Market Commentary

Daily reports from our Chief Economic Strategist.

SOME OBSERVATIONS ABOUT VALUE INVESTING
It is widely accepted the markets are entirely dominated by the largest capitalized names. It is also almost unanimously known that five companies comprise that greatest percentage of the S & P 500 in history. Data clearly indicates that
FRB TESTIMONY WAS LARGELY AS EXPECTED
FRB Chair’s testimony was largely as expected. Powell stated that the Committee is monitoring the coronavirus, signaling it out among risks threatening the economy. The Chairman characterized the economy “as strong,” inflation is “trending to goal,” and the labor market as
FED TESTIMONY AT 10:00
FRB Chair Powell testifies to Congress about the state of the economy. I am certain he will discuss the coronavirus and its possible implications. Perhaps the safest comment to make is no one knows the outcome and there is not a shortage of learned opinions. Powell’s comments can move markets but
FRB CHAIR’S CONGRESSIONAL TESTIMONY COMMENCES TOMORROW
The WHO reported Friday the number of new coronavirus cases declined for the second consecutive day. Equites however ignored that factoid and sold off Friday on virus fears.
JANUARY’S BLS EMPLOYMENT REPORT, A POSSIBLE ROTATION INTO VALUE AND PERHAPS SOME DEJA VU
Will the next several weeks be similar to the last several weeks in September? Bloomberg wrote late yesterday afternoon “market darlings including technology and dividend stocks are suddenly falling out of favor. Laggards such as those that trade at lower prices relative to earnings or book value….aka value…are coming back to life.”
AN ECONOMIC AND VIRUS INDUCED ADVANCE
Will tomorrow’s BLS labor report confirm the incredible strength in the ADP Private Employment Survey? ADP indicated that in January private employers added the greatest number of workers since May 2015. The data was almost
IS THERE THE BEGINNING OF DEMISE FOR ALGO TRADING?
Several times I have referenced at 2015 interview with Amazon’s Jeff Bezos where he commented that algorithms could be written to manipulate/influence stock prices but “this of course would be illegal.”
IS THE CHINESE SELLOFF OVER?
Chinese shares ended its brutal selloff today ending about 1.50% higher. Monday 90% of securities listed on the Chinese exchanges dropped the maximum amount allowed in one day. One trader commented “this was
AMAZON, CHINA AND A BIG DATA WEEK
I think there is little disagreement that three of the four mega capitalized technology companies that posted profits last week exceeded expectation. One pundit sounded like Ross Perot when he exclaimed “there is a giant sucking sound”
ARE THE HEADLINES SUGGESTING AN END OF ERA IS AT HAND?
Reading yesterday’s headlines one can make a conclusion that an end of an era could be at hand. One major headline read “We Missed the Exit: Banks step up Call to End Negative Interest Rates.” A group of money center European banks are asking the ECB to

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