C.J. Lawrence Weekly Market Comment Archives - C.J. Lawrence // Investment Management

May 10, 2023
Blog , CJ Lawrence , The Portfolio Strategist - Terry Gardner

Innovation at a Reasonable Price Investing Is Always In Favor, Terry Gardner, C.J. Lawrence 3/8/23

In this video, Terry Gardner discusses CJL’s Innovation at a Reasonable Price investment strategy. Terry contends that IRP is always in favor and that today’s innovators have more attractive investment characteristics than those in past cycles....

May 10, 2023
Blog , CJ Lawrence , The Portfolio Strategist - Terry Gardner

CJ Lawrence Models and Tools That Have Stood the Test of Time, Terry Gardner, C.J. Lawrence 1/18/23

In this video, Terry Gardner introduces us to three CJ Lawrence investment models, created in the 1970s and 1980s, that have stood the test of time....

December 19, 2022
CJ Lawrence , Market Commentary , The Trusted Navigator - Bernhard Koepp

Inflation slows, yields peak, the market pops, and fizzles into the holiday. – C.J. Lawrence – Market Commentary – 12/19/22

As we prepare for the holiday, the market looks like stale Champagne. There was an initial 900-point pop in the DOW on the better inflation number for November (CPI) at 7.1%. Markets were ready to pop the cork and declare inflation dead. That quickly fizzled when Fed Chair Jay Powell delivered anoth...

December 4, 2022
CJ Lawrence , Market Commentary , The Trusted Navigator - Bernhard Koepp

When good news is bad news; the case for GOLD – C.J. Lawrence – Market Commentary 12.2.2022

Turning to the September inflation report, headline CPI year-on-year for September was down slightly at 8.2%, in line with the previous three declines. The all-important core inflation which excludes food and energy was unfortunately up again....

November 14, 2022
CJ Lawrence , Market Commentary , The Trusted Navigator - Bernhard Koepp

Fed blinks; Inflation cools; America votes; China buys vaccines; Crypto implodes; Putin retreats. – C.J. Lawrence Market Commentary 11/11/2022

July 18, 2022
Blog , The Trusted Navigator - Bernhard Koepp

Mid-Year Reflections – C.J. Lawrence Market Commentary – July 18, 2022

Stock market performance in the second quarter was negative and pronounced. The major indices accelerated the downtrend started in the first quarter of the year. The S&P 500 Index fell 16.4% in the second quarter putting the Index down 20.6% for the first half of 2022. That is the worst first half p...

January 13, 2020
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Following the Smart Money May Not Be Such a Good Idea

Pension, foundation, and endowment funds are often referred to as the market’s “smart money”, owing to their resources and expertise, and the smart money has been consistently reducing equity exposure to fund entrée into new and diverse asset categories. To date, returns suggest that betting...

January 6, 2020
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – 2019 Didn’t Feel Great, but It Was!

What a difference a year makes! In the week leading up to New Year’s Day in 2018 not many pundits were forecasting that 2019 would produce one of the highest annual equity returns on record. At 28.9%, the 2019 price return on the S&P 500 is the fifth highest since 1960. But at the beginnin...

December 23, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Uptick in Infrastructure Spending Looms

Investors who bought into the infrastructure theme previously have been disappointed. Despite the growing need for infrastructure investment, most related stocks have lagged the broader indices. The S&P Materials Sector, which represents chemicals, composite, aggregates, and metals and mining comp...

December 17, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Trade Deal and an Earnings Driven Market

Our CJL Rule of 20 tells us that the sum of the forward P/E multiple on the S&P 500 added to the annual CPI core inflation rate should equal about 20. The current reading is 20.1, which sounds about right. Therefore, for stocks to move higher without violating the Rule, the “E” portion of the ...

December 9, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – The Crowd May Be Right

As our Sector Shifts table demonstrates, the Technology and Consumer Discretionary (dominated by Amazon.com) stocks gained meaningful market share from 2010 to 2017, and along with the new Communications Services stocks, have driven market performance since being reconstituted in mid-2018. ...

