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Fight the Fed – A Raw 2024 Investment Reality Check | DAVID NELSON, CFA
Myth of the Elite 7 - Mega cap stocks were not the only path to success Challenging the Status Quo - Over-reliance on traditional investment mantras, in particular conventional wisdom surrounding the Federal Reserve has been an investment loser Reality Check - Lightning rarely strikes in the same place twice. Look outside the popular favorites for new…
Buying into Big Tech: Strategic or are we now the Greater Fool | DAVID NELSON, CFA
Big Tech's Market Influence Walmart's Earnings Report as an economic indicator Small Cap Stocks - Is this the beginning of a sustained rally? Fed - Can they pull off a soft landing When the Fed will cut By David Nelson, CFA CMT Bad news is good news. Good news is bad news. That's been the guiding…
Has the U.S. financial system passed the point of no return | DAVID NELSON, CFA
By David Nelson, CFA Bullet Points First step in solving a problem is admitting you have one The United States of America is addicted to debt Will strong earnings put our problems behind us Regime Change - Yields at the long end are going higher Problems show up in debt markets first Fixed income investors…
The Fed moved the goalposts – How to play and win | DAVID NELSON, CFA
By David Nelson, CFA We are coming into the last week of September and investors are facing some tough choices on how to position for the final quarter of 2023. On the heels of 3 weekly declines traders are bracing for a breakout in the VIX, (CBOE Volatility Index) forcing even lower prices or a…
From Bretton Woods to BRICS+: Will the $US remain the reserve currency? | DAVID NELSON, CFA
By David Nelson, CFA Markets always climb a wall of worry, and this market is no different. Investors are still trying to swallow 11 rate hikes from a born-again Federal Reserve, as well as increasingly pessimistic news out of the second largest economy on the planet, China. A rising dollar hits U.S. multinationals, the yield curve…
Time to get “Real” about the coming recession | DAVID NELSON, CFA
By David Nelson, CFA Traveler's usually follow in the footsteps of those who have successfully navigated the journey before them. Even Dorothy along with a few friends and her trusty dog Toto had the Yellow Brick Road. Investors are no different. We stick to the path as long as we can but have to be prepared…
Every Bull Market has an Achilles Heel | DAVID NELSON, CFA
By David Nelson, CFA CMT This is what most investors see when they look at a chart of U.S. stocks. Bloomberg Data This is what I see. Bloomberg Data Stocks are just 5% from an all-time high and a ball spiking end zone dance. The sentiment has turned bullish but making it across that goal line…
Magnificent 7 earnings on deck, what you need to know | DAVID NELSON, CFA
By David Nelson, CFA I get it. I look like I just came in from off the street. It's Sunday morning, the crew is out, and I have to bang out this report before I can get some sleep. The next two weeks will go a long way in shaping investor sentiment for the remaining dog days…
Chip Wars | DAVID NELSON, CFA
By David Nelson, CFA The tit for tat battle between the United States and China is raging. The US has already taken action restricting access to advanced semiconductors that could be used in artificial intelligence applications. American cloud computing, in some cases is also off limits, as access could help the Chinese circumvent A.I. restrictions…
Caterer to Mercenary – Inside look into the military coup in Russia | DAVID NELSON, CFA
By David Nelson, CFA CMT BREAKING NEWS! Every so often, a story takes shape that justifies the most overused graphic in broadcast media. The recent events in and outside Russia justify that headline as the most important story of the year unfolds. Over the weekend, an attempted military coup took place in Russia. The Wagner Group,…
You can’t handle the truth – Do the Math on the 2023 Bull Market | DAVID NELSON, CFA
By David Nelson, CFA The narrative for 2023 and a bull market that continues to get little respect is that without the support of its $trillion market cap members, most of the market is little more than roadkill. Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN) and its latest addition, Nvidia (NVDA) have put in…
When Is It a Good Idea to Make an All In Bet | DAVID NELSON, CFA
By David Nelson, CFA Going all-in. When do you make that bet? We see it in the movies all the time. Gamblers living on the edge push the chips to the center of the table confident there is no way they can lose. How does that scene play in the real world outside of a Hollywood…
Running On Empty – Why a debt deal could be bad news for stocks | DAVID NELSON, CFA
By David Nelson, CFA You've probably had this conversation with friends and family. It goes something like this. What happens to my 401k and other investments if Democrats and Republicans can't come to a compromise over the debt ceiling? U.S. debt is a staggering 31.4 trillion and debt to GDP is at the highest levels…
Evolution or Revolution: The AI Era Through the Eyes of an Investor | DAVID NELSON, CFA
David Nelson, CFA CMT Artificial intelligence is capturing the hearts and minds of investors. And why not? Real intelligence on so many levels is missing in action. As humans we seem to stumble from one bad decision to the next. What could be more exciting than a new technology that takes some of the burden off…
