Markets

All Blog Posts from Markets

  • Investing & Recessions

    Our Outlook

    The problem with recessions is that earnings decline, and P/E multiples decline both at the same time. When these two metrics decline at about the same time, a significant market decline (drawdown) typically occurs. In the post WWII era, the worst drawdown occurred between December 2007 and June 2009 when the S&P 500 declined -57%. […]

  • Recession Signal?

    Our Outlook

    Over the past several decades, one of the most reliable economic indicators has been the shape of the US Treasury yield curve.  The yield curve is simply a graph of current yields on treasury bonds from the three-month T-Bill to the 30-year treasury bond. The normal shape of the yield curve from left to right […]

  • Market Quick Stats – March 2022

    For the first time in 2022, the S&P 500 finished the month up from the previous month with a total return of 3.6% in March. The year-to-date total return is -4.7% for the benchmark stock index. While rising Fed funds rates are historically a negative for stock, the result has been worse for bonds so […]

  • P&G resilience in times of turmoil

    Our Outlook

    There are certain things in life that are generally known by all. For instance, the sky is blue, bananas are yellow, grass is green, and P&G is a defensive investment in times of uncertainty. What does that mean? When economic uncertainty rises, investors generally seek safe (or safer) havens. A safe haven is an investment […]

  • Investing in Bear Markets

    Our Outlook

    At the extremes, both bull markets and bear markets cause investors to replace logic with emotion. Bull markets can create investor manias and a fear of missing out, or FOMO in today’s pop lingo. Bear markets trigger fear and cause investors to place an unreasonably high probability on the worst possible outcome. Both phenomena produce […]

  • War and Markets

    Our Outlook

    Just as COVID related mandates and restrictions started to abate in the US and around the world, Russia invaded Ukraine. First, our prayers go out to all those impacted by war. Innocent people killed, maimed, or whose lives are destroyed in other ways as they find themselves in the wrong place at the wrong time. […]

  • Market Quick Stats – January 2022

    Our Outlook

    The S&P 500 finished down (-5.2%) in January, the worst start since a (-9.8%) loss in January 2009. Notable S&P 500 decliners in January included, Moderna (-33.3%), and Netflix (-29.1%). The 30 stock Dow Jones Industrial Average saw its biggest declines in Cisco Systems (-12.1%), Home Depot (-11.5%), and Nike (-11.1%). Taking a sneak peek […]

  • PG Q2 2022 Earnings Commentary

    Our Outlook

    On January 19, 2021 Procter & Gamble reported 2nd quarter 2022 earnings results (see press release here). For the quarter, the company reported 6% top line revenue growth to $20.9 Billion versus last year. Diluted earnings per share (EPS) in Q2 was $1.66 vs. a $1.65 consensus estimate and up from $1.64 a year ago […]

  • PG Stock Valuation

    Our Outlook

    Procter & Gamble shareholders enjoyed a 20.0% total return in calendar year 2021 and the third 20% plus return since 2012. Shareholders suffered only one calendar year stock price decline over the past ten years, and that was in 2015. Significant foreign exchange conversion woes and a volume growth malaise were the culprits then and […]

  • How to Save More Money in 2022

    Our Outlook

    Here’s a simple investing and planning tip for the new year. If your employer offers a 401(k)-retirement savings plan, join the plan. If you are already in the plan but are not yet maximizing your contributions, increase your salary deferral at least 1%. If you can afford to forego more money today to save for […]

  • Inflation Update

    Our Outlook

    Inflation figures through the most recent reporting period ended November 2021, saw the Consumer Price Index (CPI) for All-Items rise 6.8% over the past twelve months. According to the BLS, this is the largest 12-month increase since 1982. Inflation readings for Energy rose 33.1% and Food rose 6.1%. Both are the largest 12-month increases in […]

  • Market Quick Stats – Year End 2021

    Our Outlook

    The S&P 500 finished up 4.4% in December to close out a strong 2021. At year-end, the 505 firms in the index were cumulatively valued over $42 trillion. The top 10 constituents comprised 29.3% of the total weight of all companies in the index. For perspective, the top weighted company, Apple, ended the year valued […]

