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May Stock and Fund Picks

May 6: The mild and steady start for this year should not lead to complacence. Further stimulus and strong corporate earnings portend that a steady-as-she-goes stock market could continue. Recent worries have arisen due to the fear that central banks could start to ease off on monetary support, as the Bank of Canada has begun to do and as Janet Yellen has warned. While the Fed here in the U.S. has remained very dovish, that could change if economic conditions…

February Stock and Fund Picks

Their are two recent positive developments. First, it looks like the stimulus package just needs to work its way through the Senate so it is likely the government will pay out stimulus checks sometime in March. Second, the single-shot nature and easier storage requirements of the newly approved J & J covide-19 vaccine should help distribution in less developed countries that have little or no infrastructure. Aside from these two positives, the market is showing signs of slowing momentum due…

January Stock and Fund Picks

The state of the economy is generally positive. Pent up demand will continue to be unleashed as vaccinations increase but don't expect a new Covid-19 stimulus bill until mid march, if then. Also, expect a re-allocation of resources away from oil and gas and towards renewables. As far as new policies that effect the economy, it's anybody's guess as to which ones will pass; the only certainty is an increase in regulations in the Federal Register. Some funds that you…

December 2020 Stock and Fund Picks

The market appears like it will be strong until mid January 2021. No one wants to sell gains at this time so it will remain somewhat overbought. That said, the Biden administration will be a lot less volatile and thereby contribute to increased market stability -- especially regarding tariffs randomly and thoughtlessly applied. Moreover, gridlock appears likely if the Senate remains controlled by Republicans. This will contain market disrupting tax and wage policies. Thus, the expectation of long-run stock market…

March 2018 Stock State

March 1st Update: Headwinds from trade wars are on the way.  This, as indicated in the February Stock State, is our biggest stock market worry. Why are tariffs on steal and aluminum such a problem?  Trade theory, not stock market talking heads, is the answer.  Tariffs on specific commodities imposed by a large nation such as the US will effect the global price by reducing demand from a large (the US) importer.  This hurts all steal and aluminum manufacturers in…

February 2018 Stock State

February 12 update: The correction or pull-back of about 10% is running its course.  Much of the attention focused on headwinds created by higher interest rates (as the 10 year government bond heads for 2.9% is an overstated concern.  Imagine you are flying a small airplane into a headwind.  The FED has helped you (the stock market) fly faster by buying government bonds (and other dept) to keep interest rates lower.  This builds up the FEDs balance sheet.  Unwinding the…

January 2018 Stock State

The economy continues to do well, but not too well.  That is, it is chugging along rather steadily but not so fast as to suggest closing in on the next recession any time soon.  The stock market is not always in lock step with the economy because it rests on not only fundamentals, but such things as investor expectations and sentiment as well.  The recent supply side tax cut that reduced corporates rates appears to underly market exuberance.  If exuberance…

December 2017 Stock State

December 1, 2017 update: Do not follow the herd, especially if it appears panicky.  You'll just run off the cliff with everybody else.  If spent all your cash because you thought this correction would be like previous ones that were short in duration, just act like Warren Buffett and be patient.  All good things come to those who wait.  Amazon and Facebook both sold off earlier this year.  Jumping out of them when they did just cost you money.  They…

November 2017 Stock State

November 15 update: We keep doing what works until it doesn't.  Be careful about buying on small dips while assuming that tomorrow the market will upon on the upside.  This may quit working with tomorrow becoming another down day.  This is characteristic of a stock market that rolls-over into a larger correction . . . which we badly need.  Given a larger correction of say 3 - 5% a global bottom, as opposed to the daily local minimums, you may…

October 2017 Stock State

September 6 update: Investors can probably ignore this. Trades pay attention. High rates of growth, the higher the worse, combined with complacent or Pollyanna investors along with stock analysts that give in to assuming an unrelenting upward trending stocks is a circumstance that inevitably leads to a correction. Listen to Cramer (Mad Money). He has experience beyond what most of us have. Hold more cash, be ready to hedge (buy TZA or TVIX), and don't panic sell. Given the solid…