Skip to content

Paulsen's Perspective

Dec 08 2022

EASING Has Begun...

  • Dec 8, 2022

The Federal Reserve has not yet begun easing, but “Easing” is a multi-dimensional event, and increasingly, the outlines of a new cycle (often associated with the beginning of a bull market) are coming into focus.

Dec 02 2022

“INVERTED” Is Such A Scary-Sounding Word!

  • Dec 2, 2022

The yield curve (i.e., the 10-year bond yield less the 3-month bill yield) finally “INVERTED” in late October, raising significant fear among investors. It is a scary-sounding word. Consider some of its synonyms: upended, capsized, backward, upset, confused, disordered, jumbled, haywire, and wrong-side-up.

Nov 29 2022

Government Economic Policies Are Best When “Ho-Hum”

  • Nov 29, 2022

Since the dot-com crash, there has been general disappointment with government economic policies—both fiscal and monetary. In the aftermath of the 2008 financial crisis, apprehension about economic programs surged, and after a brief respite from 2016-2020, the outlook since the pandemic has again darkened considerably.

Nov 21 2022

What If The Low Is Already In?

  • Nov 21, 2022

There is still considerable debate about whether the bear market has yet set its low. Certainly, if the U.S. economy is headed for a deep recession, stock investors will face additional, significant downside risk. Several smart bears on Wall Street suggest the S&P 500 could decline to about 3,000—or -25% from today’s level—as analysts are forced to cut earnings estimates. However, if the economy manages to avoid recession or experiences only a modest contraction, a new bull market may already be unfolding. While, understandably, downside risk typically gets the most attention, investors should also consider what the “upside risk” could be in the coming year if the “low is already in?”

Nov 18 2022

The Power Of DISINFLATION

  • Nov 18, 2022

The debate surrounding “how long” U.S. inflation could remain elevated and how quickly or slowly it will return to “normal” is far from over. However, at the very least, it appears that inflation has peaked. During the last few months, the annual CPI, PPI, and wage inflation rates have declined noticeably and significantly from their respective cycle highs. Several concerns still need to be addressed. Will inflation persist at its current unacceptable level and require much more aggressive policy action? Could inflation expectations yet become unanchored? Is a recession inevitable? Or, now that we’ve seen the inflation peak, will conditions promptly return to normal?

Nov 17 2022

Recession Resistance

  • Nov 17, 2022

Inflation has been slowing for the last several months and finally appeared in the “headline” numbers last week. Although a single comforting CPI report will not eclipse ongoing concerns about inflation, leading up to that report, there was a broad array of evidence that inflation was moderating and has probably peaked—e.g., falling commodity prices, decelerating wage inflation, declining import and export prices, renewed deflation in the Adobe Digital Price Index, various private sources (like Costar and RealPage) illustrating that rents had decreased, a downturn in used vehicle prices, a complete collapse in shipping rates, and increasing numbers of retail price discounts due to inventory overhangs.

Nov 10 2022

More Bond Buyers Than Bond Sellers?

  • Nov 10, 2022

In August 2020, the 10-year U.S.-Treasury bond yield hit an all-time low of about 50 basis points. Since then, the primary problem for bond investors, understandably, has been “more sellers than buyers.”

Nov 07 2022

Flat For Five?

  • Nov 7, 2022

The U.S. stock market has been ugly all year. Last week, with a Fed meeting and presser—surprise—the stock market had yet another LOUSY showing. Nonetheless, despite the Federal Reserve reiterating that the pain is far from over, investors should note that the S&P 500 has stopped falling. It might not feel like it, but after trending persistently lower during the first five-and-a-half months of 2022, the stock market has now been “Flat” for the last “Five.”

Nov 03 2022

A Liquidity Pivot Is Nearing

  • Nov 3, 2022

During the last 18 months, the U.S. economy and financial markets have been challenged by persistent declines in real liquidity growth. Slower real monetary growth—with a lag of one year or more—tends to moderate real economic growth, inflation pressures, and corporate profit expansion. In a more coincident fashion, stocks and bonds also struggle as liquidity becomes inadequate.

