MV Weekly Market Flash: Powell Giveth, Jobs Taketh Away

It’s always a bit of a risk when our Friday morning commentary makes reference to what is happening in the market on the very same day that we write and publish. As of now US equity markets are down on the day from the stronger-than-expected jobs market report that came...

MV Weekly Market Flash: And Just Like That, Bonds Are Cool Again

We are heading into that final, frenetic stretch of the year. Tomorrow most of us will put aside the travails and tribulations of markets and the economy and turn our attention to the culinary delights and company of loved ones at the Thanksgiving table. Then comes Black Friday and the...

MV Weekly Market Flash: FTX and the Blessings of Non-contagion

Over the past few years we have heard a great deal about the supposed advantages of cryptocurrencies as an asset class. As all those varieties of pixelated coins inched ever closer from obscure back alleys to the wide boulevards of mainstream finance, the phrase “digital gold” was often invoked by...

MV Weekly Market Flash: Has the Santa Claus Rally Come Early?

Did you ever wonder what it takes to send the Nasdaq Composite index higher by 7.4 percent in a single day? Here’s what it takes: a single data point showing that the core Consumer Price Index (i.e. the CPI excluding the volatile categories of food and energy items) rose by...

MV Weekly Market Flash: The Strategic Case Against Emerging Markets

It has not been much of a year for thinking about different ways to extend portfolio exposure into riskier asset classes. Inflation, geopolitical unrest, dysfunctional supply chains and all the other weekly wet-blanket topics have kept the focus of portfolio managers on protecting the downside. But in this business it...

MV Weekly Market Flash: Things That Go Bump In the Night

It’s the Friday before Halloween, so it seems like a good time for a quick tale of some of the scarier moments in financial markets over the past several decades. Here’s another reason why the present moment is a good time for this discussion: the relentless recent pace of strong...

MV Weekly Market Flash: Markets and Politics

Do politics matter for markets? We generally have a standard and perhaps somewhat annoying answer to that question, which is “typically no, but sometimes yes.” Short-term market movements normally react to political developments only when those developments pertain directly to changes in interest rate policy or tax policy, since those...

MV Weekly Market Flash: Here Come the Earnings

Another month, another inflation report running hot. The Consumer Price Index report for September came out yesterday, topping economists’ expectations for yet another month despite a welcome decline in energy prices. Food, shelter, medical services, new vehicles and transportation services all remain at elevated levels, leaving the market with a...

MV Weekly Market Flash: Recessionomics

It may seem odd to be talking about recessions when the latest jobs report, out just this morning, shows the unemployment rate back to the levels of 3.5 percent – a level which, along with those of July 2022 and February 2020, represents the lowest percentage of jobless in our...

MV Weekly Market Flash: Apoplexy In The UK

Great Britain does not rule the waves of global finance as it once did. Long gone are the days of the informal club of trading nations bound together by the gold standard and informally headquartered in the City of London. Nonetheless, it remains one of the world’s most developed societies...

MV Weekly Market Flash: This Is a Cycle, Not a Crisis

At the tail end of another week of market mayhem, we are going to pick up with the very last point we made in our commentary last week: this is a cycle, not a crisis. We do not have systemically critical financial institutions teetering on the edge of insolvency. We...

MV Weekly Market Flash: Margin Calls

Two earnings seasons have come and gone this year, and in both instances the takeaway was something along the lines of “could have been worse.” Concerns that rising inflation would have a negative impact on sales growth and profitability margins have not turned out to be as dire as some...

MV Weekly Market Flash: Better Here Than There, Updated

Within the last twenty-four hours the attention of much of the world has turned to the United Kingdom and the end of the remarkable seventy-year reign of Queen Elizabeth II. The UK gained a new sovereign head of state, King Charles III, just days after gaining a new prime minister,...

MV Weekly Market Flash: No Market For Old Hedges

In the good old days of the 2010s there was a simple mantra called “risk-on / risk-off.”  For most of the time between 2010 and 2020 the switch was set to “on” and money was to be made by placing one’s chips in equities and a handful of other risk...

MV Weekly Market Flash: Jay Powell’s History Lesson

As we write this commentary on Friday morning, Fed chair Jay Powell is still about 30 minutes away from giving his much-anticipated speech at the Jackson Hole, Wyoming meeting of central bankers that will wrap up today. So we don’t know exactly what Powell will say, but we imagine the...

MV Weekly Market Flash: What About That Recession?

All things considered, it was a fairly quiet week this week for anyone not trying to trade shares of Bed, Bath & Beyond. Meme stock mania is by no means a thing of the past! But apart from faltering companies with outdated business models rising by more than 100 percent...

MV Weekly Market Flash: The Dog Days Finally Arrive

Once upon a time, the entire month of August was set aside as that special stretch of the calendar when folks could check out for a little while. These were the “dog days of summer,” a time for trashy novels at the beach, or fly fishing in a Montana stream,...

MV Weekly Market Flash: A Mixed Take on Sales and Earnings

The second quarter earnings season is winding down, with 435 companies on the S&P 500 having delivered their results as of this morning. If all the moving pieces of corporate financial performance could be boiled down to one simple phrase describing the market’s reaction it would have to be this:...

MV Weekly Market Flash: Strange Times in the Bond Market

Few pronouncements strike as much dread into the hearts and minds of investors as those ominous three words: “yield curve inversion.” When yields on bonds with longer maturities fall below those with shorter time horizons, there’s a reasonable chance that a recession is on the way – at least according...

