Are we in an artificial intelligence investment bubble? That’s becoming the narrative in the financial media. A search on Bloomberg for “AI bubble” showed elevated number of stories, with a peak in January 2025 after the news of the DeepSeek breakthrough. In practice, what does that mean for equities, and the economy? ...
Mid-week market update: As the stock market grinds upward, I am seeing different variations of "it's a little too quiet out there" warnings from market analysts. One example is the growing gap between the implied volatility (IV) of the S&P 500 and the historical realized volatility (HV). Eventually, something has to give. It usually...
Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend...
The September FOMC meeting concluded with the Fed opting for a quarter-point rate cut. Newly appointed Fed Governor and Trump ally Stephen Miran dissented and voted for a half-point cut. More astoundingly, the dot plot showed an outlier calling for a Fed Funds rate below 3% in 2025, which requires 1.25% in rate cuts over...
Mid-week market update: Even as the equal-weighted S&P 500 touched another all-time high today, it was a marginal upside breakout. Here are the bull and bear cases for the near-term outlook. Bull Case Risk appetite indicators are confirming the stock market advance. Credit market risk appetite, as measured by the relative performance...
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