When is the best time to get out of mega cap stocks? Asking for a friend. | DAVID NELSON, CFA
By David Nelson, CFA CMT Did anything change last week? Not really. It was a modestly downbeat week with the exception of Friday's monster rally on the heels of a solid quarter from Apple (AAPL). The stock sits just shy of the August 2022 high and only modestly below all-time highs set in 2021. Bloomberg Data …
Size Matters | DAVID NELSON, CFA
By David Nelson, CFA CMTEarnings are about to get real as some of the largest companies on the planet are set to report. It's time for these Mega Cap giants to live up to their safe-haven image buoyed by fortress like balance sheets and secular growth trends that should protect them in times of tightening…
236,000 Jobs – The Fed is terrified of making this mistake | DAVID NELSON, CFA
By David Nelson, CFA CMTHow you spin a story is often more important than the story itself. It's certainly that way in politics. All you have to do is flip through your news channels on your cable box. The same story on Fox is going to look and sound a lot different than it does…
Wall Street Wars: Biden, Trump and Seinfeld Take Center Stage | DAVID NELSON, CFA
By David Nelson & ChatGPT Fade in applause Jerry on stage JERRY What's the deal with March Madness in the stock market? I mean, one minute we're cruising down the highway and the next minute we hit a pothole the size of Texas.And what do we do when we hit that pothole? We start digging…
China U.S. Relations – There’s only one way this ends | DAVID NELSON, CFA
By David Nelson, CFA US-China relations are once again center stage, as a congressional hearing Thursday highlighted the deepening concern that China's reach into our society isn't only harmful but a threat to national security. Sitting before members of the House, TikTok CEO Shou Zi Chew was grilled for hours by both Republicans and Democrats attempting…
Shotgun Marriage – UBS Credit Suisse | DAVID NELSON, CFA
By David Nelson, CFA CMT Swiss authorities had considered a full nationalization of Credit Suisse Group but it looks like UBS has agreed to an acquisition of the troubled institution at just over $3 billion. Unknown how forceful the persuasive argument was from Swiss authorities but it looks like they will shower UBS with enough…
What’s driving the surge in tech shares? | DAVID NELSON, CFA
By David Nelson, CFA CMT Investors are questioning the rush into mega cap tech at the height of a banking crisis that has rippled through markets in the last two weeks. I think CNBC's Josh Brown said it accurately. Investors today view many of these large digital companies as consumer staples. It's hard to deny that…
Silicon Valley Bank – Did the Fed break it or was it broken already? | DAVID NELSON, CFA
By David Nelson, CFA The failure of Silicon Valley Bank has sent regulators and the Federal Reserve scrambling for answers on how and why this happened. In some ways little has changed since the dark days of the financial crisis. This was a bank pushing the envelope, growing at break neck speed and seemingly unafraid that rising…
E.S.G. Good for Wall Street Bad for America | DAVID NELSON, CFA
By David Nelson, CFA E.S.G. What is it? Why is it important? And why did Congress just vote to block President Biden's Department of Labor rule, a rule that encourages private retirement fiduciary is to use ESG in the decision-making process? The bill passed both the House and Senate with bipartisan support on a very slim majority.…
Recession – The Fed says “it’s different this time” | DAVID NELSON, CFA
By David Nelson, CFA Markets have always climbed a wall of worry and this year is no exception. High on the list of investor concerns is inflation data that may not be falling fast enough for many officials in the FOMC. There's a reason why they say the Fed keeps hiking until something breaks. All to…
This chart shows why stock futures are down this morning | DAVID NELSON, CFA
By David Nelson, CFALast week's modest pull back in U.S. stocks was surprising given the current headwinds and challenges for risk assets. 2-year treasury yields are the highest since last November. Short duration fixed income and cash instruments are offering a competitive alternative to stocks.This morning futures reflect that reality with most markets looking at…
U.S. Debt Crisis – Is it time to use the nuclear option? | DAVID NELSON, CFA
By David Nelson, CFAThey say the market climbs a wall of worry. I've been hearing that my whole career and for the most part, it's true. In fact, it's so true that when there's nothing to worry about, it's probably a good time to sell.Part of the job in running money is to look out…
2023 Predictions – Hero to Zero in a New York Minute | DAVID NELSON, CFA
By David Nelson, CFA CMTEveryone loves predictions. Sports, politics, markets, even chess, it doesn’t matter. If it can produce a winner or loser someone is going to make a prediction and even more will risk dollars betting on the outcome. You can go from Hero to Zero in a New York Minute if you make…
Operational Risk Management 2023 – Portfolio Go No Go Checklist! | DAVID NELSON, CFA
By David Nelson, CFA CMTAll branches of the military use ORM or their own Operational Risk Management system. It's an imperative before launching any mission and commonly used by pilots in making go no go decisions. We identify the risks even those with low probability and make a quantitative judgement as to the feasibility of the…