TYD

Labor and the Economic Cycle

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As we arguably near the “peak” in the business cycle, labor is starting to demand more, a dynamic that we believe is emblematic of the period of aging economic expansion. Let’s have a look at what’s happening in the fight for higher wages. By Brian Nelson, CFA Each business cycle is different in both magnitude and duration, but there are some common qualities that define where an economy might be within the cycle. First, it has been more than 8 years since the March 2009 stock-market panic bottom, a period that witnessed firms such as Lehman Brothers, Bear Stearns, and AIG (AIG) flounder. The unemployment rate peaked at 10% during that difficult time. Since then, the US economy has emerged … Read more

Why The Fed Matters

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By Brian Nelson, CFA I tread very lightly in how I communicate broad macroeconomic information. There are investors that are purely macro-focused asset-allocators, there are eternal optimists that believe the sky is the limit regardless of any economic considerations (perhaps like the Oracle of Omaha these days?) and then there are legends like Peter Lynch who is attributed with saying that “if you spend more than 13 minutes analyzing economic and market forecasts, you’ve wasted 10 minutes,” and that “if all the economists in the world were laid end to end, it wouldn’t be a bad thing.” Peter Lynch was the manager of the Fidelity Magellan Fund that averaged a near-30% annual return during the 13-year period ending 1990, “You … Read more

Still Bullish — Stocks for the Long Run!

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Excuses not to pick stocks are only exposing biases these days. By Brian Nelson, CFA The S&P 500 (SPY), Dow Jones Industrial Average (DIA) and Nasdaq (QQQ) continue to hover near all-time highs, and all appears well. We maintain our bullish take on the markets and believe that we are in the early innings of a long bull market that started following the washout March 2020 during the depths of the COVID-19 meltdown. Stock bull markets tend to average about 4.4 years in duration, with the last one enduring ~11 years, while bear markets are very abrupt, lasting only 11.3 months on average, the last one a very short 1.1 months, according to data from First Trust. We’re about 15 … Read more