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Market Insight

The Fed has Printed Trillions. Won’t That Cause Inflation?

Which of the following are true? 1) In the past 3 months the National Bureau of Economic Research declared that the U.S. is currently experiencing its worst recession since the Great Depression. 2) In April, unemployment reached its highest level since tracking began in 1948. 3) During the same period that both of the above occurred, the stock market (S&P 500) had its best quarter in more than 20 years. 4)All of the above.

Coronavirus & Capitalism

Just like last time, this time is different. Market movements that usually take a year to make, happen in a week, or even a day. While a new bear market (a decline of 20% or more) was long overdue, the speed in which it occurred was unprecedented, as was the reason. Volatility, though coming down from its March highs, has been historic. Consider, in March the Dow Jones Industrial Average (“the Dow”) had its five worst single day point drops ever, and its four best. With such intense swings, increased media coverage and likely more time to pay attention to the market, thinking about “the long-term” is nearly impossible.

Coronavirus: Another Black Swan

Over the past few weeks financial markets have experienced swings that we have not seen in nearly a decade due to the uncertainty created by the spread of the coronavirus. While the market has been through far more harrowing times throughout history, and especially over the past 20 years, the unpredictability of the virus and the efforts to contain it have markets confused.

What Do Baseball and the Stock Market Have in Common

The league batting average for Major League Baseball was .252 in the 2019 season. This means that a player hit the ball and made it safely to base about once in every four at-bats – 25% of the time. For years, the league wide batting average has hovered around this figure. Last season, less than 2% of players hit .300 or better, with no player better than .335. Some players have great months – like Todd Helton who in May 2000 hit .512 – but eventually all end the full season not too far from .250.

Recession, Impeachment & The Stock Market

Recession and Impeachment. Today’s financial headlines seem to be fixated on both topics, yet if history is any guide, only one of the two is likely to have an influence on financial markets. Recessions are periods of economic decline which are identified when Gross Domestic Product (GDP) falls for two consecutive quarters.

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