulse of the collective, the vaccines feel like a light at the end of a dark tunnel. The US presidential election went smoother than most predicted although some were surprised at how split we appear to be as a country. Most folks I have spoken with believed Biden was going to ...
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TLDR:
Economic data is deteriorating fast with Q2 GDP likely down 35% and unemployment reaching 20%+.Opening up the economy is going to be tough if not combined with testing, tracking and capacity at hospitals.Corporate debt defaults are expected to surge to 10-15%.2020 S&P earnings are set to decline but analysts opinions are differing drastically. I favor a cautious approach for portfolios for the near term as markets have almost fully recovered their lows reached in March.
There are a lot of questions about what direction the market will be headed next. As it stands now, the S&P is down around 10% YTD, and the NASDAQ is flat driven by companies such as Amazon, Google, Netflix, Apple, Microsoft and several others. My conversations ...
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I made a decision in December to switch from monthly updates to quarterly ones and of course it's been one of the most active quarters I've ever experienced. I truly hope everyone is safe, healthy and most importantly finding productive ways to spend the time in quarantine.
As I write this update on Saturday from my house in Austin TX, the virus continues to ravage our communities and the global economy. The Fed has embarked on an unlimited monetary stimulus while the government has passed a $2 Trillion stimulus package with likely more to come. There's a lot of pain out there in the world and while I do get a sense of camaraderie similar ...
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First off, I apologize for not putting a note together until now. I've waited because I continue to read different stats and information on COVID-19 and wanted to wait until all of the information was confirmed. But at this point I think there's enough known about it and it's potential impact on our health and the economy. I apologize in advance for the length and wanted to have my entire perspective in 1 post.
What is COVID 19?
COVID-19 coronavirus is a novel coronavirus that originated in Wuhan, China, and has spread to more than 30 countries in Asia, Europe, the Middle East and now the U.S. The World Health Organization and the United States have declared public ...
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The repo market has been stressed recently and the Fed has had to step in and inject a lot of capital to help alleviate the problem. But they don't know what's causing the problem or how much money it will take to fix it.
In this Dark Corners, we will explore the repo market in more detail. But first, what is a repo? “Repo” is short for repurchase agreement. A repurchase agreement is essentially a short-term loan, usually between banks. Imagine you are a bank and you have clients who need to make payroll, but you don’t have enough cash on hand to cover the withdrawal. So you pledge a portion of your holdings (typically ...
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As we enter a new decade, I thought it was appropriate to take a look at the past one as well as my expectations for what's to come specifically in the investment world. I can only imagine there will be countless technological breakthroughs during the next 10 years just as we saw over the previous 10 and am excited for the ones that move humanity forward and not just ones that keep us glued to a phone (or whatever tech comes next). Before we get into 2020 and beyond, let's take a quick stroll through memory lane.
2010's
The past 10 years saw incredible gains in the US stock market as few expected the record breaking rally. If ...
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Monthly Recap
November marked a continuation of the impeachment hearings and Hong Kong unrest, Michael Bloomberg throwing his hat in the 2020 Presidential race and a house bill decriminalizing marijuana federally. However, the US equity markets saw solid returns with the S&P returning over +3.5%, while international and emerging markets posted modest gains or were flat. Diversified portfolios continued to struggle vs. the S&P 500 since we saw bond and commodity markets pull back. The US large cap indices continue to be a bright star in the equity markets, although things don't last forever and diversification should not be abandoned.
As always, below is a recap of November’s noteworthy events:
Political:
Testimony by various people (Gordon Sondland, Kurt Volker and ...
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Monthly Recap
After September's noisy month of being dominated by WeWork and a potential impeachment of President Trump, October was equally as busy with a Fed rate cut, continued impeachment discussions, a bailout of WeWork by Softbank and much much more. The markets continued their march higher as the economic expansion continues to break records with each passing month. But one must wonder how much longer can things continue on this path. Negative rates does not make much sense and is a very big experiment most of the developed world is engaged in. My hypothesis is it's not going to end well. A wise man once said that we often meet our destiny on the ...
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Monthly Recap
September was a particularly "noisy" month and was dominated by 2 main stories: 1. impeachment of President Trump and 2. WeWork's IPO and alleged abuses by it's founder Adam Neumann.
Starting with impeachment, Nancy Pelosi launched a formal impeachment inquiry after Trump withheld military aid for Ukraine days before telling President Volodymyr Zelenskiy he should investigate Biden and his son Hunter, who was on the board of a Ukrainian gas company. There are now several whistle blowers who've stepped forward who were present or part of an effort to lock down the call records. Then days later President Trump requested China should also start an investigation into the Biden's. It's hard to believe anything ...
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Monthly Recap
Thank goodness August is over with as there was a tremendous amount of noise. Things seemed to reach a fever pitch this past month with the ever evolving US-China trade war, protests in Hong Kong and interest rates which continued to fall globally. The US stock market started off weak and ended up posting only modest losses for the month which was a win in my book due to all the negative headlines that occurred during the month. To recap, here are some of the noteworthy events and stories from August:
China responded to President Donald Trump’s tariff threat with another escalation of the trade war, letting the yuan tumble to the weakest level in more than a ...
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