Notes on the Week Ahead

Summer Sequels

The formula in Hollywood today lacks imagination. It's all about remakes and sequels. Financial markets, too, are seeing a series of sequels and a few are opening this week.

The Investment Implications of Excessive Stimulus

In the financial landscape of 2019, the Federal Government and Federal Reserve are playing the parts of over-indulgent grandparents, the markets are cast as the over-stimulated grandkids and investors are left with the role of responsible adults, having to make rational choices and knowing that they will eventually have to deal with the consequences of too much stimulus.

Chairman Powell’s Message

On Wednesday and Thursday of this week, Fed Chairman, Jay Powell, will deliver his semi-annual testimony to Congress on the outlook for the economy and monetary policy. As he prepares, while he will focus on the clarity of his message, he may well be distracted by the potential reaction of political and market audiences.

Can the Fed stop at just two rate cuts?

My wife, Sari, is an excellent cook and sometimes, when I return from a long day, I'm met at the front door by the delicious scent of freshly-baked chocolate-chip M&M cookies. The problem is, with a pair of cookies eaten but a big pile of them still smiling up at me, can I stop at just two? The Federal Reserve faces a similar dilemma when it comes to rate cuts.

Schrodinger’s Market

I should state, at the outset, that I do not profess to have any deep understanding of quantum mechanics. However, the U.S. bond market and the U.S. stock market seem to coexist in alternative realities today.

The Fed Shows its Hand

On Wednesday, the Federal Open Market Committee (FOMC) of the Federal Reserve will hold its fourth meeting of the year. The Fed is not ready to change interest rates yet.

Nice Levels – Shame about the Pace

Following Friday's May jobs report, and in reaction to slower growth, lower inflation and trouble in the global economy, the Fed is clearly taking a more dovish stance, making at least two rate cuts likely by the end of 2019.

Investing for a Middle-Case Scenario

Commercial interests dictate that the public must always be shocked or scared out of their complacency and so the "worst case scenario" will always get top billing.

The Slowdown is Coming -Take Two

Despite a better than expected outcome from earnings season, the economy once again appears set for a slowdown with second quarter economic growth potentially coming in at less than 1% annualized. Numbers due out in the week ahead should help clarify whether the slowdown is for real this time.

Adjusting to Demographic Reality

I ran in a local 5K race over the weekend. As the assorted participants milled around at the start, I noticed just how many of them looked on the young side. But this happens more often these days –every year there are more runners younger than me and fewer that are older. And so I huffed and puffed my way around the course, breathing in the dust kicked up by the heels of some young teenager in front of me.