Coronavirus Market Panic and Opportunity
Worsening coronavirus or COVID-19 news drove a 12.4% decline in the Dow Jones Industrial Average, last week, erasing $5 trillion in global equity market value. This COVID-19 market panic was exacerbated by both China’s news suppression and the virus’s suspicious Wuhan lab origin; and further amplified by the news–stock market reaction–feedback loop. Historic market panics like […]
S&P 5905 Target up 88% and the Fed Model’s Flaw
We revised our S&P 500 2020 Fed Model price target up to 5905 (up 88%). This letter reviews how recent decades of extreme Central Bank accommodation has distorted the Fed Risk Premium Model’s credibility when compared to other valuation models which are more cautious. The 2020 Rally: The Federal Reserve is lowering short term rates […]
Investment Trends for the Next Decade
The 2020s will produce important new trends in the global markets which this letter will explore. The new investment themes for the 2020s are: Rising rates will hurt bond performance Energy stocks will rebound Commodity prices will rise Emerging market outperformance will resume The New Cold War: China, Iran, North Korea, Russia and Venezuela S&P […]
How to Invest for S&P 5559 on a Central Bank Bubble
How to Invest for S&P 5559 on a Central Bank Bubble None of the potential black swan events like the Hong Kong riots, the Brexit from the EU, the US-China trade dispute, the US impeachment inquiry, the Saudi Arabian oil refinery attack and the global industrial slowdown materialized to topple the US equity market in […]
Gold and Silver Return as Investment Leaders
The black swan risks of a hard Brexit and a Tiananmen Square type slaughter of Hong Kong protesters by the Chinese Communist Party decreased last week resulting in a stock market rally and a pullback in safe haven assets. This market reprieve, however, has not resolved the risks associated with Britain’s efforts to leave the […]
Is Hong Kong A Black Swan?
Investors should adjust their portfolios to emphasize gold and commodities and reduce their holdings of stocks and bonds. Income Growth Advisors, LLC believes the future performance of bonds over the next decade is likely to be in the low single digits and the benefits of declining interest rates are diminishing. The European and Chinese economies […]
Trade and Recession Fears Versus Federal Reserve Policy
Volatility returned to the equity markets when the July 31th Federal Reserve quarter point interest rate cut led to a sharp equity market selloff. The cut was so widely anticipated that Fed Chairman Powell’s statement that little additional accommodation would be needed–drove the equity markets lower. Then the August 1st snapback rally was smashed by […]
Project Harpoon and the Chinese Two Step
The S&P 500 has retreated from all-time highs as the promise of a US China trade agreement has withered. Additionally, threatened tariffs against Mexico and new troubles with North Korea are weighing on the market. Recent extreme weather threatens to raise US agricultural prices which, in combination with continued and new tariffs, could reverse the […]
The AMID Unitholder Tragedy
The first quarter’s powerful rebound in US equities was driven by improving prospects of a comprehensive enforceable trade deal with China and a complete reversal of the Federal Reserve’s hawkish fourth-quarter policy and posture. With the markets now pricing in improving global trade prospects and dovish central bank monetary behavior, equities are no longer the […]
MLPs at a Crossroad.
February built on January’s sharp equity market rebound as the Federal Reserve affirmed its commitment to a neutral posture that would not jeopardize the economy’s health simply for the sake of monetary normalization. Further, progress with the US-China trade negotiations has continued on a positive path. A material change in China’s systemic theft of American […]