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Market Commentary

January 2019 Monthly Market Commentary

Bubble Bubble Toil and Trouble


There’s a time-honored adage that Wall Street likes to climb a wall of worry. As the calendar winds down on 2018, that wall keeps getting higher, resulting in one of the most tumultuous market environments in years. The question is, will that wall come tumbling down or pose a formidable barrier for the economy to surmount in the coming year? As it is, the expansion is getting long in the tooth and showing distinct signs of fatigue. A recent Duke University poll revealed that 50 percent of Chief Financial Officers expect the economy to fall into a recession in 2019. That’s more pessimistic than the view held by the majority of economists, but even they are upping the odds of a downturn this year. The latest poll puts the odds at over 20 percent, which is still low but up about five percentage points from a few months ago.

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Weekly Market Commentary

January 14, 2019


Following a vigorous rally this week, the stock market is on the cusp of leaving correction territory, clawing back nearly half of the near-20 percent drop in the S&P 500 index since September 21. Likewise, bond yields bounced back from their lows reached a week ago, with the 10-year Treasury yield moving up from 3.55 percent to 3.75 percent on Thursday before slipping back to 3.70 % at week’s end. Do these moves in financial assets mean that perceptions of the economic outlook have improved? Not likely. Indeed, the latest Wall Street Journal poll of economists placed the odds of a recession over the next twelve months at 25 percent. That’s up from 17.6 percent in the early-October survey, just as the stock market rout was getting underway. True, the most important barometer of the economy’s health, job growth, came in much stronger than expected over the final two months of the year. If not for the blockbuster December employment report, recession fears might have been even higher in the WSJ survey, which was taken between January 4 and 8.

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Weekly Market Commentary

January 7, 2019


What a difference a year makes. As the curtain rises on 2019, the economic and financial landscape is the mirror image of the opening week of 2018. A year ago, Trump’s tax cuts and other business-friendly measures were on the books, stoking expectations of quickened growth and muscular profits, which understandably ignited a powerful stock market rally. At the same time expectations of higher inflation and tighter monetary policy also took hold, sending bond yields sharply higher.

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