U.S. 10-Year Treasury Bond Yield

April 29, 2022
Blog , The Trusted Navigator - Bernhard Koepp
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C.J. Lawrence Market Commentary – Market down 3.6% for the week, S&P500’s p/e back to historical average

The first quarter of 2022 finished yesterday with the S&P500 down 4.9%, the Tech-heavy Nasdaq down 9.1%, and the Dow Industrials down 4.6%. Oil prices peaked on March 8th at $128 per barrel (Brent crude oil) and the market bottomed around that same time, clawing back about half of the loss incurr...

April 7, 2022
Blog , The Trusted Navigator - Bernhard Koepp
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Markets Bottomed in Q1 When Oil Peaked

March 18, 2022
Blog , The Trusted Navigator - Bernhard Koepp
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“Oil and Stocks Don’t Mix” Lessons Learned From the Past

A moderation of inflation would certainly be welcome if the Fed is to orchestrate a soft landing in the US Economy and avoid stagflation. One thing we have learned from history, severe oil spikes create interesting entry points for stocks in near term. ...

March 16, 2022
Blog , The Trusted Navigator - Bernhard Koepp
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More Volatility Ahead…

It goes without saying, there is unprecedented pressure on Putin to change course in the coming weeks or risk complete economic collapse and isolation. We remain patient regarding our portfolio positioning. ...

October 7, 2019
Blog , The Portfolio Strategist - Terry Gardner
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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 23, 2019
Blog , The Portfolio Strategist - Terry Gardner
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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
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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. ...

August 5, 2019
Blog , The Portfolio Strategist - Terry Gardner
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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 8, 2019
Blog , The Portfolio Strategist - Terry Gardner
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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...

June 10, 2019
Blog , The Portfolio Strategist - Terry Gardner
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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
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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 13, 2019
Blog , The Portfolio Strategist - Terry Gardner
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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...

April 1, 2019
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – The Market Gets a Lyft, but Equities Can’t Find Long Term Love

On Friday, Lyft raised $2.34 billion and saw its share price rise in the after-market from the offering price of $72 to close at $78. That values the “tech unicorn” at ~$22.4 billion, even though the company lost $911 million on $2.2 billion in revenue in 2018. ...

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

December 24, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – The Battle Between Rising Interest Rates and Corporate Earnings Growth is On…CJL Market Monitor at Neutral

Over the past several months the Monitor’s bullishness has moderated as interest rates climbed towards more “normal” levels. The Market Monitor’s current reading is NEUTRAL, with a reading of 0, on a scale of -6 to +6. ...

December 17, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – Economic Fears Feed Market Volatility but Slow Stable Growth and Tame Inflation Could Be Bullish for Stocks in 2019

Positioning portfolios for next year and beyond will be challenging for top down investors and managers. The 2019 and 2020 economic and corporate profit outlooks are murky and investors who remember the sting of the 2008 downtown may choose to remain in safe ports rather than face the risk that the...

November 19, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – Does “Jay” Do the Thanksgiving Shopping?

The U.S. 10-year treasury bond yield looks to also be questioning the outlook for growth and inflation. Despite strong employment reports and record treasury issuance, the 10-year yield has drifted back below 3.1%. Odds are high that the Fed will raise the Fed Funds target rate at its December mee...

November 12, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – The Battle Between Rising Interest Rates and Corporate Earnings Growth is On…CJL Market Monitor at Neutral

October 22, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – Is U.S. Economic Growth Reaching a Peak? The Bond Vigilantes May Tell Us.

In the early 1980’s our former Deutsche Bank colleague, Dr. Ed Yardeni, coined the phrase “Bond Vigilantes” to describe bond market reactions to loose fiscal policy. When the federal government threatened to ramp debt-fueled spending, the Bond Vigilantes would ride in, sell treasuries, and p...

October 15, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – February Redux? Maybe Not.

What’s changed in the backdrop is the calculus on global growth. The U.S.– China tariff and trade battle has cast a pall over the global synchronized economic growth scenario, encouraging the IMF to lower its forecast for global economic growth for this year and next, to 3.7% from 3.9%, and to ...

October 9, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – Don’t Fear the Rate Cycle

But an examination of past rate cycles suggests periods of steadily rising rates do not end bull markets. In fact, periods of economic growth and tightening interest rate conditions are often accompanied by strong equity performance. Excluding the high-inflation period of the late 1970’s-early 1...

September 24, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – Peak Margins? Not Yet.

The combination of improved corporate operating efficiencies, new process technology, automation, and lower corporate tax rates look to be contributing to a new era in profit margin expansion. The S&P 500 Index trailing 12-month net income margin reached 11.3% in 2Q18 and is expected to rise to 11....

July 16, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly Market Comment – Healthy Corporate Fundamentals and Stalled Bond Yields Keep the CJL Market Monitor in BUY Territory

The Market Monitor’s current reading is “BUY”, with a numerical score of +1, the lowest reading in BUY territory, on a scale of -6 to +6. As the Fed has lifted the Fed Funds target rate, the year-over-year interest rate rate-of-change models have weighed on the Monitor score. But despite ri...

June 18, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – Moderate Inflation Supports Healthy S&P 500 Revenue Growth

Consecutive multi-year revenue growth, above 4.0% annually, has historically been a strong underpinning for stock prices. Over the past 25 years, there have been three periods when the S&P 500 produced 4.0%+ revenue growth for three or more consecutive years. During those periods the average annua...

June 4, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – Beware of the Bond Trap

Declining prices and a limited ability to replace higher yielding securities with equivalent yields is symptomatic of the challenges facing asset allocators in rising rate environments. Investors looking to rebalance and reallocate balanced portfolios towards bonds may instead want to consider cash...

April 30, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C. J. Lawrence Weekly – Rising Rates Provide Headwind, not Barrier, for Stocks

There has been considerable focus in the financial media, and among market pundits, regarding the headwinds for stocks posed by rising interest rates. Our work agrees that rising rates do present challenges, but that strong corporate earnings growth can be a healthy off-set. ...

February 12, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – Volatility Returns (Chairman, James Moltz)

The abrupt rise in stock market volatility is being driven by a growing concern that recently enacted fiscal stimulus will overheat the economy bringing with it inflation, higher interest rates and federal funding issues. The 10% correction in the major U.S. indices is testimony to the market’s pe...

February 6, 2018
Blog , The Trusted Navigator - Bernhard Koepp
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Corrections vs Crashes – What are We Watching?

Despite being fundamental investors, we need to turn to technicals today to understand if a correction is “normal” or something more ominous. We look to the structure of the sell off, ie is it orderly etc. We need to make sure price discovery is achieved and markets can cope with the extra volum...

February 5, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – The Tug‐of‐War Between Lower Valuations and Faster Earnings Growth Still Skews Towards Growth

The race between earnings growth rates and the rate of decline in the market’s P/E multiple is on. Along the way, the 10-30 year treasury bond spread may provide insights into the appropriate market multiple to apply. The challenge for equity investors will be to find stocks with earnings growth r...

January 22, 2018
Blog , The Portfolio Strategist - Terry Gardner
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C.J. Lawrence Weekly – Inflation Counter‐Forces in the New Economy

Today’s disruptors are doing the same thing in mature industries throughout the economy. The new “gig” economy has introduced deflationary forces that some feel could challenge the traditional cycle of inflation. Economic history tells us that the correlation between labor markets and inflatio...

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