Green Book February 2022
“Collared” By The Fed?
In late January, the S&P 500 was down so much (almost 10%!) that it revived talk of investors’ favorite “safe” security. No, not T-bills—and not even Amazon or Apple common stock—but the Fed “put.” Years ago, we called it the “hypothetical” Fed put. But by now, we’re believers.
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Featured Articles
Speed Trap Ahead?
In San Francisco, thefts of less than $950 have been decriminalized, while in Minneapolis, police are so beleaguered that car thefts not involving injury are ignored. Is it any wonder that the economy felt free to violate its usual stock market “speed limits” throughout much of 2021?
Hello To The Roaring Thirties?!
The ink hadn’t dried on 2020’s PPP checks when pundits began speculating that the new decade could be a repeat of last century’s “Roaring Twenties.” That’s become a popular view after a booming 5.7% real GDP growth and a nearly 30% stock market gain in 2021. Just how popular? Analysts are already extrapolating their bullish views into the 2030s!
Not All “First Hikes” Are Equal
The market has started to price in a much faster pace of the Fed’s tightening this year. We have found more similarities than differences between recent market action and the historical patterns around the first rate hike.
Research Preview: A Playground Scuffle Between Value And Growth
It is a scene easy to imagine: Two children on the playground arguing about who’s the top dog. This schoolyard scuffle played out in 2021 between the Value and Growth styles, with each claiming bragging rights from their own perspective.
Two Ways To Spin The Russell 2000 “Bear Market”
At the market’s January 27th close, the headline blared, “Russell 2000 Enters Bear Market.” Well, not exactly. If one accepts that a 20% decline constitutes a bear market, then the bear actually began on November 9, 2021—the day after the Russell 2000 peak.
A Detour On The Way To The Moon
It’s been a year since the retail crowd on WallStreetBets—a Reddit forum—banded together to “stick it to the shorts.” The event was short-lived, but the effects are still being felt throughout the market.
Danger For Discretionary?
It’s been so long since investors have faced a serious Fed tightening episode that they may have forgotten a helpful rule of thumb: An initial hike in the fed funds rate is usually a good excuse to dump some Consumer Discretionary stocks.
Table of Contents
Stock Market
- “Collared” By The Fed?
- A Failure of "Free Money"
- “Plotting” The Course For 2022
- Easy Money? Not In Small Caps
- Two Ways To Spin The Russell 2000 “Bear Market”
- Speed Trap Ahead?
- What “Causes” Inflation To Decline?
- Bubble Or Not? Two Valuation Takes
- Hello To The Roaring Thirties?!
- Too Early For Curve Watching?
- Danger For Discretionary?
- Still An Uptrend… According To This
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
- Earnings Momentum
- Small Cap vs. Mid Cap. vs. Large Cap
- Growth vs. Value vs. Cyclicals
- Additional Factors
Portfolios
Major Trend
Estimating the Downside
At Random
Speed Trap Ahead?
In San Francisco, thefts of less than $950 have been decriminalized, while in Minneapolis, police are so beleaguered that car thefts not involving injury are ignored. Is it any wonder that the economy felt free to violate its usual stock market “speed limits” throughout much of 2021?
Hello To The Roaring Thirties?!
The ink hadn’t dried on 2020’s PPP checks when pundits began speculating that the new decade could be a repeat of last century’s “Roaring Twenties.” That’s become a popular view after a booming 5.7% real GDP growth and a nearly 30% stock market gain in 2021. Just how popular? Analysts are already extrapolating their bullish views into the 2030s!
Not All “First Hikes” Are Equal
The market has started to price in a much faster pace of the Fed’s tightening this year. We have found more similarities than differences between recent market action and the historical patterns around the first rate hike.
Research Preview: A Playground Scuffle Between Value And Growth
It is a scene easy to imagine: Two children on the playground arguing about who’s the top dog. This schoolyard scuffle played out in 2021 between the Value and Growth styles, with each claiming bragging rights from their own perspective.
Two Ways To Spin The Russell 2000 “Bear Market”
At the market’s January 27th close, the headline blared, “Russell 2000 Enters Bear Market.” Well, not exactly. If one accepts that a 20% decline constitutes a bear market, then the bear actually began on November 9, 2021—the day after the Russell 2000 peak.
A Detour On The Way To The Moon
It’s been a year since the retail crowd on WallStreetBets—a Reddit forum—banded together to “stick it to the shorts.” The event was short-lived, but the effects are still being felt throughout the market.
Danger For Discretionary?
It’s been so long since investors have faced a serious Fed tightening episode that they may have forgotten a helpful rule of thumb: An initial hike in the fed funds rate is usually a good excuse to dump some Consumer Discretionary stocks.
Stock Market
- “Collared” By The Fed?
- A Failure of "Free Money"
- “Plotting” The Course For 2022
- Easy Money? Not In Small Caps
- Two Ways To Spin The Russell 2000 “Bear Market”
- Speed Trap Ahead?
- What “Causes” Inflation To Decline?
- Bubble Or Not? Two Valuation Takes
- Hello To The Roaring Thirties?!
- Too Early For Curve Watching?
- Danger For Discretionary?
- Still An Uptrend… According To This
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
- Earnings Momentum
- Small Cap vs. Mid Cap. vs. Large Cap
- Growth vs. Value vs. Cyclicals
- Additional Factors