Companies are starting to understand the implications of the Fed’s moves: If they want a healthy share price, focus on profits today—not moonshot projects.
We’re closer to the bottom, so it isn’t surprising that investors are again trying to work out when to buy, rather than when to sell.
If and when something else goes badly wrong, central banks are likely to intervene. Can they do that while continuing to battle inflation?
The basic pattern of markets for the past two decades has been reversed. Investors grew used to it, but it no longer works.
Investors are behaving like sugar-starved children offered a lollipop, grasping for it with delight only to scream when it is taken away again.
The crisis in the U.K. offers a preview of dangers other economies could face in an era of high inflation and rising interest rates.
If markets lose confidence, it will make it even harder for what was already a high-risk fiscal policy to succeed.
Markets are doing what they always do, hoping against hope that there’s no recession, or at least a very mild one, right up to the last minute.
Soaring profits at oil companies and miners are making earnings look better than the reality of the rest of the stock market, and distorting Wall Street’s favorite valuation tool, the ratio of price to forecast earnings.
The danger is that stocks and bonds have further to fall because investors are still clinging to the vestiges of the belief that inflation will soon be conquered.
Periods of strengthening or weakening of the dollar haven’t obviously coincided with the economic cycles. Something else has been going on.
The U.K. might not sound like a natural place to invest, but everything has a price.
A U.K. fund manager says the big worry isn’t inflation, it’s the Fed reversing quantitative easing.
What happens in the economy eventually matters. Slower growth, more inflation and higher interest rates isn’t a recipe for long-term success.
The last two months’ rally in bonds and stocks—even putting the Nasdaq back into bull market territory—rests on a lot of people being wrong.
Unfortunately, there is no sign the Federal Reserve will change its mind and agree with investors that rates should come down again next year.
It sounds mad to ignore reality and listen only to what you want to hear. But markets work like this for a good reason.
Stocks are trying for a desperate recovery, and for that to work out, everything has to go just right. The basic requirement is that a deep recession is avoided, but the important follow-on is that the Federal Reserve has to pivot away from rate increases.
The ECB’s growing political role makes investing in Europe harder, requiring an even bigger focus on the internal politics of member states.
Valuations are only helpful if they suggest stocks are so inexpensive that bad news is all priced in. Needless to say, that’s not the case.