Author Archives: Michael Murphy

Dear New World Investor: Stocks broke their downtrend yesterday after the Fed’s Beige Book cited softening demand and moderating price growth. Economic activity was downgraded to “stagnating” or “unchanged” after July’s “modest expansion,” with five Districts reporting slight to modest growth in activity and five others reporting slight to...

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Dear New World Investor: The S&P 500 decisively snapped a four-day losing streak today by gaining 330 points from its intraday low. The Index still lost 5.5% since last Thursday and fell 4.2% in August. It is down 16.8% year-to-date. And here comes September! When the S&P has been...

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Dear New World Investor: Friday at 10:00am EDT Federal Reserve Chairman Jerome Powell will address the Kansas City Fed’s annual Jackson Hole conference. Last year he said inflation was transitory to justify not responding to already-rising prices with higher interest rates. He was wrong. This year, he is expected...

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Dear New World Investor: The Fed minutes indicate they are full speed ahead on interest rate increases until either inflation cracks or unemployment shoots up. The Goldman Sachs Credit Impulse Index shows a hard landing coming for the economy with a stock market decline likely. Fed tightening takes seven...

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Dear New World Investor: The headline Consumer Price Index year-over-year change was 8.5% versus the 8.7% estimate and 9.1% last month. The month-over-month change was zero compared to the 0.2% estimate and 1.3% last month. That is the lowest month-over-month change since COVID hit, but the entire cause was...

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Dear New World Investor: The lesson of this market since the June 17 low is when stocks rally and very few investors can say why, and it looks absurd and un-fundamental, sometime those are the most vicious rallies. Everyone thinks the next lesson will be a dramatic reversal from...

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Dear New World Investor: The Fed raised the Fed funds rate ¾ of a percent (75 basis points or bps) to a range of 2.25% to 2.50%. The cumulative rate hike for June and July is the most aggressive since the early 1980s, yet the stock market exploded higher....

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Dear New World Investor: Tuesday was a 17:1 up day (advancing volume/declining volume), the best day since March 24, 2020. Combined with Friday’s 11:1 up day, it was the second 10:1 up day in three sessions. In the past, after two 10:1-or-better up days within three months without a...

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Dear New World Investor: Happy Bastille Day! July 14 is the French National Day celebrating the anniversary of the storming of the Bastille on July 14, 1789, a major event of the French Revolution. In the US, we could be celebrating the likely end of Fed fear as the...

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Dear New World Investor: The Federal Reserve Open Market Committee minutes from their June 14-15 meeting said: “Participants judged that an increase of 50 or 75 basis points would likely be appropriate at the next meeting.” OK, that negative is in the market. At the July 26-27 meeting, a...

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