MV Weekly Market Flash: Private Equity Not Immune from the Troubles

It has been a tough year so far for the traditional asset classes of stocks and bonds. Rising interest rates, inflation and concerns about economic growth have all taken a toll on performance. Not surprisingly, we have seen a lot of marketing effort extolling the benefits of alternative assets –...

MV Weekly Market Flash: The Post-Distortion Economy

If you spend any time listening to professional economists opining on what lies in store in the months ahead, you would be forgiven for coming away confused. Are we heading into a recession? Maybe, maybe not. It is entirely possible that the real rate of GDP growth for the second...

MV Weekly Market Flash: Earnings and Inflation Are Top H2 Concerns

And just like that…it’s already the second half of 2022. Not too many folks other than habitual short sellers and permabears will be sad to see the year’s first half slide into the history books. The big headline making its way through financial news platforms today is that the stock...

MV Weekly Market Flash: Europe’s Sea of Troubles

We have talked a bit in recent commentaries about the so-called “bad news is good news” phenomenon, where underwhelming economic reports actually help boost stock market sentiment. The underlying theory seems to be that as recession fears increase, inflationary concerns will subside and – punch line – the Fed and...

MV Weekly Market Flash: The Earnings Puzzle

Stock markets will be closed this coming Monday, marking the first time that US financial institutions will shut down in honor of Juneteenth. Many investors will no doubt appreciate the extra day of peace and quiet after a week of seemingly unrelenting turbulence, and the chance to think ahead as...

MV Special Update: 06/14/2022

To Our Valued Clients: Yesterday, the S&P 500 stock index closed down 21.8 percent from its last record high reached on January 3 of this year. Long-standing custom in financial markets defines a bear market as a decline of 20 percent or more from a prior peak. When these events...

MV Weekly Market Flash: What the Fed Can (and Cannot) Do About Inflation

After a few days of fairly listless trading, US equity markets took a deep dive late in the day on Thursday; protective cover, perhaps, for those fearing a hotter than expected inflation report on Friday morning when the Bureau of Labor Statistics was due to release the May Consumer Price...

MV Weekly Market Flash: Good News, Bad News

In the long run, a healthy economy and a healthy stock market go together. In shorter cycles of activity, though, the correlation between the two is inherently unpredictable. It’s always worth remembering that economic reports are by nature backwards-looking, while markets look ahead to what might lie in store in...

MV Weekly Market Flash: Go Away, or Stay to Play

This year it seems that the old-timers on Wall Street have it at least partly right. “Sell in May, go away” goes the timeworn chestnut. Investors certainly have fulfilled the first part of that command. Barring some completely unexpected turnaround between now and the day after the holiday long weekend,...

MV Weekly Market Flash: Hard Landing for Retail

It turns out, apparently, that Netflix was the canary in the coal mine. Recall that a few weeks ago the streaming giant stumbled after an earnings call revealed a decline in new subscribers for the first time in a decade. Netflix stock, one of the highest-flying names of the last...

MV Weekly Market Flash: The Pain Trade

A lot of things happened this week, and it has been a challenge to try and connect the moving parts. Stocks are on track to register their sixth straight week of declines, for the first time since the confluence of the Eurozone financial crisis, credit rating downgrade of US Treasuries...

MV Weekly Market Flash: Risk Is Not a One-Way Street

In our investment committee meeting this past Tuesday the discussion came, as one would expect, to the Fed and the likelihood that it would be raising the Fed funds target rate by 0.5 percent at the Federal Open Market Committee meeting this week. What effect would that have on the...

MV Weekly Market Flash: The Mixed Message on GDP

On Thursday morning the Bureau of Economic Analysis reported that first quarter GDP fell by 1.4 percent (on a quarter-to-quarter, annualized basis). The S&P 500 rose by 2.5 percent on the same day. That may sound odd, but in fact the market largely ignored the GDP story and focused instead...

MV Weekly Market Flash: Earnings Strong, With a Notable Exception

There have been a couple different stories about corporate earnings out there in the mediasphere this week. You probably know one of them, especially if you yourself happen to own shares of Netflix, which are worth quite a bit less at the end of the week than they were on...

MV Weekly Market Flash: What Peak Inflation Does (and Doesn’t) Mean

If you were following the flow of economic data releases this week you probably took note of the Consumer Price Index release on Tuesday, from the Bureau of Labor Statistics. The CPI, of course, has been the talk of the town within the last year as inflation has soared to...

MV Weekly Market Flash: Cereal Problems

You have probably noticed that prices at the grocery store are higher than they were a year ago, but some, like cereal and sunflower oil, are a whole lot higher. For most of us in developed Western countries that is an annoyance, but a more or less bearable one. Not...

MV Weekly Market Flash: The Jobs Question, Short-Term and Long-Term

It’s the first Friday of the new month, which means it’s time for another jobs report from the Bureau of Labor Statistics. This month, unlike some in recent memory, was fairly uneventful. The headline unemployment rate ticked down to 3.6 percent, just a tad higher than the 3.5 percent rate...

MV Weekly Market Flash: Pullbacks Long and Short

Believe it or not, we’re only a couple weeks away from the end of the first quarter. And what a quarter it has been, the lowlight of course being the unthinkable devastation and human misery resulting from an unprovoked war of aggression by Russia on Ukraine. In addition to what...

