Eye on the Market is a timely commentary that offers views on the economy, markets, and investment portfolios. The author, Michael Cembalest, is the Chairman of Market and Investment Strategy for J.P. Morgan Asset Management.
Check out the latest:
A close look at the Progressive Agenda, China’s deteriorating welcome mat in DC and US Tech IPOs.
Active management and QE-distorted markets
Michael Cembalest analyzes the performance of over 6,700 domestic and international active equity managers, and discusses the challenges they face outperforming at a time of markets distorted by quantitative easing.
A brief comment on a proposal from leading Presidential candidates to ban hydraulic fracturing everywhere, immediately.
So Long Yellow Brick Road
It was a long, hot summer at the Heritage Foundation. An update from the front lines of the Trade War.
Food fights at the Fed and in the Leveraged Loan market
The food fight between the President and the Fed Chair could result in too much easing, and the expansion of valuations beyond sustainable levels. The other food fight: leveraged loan issuers vs buyers. Issuers are winning this fight hands down due to the erosion of covenants.
Lost in space: The search for democratic socialism in the real world
Michael went on a search for Democratic Socialism in the real world, and ended up halfway around the globe from where he began.
Listen when people tell you who they are
Michael discusses how he should have taken Trump at his word on tariffs, and the impact of the widening trade war on global growth and equity markets as proposed tariffs approach pre-war levels.
Smoot Hardly: the US-China trade war, prescription drug price legislation and the 2020 election
Michael discusses US-China trade war in context, the outlook for prescription drug price legislation, and an updated ideological scorecard for 2020 Presidential candidates
Fed Zeppelin: Is the Fed making a mistake?
The Fed halted tightening and propelled equities to their fastest recovery ever following a bear market. This decision was made despite the lowest unemployment rate in 40 years. Does that make sense? Also, a possible deal with China.
Mountains and molehills: Achievements and distractions on the road to decarbonization
Michael discusses this year’s Eye on the Market Energy paper. Topics include the unattainable objectives of the Green New Deal, an overview of the world’s de-carbonization challenges, Germany’s energy transition and Trump’s War on Science.
Short People: the market rebound, and what comes next
Michael discusses how short covering, rather than real money, has driven the fastest recovery on record following a bear market, and looks ahead at slowing earnings growth.
The Decline of Western Centralization, Part II
For the first time in 20 years, markets will have to survive without support from central banks. While we expect US GDP and profits to continue to rise in 2019, unresolved trade issues, slowing global growth and a move by the Trump administration away from its 2017 market-friendly policies are likely to cap a post-correction rebound. All things considered, it looks like a volatile, positive single-digit year for diversified portfolios in 2019.
Good luck with that
In this year’s Holiday Eye on the Market, Michael records a note to his spouse on her father, the 2020 US Presidential election, and what might be the widest ideological divide in 100 years.
Private equity forecast: plenty of dry powder
In today’s special issue Eye on the Market, Michael takes a close look at the question of rising committed and unspent capital in private equity, and implications for investors.
In this month’s podcast, Michael looks at the midterms: GOP gains in the Senate, an historic loss in the House given economic and market conditions, and what it means for investors.
How business cycles end: implications for investors
A brief note on the latest price action in equity markets, how business cycles end, and how markets are being left to fend for themselves without central bank intervention for the first time in 20 years.
2018 has been another year of American exceptionalism in equity markets, with our enthusiasm tempered by the tech-dependence of equity returns, high valuations, fading stimulus and constitutional/tariff risks.
The song remains the same
Michael Cembalest discusses his latest Eye on the Market, The song remains the same. Michael reviews current market dynamics, walks through four investment strategies that have performed well over multiple cycles as this one enters its latter stages, and shares his thoughts on the Helsinki summit.
Michael Cembalest discusses the underappreciated risks of Chinese retaliation against US companies doing business in China, and how a full-blown trade war and military conflict are far from inevitable.
The Arc and the Covenants
Michael Cembalest takes a unique look at US states, cities, and counties using his signature comprehensive debt ratio. While municipalities have time to address underfunded obligations, some face difficult trade-offs.