Chinese property developer Evergrande’s liquidity crisis has sparked fear and selling in Chinese property stocks over the past several weeks. Could this spark a systemic risk scenario, similar to when Lehman Brothers went under? We don’t think so
The Covid-19 pandemic was an unprecedented shock to a large majority of global economies, but the economic damage was met with an extraordinary global monetary response.
To quote the great Frank the Tank from Old School, “We’re going streaking!” Although Frank had another idea, stocks have been streaking in some historic ways, both near-term and longer-term.
“Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes,” Benjamin Franklin
One of the best known investment axioms is to “sell in May and go away.” This is largely because the six months from May through October have historically been some of the weakest months of the year for stocks.
President Biden’s recently proposed $2 trillion infrastructure investment plan would, if enacted as-is—a big “if” for sure— provide much needed support to traditional infrastructure projects like roads and bridges amongst other projects. While the plan would tangentially support the municipal market through better economic growth and higher tax revenues, there could be other provisions that would impact the municipal market more directly.
Stocks sold off yesterday after a report that the White House was considering doubling the capital gains tax on the wealthy to 39.6%.
The bull market continues, with the S&P 500 Index now up more than 10% in 2021. With stocks up more than 80% from the March 2020 lows, the reality is a well-deserved break or consolidation could happen at any time.
Treasury yields started moving sharply higher this past month (remember that as yields go up, prices go down). And while the upward march began in earnest last August when the 10-Year Treasury yield bottomed at an all-time low rate of 0.50% based on closing prices, the past week we saw the 10-year break through the 1.25% threshold and touch 1.35%, a new high for the year.
December is widely known as one of the best months of the year for stocks, but most don’t realize that the majority of the gains happen in the second half of the month.