December 2, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – The U.S. Consumer Remains Healthy, While the Gap Between Sector Winners and Losers is Widening

The U.S. consumer is healthy and living within his/her means and that should be positive for consumer related stocks. But wide gaps are forming between those with cutting edge business models and those without. Passive investors in the sector may wind up with average returns, while active investor...

November 25, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Thanksgiving Dinner Costs are Down. Pass the Turkey!

This week, millions will partake in the time-honored American tradition of the Thanksgiving feast. The origins of the celebration date back to the earliest settlers of the “new continent”, who upon forming the Plymouth Colony, suffered the perils of a harsh winter. With the help of t...

November 18, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – U.S. Manufacturing Economy Not Yet Ready to Turn

Despite the weakness in the underlying freight economy, analysts who track industrial and materials companies remain optimistic. Earnings per share for the S&P Industrials Sector Index and S&P Materials Sector Index are forecasted to grow 17% and 15% respectively in 2020. ...

November 4, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Low Bond Yields Keep CJL Market Monitor Firmly Tilted Toward Stocks

We run our C.J. Lawrence Market Monitor at the end of each month to measure the relative attractiveness of stocks versus bonds, and to test the internal technical health of the stock market. The Monitor was created in the early 1980s as an asset allocation tool and has served as a useful barometer...

October 28, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – The Slide in Business Spending Growth May Be Bottoming

Microsoft’s strong quarterly earnings report and related commentary regarding IT spending were well received by the equity markets last week. The company posted quarterly financial results that exceeded analyst expectations. But perhaps what captivated the broader market’s attention ...

October 21, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – The Patient is in Recovery and the Prognosis for Health Care Stocks Look Good

Investors may find the current Health Care Sector backdrop enticing, with opportunities across the risk spectrum. Cutting edge companies are now trading near historic low valuations, presenting patient investors with attractive entry points. The anti-health care company rhetoric may be at a fevere...

October 15, 2019
Blog , The Portfolio Strategist - Terry Gardner , Uncategorized

C.J. Lawrence Weekly – The Running (Away) of the Bulls

Recent surveys have shown a steady decline in bullish outlooks among participants, with last week’s reading hovering just above 20%. That compares to a long-term historical average of 38.1%. The current bullish reading is the lowest since May of 2016 and is approaching a negative two standard d...

October 7, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Tight Bond Spreads Suggest Recession is not Imminent

The direction of absolute U.S. Treasury bond yields will offer important insights into the strength of the U.S. economy, the direction of inflation, and investor risk appetite. But yield spreads are another useful tool in gauging the health of U.S. rated companies and their risks related to the di...

September 30, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Fundamentals Drive Stocks Even During Periods of Political Turmoil

Analyzing precedence is not a particularly insightful exercise when looking for correlations between market behavior and periods of U.S. Presidential turmoil. Historically, markets have looked through Presidential crises remaining focused instead on the markets’ underlying fundamentals. The cu...

September 23, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – The CJL Rule of 20 Pegs the Stock Market Valuation at Fair Value

The relationship between price-earnings multiples and inflation is captured in the C.J. Lawrence “Rule of 20” which Jim devised in the 1980s. The Rule suggests that adding the current price-earnings multiple on the S&P 500 to the annual rate of inflation should approximate 20, which is the 50-...

September 16, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Rotation to Value Looks Unsustainable

We continue to favor stocks of growth companies that drive their own fate and grow market share regardless of economic conditions. ...

September 10, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Corporate Insiders Increasingly Like the Odds of their Own Stocks

Correlations between insider stock purchases and the company’s stock price are not always tight. Some insiders are better buyers than others. But in aggregate insider purchases can paint an important picture of insider confidence in their own company and stock and whether they are will...

September 3, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Sales Growers in Communications Services and Healthcare Sectors Have the Right Mix

Among the S&P 500 Index sectors, Communications Services, Health Care, and Consumer Discretionary have been delivering impressive sales growth year-to-date and are expected to outpace the S&P 500 again next year....

