The Continuing Market Melt-up The third quarter sustained the upward momentum in the market, which we have characterized as a “market melt-up.” In our assessment, this trend was attributable to two primary factors. First, the extraordinary performance of the American…
From Liberation Day Chaos to Cautious Recovery The second quarter of 2025 started with the April 2nd "Liberation Day" tariff announcement that sent shockwaves through global financial markets. What began as extreme volatility and panic selling evolved into a remarkable…
Stock Price Performance in Review We postponed publication of our quarterly memo awaiting the statement from President Trump on tariffs. That turned out to be wise. His statement hit the market, which was already down from year-end 2024, like a…
Stock Price Performance in ReviewThe year 2023 ended on a high note. During the year, the S&P 500 Index rose 24.2% to close the year at 4,769.83. The total return on the index, including dividends, was 26.3%. However, as of…
Stock Price Performance in ReviewWe begin our Q3 2024 memo with a look back over the last ten years. The chart below plots both the standard S&P 500 index, which is value-weighted, and the equal weighted S&P 500 index over…
The performance of the market was remarkable in the second quarter. Driven by the Magnificent 7 tech stocks, for which the total return was 16.5%, the total return for the S&P 500 was 4.3%. What was remarkable was not the…
The S&P 500 ended the year 2023 at 4,769. During December, several leading financial firms were asked for their forecasts for the year-end 2024. The results are shown below. The most optimistic forecasts were by Fundstrat (a well-known bullish firm),…
A market crash is nothing more than a low risk premium meeting risk aversion.----- John P. Hussman, Ph.D., November 8, 2021, When Bubble Meets TroubleRisk Premiums and Stock Prices In our third quarter memo, we stressed the importance of the equity risk…
Discount rate variation (equivalently expected returns, risk premiums) is now at the center of asset pricing questions, from bubbles to the nature of the crash.----- John Cochrane, Presidential address to the American Finance Association.As John Cochrane notes, it is hard…
Stock Market Review for the First Half Year The market performance in the first half of 2023 was a surprise, to say the least. Whereas the year began with concerns about an impending recession, the market shrugged off those fears…