  • Consumer Goods – Post Pandemic

    Our Outlook

    It’s no secret that the COVID pandemic and related government mandated shutdowns created winners and losers. Businesses that were deemed essential were generally winners and those deemed non-essential were generally losers as they were shut down to varying degrees. Clearly, restaurants, restaurant suppliers, hotels, airlines, and other travel related companies were impacted the most negatively. […]

  • Market Quick Stats – November 2021

    Our Outlook

    November’s S&P 500 total return of -0.69%, was a tad negative. However, the 30 stock Dow Jones Industrial Index fell -3.5% driven by declines in 25 of the 30 companies in the index. Looking toward December, fears of a December 15th US debt ceiling limit will likely resurface. And, markets will be focused on Chairman […]

  • Tax Efficient Investing Tips

    Our Outlook

    In December, we all get busier preparing for the holidays, buying gifts, attending holiday parties, traveling to see family, and spending more time with children and grandchildren. It can be easy to forget about planning and investments for a while. However, amidst the holiday hustle & bustle you don’t want to overlook your annual opportunity […]

  • Supply/Demand Imbalances

    Our Outlook

    Global supply chain issues are both a supply and a demand problem. On the supply side, labor has become scarce. Pandemic related mandatory shutdowns, COVID quarantines, and older worker retirement decisions have combined to create a serious labor shortage. In the October National Association of Business Economics (NABE) survey, 47% of respondents reported a shortage […]

  • Market Quick Stats – October 2021

    Our Outlook

    Fears sparked by reports of a possible default at China’s Evergrande, and the impending US debt ceiling limit drove the S&P 500 to a -4.6% loss in September. How quickly fears faded after Evergrande averted default (for now) and congress extended the debt ceiling limit to December 3rd. These thaws and strong Q3 corporate earnings […]

  • P&G Q1 fiscal year 2022 Earnings Results

    Our Outlook

    On October 19th, 2021 Procter & Gamble reported 1st quarter results for fiscal year 2022 (see press release here). The company reported net sales of $20.3 billion, representing 5% top line revenue growth versus Q1 2021. Looking at sequential quarters, top line growth slowed from the 7% pace posted in Q4 2021. Diluted GAAP earnings […]

  • Supply Chain Disarray

    Our Outlook

    Global Shortages Semiconductor chip shortages impacting the auto industry are well documented, but how bad are they?  Apparently, bad enough that respected German firm Bosch believes global semiconductor supply chains for the auto industry are no longer “fit” for their original purpose. Moore’s Law Over the past few decades, Moore’s Law has played out, and […]

  • Market Quick Stats – September 2021

    Our Outlook

    After 53 new closing highs so far this year, it seemed like this market could only go up…until September. The S&P 500 started the month with its 54th new high and then volatility crept in. By the end of a rollercoaster like month, September tallied a -4.76% decline; the first decline since January 2021. The […]

  • Focus on Investments

    Our Outlook

    What is Driving this Market? Can anything stop this market?  Slowing growth and a recession certainly could, but are they anywhere on the horizon? A host of COVID specific federal unemployment benefits are set to expire on September 6th 2021.  Among the expiring emergency benefits is an extra $300 per week of unemployment income. Federal […]

  • Market Quick Stats – August 2021

    Our Outlook

    Higher and higher Through August 30th there have been 53 new closing highs for the S&P 500.  This market is closing in on the record 77 new all-time highs which occurred in 1995 (h/t Howard Silverblatt of S&P Dow Jones Indices). The chart below highlights recent prices, total returns (total return always includes dividends), dividend […]

  • P&G CEO Transition, What to Expect?