Oct 31 2022

An INEXPLICABLE Stock Market

  • Oct 31, 2022

Since at least Jackson Hole, the narrative has been that inflation is a big problem, and the Federal Reserve was up for the fight—certifying it would raise interest rates quickly, substantially, and for a long time. Powell gave his “tough-love” speech on August 26th when the S&P 500 was at 4,200 and the Treasury yield was near 3%.

Oct 27 2022

Fed Uncertainty And Investor Sentiment To Improve?

  • Oct 27, 2022

Not since the late 1970s has uncertainty surrounding monetary policy and the Federal Reserve been so pronounced. Of course, current anxiety about Fed actions is the direct consequence of the highest inflation in 40 years. Nonetheless, the aggressive and unorthodox policies enacted this year by the tough-talking and tough-acting Fed have led to some of the most pessimistic investor-sentiment readings in history.

Oct 24 2022

Has The Stock Market Changed Its Stripes?

  • Oct 24, 2022

Until mid-year, inflation fears intensified, bond yields rose, the Fed raised the funds rate, and the stock market declined. Since mid-year, inflation fears have intensified, bond yields have risen, the Fed has persistently raised the funds rate… but the stock market stopped falling. The S&P 500 surged from its June lows, collapsed in August, and is now basically unchanged over the last several months.

Oct 18 2022

A Fed Pivot, Or Does The Bond Market Blink First?

  • Oct 18, 2022

How much more and for how much longer will the Federal Reserve keep raising interest rates? Will a significant upturn in the unemployment rate stop them? A surprising drop in a headline inflation reading? Or will recent Fed actions “break” something, resulting in a financial shock? Who knows?

Oct 13 2022

Stock Market Discounting Plenty Of “BAD”

  • Oct 13, 2022

Sentiment measures have been lousy most of this year. The CNN Fear and Greed Index is at 19—categorized as “extreme fear.” The AAII Bulls Less Bears indicator has been below -20 much of the year and is now at -31—lower than 98% of the time since its 1987 inception. The Investors Intelligence Bull/Bear Ratio, which tracks the market sentiment of financial advisors, is currently less than 1.0, illustrating panic. The 10-day moving average of the CBOE Equity Put/Call Ratio is higher than at any time since the March 2020 pandemic collapse. And, finally, the stock market’s “fear gauge”—the CBOE VIX Volatility Index®—has frequently been above 30 this year (as it is now).

Oct 10 2022

Is The “Death” Of Profits Greatly Exaggerated?

  • Oct 10, 2022

The lagged impact of an array of contractionary economic policies in place since early 2021—a severe deceleration in monetary growth, substantially less fiscal accommodation, a surge in the U.S. dollar, and significantly higher yields across the yield curve—is already slowing both real economic growth and inflation and will surely moderate profit growth. However, there is mounting apprehension that company earnings growth will not only diminish but collapse as the Federal Reserve pushes the economy into a recession.

Oct 04 2022

Good News Which Is Still “Good News”

  • Oct 4, 2022

With overwhelming concerns about inflation, overheated economic growth, and Federal Reserve tightening, any good news is mainly perceived as “bad news.” Reports showing strong consumer spending, healthy industrial activity, better housing numbers, or solid job figures only raise fears that the Fed will be forced to lift interest rates higher for longer. It’s a tough environment for investors. Typically, evidence of “economic health” is a good thing. Until the Fed blinks, however, and inflation anxiety moderates, news that is ordinarily good will be “bad.”

Sep 29 2022

Potpourri

  • Sep 29, 2022

Just a few unrelated concepts to end a turbulent week.

Sep 26 2022

Thoughts On The HAWK At The Helm

  • Sep 26, 2022

Over the years, I’ve never tried to “figure out” what the Fed would do. Rarely spent much time adding up the number of doves versus hawks comprising the board. Didn’t find much value in parsing “Fed Speak,” carefully examining changes in the minutes from the last meeting, trying to reconcile widely diverging opinions among the multiple speeches of current members, and certainly never did a deep dive into the dot plots. Turns out, that was a mistake!

Sep 19 2022

Confidence Is Cheap… Relative To Fear

  • Sep 19, 2022

What a year! Runaway inflation, surging bond yields, a rebirth of the Volcker Fed, a persistent bear market, widespread recession fears, a European War, and rising China/U.S. tensions. Not to mention—yet another booster shot, the passing of a 70-year-reigning Monarch, unprecedented heat, floods, fires, tornadoes, hurricanes, and, of course, mid-term elections in a country with massive political strife.