MV Weekly Market Flash: For Now It’s Still About Inflation

The war in Ukraine continues in its merciless ways, asset markets continue to be buffeted this way and that by the supercilious rumors that drive short-term trading strategies, and policymakers around the world continue to grapple with what the effect of the war will be on inflation and economic growth....

MV Weekly Market Flash: A Decade of a Week

There are times when the business of analyzing and writing about investment markets takes on the characteristics of a hamster on a wheel. Over and over again we cover the same ground – the Fed, the latest jobs report, the net inflows and outflows into bonds and equities – and...

MV Weekly Market Flash: Sanctions, Shorts and Fat Tails

To be perfectly honest, we do not like writing about geopolitical events within the confines of this weekly investment commentary. What happened yesterday in Ukraine was, and will continue to be, a humanitarian catastrophe and in many ways represents a decisive break from the post-Cold War world order with which...

MV Weekly Market Flash: The Fog of War…and Markets

On Tuesday this week a story broke early in the day about a possible withdrawal of Russian troops from the border of Ukraine. The story referenced a Russian source on the ground that the troops had “finished their training exercises” and were returning home. It didn’t take long for this...

MV Weekly Market Flash: The Bear of Low Quality

As last year drew to a close we were writing quite a bit about the narrowness of the year-end stock market rally – noting, for example, that some 40 percent of companies on the broad-based Nasdaq exchange were down by 50 percent or more from their 52-week highs. We picked...

MV Weekly Market Flash: Here Come the Bonds

Here in the US it’s easy to get caught up in the minutiae of the Fed: what did Bullard say at that luncheon the other day? What about Brainard in her comments at the San Fran tech conference? Is a 50 basis point rate hike on the table for March?...

MV Weekly Market Flash: A Glimpse of a New Economic Cycle

The US stock market is setting up to fall for a fourth straight week, the first time this will have happened since early fall 2020. Amid the dour talk on financial news programs, though, all is not entirely negative. We got a trifecta of information this week from the Fed,...

MV Weekly Market Flash: A Consequential Week Ahead

It has been quite an opening act for the year ahead. On occasions like this we always find that a little perspective can be helpful. With that in mind, let’s consider the price performance for the S&P 500 in the first three weeks of 2022 in the context of the...

MV Weekly Market Flash: Whip Inflation Now, Says the Fed

Some of the things that define life in the financial markets and economy of 2022 have their origin story forty years ago, in 1982. Consider this: the stock buyback, one of the perennial bull factors by which stock prices keep on keeping on, was illegal before 1982. In that year...

MV Weekly Market Flash: Jobs Report Sets a Strange Tone for the Year

Welcome to 2022! It’s that time of the year again, when we all look around us and try to make sense of what might lie in store for the remaining eleven months and change of this year, either the third or the second year (depending on how you count your...

MV Weekly Market Flash: Our Last Word for 2021: Stonks

Last week, in place of our usual weekly commentary, we provided a somewhat longer than usual analysis of some of the key factors influencing our thinking as we head into 2022. This week, as we are but one day away from bidding goodbye to 2021, we will end the year...

Special Year-End Comment: A Look Back, A Look Ahead

What else can we say about 2021 that we haven’t said for every one of the past 51 weeks since the year began? While we won’t be entirely sorry to see this year pass into the history books – a year that began with a riot in the nation’s capital...

MV Weekly Market Flash: The Importance of Doing Nothing

Sometimes the hardest thing to do is to do nothing at all. Our brains are built for action, not inaction. Flee the approaching predator. Eat all the food we see today because tomorrow there may be none. Rearrange the furniture, because we crave something new and fun. Doing nothing, by...

MV Weekly Market Flash: Ignore the Rumor, Ignore the News

One of the many old chestnuts of Wall Street wisdom in days of yore went thus: sell the rumor, buy the news. The thinking was that once some idea gained enough traction to be relatively plausible, all the price action would play out well before the thing actually came to...

MV Weekly Market Flash: Trouble Below Deck

If you are in the habit of tuning in to the daily financial news, your instinctive notion of “the market” is probably based on one of the Big Three – the S&P 500, the Dow Jones Industrial Average or the Nasdaq Composite – that always feature in the daily market...

MV Weekly Market Flash: The Staying Power of Exuberance

It’s a regular part of our job, day in and day out. We wake up, plug ourselves into the highways and byways of the global news feed, and absorb everything we can about whatever may have an impact on financial markets. Then we sit back and inevitably say something along...

MV Weekly Market Flash: The Lagarde Effect on Euro Stocks

Who’s right about inflation, and who’s wrong? Experts will be debating this question, with no conclusive answers, all the way through the holiday season and into next year. Where it really matters, though, is at the level of central bank deliberations, and here the solid wall of uniformity – it’s...

MV Weekly Market Flash: Inflation and the Bond Market

The Consumer Price Index (CPI) report that came out on Wednesday this week was a doozy. Headline inflation by the CPI measure was 6.2 percent, the highest level since October 1990. Core inflation, which excludes the volatile categories of food and energy, was 4.6 percent, higher than at any time...

MV Weekly Market Flash: Geopolitics, China and the Chamber of Commerce

A couple weeks ago an article appeared in the Financial Times newspaper about something called a nuclear-capable hypersonic missile, a piece of defense equipment that China apparently tested back in August, the first of its kind. The FT article was not a pleasant read. Hypersonic means that the vehicle travels...

