COTW: Inflation Trends
Headline inflation rose 2.3% year-over-year in April—the smallest increase since February 2021, before the inflation surge began. Core inflation increased by 2.8% year-over-year.
COTW: Trade Wars
It has been just over a month since President Trump’s ‘Liberation Day’ where he announced sweeping reciprocal tariffs. While many countries have already engaged with the U.S. in trade negotiations, trade between the U.S. and China has been severely disrupted and the impact of tariff pressures is beginning to emerge in economic data.
April 2025 Cartoon: Wait and See
April 2025 Cartoon: Wait and See
COTW: Going for Gold
Despite gold prices reaching new all-time highs, speculative positioning has moderated, suggesting sentiment is not overly extended and positioning could provide incremental support for further price appreciation. Silver also appears compelling.
COTW: Trump Tariffs
On April 2, 2025, President Trump announced sweeping tariffs: a 10% baseline on nearly all imports starting April 5, with higher rates hitting 60 nations on April 9. Key rates include China (54%), EU (20%), Japan (24%), Vietnam (46%), South Africa (30%), and Taiwan (32%). Some countries—the U.K., Brazil, Australia, Argentina, Turkey, Colombia, and Saudi Arabia—will face only the baseline rate. Mexico and Canada are exempt, though prior tariffs remain.
1Q, 2025 Asset Class Return Quilts
Gold was the top-performing major asset over the first quarter, gaining 19.5%. U.S. large-cap stocks ended the first quarter down 4.5% while U.S. small cap stocks declined by 9.5%. International equities fared better than their U.S. counterparts, with international developed market large cap stocks gaining 6.9% and emerging market stocks gaining 2.3% over the first quarter.
March 2025 Cartoon: Gambit
March 2025 Cartoon: Gambit
COTW: Stablecoins
Stablecoins are a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset, such as a fiat currency (e.g., USD, EUR), commodities (e.g., gold), or even other cryptocurrencies. This stability makes them less volatile compared to traditional cryptocurrencies like Bitcoin and Ethereum.
February 2025 Cartoon: Rain on the Parade
February 2025 Cartoon: Rain on the Parade
COTW: Healthcare Spending
It is estimated that total national health spending in the U.S. (including private and various federal programs) exceeded $5 trillion in 2024. The U.S. spends over $12,000 per person on healthcare, yet its life expectancy is six years shorter than Switzerland, the second-highest spender.
COTW: AI Spending
Despite recent advancements from DeepSeek, which suggests that powerful and cost-effective AI models are achievable without the immense infrastructure traditionally associated with major tech companies, mega-cap tech companies seem to have little interest in scaling down on AI-related spending.
January 2025 Cartoon: AI Wars
January 2025 Cartoon: AI Wars
COTW: DeepSeek
DeepSeek’s new model, R1, demonstrated high performance in various benchmarks, making it competitive with top U.S. AI models such as OpenAI’s ChatGPT, but reportedly did so at a fraction of the cost of incumbent models.
COTW: Consumer Credit
Consumer credit unexpectedly declined in November, falling by $7.5 billion—the largest decline in over a year—after a $17.3 billion gain in October. Outstanding credit card and other revolving debt declined by $13.7 billion, the most since early in the pandemic. Non-revolving credit (including auto loans) increased by $6.2 billion in November.
December 2024 Cartoon: Vibes
December 2024 Cartoon: Vibes
4Q, 2024 Asset Class Return Quilts
Gold was the top-performing major asset over 2024, ending the year up nearly 27%. U.S. large-cap stocks ended the fourth quarter up 2.4% and ended the year up 25.0%. The S&P 500 hit over 50 new all-time highs in 2024. U.S. small caps ended the year up 11.5%.
COTW: 2024 & the 10-Year Treasury Yield
The year began with the 10-year Treasury yield hovering around 4.0%, reflecting a cautious market amid ongoing inflation concerns and the Fed’s aggressive interest rate hikes in 2023.
COTW: November Jobs Report
Nonfarm payrolls increased by 227,000 in November, with upward revisions to October’s and September’s payrolls. The percentage of individuals unemployed for 27 weeks or more reached a new cycle high of 23.2% in November, while the unemployment rate rose slightly from 4.1% to 4.2%.
November 2024 Commentary: Red
Markets posted mostly negative returns in October. U.S. large-cap stocks, as represented by the S&P 500, declined 0.9% while the Russell 2000 small-cap index fell by 1.4%.
November 2024 Cartoon: Red
November 2024 Cartoon: Red
COTW: Black Friday 2024
Black Friday online shopping reached a new record high in 2024. Adobe Inc. reported on Saturday that Americans spent approximately $10.8bn online on Friday, a 10.2% increase from the previous year.
