FlashNotes

Confused by today’s rally in equities? No worries. I attribute this relief rally to three factors: 1) A group of financial institutions – Morgan Stanley, Bank of America, Wells Fargo, J.P. Morgan – are in talks to deposit ~$20B in First Republic Bank (FRC).  2) After touching a new 52-week low at around $65.50, Crude…

As markets grapple with the implications of Silicon Valley Bank (SVB), it is difficult to keep the emotion out of investing. Emotion – fear and hope alike – have no place in any investment strategy. Until regulators reach a more permanent resolution, we should expect increased volatility. To remove emotion from the equation, I defer…

Initial Thoughts Chat GPT has created significant excitement surrounding AI, causing associated stocks to skyrocket. Initially, I dismissed this as a typical buzzword bubble. However, earnings from Nvidia (NVDA) and Broadcom (AVGO) have led me to question my skepticism. Ambitious Statements From Conservative Management Jensen Huang, CEO of NVDA, remarked that AI is at an…

Shadows of 2022 The latter half of February felt a lot like 2022. If you told me what yields were going to do, I could tell you what stocks were going to do. Yields up; stocks down: nothing else matters, no matter how good or how bad. It was that simple.   Financial Markets 101: Yields…

A Shift In Emphasis Despite a vast number of companies reporting before and after each session, economic data dominated this week’s tape (2/13 – 2/17/23). The market is shifting its emphasis from the micro – company-specific developments – to the macro – economy-wide developments. While this shift occurs quarterly, it is worth noting because in…

When I woke up at 8:30AM to give Payrolls a cursory look, my initial thought was that the bear was about to reassert itself.  These numbers imply wage inflation was far from contained, and that the Fed will need to go higher for longer. However, a few bullish nuggets buried within the report put in…

Last week, I wrote a piece explaining how tech layoffs may imply slower growth for the mega-caps in 2023. If you haven’t, then I recommend skimming it; the implications came to fruition for MSFT, AMZN, AAPL, and GOOG. As each announced, the post-market reaction was mixed but became decisively negative once forward guidance revealed slower…

In bear markets, stocks have a tendency to behave like commodities, trading up and down together based on the macro. Bull markets are different; they feature differentiation.  Throughout 2022, there was no differentiation. Economic sectors were judged by their weakest link. On two separate occasions in 2022, negative headlines regarding Snapchat (SNAP) brought down the…

In the first two weeks of the year, each major has rallied between 3-5%. Select individual names are up 15-30%. There is no debate: 2023 has been a great start for equities, especially for stock pickers. It is important to keep your greed in check. Bears and bulls may not get along, but they both…