MV Weekly Market Flash: Confusion Awaits the Fed

Supply chain dysfunctions cast a pall over the earnings reports of two of the most habitually reliable bearers of good tidings, Amazon and Apple, with both tech behemoths not only failing to beat the Street’s estimates for the third calendar quarter, but warning of headwinds aplenty ahead. US gross domestic...

MV Weekly Market Flash: Bankers Behaving Badly

Back in September there was a mini-kerfuffle involving two regional Federal Reserve presidents – Eric Rosengren of the Boston Fed and Robert Kaplan of the Dallas Fed. The scandal involved the active trading in individual securities by both men – both of whom are closely involved in the Fed’s deliberations...

MV Weekly Market Flash: Another Strange Jobs Report

In case you haven’t heard, the labor market is in a very strange place, both here at home and around the world. If you happened to glance at a British newspaper or magazine any time in the past couple weeks you would have seen long lines at gas (sorry, petrol)...

MV Weekly Market Flash: Junk Party

It was a great time to be in private equity, with record levels of new deals and a seemingly bottomless desire by investors for the speculative-grade debt raised by the private equity kingpins to fund their deals. Average yields of around 8.5 percent offered a tasty jolt of purchasing power...

MV Weekly Market Flash: First of All, Do No Harm

The pandemic may have imparted two important lessons for the pundits and prognosticators who populate the world’s financial markets. First, you cannot predict the timing and magnitude of something like a debilitating virus that sweeps across the planet. Second, even if you could predict the event, you couldn’t predict what...

MV Weekly Market Flash: Debt Ceiling Déjà Vu

Ten years ago, markets got a nasty shock when the normally routine act of raising the debt ceiling got roped into the bitter world of Congressional partisan gamesmanship. Then-president Obama tried and failed to cut a deal with then-House Speaker John Boehner. Standard & Poor’s, unimpressed by the devil-may-care shenanigans...

MV Weekly Market Flash: Fourth Quarter Could Be Bumpy

August is over, which means we can no longer lazily type in “dog days, low volumes, everyone’s on holiday” as the go-to explanation for whatever is going on in asset markets. The kids are going back to school and the smell of pumpkin spice is already wafting through the air,...

MV Weekly Market Flash: Emerging Markets? China, Asia, Not Much Else.

The term “emerging markets” came into being way back in the ancient mists of the 1980s, replacing the clunkier “third world” as a descriptor for countries that, while lacking much of the hard and soft infrastructure of the developed world, had a future of bounteous growth prospects with which to...

MV Weekly Market Flash: What’s the Point of QE?

Earlier this week the Fed issued minutes from the most recent Federal Open Market Committee (FOMC) meeting, and the release caused a bit of a kerfuffle in equity markets. By “kerfuffle” of course we mean something that actually triggers a pullback of more than one percent (barely) in the S&P...

MV Weekly Market Flash: Killer Earnings, Fading Exuberance

The second quarter earnings season is about to end, and it’s been a barnstormer. With about 90 percent of all S&P 500 companies having reported, the blended growth rate – comprising the actual reported numbers along with analysts’ estimates for the remaining 10 percent – is a stonking 91 percent....

MV Weekly Market Flash: NIRP and TINA

The financial world loves itself some acronyms to sprinkle into everyday conversations, often the more obscure the better. We generally take pains to avoid the word salads of capital markets gobbledygook, but every now and then we come across some constructs that really can help our clients understand what’s going...

MV Weekly Market Flash: As Good As It Gets

We have known for some time now that the second quarter GDP report was going to be a barnstormer, for no other reason than the point of comparison. The second quarter of 2020 saw the lowest year-on-year contraction since the Bureau of Economic Analysis started keeping regular records in 1948....

MV Weekly Market Flash: Decoupling and the China Dilemma

At the end of last month a Chinese company called Didi Chuxing went public via an initial public offering of American Depositary Receipts (ADRs) on the New York Stock Exchange. The $4.4 billion raised made Didi, a ride-hailing app, one of the most prominent of the 34 Chinese companies that...

2021: Midyear Commentary

Every January we publish an annual outlook where, among other things, we offer some views about what might be in store for markets and the economy in the year ahead. Last year we – along with the rest of the known world – got kind of sideswiped on this. All...

MV Weekly Market Flash: Europe’s Summer of Woes

Covid, climate, cyber…of the big three scourges currently stalking the globe, Europe was at least spared this week of any known large-scale cyberterrorist attack. It was a bad week regarding the other two, however. The delta variant continues its ruthless stalking of a population still having trouble reaching its vaccination...

MV Weekly Market Flash: The Saga of Strange Bond Yields, Continued

Yes, it’s another column about the bond market after a few weeks where we turned our attention elsewhere. But we’re still trying to make sense of a trend that we wrote about a few weeks ago that has only gotten stranger since – and we think it is one of...

MV Weekly Market Flash: Oil 100 or Oil Bust?

Commodities have been one of the big stories for the first half of this year. For much of this time so-called real assets from crude oil to copper to lumber rose together, benefitting from the tailwind of the reflation trade that also saw bond yields rise and stock market mojo...

MV Weekly Market Flash: Toshiba and the Fragility of Nikkei 30,000

We don’t write much about Japan in our weekly commentaries, because quite honestly in most weeks there are other, more important things going on in global capital markets that we believe merit our attention. Every now and then, however, a story catches our eye and reminds us that there is...

