While the US equity market is at record highs, we have become more positive on the market and the economy in recent letters. Fears that a Smoot Hawley trade war scenario have not played out and the administration’s successful negotiations
The economy is heating up. The second quarter GDP was revised upward to 4.2% from 4.1%. Walmart, the nation’s largest retailer, reported second-quarter sales of $128 billion and same-store sales growth of 4.5%--the highest growth rate in ten years, demonstrating
Both S&P 500 earnings estimates and the US economy are accelerating. This combination of improving fundamentals revives the prospects for another leg up in the stock market and potentially Jeremy Grantham’s 50-60% melt-up scenario. Since last October, we have cautioned on
This year’s increased stock market volatility and sharp declines in the emerging markets are the result of rising interest rates. If interest rates revert to the normal 2007 pre-financial crisis levels, a process not even halfway complete, the potential for
This month’s letter argues that rising rates are fundamentally changing investing and asset allocation. Our basic premise is that interest rates are artificially low and will continue to rise, which, in turn, will hurt the performance of equities and bonds.
The remarkable 34-year bull market in bonds which enriched stock, bond and real estate investors for the last three decades, broke another key milestone in April when the 10-year US Treasury yield rose above the 3%. Breaking this psychological milestone