Author Archives: Michael Murphy

Dear New World Investor: What a week! Inflation vs. the Fed, labor markets vs. the Fed, OPEC+ vs. the Fed…no wonder everyone feels like the collateral damage of a drive-by shooting, even after the best two days in the market since April 2020. Let’s dive in. First, last Friday...

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Dear New World Investor: One year ago, the Fed said interest rates would remain lower for longer, they were unlikely to raise rates until 2024, they believed a recession was unlikely, inflation was transitory and not a problem, and inflation should fall to 2% in 2022. Wrong on every...

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Dear New World Investor: The Consumer Price Index report was worse than I or, apparently, most everyone else expected, resulting in a whopping 4.3% drop in the S&P 500 and 1,276 point on the Dow Jones Industrials. About 30% of the CPI is related to real estate, where the...

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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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