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Paulsen's Perspective

Jul 13 2020

Not Your Parents' Growth Or Value?

  • Jul 13, 2020

Value stocks and growth stocks have recently created angst for investors. Value investing reflects an entrenched, losing momentum and the growth style increasingly appears like a bubble in search of a bust. This isn’t exactly a new trend—growth has been besting value for much of the last 15 years, but it has accelerated mightily since year-end, escalating concerns among both value and growth investors.

Jul 07 2020

Economic VIX Exploding!

  • Jul 7, 2020

Although the stock market’s VIX Volatility Index is back below 30 and continues to moderate from its surge in March, the Economy’s VIX Volatility Index is just beginning to explode! Over the last ten years, the average annualized quarterly growth in real GDP was 2.1%.

Jul 02 2020

The Payroll Prophecy!

  • Jul 2, 2020

Should this morning’s payroll-employment report cause stock investors to tremble? Probably not.

Jun 29 2020

Bull Market Possibilities

  • Jun 29, 2020

From its March 23rd low to its recent high, the S&P 500 surged by almost 45%! Is the speed and size of its rally too much, too fast?

Jun 25 2020

Embrace Uncertainty!

  • Jun 25, 2020

Many believe the stock market rally during this pandemic is nothing more than a sugar high orchestrated by the Federal Reserve. Liquidity trends have always been important for the financial markets, and undoubtedly, the outsized policy-push by monetary officials has played a significant role in the market’s recent success.

Jun 22 2020

Some Singulars

  • Jun 22, 2020

No big theme this week. Just half a dozen “one-offs!”

Jun 15 2020

Profit Expectations To Lift?

  • Jun 15, 2020

Company earnings are currently collapsing but the coming year’s consensus profit expectations are poised to lift. Several indicators that have historically been highly correlated with improvement in profit forecasts have recently turned higher and the backdrop of massive policy stimulus is supportive for upgraded outlooks.

Jun 08 2020

Another Positive for the Stock Market! Rising Bond Yields?

  • Jun 8, 2020

As economic activities restart around the country, bond yields have also begun to climb. Last week, the 10-year U.S. Treasury yield rose by about 25 basis points, to its highest level since March 19th, marking only the second time since yields collapsed that they showed any sign of leaving the “sub-1%” area.

Jun 03 2020

Don’t Fade The “Economic” BOUNCE

  • Jun 3, 2020

Despite several issues of importance—national riots, an upcoming presidential election, Chinese relations, and an ongoing pandemic—the stock market is primarily focused on a single thing: the restart of U.S. and global economic activities. There is a worldwide, synchronized economic bounce afoot. Because of the unprecedented magnitude of the recent Covid-19 economic collapse (can it really get much worse?), economic news seems poised for a period of improvement.

Jun 01 2020

Two Conundrums? A Single Answer!

  • Jun 1, 2020

Compared to historical norms, for much of the last 30 years valuations in the U.S. stock market have remained persistently high. Only rarely has it been considered cheap and many investors have purchased stocks that, by conventional metrics, were either uncomfortably or absurdly expensive.

May 26 2020

Conjectures?

  • May 26, 2020

Things are moving fast! Attitudes and expectations are changing. On the health front. On the economic front. And, in the financial markets. Here are a few “Conjectures?”

May 20 2020

Can’t Wait for a Return to Normal

  • May 20, 2020

Many believe it will take years to fully recover from Covid-19. Indeed, over the weekend, U.S. Federal Reserve chairman Jerome Powell suggested that although the economy will eventually recover, the process could stretch through until at least the end of next year and ultimately depends on the development of a vaccine.  

May 15 2020

Re-Opening The U.S. Economy Is ALL About Politics

  • May 15, 2020

The attempt to re-open parts of the U.S. economy amidst the ongoing Covid-19 crisis is either Red, Blue, or Purple! Using data from an employment tracking tool utilized by 100,000+ local businesses across the United States, the accompanying chart illustrates the speed and depth of the decline in hours worked and its recent slow recovery among traditional Republican, Democratic, and Swing states.

May 13 2020

Growth Stocks Aren’t Winning… “Growth” Is!

  • May 13, 2020

Growth stocks have been outperforming for much of the last decade, particularly in recent years, and amazingly so since year-end. However, as the charts here illustrate, it is not so much that growth stocks are winning as it is “Growth!” 

May 08 2020

Policy POWER

  • May 8, 2020

Economic policies have long been a potent force for both the economy and the financial markets. Despite being unsure and worried about how the Covid-19 crisis will yet play out, investors are also currently fearful of ignoring the old adage “Don’t Fight the Fed.” 

May 06 2020

Some Valuation Vignettes

  • May 6, 2020

It is always challenging to judge value, particularly during recessions when earnings power temporarily (one hopes?) contracts. The difficulty has been magnified in the current situation because, like economic data in general, earnings are in freefall! 

Apr 29 2020

Broader Market Leadership? You Gotta Bring The HEAT!

  • Apr 29, 2020

Domestic, large capitalization, and growth have dominated stock market leadership for much of the last decade. During this stretch, investors (author included) have repeatedly attempted to exploit “undervalued and out-of-favor” segments of the stock market, only to be proved premature. 

Apr 24 2020

A Bottomless Economy?

  • Apr 24, 2020

Is there any way to judge when U.S. economic reports may finally bottom? Obviously, it depends on what happens with the virus. If it continues to burn hot or simply lingers longer than expected, keeping “stay-at-home” orders in place, could economic data prove bottomless? 

Apr 21 2020

The “Growth Style” Dominates With A Unique Profile

  • Apr 21, 2020

For the second time in the last 30 years, “growth” has dominated leadership within the stock market. After significant outperformance during the 1990s’ dot-com era, the growth style has again substantially outpaced since the start of the last recovery (Chart 1).

Apr 16 2020

Earnings Are Going Down... But Maybe Not Stock Prices?

  • Apr 16, 2020

Earnings, like everything in the economy, are in freefall. Finance textbooks would argue this paints a bleak future for the stock market, but that isn't always the case. 

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