    Our Outlook

    CEO Transition As David Taylor’s tenure as CEO comes to completion on November 1st, Jon Moeller will take over responsibilities as Chief Executive Officer and President at Procter & Gamble. David Taylor will move to Executive Chairman of the Board (here). The company has seen a fair amount of turnover in the CEO position since […]

  • Infrastructure & Budget Legislation

    US Senate Spending Bills On August 10, 2021, the US Senate passed a bi-partisan infrastructure funding bill worth $1.1 trillion (see more here).  The Senate bill allocates about 10% toward roads & bridges and smaller amounts for rails, ports, airports, and EV charging stations. According to Statista, in 2018, the US spent 0.52% of its […]

  • Bond Rates Are Declining, Why?

    Our Outlook

    What are Lower Yields Telling Us? On March 19, 2021, the benchmark ten-year US Treasury bond closed yielding 1.74%. By the first trading day in August the bond’s yield had dropped to 1.20%. With all of headlines and talk about rising inflation, why have bond yields dropped so significantly since March? The bond market and […]

  • Market Quick Stats – July 2021

    Our Outlook

    Back to Normal?  Not So Fast… Just as most restaurants and business in cities with the most stringent COVID precautions/restrictions started to re-open, some of those locations are introducing new COVID precaution/restriction measures. For example New York City mayor Bill de Blasio recently announced mandatory vaccinations for all newly hired NYC government employees and for […]

  • P&G 2021 Q4 & Year End Earnings

    Our Outlook

    On July 30th, 2021 Procter & Gamble reported 4th quarter & fiscal year-end 2021 earnings results (see press release here). For the quarter, the company reported 7% top line revenue growth to $18.9 Billion versus last year. Diluted earnings per share (EPS) in Q4 was $1.13 vs. a $1.08 consensus estimate. Overall ‘organic’ revenue increased […]

  • How to Look at Market Valuations

    Our Outlook

    What is a “Fair” Price for Stock Before you buy or invest in stock, you’ll want to answer the question: Are stocks valued appropriately for the current level of economic activity or expected level of activity over the next twelve months? You can think about stock valuations a little like you might think about a […]

  • Is 2021 Back to Normal Yet?

    Our Outlook

    (Re) Open For Business Here we are halfway through 2021. Restaurants and business throughout the nation are re-opening. How is this return to normal playing out in the economy and stock and bond markets? As of June 30th, according to S&P Dow Jones Indices, the S&P 500 index of US stocks is up 15.2% year-to-date (YTD). […]

  • Focus on Personal Finances

    Our Outlook

    High Debt Levels Higher levels of corporate, government, and personal debt may be creating a more fragile economic environment. In past decades, low debt was considered prudent and desirable. Today, fiscal policies pursued by the US Federal government have pushed our national debt over $28 trillion, and zero interest rate (ZIRP) monetary policies of the US […]

  • What About Bitcoin?

    Our Outlook

    Crypto Curiosity Record breaking prices propelled Bitcoin into the mainstream news this spring. We have fielded more and more questions about cryptocurrencies in general and Bitcoin specifically. It appears likely that blockchain technology and maybe some cryptocurrencies may survive. Ultimately, how they are regulated and how widely they will be used as currency or for […]

  • Taxes & Energy Policy

    Our Outlook

    Individual Tax Rates The current US government administration is considering raising taxes for individuals & families, corporations and even estates.  A recent CNBC article discussed how the Biden administration is looking to raise the top marginal tax bracket to 39.6% from 37.0%.  Coupled with this is the likelihood of lower income thresholds for each tax […]

  • Inflation and the Economy – 1st Half 2021

    Our Outlook

    Inflation – Persistent or Transitory? One of the biggest financial news themes this year has been inflation. There is no question that price inflation is on the rise.  Is it here to stay, or will recent increases be short-lived and transitory? Each month, a US government agency called the Bureau of Labor Statistics (BLS) measures […]

  • Thoughts on Your P&G October LTIP Award & Choices

    What’s New Procter & Gamble employees who are normally eligible for the LTIP award in February, will now be receiving the award in the preceding October. Eligible employees have the opportunity to choose either RSU’s, Stock Options, or a combination of both in 25% increments. Consult your P&G compensation department and online resources for your […]