Week of August 21, 2023 Prior to the inflation surge that occurred in the United States in the mid-1970s, US 10-year Treasury Note yields averaged between 4 1/2% and 6% in the mid-1960’s. Today, the 10-year Treasury Note yields 4.25%, suggesting yields have nearly normalized. This assumes inflationary pressures continue to moderate. If inflation remains … Continued

Week of August 14, 2023 A recession can be a self-fulfilling prophecy. As consumer sentiment declines, so does consumer spending. If the economic outlook is grim, consumers feel they have to spend less. Fewer transactions and a falling velocity of money lead to recessionary concerns. Thus, a negative feedback loop is born. The Consumer Sentiment … Continued

Wikipedia defines alarmism as excessive or exaggerated alarm of a real or imagined threat. Alarmism connotes attempts to excite fears or give warning of great danger in a manner that is amplified, overemphasized or unwarranted.  This is not new and has a number of possible causes, such as seeking recognition, funding and/or votes.  Of course, … Continued

Week of August 7, 2023 Singing with intensity, fury, and tenacity. Taylor Swift is predicted to generate as much as $1 billion of GDP in the United States this year. Her earnings will be off the charts. Is there moral outrage? No. Should there be? No. This is the American dream, personified. Our Signals remain … Continued

As cars and trucks become generally more available, following the problems associated with Covid and the supply chain, ownership costs are accelerating.  Four of the five primary costs associated with owning and operating personal vehicles, purchase price, repairs, insurance, and financing, are all rising, in some instances, by a lot.  Only fuel costs have been moderating. … Continued

Week of July 31, 2023 Gold spiked up last week to within 5% of its all time high reached in April. The one-month US Treasury Bill yield also spiked up to a 20 year high at 5.4%. Typically, rising rates on short term treasuries portends a drop in inflationary expectations which would lead to a … Continued

The advent, and increasing use, of social media, has led to greater access to information, while, at the same time, has increased the difficulty of differentiating between facts, beliefs and agendas. Successful investing requires an understanding of what is actually factual and what is not.  This is not easy in part because many, so-called facts, … Continued

Week of July 24, 2023 The Standard & Poor’s 500 stock index peaked at roughly $4,779 in October of 2021.  This past week it closed at $4,536, about 5% off of its prior high and roughly 25% above the lows reached in the summer of 2022.  As mentioned in recent Sigma Signals, the failure of … Continued

Week of July 17, 2023 The Standard & Poor’s 500 stock index (SP500) continued to advance last week and, notably, the number of companies in the SP500 participating in the gains has broadened. This is not unusual in an unfolding bull market. As we noted recently, the gains in the SP500 initially were largely concentrated … Continued

Barn raising is a collective action of a community, in which a barn is built or rebuilt by members of the community.  In many respects this could be considered a precursor of property/casualty insurance, wherein the insureds pay a modest annual fee with the expectation that the combined contributions, cash or in kind, of the member … Continued

Week of July 10, 2023 Inflationary concerns rose to the forefront last week as ADP reported surprisingly strong employment growth trends. The implication is that wage pressures will remain firm. Commodity prices, on the other hand, are well off their peaks. The Fed appears to be poised to act to further to raise rates if … Continued

Market timing is the act of moving investment money in or out of a financial market, based on expectations for a change in valuations.  To the extent that investors can predict when the market will go up or down, they can, in theory, make trades that capitalize on these movements. Timing the market is often … Continued