Articles for tag: Central Banks, Earnings, Economy, Investing, Markets, Stocks

February 2, 2024

Ron Finklestien

Fed Pause Has Tightened Monetary Policy

Fed’s Monetary Policy Tightens Amidst Uncertainty of Rate Cuts Fed’s March Rate Cut Markets were disappointed by Chair Powell saying March is not the Fed’s base case for its first rate cut at its recent Fed meeting. The Fed wants to see more progress on inflation, even though headline PCE inflation – the metric for the Fed’s 2% target – is already down to 2.6% YoY and core PCE is down to 2.9% YoY. Delay in Rate Cuts Markets are now pricing the first rate cut in May. If they’re right, the Fed will have gone 10 months between its last hike

January 24, 2024

Ron Finklestien

The Market’s Mercurial Dance with Elections and Macro Factors

The Undercurrents of Political Uncertainty The 2024 presidential election is well underway, with the recent Iowa caucuses and the New Hampshire primary setting the stage. It’s a common misconception that the impact of elections on markets only becomes apparent close to the actual election date in November. In reality, the influence of elections on the market landscape can manifest much earlier, permeating through various sectors and asset classes. Vying Futures The fortunes of sectors and asset classes are subject to the ebb and flow of election outcomes. Uncertainty tends to cast a shadow over markets, and the prospect of different

January 19, 2024

Ron Finklestien

Anticipating Q4 Earnings: A Roller Coaster of Expectations

As we buckle up for the Q4 earnings season, an undeniable mix of excitement and trepidation is in the air. We’re all eager to predict the twists and turns that these financial reports will take us on in the coming weeks. (We also examined the impact of earnings on prices and volumes in Phil’s recent blog.) Anticipating a Surge in S&P 500 Earnings Reports Currently, only a paltry 10% of S&P 500 firms have reported their Q4 earnings (see chart below). However, the momentum is set to accelerate over the next five weeks, with an additional 80%+ of companies slated

January 10, 2024

Ron Finklestien

The Outlook for Small-Cap Upside: Valuations and Economy

After scrutinizing the performance of different asset classes in 2023, this week is dedicated to appraising the implications for valuations as the year kicks off, and the potential ramifications for stock performance. Large-Cap Sectors: A Balancing Act For large caps, most sectors hover around their average PE valuation over the past decade, signifying relatively fair valuation. There are notable exceptions – Information Technology is rich, reflecting investor optimism about AI, and Energy is cheap due to hurt inflicted by plummeting oil and gas prices. Small- & Mid-Cap State of Affairs When it comes to small-caps and mid-caps, valuations remain inexpensive

January 5, 2024

Ron Finklestien

Riding the Market Rollercoaster in 2024 Riding the Market Rollercoaster in 2024

Happy 2024, everyone! We hope everyone had a great holiday season. We thought we’d start the year with a quick recap of how markets did over the last year (pretty good!), two years (not as good!), and this year (too soon for doom and gloom). 2023 turned out to be a great year for markets A broad range of assets saw positive returns last year, as shown in Deutsche Bank’s chart below (dark blue bars). Up to October 27 (light blue bars), returns were more middling, however, with about half of the assets shown still in the red. Since then,

January 5, 2024

Ron Finklestien

mining

Circular Economy: A Boost to Secondary REE Supply in the Next Three Decades Circular Economy: A Boost to Secondary REE Supply in the Next Three Decades

As our planet grapples with a rapidly evolving climate crisis, the significance of rare earth elements (REEs) in driving the transition towards a more sustainable future cannot be underestimated. A recent study has shed light on the pivotal role of circular economy strategies in increasing the global supply of REEs and reshaping the supply chains in the upcoming three decades. This framework aims to map the REE flows from in-ground to in-use stocks for global just transition. a, The roles of different circular economy strategies in the shift of in-ground minerals to in-use stocks. b, How the transition of REEs