MV Weekly Market Flash: Summer of Volatility?

The press conference following a Federal Open Market Committee (FOMC) meeting can be a pretty tedious affair, with carefully crafted Fedspeak answers to the predictable questions lobbed by financial journalists. But Fed chair Powell did say one important thing on Wednesday, very clearly and without nuance. “Dots do not represent...

MV Weekly Market Flash: Not Much Ado About Inflation

There is a reason why we are constantly telling our clients that short-term movements in the market are unknowable. You know that some big piece of news is coming out in a couple days that could have major economic implications. You assume that prices of stocks, bonds and other assets...

MV Weekly Market Flash: Macro Matters

There is a lot of economic news out there to digest. Unlike the first half of the year, which seemed to be more about the capricious tradewinds of momentum and less about the underlying fundamentals, what happens in the second half could largely be a function of those monthly jobs,...

MV Weekly Market Flash: Big Oil’s Very Bad Wednesday

Black Tuesday, 1929 turned out to be a big deal. Black Monday, 1987 – not so much. The history books all duly note that the Wall Street crash of October 29, 1929 marked the opening act of the Great Depression, during which the US stock market at one point in...

MV Weekly Market Flash: How’s That Rotation Working Out?

There’s a lot of chatter out there about how the summer of 2021 is shaping up in equity markets. The bumpy-ride faction has enjoyed some validation recently, with volatility perking up after seeming to settle down at sub-20 levels on the VIX (kudos to whoever made that $40 million option...

MV Weekly Market Flash: Making Sense of a Strange Week

The headline for this week’s article may be just a bit misleading: “making sense of a strange week” is actually something we find ourselves trying to do more often than not as the calendar progresses through the year. But a few of the high-profile events of this week are instructive...

MV Weekly Market Flash: Jobs Numbers, Interest Rates and Tech Stocks

The main theme of the past several weeks has been the surging economy. A big GDP number last week (six percent growth in the first quarter of 2021), rebounding consumer confidence and the first signs of an uptick in inflation have all supported the narrative that the recovery is here...

MV Weekly Market Flash: When Giants Rule the Earth

When you’re small, a little change can go a long way. Say that your new start-up company earned $1.00 per share in its first year of operations. In the second year you managed to earn a second dollar, so that your year-2 EPS is $2.00. That’s a pretty impressive growth...

MV Weekly Market Flash: India’s Warning to the World

One year ago – April 23, 2020 – the world was coming to terms in fits and starts with the reality that the pandemic wrought by the Sars2-Cov19 virus was going to be more than a couple weeks of absence from the office and social distancing from friends and family....

MV Weekly Market Flash: The Bitcoin Follies Go Public

A financial firm by the name of Coinbase went public this week, and instantly garnered a market capitalization of $76 billion. How big is $76 billion? Well, it’s bigger than the parent company of the New York Stock Exchange (worth $73 billion at today’s prices). It’s bigger than CME Group,...

MV Weekly Market Flash: Calm Before the Storm, Or Just plain Calm?

Here’s a fun little fact. According to the most recent Flow Show report issued by BofA Merrill Lynch, a whopping total of $576 billion flowed into global equity funds in the past five months, since November 2020. To put that number in perspective, it is larger than the $425 billion...

MV Weekly Market Flash: Grand Theories and Mundane Realities

The sweep of history always looks neater when observed from a distance. We speak with confidence about the natural and human forces that drove the transition from medieval to modern Europe, or the fall of Rome, or the rise of Meiji-era Japan. Easy divisions of the flow of time help...

MV Weekly Market Flash: What We Learned in Q1, and What May Await Us in Q2

So here we are with a quarter of the year gone by already. One thing we think is safe to say: the world we are observing today is not radically different what we might have imagined at the beginning of the year. When we go back and look at the...

MV Weekly Market Flash: The Fed and the Bond Market Go At It Again

The old guessing game is back: who’s right? A couple things happened this week to bring this question front and center. On Wednesday, the Federal Open Market Committee (FOMC), the Fed’s monetary policy deliberators, released its economic projections for the near future while resolving to leave short-term interest rates at...

MV Weekly Market Flash: De-Mystifying Factor Strategies

A great deal has changed in the world of finance since both of us got into the industry way back in the 1980s. One thing has not changed. Practitioners of the financial arts seem to love nothing more than taking a simple idea and making it sound as densely complicated...

MV Weekly Market Flash: The Perils of Chasing Innovation

To somewhat paraphrase William Shakespeare, we come not to bury innovation, but to praise it – though perhaps in a somewhat roundabout way. To be perfectly clear, we are fans of innovation. We applaud the creative process that leads to the possibility for breakthrough inventions that can change our lives...

MV Weekly Market Flash: Tantrum Without a Cause

The ancient Chinese concept of “wu-wei” roughly translates to “achieving without action.” It was a quality sought in great leaders, who were to understand that a successful outcome – to a military campaign or overthrowing a bandit rebellion or whatever – was not due to aggressive individual actions but to...

MV Weekly Market Flash: Bitcoin, the Solution In Search of a Problem

FOMO – fear of missing out – has been around for as long as members of the human species have traded with each other. In the seventeenth century there was a mania among the good citizens of Holland for tulip bulbs. At one point during this frenzy the price of...

