Author Archives: Michael Murphy

Dear New World Investor: Well, I know this feels bad. But for the second time in a week, the S&P 500 touched the bear market trigger (3855 – down 20% from its all-time high) and bounced. Yet sentiment is extremely negative. Nearly $81 billion exited stock and bond funds...

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Dear New World Investor: This is a difficult, miserable market with only a few bright spots. First, virtually everyone is bearish – “investor sentiment is so bearish, it’s bullish.” When everyone who is going to sell has sold, stocks go up. Second, this drop – painful as it is...

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Dear New World Investor: Powell giveth and the markets taketh away. Yesterday, the Fed increased the Fed funds rate by 50 basis points – ½ of 1%. It was the first 50 basis rate hike in 22 years but exactly as expected and the market yawned. Then, in his...

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Dear New World Investor: Earnings season is underway. There are always high-profile misses – looking at you, Netflix – but the key is that overall estimates keep on being revised up. Since the beginning of this earnings season, March quarter S&P 500 earnings have been revised up 2.1% to...

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Dear New World Investor: March quarter earnings reports so far are pretty good, with the notable exception of Netflix. Our stocks start reporting next week with the big guys – Apple, Corning, Gilead, and Meta – going first, as usual. May 9 is the major Russian holiday marking their...

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Dear New World Investor: The headline March Consumer Price Index hit a 40-year high of +8.5%, yet yields fell on Treasury paper because the core CPI excluding food and energy was up “only” 0.3% from February, compared to the 0.5% expected. The core numbers will slow quickly and the...

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Dear New World Investor: Soon to be Fed Vice Chairman Lael Brainard kneecapped the rally by saying the Fed will run down their balance sheet aggressively, perhaps at $95 billion every month, beginning as soon as next month. The 10-year Treasury note closed today with a 2.652% yield while...

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Dear New World Investor: Yield curve inversions, where shorter-dated Treasury notes yield more than longer-dated notes or bonds, are both feared and poorly understood by investors. In the past, whenever the yield on the 2-year note has risen above the yield on the 10-year note, there’s been a recession...

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Dear New World Investor: It’s Spring Break for my eighth-grader, so we headed to the Oregon coast for a few days, hoping the Cascadia tsunami would hold off until we got back. It did, and we came back to the same old, same old: the Fed is more hawkish,...

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Dear New World Investor: Happy St. Patrick’s Day! Or as best you can, with headlines like: Yuan Jumps After Report on Saudis Weighing Its Use in Oil Deals (Whoops, there goes reserve currency status for the dollar) U.S. consumer sentiment near 11-year low; near-term inflation worries mount (Whoops, there...

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