New highs are getting so common that investors are disappointed when markets fail to achieve them at least weekly. That should tell you something about the future direction of stocks, at least in the short term. As investors piled into stocks again this week in anticipation of unending spending by the federal government, it might be time to take a few profits. Don’t take that statement the wrong way. I am not calling for an end to this run-up in stocks. I think we could kiss the 4,000 level on the S&P 500 Index before we face a really big…
Insights & Advice
Bill Schmick
The Reflation Trade
Over the past six months, an increasing number of investors have come to believe that a rise in the inflation rate is inevitable. That appears to be a sound bet from where I sit, even though the present data doesn’t support that wager. The argument for increased inflation centers around money. The world is awash in the stuff. Central banks have been printing money for years to stimulate their economies. Last year’s pandemic only opened the monetary flood gates even further. And the trend is not over. During the next few months, here in the U.S., the Biden Administration is…
Stocks and the new relief plan
Investors marked time throughout the week waiting for President-elect Joe Biden’s $1.9 trillion economic relief package to be announced on Thursday night. They were not disappointed. The size of the proposed bill was within the expectations of most market participants. As such, it was a classic ‘sell on the news” event Friday morning. The debate going forward will be how much of the new administration’s proposal will ultimately become law. That remains to be seen, since Federal funding for states and local governments and the $15/hour minimum wage will unlikely receive Republican approval. Investors aren’t really taking that on board…
Solar sector is not all green
There is one thing investors agree upon, solar stocks have skyrocketed in value over the last 12 months. The ESG (environment, social and corporate governance) crowd are ecstatic. They point to the gains as a clear example of how investors can all contribute to the greater good and still make money. But that thesis has some holes in it. So far in 2021, the frenzy to buy solar, electric, and water stocks has only increased. the incoming Biden Administration has already made clear its focus on increasing investments in renewable energy. As such, most investors expect a boatload of government…