In a not-so-surprising move, the rating agency Moody’s has downgraded the credit quality of the U.S. to AA1 from AAA. This recent action reflects the ever-growing concern over America’s budget deficits and exploding debt. With a national debt approaching $37 trillion due to years of excessive spending, some believe the financial strength of the U.S. is weakening. As you continue reading, it should become clearer why Moody’s has taken this action. A country’s debt is often measured against its economic growth or GDP. This is called the debt-to-GDP ratio, which for the U.S. was 35.39% in 1980, 57.11% in 1990,…

Q1 Earnings Reports Trip.com Trip.com (9961 HK, TCOM US) reported Q1 financial results after yesterday’s US market closed. The stock was off by -2.22% overnight despite lagging its internet peers and the Hong Kong market year to date (YTD). The lack of Q2 guidance weighed on sentiment. Revenue increased by +16% year-over-year (YoY) to RMB 13.8B ($1.9B) from RMB 11.9B and versus expectations of RMB 13.8B. Adjusted Net Income was RMB 4.2B ($579mm) from RMB 4.06B and versus expectations of RMB 3.84B. Adjusted EPS was RMB 5.96 ($0.82) from RMB 6 and versus expectations of RMB 5.66. Bilibili Online video…

With an ever-growing list of similar-sounding ETFs to choose from, finding the best is an increasingly difficult task. How can investors change the game to shift the odds in their favor? Don’t Trust ETF Labels There are at least 232 different All Cap Blend ETFs and at least 898 ETFs across twelve styles. Do investors need 74+ choices on average per style? How different can the ETFs be? Those 232 All Cap Blend ETFs are very different from each other. With anywhere from 1 to 9,752 holdings, many of these All Cap Blend ETFs have drastically different portfolios with differing…

While stocks managed to bounce back from early losses the first day after Moody’s downgrade of U.S. sovereign credit—bringing it in line with previous actions by Standard & Poor’s (2011) and Fitch (2023)—we understand that the decision raises concern about America’s fiscal health. But as history has shown, these downgrades have hardly been lasting impediments to long-term equity market gains. For investors with a steady hand and a long-term perspective, the evidence continues to favor staying the course. The rationale from Moody’s echoed familiar concerns: persistent large fiscal deficits, rising entitlement spending and limited political will to rein in debt.…

April Economic Data Release New Home Prices Month over Month -0.12% Used Home Prices MoM -0.41% Property Investment Year-to-Date (YTD) -10.3% versus expectations -10% and March’s -9.9% Residential Property Sales YTD -1.9% versus March’s -0.4% Retail Sales +5.1% versus expectation 5.8% and March’s 5.9% Online Retail Sales +7.7% YTD YoY Industrial Production +6.1% versus expectations 5.7% and March’s 7.7% Fixed Asset Investment 4.0% versus expectations 4.2% and March’s 4.2% (Infrastructure +5.9% YoY, Manufacturing +8.8%, Real Estate Development -10.3%) Jobless Rate 5.1% versus expectations 5.2% and March’s 5.2% Key Points made in the National Bureau of Statistics spokesperson Fu Linghui: “Vigorously…

The Federal Open Market Committee is expected to hold rates steady at its upcoming decision on June 18, according to fixed income markets. However, the meeting may be significant in shaping expectations for monetary policy for the remainder of 2025. That’s because policymakers will update expectations for the Summary of Economic Projections, which includes a forecast for interest rates. This may, in turn, depend on data on jobs and inflation in the weeks leading up to the meeting. The State of The Economy At a speech on May 15, Fed Governor Michael Barr said, “In my view, the economy is…

You probably wouldn’t bet on a horse that usually finishes in the middle of the pack. But in the stock market, sometimes that’s a good idea. Once a year, I write about my “Do Nothing Club,” a group of stocks that linger near their prices from a year ago, but that I believe may levitate in the coming year. In 21 years, my Do-Nothing stocks have averaged a 14.3% return over the year following publication, beating the Standard & Poor’s 500 Total Return Index at 10.1%. Of course, price stagnation in and of itself is no reason to get excited…

Moody’s credit rating agency issued a “negative outlook”, however, the markets scarcely noticed. Bond yields stayed put. Stocks shrugged. The dollar stood firm. But more importantly, the Moody’s downgrade means trust is slowly eroding. This isn’t about the United States defaulting. The default isn’t due to the government failing to make an interest payment. Credibility underpins every currency, bond, and valuation. When credibility cracks, repricing is quiet. It is subtle, systemic, and has a longer-lasting effect. Markets don’t scream at trust loss. They whisper. Smart investors listen. Downgrades don’t represent the actual risk. It signals a steady, grinding erosion of…

Is it time to buy the dip on these cheap dividends—which by the way yield between 5.3% and 7.6%? Yes, the market-at-large has bounced quite a bit. But these payers remain mired in the bargain bin. Vanilla investors who only focus on the S&P 500 have serious FOMO. They worry that they missed the pullback. The best buying opportunity, at least in terms of the plain “SPY” ETF owned by most of America, lasted only a week or two: But there are still cheap dividend payers that haven’t rallied alongside the popular names. At least not yet. Let’s discuss five…

About a month ago, Mike Bird, the Wall Street editor for The Economist, tweeted (or “X-ed,” I guess I should say) the following: “You have to concede that there would be a form of stupid, ridiculous beauty in the S&P 500 closing completely flat for April.” And, well, after all the drama we saw in April, that’s pretty much where we landed. I once met Mike for coffee, and he’s a friendly, intelligent person, so it’s easy for me to agree with him here: Yes, the market behaved stupidly in April, starting with the tariff selloff and ending with the…