August 26, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – The Uncertainty Meter is Pegged

Friday’s stock market price action was emblematic of the current headline driven market. Initially, investors took comfort from comments that Federal Reserve Chairman Powell made at a gathering of central Bankers in Jackson Hole, suggesting that the Fed was ready to take further action if needed...

August 19, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – The U.S. Consumer Remains Global Growth Engine

Confidence among most U.S. households remains high despite the recent equity market volatility and negative trade headlines. Elevated home prices, low unemployment, and marginally higher wages at home may be offsetting global macro concerns. ...

August 12, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – This Week’s Suggested Summer Reading List

Terry Gardner is away this week on vacation, so the Weekly Market Comment will resume next week. But given recent market volatility and concerns surrounding Hong Kong and the trade stand-off between the U.S. and China, Terry himself thought it might be helpful to highlight three important WMCs writ...

August 5, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Equity Risks Rise but Relative Yield Comparison Still Favors Stocks

The Federal Reserve Board’s Open Market Committee (FOMC) reduced the Fed Funds target rate by 25 basis points last week. The move marked the first time the Fed reduced the target rate in over a decade. While the broader markets may have been looking for more than 25 basis points, inves...

July 29, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Industrial Stocks Challenged by Slowing Global Manufacturing Activity

The market playbook was challenged last week. Under the “old rules”, Friday’s release of better-than-expected second quarter US GDP should have nudged up U.S. treasury bond yields and caused gold prices to cool. But the yield on the benchmark U.S 10-Year treasury bond was flat on F...

July 22, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – In Libra We Trust?

It’s tongue-in-cheek note title, not meant to convey real conviction, but to highlight the issue that in the new economy, even money is being disrupted. David Marcus, former PayPal and Facebook Messenger executive and new head of Calibra, the digital currency consortium organized by Facebook...

July 15, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – U.S. Stock Indices Hit New Highs Amid Little Fanfare

Despite softer than expected economic data out of Asia last week, the U.S equity markets rose to new highs. On Friday, the Dow Jones Industrial Average, NASDAQ Composite, and S&P 500 Index all closed at new records. Falling bond yields have been the bullish propellant so far this yea...

July 8, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Earnings Take Center Stage

Friday’s positive payroll report gave the stock market a bout of indigestion, complicating the argument that the Federal Reserve would commence an interest rate easing cycle at their July meeting. The market’s recent rise has been fueled by the prospect of lower interest rates, so the noti...

July 1, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – The Wall of Worry is Painted Gold

The geopolitical backdrop is changing fast and the markets are taking note. This past weekend the US and China agreed to resume trade talks and the U.S. agreed to delay the next round of trade tariffs. In exchange, China has apparently agreed to purchase more U.S. agriculture products.&n...

June 24, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Interest Rate Cuts May Stave Off Reckoning for Highly Leveraged Companies

One metric we like to watch to help gauge the health of S&P 500 companies is the Interest Coverage Ratio. The ratio measures how easily a company can pay its debt. In aggregate, the Index’s ratio provides insight into the health of corporate balance sheets and supporting cash flow....

June 17, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – S&P 500 Earnings Forecasts are Heading Lower. Can the Market Handle It?

The S&P 500 posted another positive performance last week and is now within 2% of the Index’s record high set back in April. Last week’s U.S. economic reports were generally supportive. Retail sales for May came in close to expectations and prior months’ results were revised upwards. U...

June 10, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Will China Bite the Apple?

Equity analysts have been slow to lower earnings forecasts for this and next, but the bond market is already signaling meaningfully slower growth ahead, catalyzed by lower global trade activity....

June 3, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Trade Uncertainty May Challenge the Rule

The market’s risk-off posture has pushed U.S. treasury bond prices higher and yields meaningfully lower. Sliding treasury bond yields, which had previously been viewed as a positive support for stocks are no longer viewed as bullish....

May 28, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Trade Stand-Off May Lead to Long Term Gain, Short Term Pain. Overweight Communications Services

We’ve written previously about the longer-term impact of the trade war on sourcing and manufacturing decisions, and our belief that one of the stand-off outcomes will be the re-shoring of manufacturing capacity back to the U.S. over the next several years. But in the meantime, the global economy ...