COTW: A Lesson in Investment Risk
With Thanksgiving this week, what better time to revisit the classic analogy provided by Nassim Taleb in his 2007 book, The Black Swan.
COTW: The Fiscal Deficit
Despite the pandemic having ended several years ago, the U.S. economy continues to be driven by crisis-era government spending, which is producing multi-trillion-dollar deficits with no end in sight.
October 2024 Cartoon: The American Dream
October 2024 Cartoon: The American Dream
October 2024 Commentary: The American Dream
Markets posted mostly negative returns in October. U.S. large-cap stocks, as represented by the S&P 500, declined 0.9% while the Russell 2000 small-cap index fell by 1.4%.
COTW: The September CPI Report
The Consumer Price Index (CPI) rose 0.2% in September, bringing the year-over-year increase to 2.4%. This marks a slight decline from the 2.5% annual rate recorded in August, and is the lowest annual rate since February 2021.
September 2024 Cartoon: Rate Cuts and Deficits and Elections, Oh My!
September 2024 Cartoon: Rate Cuts and Deficits and Elections, Oh My!
3Q, 2024 Commentary: Rate Cuts and Deficits and Elections, Oh My!
Markets performed well over the third quarter, and every major asset class is now positive for the year to date. In fact, this was the best first nine months of the year for U.S. large-cap stocks since 1997.
COTW: Inflation and Rate Cut Expectations
With both core and headline inflation above the official 2% target for over three years, financial conditions at their loosest since May 2022, and the labor market not showing signs of significant cooling, it’s debatable whether the Fed’s recent 50 basis point rate cut—historically reserved for times of crisis—was justified.
3Q, 2024 Asset Class Return Quilts
The quarter was strong for most risky assets, particularly in rate-sensitive sectors and asset classes such as small caps, utilities, and REITs, helped by the first U.S. interest rate cut and growing expectations of further cuts later this year.
COTW: Profitable Small Caps
U.S. small-cap stocks have performed well, gaining 11% year-to-date. However, the market remains selective: only profitable small-cap stocks are doing well, while unprofitable companies continue to lag.
COTW: Base Effects
Base effects impact how an inflation print appears. For example, if the 12-months-ago print had unusually high inflation, this year’s inflation rate might seem lower, even if prices are still rising. This is because prices are being compared to already elevated levels from the previous year. In the U.S., core inflation has been above the Fed’s 2% target for over three years.
August 2024 Cartoon: Those Lazy-Hazy-Crazy Days of Summer
August 2024 Cartoon: Those Lazy-Hazy-Crazy Days of Summer
August 2024 Commentary: Those Lazy-Hazy-Crazy Days of Summer
Despite early declines, U.S. large cap stocks recovered to end August up 2.4%, but U.S. small cap stocks finished down 1.5%. U.S. intermediate-term bonds rose 1.4%.
COTW: Gold Performance in September
Gold prices historically experience a phenomenon known as the “September curse,” which refers to a consistent decline in gold prices during this month. This trend has been observed since 2017, with gold prices dropping every September during this period, averaging a decline of 3.2%.
COTW: Rising Rate Cut Expectations
As widely expected, the Federal Open Market Committee (FOMC) kept interest rates unchanged at the July 31 FOMC meeting. However, minutes from the meeting, which were released on Wednesday, revealed a willingness to start cutting rates as concerns about the labor market have begun to outweigh inflation concerns.
COTW: July Jobs Report
According to the Bureau of Labor Statistics, Hurricane Beryl, which formed on July 8, had no significant impact on the national employment and unemployment data for July. The unemployment rate rose to 4.3% in July, with only 114,000 new jobs added over the month, notably lower than anticipated.
July 2024 Cartoon: Passing the Baton
July 2024 Cartoon: Passing the Baton
July 2024 Commentary: Passing the Baton
U.S. small cap stocks ended July up 10%, while U.S. large cap stocks ended the month up 1%, the widest relative performance spread since February 2000.
COTW: The Yen Carry Trade
The carry trade strategy involves borrowing Japanese yen at a 0% interest rate and investing in higher-yielding assets abroad to earn a profit.
COTW: Market Breadth
A handful of mega-cap technology companies are largely responsible for the S&P 500’s strong year-to-date returns of 16.3%. However, market participation has been historically narrow, with only 22% of S&P 500 members outperforming the broader index, a level well below the historical average of 52%.
June 2024 Cartoon: Status Quo
June 2024 Cartoon: Status Quo
2Q, 2024 Commentary: Status Quo
U.S. markets delivered mixed results in the second quarter. Large cap stocks climbed 4.3% while small cap stocks declined by 3.3%. Bonds ended the quarter up 0.1%.
COTW: ISM PMIs
The ISM Manufacturing PMI registered 48.5 in June, down from 48.7 in May, indicating contraction in the manufacturing sector for the third consecutive month.
