Notes on the Week Ahead

In Newgrange, just north of the River Boyne in County Meath, Ireland, there exists a giant burial tomb, constructed, it is estimated, around 3200 BC and measuring over an acre in area .  Little is known about the people who built it.  However, we can surmise that they had some knowledge of both astronomy and engineering since each year, only at dawn on this day, the Winter Solstice, a beam of sunl...

No parent can ever forget the day their child was born.  From that moment on, you’re completely responsible for another, entirely helpless, human being.  And so you do everything you can to love them, to nurture them, to teach them and to help them grow.  At the start, their problems are little ones and usually you can help them surmount them.  

A week ago, President-elect Biden hurt his foot while playing with Major, one of his rather rambunctious dogs.  Following a CT scan of his injury, it was determined that he had suffered a hairline fracture and his doctor suggested an orthopedic boot.  While it is, no doubt, an awkward piece of footwear, the course of treatment was not controversial.  If, however, his doctor had told him to just wa...

Following knee-jerk flight-to-safety bounce as the pandemic struck, the U.S. dollar has fallen in recent months and is now down over 6% year-to-date against the euro and over 4% year-to-date against the yen.  This is a small start on a welcome journey. While some politicians and editorial writers will always proclaim their pride in a “strong dollar”, the truth is that an over-valued currency has b...

Currently, a 7-day moving average of the number of confirmed cases of Covid-19 exceeds 170,000 while a 7-day moving average of fatalities is above 1,500.  While most people are very worried about this, spotty compliance with mask-wearing and millions of families getting together over the holiday season could well boost these numbers in the days ahead. This will sadly lead to traumatic scenes in ho...

Of all the challenges facing investors in this blighted year, maintaining a long-term perspective may be the hardest.  In recent weeks, markets have swayed back and forth in reaction to case counts, vote counts, vaccine news and stimulus views, obscuring longer-term trends on economic growth, inflation, earnings and interest rates.  It has also been tempting to ignore the crucial importance of cur...

There was a time, long before GPS or the need to select the accent of the artificial being that would bark driving directions at you, when people consulted road maps. On trips abroad, my wife, Sari, who’s more gifted with fast reflexes than geography, would take the steering wheel while I would unfold an oversized map on my lap, crinkling and tearing at the seams. However, as we buzzed along the r...

A few years ago, just when I’d started training for a big race, I strained my Achilles tendon.  Being an Irishman, I couldn’t, of course, bring this evidence of age and infirmity to the attention of an actual physician.  However, I consulted the oracles of the internet and they were, for once, very consistent in their advice:  “Wait a few days until the pain has faded and then work steadily on ank...

It always requires discipline to look beyond the next few weeks and months and take a long-term view. In the short run, investors remain focused on election uncertainty and how the once-again worsening pandemic, combined with stalemate over further fiscal stimulus, threatens to dramatically slow the pace of economic recovery, following a strong third-quarter bounce.

Turbulence defines today’s investment environment, with great waves of uncertainty surging from the pandemic, the election, fiscal policy and a slowdown in what had been, to this point, a sharp recovery from a very deep recession. But amidst the tumult, investors should not neglect the crucial role of interest rates. The waves of uncertainty should fade in 2021 and, as they do so, the primary role...

For most Americans, November 3rd can’t come soon enough. U.S. presidential election campaigns are always hideously long and this one has felt particularly painful, with such a deep divide between the supporters of the rival candidates.  However, recently there has been increased speculation about the grim possibility of the election outcome being contested.  Quite apart from the further division t...

For most of the last 40 years, the United States, like most developed economies, has suffered from a lack of demand for goods and services. This has contributed to a steady slide in inflation. More importantly, it has indirectly triggered recessions by funneling money towards assets, feeding bubbles which have inevitably burst. A lack of aggregate demand has also slowed the recovery from those dow...

This week, I, like about 20,000 others, will attempt to complete the virtual Boston Marathon.  I had signed up again with the Dana Farber Marathon Challenge team to run it in April, after a rather ragged performance in 2019.  But then the race, like so much this year, first got postponed and then went virtual.  And so, next Saturday morning, I will nervously walk out my front door, turn left and j...

English, as spoken in Ireland, is full of colloquialisms, phrases which are plain and clear to the local population and entirely mysterious to visitors.  Of course, Irish people don’t realize this and, over the years, I’ve become used to the bemused smile of Americans who clearly hear what I say but, equally clearly, have no notion of what I mean.

Washington Hawks flourished in the late 1970s and 1980s, when deficits and inflation were seen as significant threats to the nation. However, their numbers have dwindled in recent years due to persistent low inflation and the rise of populism. The current pandemic recession appears to have dealt a death blow to the species and its traditional habitat has now been taken over by swirling flocks of r...

The title of these weekly articles often starts with, “The Investment Implications of…..” This is usually appropriate since almost all big issues have investment implications and the focus of these articles has always been to see the investment environment with clarity.

Apparently, the hard-working analysts at the Congressional Budget Office threw in the towel on Friday afternoon. They were scheduled to release their estimates of the budget deficit for July but, late in the day, the CBO website announced that the numbers would be coming out today instead.

New GDP data released last week confirmed that the 2020 recession has been the deepest in over 70 years, with a peak-to-trough decline in real output of 10.6%. This, of course, was already evident in monthly data on consumption, employment, trade and inflation and has been reflected in a very sharp decline in corporate profits.

Last week, I was preparing for a zoom call with some of our client advisors at JPMorgan Asset Management, by reviewing a list of questions they had kindly supplied in advance, and I came across a particularly awkward one: what has been my biggest investment mistake?

In life before the pandemic, (and it seems like years ago), Sari and I would often drive from our home in Massachusetts to New York for the weekend. The destination was always fun – seeing the kids, exploring new restaurants, catching a Broadway show and sometimes running a road race the next morning to burn off the extra calories. But we had to get there first.

In the week ahead, as has been the case for most of the year, markets will likely take their cues from medical rather than economic data. The key question is whether America will see a second wave in the Covid-19 pandemic.  The answer to that question has, of course, profound human and social consequences.  However, it also has implications for the economy, for fiscal and monetary policy, and, ult...

In recent weeks, as stocks have rebounded strongly from their March lows, many have asked if the market has come too far, too fast. Thursday’s sharp selloff may have been an expression of that concern.

In the week ahead, America will be focused on the killing of George Floyd and its aftermath. These are difficult days for our country, beset as we are by a pandemic, a deep recession, political division and racial tension.

In the early days of her marriage, my mother tried to achieve the almost impossible goals established by society for a 1960s wife.  Apart from tending to the needs of my somewhat Victorian father, she did her best, on an inadequate allowance, to keep herself and a growing family fed and clothed. 

On Friday, the Bureau of Labor Statistics will release the Unemployment Rate for April, which will undoubtedly be the single ugliest economic statistic of my lifetime. We estimate that, based mainly on continuing unemployment claims, the number will come in at 15.5%. We also estimate that roughly 19 million Payroll Jobs were lost in the month.