MV Weekly Market Flash: The Commodities Not-Yet Supercycle

Let’s start this week’s commentary with a simple statement: the stock market is a sideshow. If you want to try and understand what market trends are reflecting about the larger economic and geopolitical story, then you want to be paying attention to what is happening with commodities prices and bond...

MVF Special Update: 02/11/21

Observers of the financial markets with long memories will no doubt remember the words of former Federal Reserve Chairman Alan Greenspan, who in a 1996 speech asked, “But how do we know when irrational exuberance has unduly escalated asset values?” It has now been nearly 25 years since the term...

MV Weekly Market Flash: Mixed Signals and Fiscal Relief

The news this week has been mostly on the positive side when it comes to the virus. New cases in the US are down from the lofty 300,000+ levels of last month to the low 100,000s (though in a broader context that is still on par with the levels seen...

MV Weekly Market Flash: The Sacking of Wall Street

The Battle of Hadrianople took place in 378 CE, two years after a multitude of Germanic Gothic tribes had gained permission to cross the Danube River into the Roman Empire. The Gothic hordes killed the eastern emperor Valens and embarked on further hostilities against the Romans that led to the...

2021: The Year Ahead

In January 2020 our Annual Outlook was one of hundreds of prognostications coming out then that – by the strict measure of forecasting what would happen in the next twelve months – turned out to have a useful shelf life of about four weeks. That was the time it took...

MV Weekly Market Flash: No Rest for the New Team

Joseph R. Biden, Jr. was sworn in as the nation’s 46th president this Wednesday, and Kamala D. Harris became the country’s first female, African-American and Asian-American vice president. The speeches, songs, poems and pageantry of the day reflected much of what is best about our republic. Alas, the time for...

MV Weekly Market Flash: The Curve Steepens

Last week was a very tumultuous one in the world of US politics, but it was fairly benign for US stocks. Or so it seemed. We got a number of calls from folks wondering why markets were not reacting more to the drama in Washington. Here’s the short answer: the...

MV Weekly Market Flash: Our 2021 Investment Thesis

Happy New Year! As is our custom, we open the year by presenting our investment thesis for the twelve months ahead. This thesis will be central to the Annual Outlook we will be publishing within the coming two weeks. The year ahead promises to be full of twists and turns...

MV Weekly Market Flash: The Legacy of 2020

Well, it’s finally here, the last day of 2020, and there’s a popular meme going around the byways of the Internet to the tune of that timeless Ramones song “I Wanna Be Sedated”: “2020-24 hours to go!” Forget all the usual year-end retrospectives and listicles that proliferate at this time...

MV Weekly Market Flash: The Roaring Twenties?

The human brain loves patterns, and it loves a good story to weave around the patterns it perceives. So here is a story that is gaining some currency among some of the more optimistic market pundits looking down the road at what may be in store for us in the...

MV Weekly Market Flash: The Case for Caution

You might recall that we published a piece during the week before Thanksgiving called “The Case for Optimism,” focusing on some seemingly compelling reasons why the year ahead might be a very good one indeed for risk assets. Since then we have started to see the usual flow of year-ahead...

Arian Vojdani on Bloomberg Radio

Arian Vojdani was on Bloomberg Radio discussing his market outlook in regards to stimulus talks, vaccine, and the incoming administration. The podcast can be listened to here.  (Arian's comments begin at approximately 11:58 of the podcast.)

MV Weekly Market Flash: Europe’s Woes

Every language has particular features that give it distinction. Perhaps the most distinctive feature of the German language is its sparkling ability to encapsulate an extensive idea into a terse single word. “Schadenfreude” is one such word: “the expression of one’s joy or pleasure at the misfortune of another.” It’s...

MV Weekly Market Flash: Momentum for the Moderates?

The stock market may have closed out an exuberant November this week, with the popular (though not particularly representative) Dow Jones Industrial Average having its best month since 1987. Outside the “this is fine!” investor playground, though, the pandemic continues to exert its brutal impact on real-world communities across the...

Arian Vojdani on Reuters TV

Arian Vojdani was on Reuters TV with Conway Gittens discussing short- and long-term views of the markets. The clip can be viewed here.

MV Weekly Market Flash: The Optimistic Case for 2021

We will shortly begin our customary year-end planning process to determine our strategic allocation models for 2021. An important part of this process involves considering alternative scenarios for the year ahead and translating those scenarios into position weights for different classes of equities, fixed income and other assets. We typically...

MVF Special Update: 11/24/20

To Our Valued Clients: We wish you and yours a happy, healthy Thanksgiving and start to the holiday season. As of this writing, we are happy to report that, thanks to recent developments, there are some positive signs breaking through the uncertainty that has clouded the financial markets for much...

MV Weekly Market Flash: Considering the Vaccine Trade

Old hands on Wall Street have long ascribed distinct anthropomorphic characteristics to different asset markets. The stock market, they say, is the kid who sees a pile of straw under the Christmas tree and says “I know there must be a pony in the back yard!” The bond market is...

MV Weekly Market Flash: The Indecisive Bond Market

In all fairness there is a lot of conflicting news out there today, enough to seemingly justify the whiplash-inducing lurches back and forth by major asset classes this week. Monday brought with it news of a coronavirus vaccine that had demonstrated 90 percent efficacy in trials pitting the drug, developed...

MV Weekly Market Flash: Politics, Markets and the Road Ahead

Well, this has been a week. The world’s eyes were on a map of 50 states, but those eyes were not fixated on the many that were confidently and immovably etched in a deep red or deep blue. The action was in that handful of “grey states” – too early...