May 21, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Regardless of Outcome, the U.S.-China Trade Dispute May Accelerate the U.S. Manufacturing Renaissance

Editor’s Note: A month ago we wrote about growing unease among U.S. businesses operating in China. We are recirculating that note this afternoon as trade tensions between the U.S. and China reach a new level. The imposition of tariffs on Chinese imports by the U.S., retaliatory tariffs on ...

May 13, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Recent Volatility May Test the CJL Market Monitor’s Bullish Stance

The C.J. Lawrence Market Monitor was created in the early 1980s to measure the relative attractiveness of the stock market versus bonds, and to test the internal technical health of the stock market. Over the Monitor’s 38-year history, it has been a useful asset allocation tool. While not develope...

May 6, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Labor Productivity Leadership Should Be Embraced

Last week’s U.S. Labor Department report stated that U.S non-farm labor productivity rose at a 3.6% annualized rate in the first quarter of 2019. That was welcome news for stock market bulls who had been viewing the lack of worker productivity as an obstacle to growth, or as a path to higher unit...

April 29, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – U.S. Capital Spending Growth Looks Poised to Reaccelerate

S&P 500 Index capex declined in both 2015 and 2016 suggesting that, if history repeats, 2017 through 2022 should be expansion years. Flush corporate balance sheets, combined with aged equipment fleets and trends towards cloud computing, 5G network transformation, and manufacturing automation should...

April 22, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – India’s Election May Have Broad Implications for the Global Economy

This year India will surpass France and Britain to become the world’s fifth-largest economy, according to the latest IMF numbers. At projected 7.3% growth in 2019 and 7.5% projected growth in 2020, India is also the world’s fastest growing major economy. Previously regarded as one of the globe...

April 15, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Regardless of Outcome, the U.S.-China Trade Dispute May Accelerate the U.S. Manufacturing Renaissance

But the U.S., which has been undergoing its own industrial and manufacturing renaissance, catalyzed by the evolution of low-cost energy production and availability, is poised to gain its fair share of global industrial growth and new opportunities created by “reshoring” initiatives. Low cost en...

April 8, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Profit Bulls Have History on Their Side

The market debate about the trajectory of earnings will likely escalate in the coming weeks as companies report 1Q19 financial results. But our work shows that if history repeats, there may be several more years of net income growth ahead. ...

March 25, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – The IPO Canary is Still Singing

Significant outflows from stock funds and into bond funds experienced during the past three years, and nine-year high cash levels in money market funds, suggest there is ample capital available for investors to deploy and/or reallocate for favored new issues. So long as the broader market remains i...

March 18, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Free Cash Flow Is King

To identify high cash flow yielding companies and compensate for deferred capital expenditure risk, we ran a screen of the S&P 500 that included companies with a 2019 free cash flow yield in excess of the market (5.2%) but excluded those with an average 3-year annual capital expenditure growth rate ...

March 11, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – The U.S. Consumer is the Global Economy’s “Atlas”

according to recent confidence and comfort index readings, the U.S. consumer is feeling strong and may be up to the task of playing the role of Atlas, who according to Greek mythology, carried the weight of the world on his shoulders. ...

March 4, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Low Interest Rates Add Fuel to the Stock Market Recovery

For stock investors, low rates are a welcome market backdrop, and have helped stocks recover from their December lows. Of course, favorable headlines regarding a pending trade deal between the U.S. and China have helped boost market sentiment, but the fundamental underpinning of low interest rates ...

February 18, 2019
Blog , The Portfolio Strategist - Terry Gardner

C.J. Lawrence Weekly – Global Freight Indices Showing Softness

Given China’s voracious appetite for dry commodities, the BDI is considered a good leading indicator of Chinese economic output. The signal it is currently sending is that Chinese economic growth may be slower than consensus forecasts. The BDI reached a 5-year high in July of 2018 but is now dow...

C.J. Lawrence Weekly Market Comment

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