Posts by buffalobuilt
Q4, 2023: Drained
Growth, Inflation & Policy As of October 23, 2023 Economic Activity The Conference Board’s Leading Economic Index (LEI) has been negative for 18 consecutive months and continues to signal a looming recession and subsequent slowdown in economic activity. However, estimates for the severity of the recession eased over the quarter, with the Conference Board forecasting a…
Read MoreQ3, 2023
Summary As of October 13, 2023 The S&P 500 ended September down 3.3%, reinforcing September’s reputation as the worst month of the year for stocks. The Bloomberg U.S. Aggregate Bond Index, which ended the quarter down 3.2%, is down 15% over the past three years in the largest three-year decline in history. Strategic Petroleum Reserve…
Read MoreQ3, 2023: The Running of the Bulls (and Bears)
Growth, Inflation & Policy As of July 28, 2023 Leading Economic Indicators The Conference Board’s Leading Economic Indicators (LEI) is used to forecast future economic activity. Since 1988, the U.S. LEI has dropped below zero over a six-month period on ten occasions. On five of those occasions, the LEI has dropped below -4%, signaling a recession…
Read MoreQ2, 2023
Summary As of July 19, 2023 The first half of 2023 has been anything but ordinary—from a banking crisis in March and a near-miss with a U.S. debt default to the flurry of excitement in Artificial Intelligence and anything related to it. On the surface, U.S. stocks continued to push higher during the quarter. The…
Read MoreQ2, 2023: Tick Tok
Growth, Inflation & Policy As of April 23, 2023 GDP & Inflation Over the quarter, inflation continued to tick lower. Despite the recent banking system instability and the collapse of two large banks in the U.S. in mid-March, the Federal Reserve has continued to hike rates. The most recent rate hike highlights the predicament that the…
Read MoreQ1, 2023
SUMMARY As of April 17, 2023 Both U.S. and international equity markets rallied in the last few days of March to end the month (and the quarter) with positive returns. As long-term interest rates stabilized, U.S. bonds recovered most of February’s losses, ending the quarter at January-month-end levels. Despite a barrage of economic and policy…
Read MoreQ1, 2023: Money Like Water
Growth, Inflation & Policy As of January 3, 2023 INFLATION AND GDP Despite inflation starting to slowly tick lower over the last quarter, the probability of the U.S. heading into a recession in the next 12 months has become almost certain. Bloomberg’s recession probability model has correctly predicted a recession within 12-months every time the series…
Read MoreQ4, 2022
SUMMARY As of January 18, 2023 As inflation showed signs of slowing in the fourth quarter, both stocks and bonds recovered some of their losses from previous quarters, and most assets ended the quarter with positive returns. Despite a relatively good final quarter, 2022 was one of the worst years in history for markets, including…
Read MoreQ4, 2022: Whac-A-Mole
Growth, Inflation & Policy As of November 1, 2022 INFLATION, GDP AND VALUATIONS Historically low inflation has led to strong asset returns and structurally higher equity multiples, but there may be a return to a more volatile macroeconomic regime. Even though inflation (as measured on a year-over-year basis) is expected to roll over, this does not…
Read MoreQ3, 2022
Summary In the first half of the quarter, stocks and bonds rallied on the hopes of a Fed policy pivot, but a sharp reversal in the second half brought new highs for bond yields and new lows in stocks for the year. Investors reacted especially negatively to Federal Reserve Chair Jerome Powell’s August speech at…
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