MV Weekly Market Flash: Getting the Memo

The stock market has been having a pretty rough week. As usual, financial media types have supplied us with a couple go-to explanations. If you tuned into CNBC or a similar market-focused source you probably heard something along the following lines: “stocks fell this week because Covid cases are up...

Money Tips for Millennials: Steer a Steady Course in a Turbulent Year

From the pandemic, to a hard-fought election, to social unrest, 2020 has been a challenging period on many fronts. In such times of great uncertainty, people can make hasty and unwise financial decisions. For those who may not have lived through earlier market cycles, here are five critical points to...

MV Weekly Market Flash: The China Question Looms Large

Imagine if someone had come back from the future to tell you, at the end of 2019, that the dominant news story of the year 2020 was going to be a virulent pandemic that arose in a food market in Wuhan, China. Would your first instinct have been to place...

MV Weekly Market Flash: Plenty of Room for Rates to Rise

The Fed intends to keep interest rates at or close to zero for the indefinite future. The central bank has said as much in each of its last several meetings of the Open Market Committee that sets monetary policy. But it is important to remember that while the Fed has...

Arian Vojdani on Bloomberg Radio

Arian Vojdani was on Bloomberg Radio discussing investing in today's climate. The podcast can be listened to here.  (Arian's comments begin at approximately 11:15 of the podcast.)

MV Weekly Market Flash: The Autumn of Our Discontent

It really has been one of those weeks. Too many headlines, too much information, and a relentless fog of noisy distractions making it difficult for even the most rational of minds to sort through what matters and what doesn’t. But in the end it always comes down to the same...

MV Weekly Market Flash: Is the Bear Market Actually Over?

The trading week is not yet over as we write this piece on Friday morning, but it looks as if the S&P 500 will end the week down for the fourth week in a row, marking the first time that has happened in over a year. Of course, this comes...

MV Weekly Market Flash: The New Old Economy

Meet the new decade, same as the old decade – only slower, and with even less inflation. That is the picture presented by the Federal Reserve at the conclusion of this week’s Federal Open Market Committee meeting, where the Fed meets periodically to discuss and implement monetary policy. It might...

MV Weekly Market Flash: An Autumn of Uncertainty

It’s that time of year again. Labor Day is behind us and for investors the trickiest two months of the year are underway. September and October have delivered a bevy of surprises over the years. Many of us well recall that auspicious day in September 2008 when Lehman Brothers went...

MV Weekly Market Flash: Inflation, the Dollar and Your Bond Portfolio

Jackson Hole, Wyoming is by all accounts a lovely place to be in late August, with crisp late-summer skies of azure framing the inspiring cathedral spires of the Grand Tetons. Central bankers from around the world gather in this idyllic venue every year around this time for their annual confab...

MVF Special Update: 08/25/2020

To Our Valued Clients: The presidential election is edging closer and speculation about the outcome will likely add another note of uncertainty to the financial markets, which have already been subjected to volatile swings caused by the pandemic, related economic pressures and global trade tensions. Regardless of who resides in...

MV Weekly Market Flash: Relativity Theory

Stock prices didn’t exactly surge this week, even as the S&P 500 finally set a new record high on Tuesday and thus, for the moment anyway, formally ended the shortest bear market in the history of the world. On that record-setting day there were actually more stock prices in decline...

MV Weekly Market Flash: Caution, FOMO and the K-Shaped Recovery

Very few things are certain in times of economic downturn. One thing you can hang your hat on, though, is that market pundits will scour the contours of every letter of the English alphabet looking for the perfect visual symbol to align with their views on what the downturn-plus-recovery will...

MV Weekly Market Flash: The Everything Rally

New month, same old stuff. The virus is still on a coast-to-coast rampage, the economy is still stumbling through the fog and Congress is still deadlocked over how to help. And asset markets of all stripes are still in full-on rally mode. Are things looking great? They must be, since...

MV Weekly Market Flash: Markets, Tech and the Economy

We learned many things about the world on Thursday. As usual, some were edifying and others were beyond cringeworthy. One the one hand, we found out that the total output of the US economy, as measured by Gross Domestic Product (GDP), fell by an annualized rate of 32.9 percent from...

MV Weekly Market Flash: The EU’s Potential Game-Changer

Something unusual has been happening in recent weeks. Equity markets outside the US, those long-suffering European and Asian bourses trailing in the flamboyant wake of the seemingly indestructible S&P 500, have woken up and gotten their game on. In the chart below you can see on the left-hand panel that...

Arian Vojdani on Yahoo!Finance

Arian Vojdani was featured on a segment on Yahoo!Finance today discussing markets, trading catalysts, and market outlook. The clip can be viewed here.

MV Weekly Market Flash: China’s Old Playbook for a New World

What is a more powerful mover of markets: a home-grown virulent health pandemic or a state-sponsored campaign to buy stocks? Judging from the evidence thus far in China, the SARS-Cov-2 virus would seem to have nothing on the power of the People’s Liberation Daily as a directional force for domestic...

MV Weekly Market Flash: Earnings At a Crossroad

It’s earnings season again, and this one is likely to be a doozy. Companies reporting their results for the second calendar quarter of 2020 will get to show us how they have held up during a three month period that involved a dramatic lockdown, a furious scramble to reopen key...

