In life and in economic cycles, there are key milestones. A key one for the economy was hit August 14, 2019: The 10-year U.S. Treasury yield was less than 2-year U.S. Treasury yield. In other words, the yield curve “inverted.” The inversion that day was brief and slight, as the 2-year yield was barely above … Continue reading OPCM’s Thoughts on Yield Curve Inversion
Click here to view a PRINT VERSION of this article. Historically, two sectors with consistently slow earnings growth have been utilities and consumer staples. Over the long-term, these two sectors have posted annualized earnings growth of 3% and 5% respectively, below the S&P 500’s 7% earnings growth. Although earnings growth has been slower, and these … Continue reading Safe Is Not Safe Anymore
Click here to view a PRINT VERSION of this article. We have long known that 2019 held the potential to be somewhat of an IPO extravaganza – a year in which some of the largest private companies, many located in the Bay Area, were set to go public. Some of the most high profile companies … Continue reading IPO: It’s Probably Overpriced?
Click here to view a PRINT VERSION of this article. Picture this: It’s a bright summer day and you decide to take a visit to your local botanical gardens to enjoy the sunny weather. While you are strolling down the path, you spot a patch of lavender flowers and lean down to smell the sweet … Continue reading Psychology and Money: A Primer on Behavioral Finance
Click here to download a PRINT VERSION of this article. At the end of March, the benchmark ten-year U.S. Treasury was yielding 2.41%. The second quarter saw yields on the ten-year Treasury fall by a remarkable 40 basis points (0.40%) to end the quarter at 2.01%. This is a historic drop in interest rates. Many … Continue reading Credit Markets: A Historic Quarter
Click here to download a PRINT VERSION of this article. Since 2006, the only inversions investors studied were inversions involving multi-national companies relocating their headquarters and legal residence to countries with lower tax rates. In January and then again in March, the word inversion meant something else for the first time in 13 years. In … Continue reading Do the Recent Yield Curve Inversions Guarantee a Recession?
Click here to download a PRINT VERSION of this article. In the ten years since the financial crisis, housing markets have recovered, stock markets have eclipsed their prior highs, and the U.S. economy is on the cusp of its longest expansionary period to date. Despite these remarkable gains, the emotional impact of the financial crisis … Continue reading Housing, Homebuilders, and Corrections…
Click here to download a PRINT VERSION of this article. After a volatile end to 2018, interest rates continued their move lower in the first quarter driven by a dramatic shift in U.S. Federal Reserve policy and overarching concerns around the health of the global economy. The benchmark ten-year U.S. Treasury, which hit a recent … Continue reading An About Face from the U.S. Federal Reserve
Back in 1946, a nuclear physicist working at the Los Alamos National Laboratory, Stanislaw Ulam, was convalescing from an illness. Unable to binge Netflix (as I do when recovering under bed rest) he instead amused himself by playing solitaire. Ever the mathematician, Ulam began wondering about the statistical probability of a successful solitaire game. As … Continue reading How I Stopped Worrying About Uncertainty and Learned To Trust the Numbers
The old saying “stock prices follow earnings” was not in effect during 2018. The S&P 500 delivered outstanding earnings growth of 22% during the year. However, this impressive earnings growth coincided with the worst performance for the S&P 500 in over 10 years, along with one of the worst single quarters since 1940. Practically overnight, … Continue reading What Does the Recent US Stock Market Action Mean for 2019?