Sep 16 2022

Yields Increasingly OUT OF BOUNDS?

  • Sep 16, 2022

Yields have been on an upswing all year, and based on Federal Reserve comments, they may go up for the balance of 2022 and perhaps into 2023. Nevertheless, a host of factors suggest yields are getting more and more “out of bounds” with historical norms, and a “rate peak” is probably nearing.

Paulsen's Perspective Archive

Jul 25, 2022
May 31, 2022
May 19, 2022
Apr 18, 2022
Apr 07, 2022
Mar 28, 2022
Mar 23, 2022
Mar 08, 2022
Mar 01, 2022
Jan 04, 2022
Nov 22, 2021
Nov 16, 2021
Nov 11, 2021
Nov 08, 2021
Oct 27, 2021
Oct 12, 2021
Sep 27, 2021
Sep 13, 2021
Sep 07, 2021
Aug 26, 2021
Aug 05, 2021
Aug 03, 2021
Jul 27, 2021
Jul 23, 2021
Jul 12, 2021
Jul 01, 2021
Jun 25, 2021
Jun 23, 2021
Jun 21, 2021
Jun 10, 2021
Apr 29, 2021
Apr 19, 2021
Apr 14, 2021
Apr 12, 2021
Apr 06, 2021
Apr 01, 2021
Mar 30, 2021
Mar 23, 2021
Mar 16, 2021
Mar 08, 2021
Mar 05, 2021
Feb 19, 2021
Feb 04, 2021
Jan 25, 2021
Jan 04, 2021
Dec 14, 2020
Dec 02, 2020
Nov 02, 2020
Oct 27, 2020
Oct 15, 2020
Oct 09, 2020
Sep 10, 2020
Aug 13, 2020
Aug 11, 2020
Aug 03, 2020
Jul 29, 2020
Jul 21, 2020
Jul 02, 2020
Jun 25, 2020
Jun 22, 2020
May 26, 2020
May 08, 2020
Apr 24, 2020
Apr 13, 2020
Apr 07, 2020
Apr 06, 2020
Mar 25, 2020
Mar 16, 2020
Mar 09, 2020
Feb 28, 2020
Feb 26, 2020
Feb 18, 2020
Feb 10, 2020
Jan 13, 2020
Jan 07, 2020
Jan 02, 2020
Dec 23, 2019
Dec 19, 2019
Dec 02, 2019
Nov 21, 2019
Nov 19, 2019
Nov 14, 2019
Nov 04, 2019
Oct 28, 2019
Oct 03, 2019
Sep 30, 2019
Sep 23, 2019
Sep 17, 2019
Sep 03, 2019
Aug 30, 2019
Aug 15, 2019
Aug 07, 2019
Aug 05, 2019
Jul 15, 2019
Jun 21, 2019
Jun 17, 2019
May 20, 2019
Apr 29, 2019
Apr 18, 2019
Mar 25, 2019
Mar 18, 2019
Mar 11, 2019
Feb 19, 2019
Feb 11, 2019
Jan 22, 2019
Jan 16, 2019
Dec 06, 2018
Dec 03, 2018
Oct 15, 2018
Sep 17, 2018
Aug 20, 2018
Aug 13, 2018
Jul 31, 2018
Jul 30, 2018
Jul 23, 2018
Jun 08, 2018
Jun 08, 2018
May 21, 2018
Apr 30, 2018
Apr 09, 2018
Apr 05, 2018
Apr 02, 2018
Mar 26, 2018
Mar 26, 2018
Mar 12, 2018
Mar 08, 2018
Mar 05, 2018
Feb 05, 2018
Jan 29, 2018
Jan 22, 2018
Dec 27, 2017
Dec 18, 2017
Nov 13, 2017
Oct 30, 2017
Oct 23, 2017
Oct 02, 2017
Sep 25, 2017
Sep 20, 2017
Sep 11, 2017
Sep 05, 2017
Aug 07, 2017
Jun 29, 2017

Interested in Investing in a Model?

Contact us if you are interested in investing in our ETF models.