MVF Special Update: 07/07/2020

Our thoughts are with you as we collectively strive to navigate uncharted territory, whose rough terrain reflects the COVID-19 crisis, economic uncertainty, and political and social divisions. During these challenging times, we hope that our perspective on the financial markets is helpful to your investment decision-making. While it may seem...

MV Weekly Market Flash: The Jobs Report in Perspective

The normal state of things is “Jobs Friday” – the first Friday in every month being the date of the Bureau of Labor Statistics monthly employment report. But hey, folks, it’s 2020 so anything is possible, including Jobs Friday coming on a Thursday (the real reason, of course, being that...

MV Weekly Market Flash: Halfway There

It’s hard to believe that this surreal stretch of time known as year 2020 of the Common Era is nearly halfway over. However the next six months play out, we imagine that very few people will be sad to kick this year into the history books come December 31. So...

MV Weekly Market Flash: Calling a Bubble Is Relatively Easy. Timing One, Not So Much

Yep, it’s a bubble. Not a maybe-bubble or a kinda-bubble, but the genuine artifact, we will argue. While the term tends to get bandied about fairly liberally, actual bubbles are relatively rare creatures in the ecosphere of the global capital marketplace. Let’s consider the evidence from several different viewpoints. We...

MV Weekly Market Flash: Fear and Greed at Hyperspeed

It is always interesting to ask, after one of those days of massive price swings in the market: what exactly happened that we didn’t already know? Take, oh, let’s say, Thursday of this week. The major US benchmark indexes fell by around six percent over the course of the day....

MV Weekly Market Flash: 1968, and What Happened Next

This has been a week of extreme nerves and emotions in our country, a week in which we have seen manifest evidence of both our darkest demons and our better angels playing out on the national stage. Our hearts go out to the family of George Floyd and to all...

MV Weekly Market Flash: Another False Dawn for Value

Spare a thought, if you will, for the beleaguered managers of value stock funds. There was a time, and not all that long ago in the great scheme of things, when value managers ruled. “Value outperforms growth over the long term” was as close to a law of nature as...

MV Weekly Market Flash: Of Sports and Stocks

In the long run, it’s cash flow that matters. If you’ve been reading our commentaries for awhile you will have heard us say this many times over. This, the primacy of sustainable cash flow generation throughout the economic cycle’s up and down phases, is the core principle of our investment...

MV Weekly Market Flash: Inflation, Deflation or No-flation?

We have become accustomed in the past few weeks to festooning these weekly commentaries with “never before in history” charts: the latest employment numbers, or investment grade bond prices or some other eye-popping deviation from long-term norms. We could do the same this week – headline retail sales plummeted by...

MV Weekly Market Flash: The Slow Emergence of a New World Economy

In some ways our commentary this week picks up from where we left off last week, but we’re extending our gaze from the sudden shocks of the present out to what is increasingly likely to be the slow stagnation of at least the intermediate future. Our discussion last week about...

MV Weekly Market Flash: The Economy and the Market

Let’s lead right off with the chart this week, because it visually encapsulates everything people have had a hard time processing in the past few weeks. On Thursday April 29 we learned that initial claims for unemployment filed in the previous week (from April 20-24) came in at 3.8 million,...

MV Weekly Market Flash: The Strange Yet Rational Case of Negative Oil

It’s reasonable to assume that you have never once driven into a gas station expecting an attendant to come out and pay you for the privilege of filling up your car. Doesn’t happen! But for a brief and very strange moment this week, the price of one particular type of...

MV Weekly Market Flash: Nice Prices, Scary Valuations

Ever since it cratered down to nearly 34 percent below its February 19 record high, on March 23, the S&P 500 has had itself a nice little bounce. As of the market close on April 16 the index was back to trading only 17.3 percent off the February high, thus...

MV Weekly Market Flash: The Fed Is Not Dead

Central banks arguably saved the global economy from a full-on depression in the period following the financial crisis of 2008, and they stayed around for many years afterwards, keeping interest rates at historical lows and pumping money into the economy via a succession of quantitative easing programs. The economy was...

MV Weekly Market Flash: Stay Buckled In, For Now

There are so many strands to this story, the unfolding drama of the coronavirus crisis that is dominating every aspect of our lives. But they are not parallel strands, neatly aligned and independently observable. They are like a chaotic pile of yarn, strands entangled with each other in a way...

MV Weekly Market Flash: The Great Bond Market Cataclysm

We are all in the process of adjusting to a different life than the one we knew just a scant couple weeks ago. There is much that we still do not know about how the coronavirus crisis is going to play out in terms of the number of cases, the...

2020: The Year Ahead

The last time the calendar saw out the decade of the teens and ushered in that of the 20s – fully one hundred years ago – the world was a very different place. There is no experience in our recent lifetimes to compare to the devastation of the First World...

MV Weekly Market Flash: Asset Repricing in 2020

If you spend enough time immersed in the chatter of financial news outlets you will invariably come across the phrase “asset repricing.” As 2019 draws to a close there is much use of this phrase as a way to describe the (to many) surprising resilience of risk assets, particularly equities,...

MV Weekly Market Flash: Will Politics Matter in 2020?

It’s Thanksgiving week, and most of you are hopefully going to put aside for a few days the contentious topics that dominate the news on any given day. We certainly plan to do just that. But before we fully immerse ourselves in the aromas of turkey and cornbread stuffing (yum),...