Guild’s Basic Needs Index
Commodity Price Drivers: The Rational, the Irrational, and the Unpredictable
Many commodities have boomed, driven by a confluence of forces: ongoing monetary and fiscal stimulus; accelerating post-pandemic global economic growth; long-term underinvestment in commodity production capacity; pandemic-related supply chain and shipping disruptions; the rise of sustainability metrics for public companies; the push for decarbonization and the electrification of the global
Market Summary — 29 April 2021
As we continue to lap the initial stages of the pandemic, a lot of numbers are going to start showing year-over-year peaks: GDP, earnings growth, inflation. Looking forward, everything may start to look like deceleration — and since the market is a discounting mechanism that looks out to the future,
Will the Feds Ban Bitcoin?
Last week we wrote about the advent of central bank digital currencies, outlining the motivations that governments and central banks have for upstaging the rise of decentralized crypto networks such as bitcoin and Ethereum. This week we’ll take a look at a trend in communication from fiscal and monetary authorities,
Market Summary — 22 April 2021
The overall market indices in the U.S. have moved sideways, near all-time highs. Many former high-flyers have corrected, with formerly exuberant cryptos and SPACs registering volatility and declines, suggesting that the market is already experiencing a sector by sector correction. The S&P 500 may see more correction soon, perhaps registering
When the Fed Creates Its Own Bitcoin: The Disruptive Potential of Central Bank Digital Currencies
Bitcoin and cryptocurrencies in general have reclaimed the imagination of the investing public, especially as crypto has enjoyed another of its periodic spectacular runs since late last year. Belatedly, mainstream analysts are beginning to note what we told a crowd at the Las Vegas MoneyShow three years ago — digital
Market Summary — 15 April 2021
While we remain bullish on the U.S. market longer-term, the market is obviously ready for a normal correction. This correction may only be a 5% pullback, or it may be slightly more. Therefore we have held some cash and short positions in order to hedge out the risk and provide
The Boom Arrives on Main Street
As we noted last week, we believe that as 2021 progresses, we will have a drumbeat of increasing analyst expectations for GDP growth and economic activity. The past year’s pandemic-driven economic gyrations have been so severe that economists and macro strategists — who as a group are not the most
Market Summary — 8 April 2021
Countries We Like We are bullish on the U.S., Japan, Korea, and India, and we favor the industries mentioned below. We are optimistic on the remainder of 2021, and believe that GDP growth in the U.S. will exceed analysts’ expectations, and that they will spend the year playing catch-up. Market
What Could Derail The Economic Train? Watch Out For A Tax Policy Accident
A trend has emerged: the research departments of the big brokerage houses are gradually increasing their estimates for U.S. GDP growth in 2021. Last week, Bank of America raised its full-year target from 6.5% to 7%. Although Goldman Sachs has kept its full-year target at 7.5%, this week it pulled
Market Summary — 1 April 2021
The U.S. Market The rotation continues, and for a few more months one industry after another may see a fall in stock prices while the broad indices move ahead very slowly or rotates sideways. Interest rates will rise, but as long as five-year bond yields stay below the CPI, we
The Guild Basic Needs Index: Up 15.6% Compared to A Year Ago
Reading time: 3 minutes For many years, Guild has compiled and tracked a neutral inflation index which we call the Guild Basic Needs Index™ (GBNI). We designed it to be a simple analysis of the real state of the inflation experienced by consumers — an unchanging basket, unmanipulated by rebalancings,
How Rising Rates Are Hurting the Emerging Markets Rebound
Reading time: 3 minutes Emerging markets, like the rest of global stock markets, have enjoyed a torrid rise since the pandemic bottom just over a year ago. That rise was reinvigorated in late October and early November as word filtered into markets that covid vaccines had proven effective in accelerated
Market Summary — 25 March 2021
Reading time: 4 minutes The U.S. Market The U.S. is undergoing a rolling correction as industry after industry corrects and then stabilizes. Higher interest rates will benefit some industries more than others, and the key is that the industries most benefitted by higher rates are only benefitted as long as
Inflation Is Coming, the Cycle Is Turning, and You Need To Get Ready
The Fed’s press conferences in the era of “money printer go brrrrrr” are often derided as “nothingburgers,” but of course they are still required listening and contain important information. Nothing in Fed Chair Powell’s Wednesday press conference was surprising to us, but it served to underscore our convictions about (1)
Market Summary — 18 Mar 2021
We note that interest rates are now above where they were when the pandemic began; the economy is sitting on many trillions of newly-created dollars; and analysts are vying for more aggressive 2020 GDP growth targets. Even the Federal Reserve is raising its growth targets, and while the majority of
Where Will the Stimulus Money Go? Markets, Regional Booms, and Inflation
In the blink of an eye last spring, half the American workforce found themselves doing their jobs remotely. In spite of the rollout of vaccines and the rollback of pandemic behavioral restrictions in many places, that shift is still largely intact. In the long term, perhaps a quarter of the