2Q, 2024 Asset Class Return Quilts
Q2 was a good quarter for most risky assets, particularly U.S. large-cap stocks, with those benefitting from the artificial intelligence (A.I.) theme, including mega cap tech and utilities, driving markets.
COTW: S&P 500 Returns & Incumbent Political Parties
Negative stock market returns have impacted election outcomes, but positive returns have had less of an impact.—i.e., negative returns ‘guarantee’ loss, while positive returns don’t necessarily guarantee wins.
COTW: FOMC Rate Decisions in Election Years
Between 1994 and 2023, the Fed has hiked interest rates during the months of May to November in an election year only 16% of the time. In contrast, the Fed has only cut rates 3% of the time during the same period of an election year since 1994.
May 2024 Commentary: Power Play
May was nearly ideal for most asset classes, and U.S. equities performed best as large cap and small cap stocks both rose 5%. Intermediate-term bonds ended the month up 1.7%—their best monthly return this year.
COTW: Stock Splits
On June 7th, Nvidia executed a 10-for-1 stock split, where each shareholder received nine additional shares for every share they owned at the market’s close on the day of the split.
May 2024 Cartoon: Power Play
May 2024 Cartoon: Power Play
COTW: Q1 Earnings Expectations
Earnings expectations have ticked up with 96% of S&P 500 companies having reported Q1 results.
COTW: BNPL
Buy Now, Pay Later (BNPL) is a financial service that allows consumers to purchase products immediately and pay for them over time through a series of installments.
April 2024 Commentary: Policy Tug of War
In April, rising bond yields and increased geopolitical tensions pressured the stock
market, and U.S. large cap stocks declined 4.1% while small cap stocks ended the
month down 7.0%.
COTW: Treasury Issuance
Treasury last week announced second and third quarter borrowing estimates. 2024 issuance on track to surpass 2023 as the highest after 2020…
April 2024 Cartoon: Policy Tug of War
April 2024 Cartoon: Policy Tug of War
COTW: Gold Miners
Gold miners have lagged behind physical gold due to rising operational costs and country-specific challenges….
COTW: AI & Nuclear Power
Tech firms and Silicon Valley billionaires have increasingly focused on nuclear energy as a sustainable solution to meet the growing energy demands of energy-intensive AI.
1Q, 2024 Cartoon: A New Bull’s Eye
1Q, 2024 Cartoon: A New Bull’s Eye
1Q, 2024 Commentary: The Fed’s Aim: A New Bull’s Eye
Equity markets concluded the first three months of 2024 on a strong note as the S&P 500 achieved new all-time highs. The small cap Russell 2000 ended March at its highest level since January 2022.
COTW: Record Office Vacancy Rates
The dramatic rise in office vacancy rates across the U.S. in recent years can largely be attributed to the shift in workplace dynamics post-COVID-19, with a significant number of employees now working in a hybrid model from home.
1Q, 2024 Asset Class Return Quilts
Q1 saw robust returns across most risky assets, particularly in stocks, supported by stronger-than-expected economic growth, and a resilient consumer.
COTW: Cocoa Prices
Cocoa prices have risen more than 140% this year. The recent uptick in cocoa prices is the result of disruptions affecting both supply and demand.
COTW: End of an Era
On Tuesday, the Bank of Japan announced a significant (and highly anticipated) policy move last week by ending its negative interest rate policy and making its first rate hike in 17 years.
February 2024 Cartoon: Navigating the Bull
February 2024 Cartoon: Navigating the Bull
February 2024 Commentary: Navigating the Bull
Equity market returns were robust in February. U.S. small cap stocks led the rally, up 5.7%, and the S&P 500 set new highs, marking a rare occurrence of gains in 16 of the past 18 weeks, something not achieved in more than 50 years.
COTW: Gold Performance
Gold recently achieved a new all-time high, surpassing $2,100/Oz on March 5…
COTW: Consumer Sentiment
The February University of Michigan consumer sentiment survey showed a mixed trend, with a preliminary reading of 79.6 unexpectedly declining to 76.9 in the closing days of the month.
COTW: AWS Revenue
Over the past 12 months, AWS revenue alone exceeded the revenue of Nvidia ($45 billion), Visa ($33 billion), Disney ($89 billion)…
January 2024 Commentary: The Size Divide
The U.S. economy grew by an annualized 3.3% in Q4 2023, beating expectations. Consumer confidence rose significantly due to lower inflation expectations and a robust labor market, despite some signs of cooling.
January 2024 Cartoon: The Size Divide
January 2024 Cartoon: The Size Divide
COTW: Rate Cuts
As of February 5, the implied Fed funds rate for December 2024 was 4.14%.
COTW: The Trillion Dollar Market Cap Club
U.S. companies that currently have a market capitalization of $1 trillion or more include Apple, Microsoft, Alphabet (Google), Amazon, Meta (formerly Facebook), and Nvidia.
