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…

Moody’s lowered the sovereign credit rating of the US, joining S&P and Fitch in stripping America’s AAA status. While this is historic and will attract media attention, it reveals what has long been the Federal government’s poor governance and management. Spending more than it collects in taxes and lacking the courage to make difficult decisions and think long term. The current administration is admirably trying to right the financial ship. However, its on-again, off-again tariffs will never collect the intended revenue. Additionally, its proposed tax reductions come without corresponding serious spending cuts or addressing entitlement payments. While the Federal government…

I learned more about governance failure from my neighborhood HOA than from most boardrooms I’ve analyzed. I live in a small annex of houses along the edge of a more extensive residential complex. We are formally members of the homeowner’s association. The drawback here is that there is no clubhouse, pool, landscaping, or snow removal. There isn’t a single service offered. Still, we pay annual dues like everyone else — but a little less, as if the lack of value justifies a mild reduction. It seemed at first like a local annoyance. I then turned to examine closer. Not only…

The ten-year U. S. government note this week made it above 4.50% and, as economist Mohammed El-Arian notes, took the yield higher than its been for three months. This has helped to move the dollar index higher, although not all that much. The effect on interest rate sensitive stocks has been negative. (The 30-year U. S. government bond almost climbed back to the 5%, a level last seen in January.) The interest rate sensitive Real Estate Select Sector SPDR Fund has spent the month of May declining from its March and April peaks. The Dow Jones Utility Average is the…

Week in Review Asian equities were mostly higher for the week after the US and China announced a 90-day tariff pause for negotiations over the coming weeks. Internet earnings season kicked off in earnest this week. JD.com, Tencent, KE Holdings, and NetEase squarely exceeded expectations, while Alibaba missed estimates on its top and bottom line. New loans and aggregate financing for April, reported on Wednesday, came in below expectations, explaining the People’s Bank of China’s (PBOC) decision to cut rates last week. Mainland-listed shares of battery giant Contemporary Amperex Technology (CATL) were up over +6% this week in anticipation of…

A few up days does not mean volatility won’t return. In fact, I think most investors expect more market turbulence in the future, not less. And, the best way to defend your portfolio against a volatile market is to do your diligence. Diligence brings you opportunities while less rigorous investors are left to panic. My firm’s research delivers unrivaled diligence and enables you to block out the noise and focus on the true earnings and valuation of companies. For example, this week’s Long Idea is an opportunity to bolster your portfolio with a safe, high-quality stock. I previously made General…