COTW: Bitcoin Spot ETF
While bitcoin initially declined following the SEC approval, what the longer-term impact on the historically volatile cryptocurrency’s price will be remains to be seen.
4Q, 2023 Commentary: Balancing Act
Despite early 2023’s recession fears and banking crisis, the market rallied with U.S. large cap stocks up 26.3% and U.S. intermediate-term bonds up 5.5%, buoyed by moderating inflation.
4Q, 2023 Asset Class Return Quilts
In equities, U.S. Large Cap stocks were the top performers over 2023, with gains driven by Technology, Communication Services, and Consumer Discretionary sectors.
December 2023 Cartoon: Balancing Act
December 2023 Cartoon: Balancing Act
COTW: Santa Claus Rally
The Santa Claus Rally refers to a phenomenon in the U.S. stock markets where there is often an uptick in stock prices in the last five trading days of December and the first two trading days in January. On average, the Santa Claus rally has historically produced an excess return of +1.5%. Returns during the Santa Claus Rally period have been positive 79% of the time.
COTW: A Brief History of Apple
December 12 marked 43 years since Apple’s IPO.
November 2023 Commentary: Retail Therapy
Underneath strong consumer spending levels lies growing credit reliance, hinting at an unsustainable trend that could foretell increased economic and market volatility.
November 2023 Cartoon: Retail Therapy
November 2023 Cartoon: Retail Therapy
COTW: The Life of a Thanksgiving Turkey (Revisited)
With Thanksgiving tomorrow, what better time to revisit the classic analogy provided by Nassim Taleb in his 2007 book, The Black Swan.
October 2023 Commentary: ‘G’ is for Government
The U.S. government added $532 billion in debt outstanding in October, while facing future budget strains due to a record (and growing) $659 billion in interest outlays, signaling additional challenges for government spending productivity and overall fiscal health.
COTW: Higher Inflation Expectations
Inflation expectations (both for the shorter-term and the medium-term) unexpectedly jumped up this month…
October 2023 Cartoon: ‘G’ is for Government
October 2023 Cartoon: ‘G’ is for Government
COTW: October
October seems to be a historically important month for the S&P 500, with some key moments throughout history all occurring around mid-October
3Q, 2023 Asset Class Return Quilts
The S&P 500 ended September down 3.3%, the worst monthly return year-to-date.
3Q 2023 Commentary: Drained
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.
COTW: The Rule of 72
The “Rule of 72” is a simple formula used in finance to estimate how long it will take to double an investment’s value by dividing 72 by the annual interest rate or annual growth rate. Over the past four decades, declining cash yields, proxied by the 3-month Treasury yield, have extended the doubling time for cash investments
September 2023 Cartoon: Drained
september-2023-cartoon-drained
COTW: Yen-tervention
The Japanese yen has been dropping sharply over the past few days, after the Bank of Japan announced that it has kept interest rates in negative territory, at -0.1%.
COTW: One Year Later
On September 23, 2022, the British government announced its largest tax cuts since the early 1970s, primarily funded through borrowing, totaling over $196 billion in projected costs over the coming years. This announcement led to a sharp increase in gilt yields, further driven higher by existing worries about inflation, interest rates, and the long-term sustainability of UK government finances.
August 2023 Commentary: Goodbye, August
The S&P 500 experienced a 1.6% decline in August but remains 18.7% higher on the year, while the Bloomberg Aggregate Bond Index is up a paltry 1.4% for the year to date.
August 2023 Cartoon: Goodbye, August
August 2023 Cartoon: Goodbye, August
COTW: The September Effect
September has historically been one of the worst-performing months, particularly over the last two decades. Referred to as the “September Effect,” this phenomenon reflects a tendency for stocks, notably the S&P 500, to exhibit poor performance during September. The most notable declines occur within the initial half of the month, with an average drop of 5.7%.
July 2023 Commentary: Hot Streak
Markets continued their hot streak in July, and the S&P 500 posted its fifth consecutive month of positive returns, ending the month up 3.2%.
COTW: Wages and Sentiment
After 24 consecutive months of negative growth, real wages turned positive for the first time in June, as wages outpaced inflation for the first time since 2021. Real average hourly earnings remained positive in July, for a second consecutive month.
July 2023 Cartoon: Hot Streak
July 2023 Cartoon: Hot Streak
COTW: The July Rally
The July Rally refers to the historically strong performance of U.S. large cap stocks in the month of July. Since 1920, July has been a top-performing month
2Q, 2023 Asset Class Return Quilts
U.S. stocks continued to push higher during the quarter. The S&P 500 ended the first half of the year up 16.9% and is now up 24.4% since it’s October lows.
2Q 2023 Commentary: The Running of the Bulls (and Bears)
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.
