CJ Newsletters

An Awakening for the Woke: Playing by the Rules

This summer, we’re likely to see the dark side of the policy formation process in Washington. It holds the potential for imparting significant and long-lasting effects on the economy, some good, some not so good. For the past 20 years we’ve seen bipartisanship in government relegated to the status of a “concept” more so than a practice. Both parties share the blame. It’s given rise to an almost constant state of gridlock where only a few big, important things get…

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CJ Update – May 28, 2021

A Shadow Correction Lurks Within This Rotation As we head into the long holiday weekend, stocks have meandered within a narrow trading range for the past week. A memorable and impressive earnings season has given rise to speculation over whether we’re seeing “peak” fundamentals for this economic cycle. (Not yet) The inflation debate continues and will apparently persist until the Fed announces a change of course. (Don’t hold your breath) That’s likely to be at least a quarter or two…

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CJ Update – April 30, 2021

Fiscal Policy Changes Appear on the Horizon It’s been an eventful month of April. We saw the government embark on a spending spree while the private sector reveled in a blockbuster Earnings Season. The $1.8 trillion American Families Plan has been announced. It follows the American Rescue and American Infrastructure Plans. The tab? Nearly $6 trillion at first glance. Of that, the latest iteration of government benevolence opened at $1.8 trillion, paid for by tax increases on corporations and as…

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CJ Update – April 1, 2021

The Markets in Q1 Reflect Broad Economic Expansion Ahead The first quarter came to a close this week, leaving in its wake a fading narrative of runaway inflation that had served as media fodder the past two weeks. The results for Q1 confirm a significant shift in market leadership. The NASDAQ index, last year’s darling, trails both the S&P 500 and the DOW30 by more than half as the Cyclicals, issues that typically lead a broadening economic recovery, posted upper…

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CJ Update – March 19, 2021

The Fed Has Spoken, Is Anyone Listening? Last year’s index inequality continues to unwind as investors move from the pandemic-assisted, stay-at-home, growth stocks to the recovery-assisted Cyclicals. It’s been a persistent theme in recent weeks that comes as no surprise. That shift has weighed heavily on the Tech sector and companies that flourished during the pandemic. While many solid companies that have been sold recently will eventually go on to make new highs as the recovery broadens, a number of…

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Investors Envision a Reopened Economy

Investors Envision a Reopened Economy This week, we find ourselves a year removed from the onset of the pandemic and the hyper-speed bear market decline that resulted. We’re also a few weeks short of the one-year anniversary of the bull market that followed. Things happened fast in 2020, including the development of vaccines that now offer a glimpse of what post-pandemic life will look like in 2021. The economy is accelerating and has broadened its resurgence in the last few…

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CJ Update – February 26, 2021

Investors Rebalance While Washington Dithers It’s been a noise-worthy (not newsworthy) couple of weeks since our last update. In the aftermath of the much-publicized “Trading Frenzy”, it was determined that a number of gullible and impulsive traders lost money speculating on stocks. Losers in the stock market? Shocking. Definitely not a first, but apparently news to some in Congress who feel compelled to save people from their own worst instincts. The House Financial Services Committee launched a televised hearing last…

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CJ Update – February 12, 2021

Investors Remain Focused on the Relevant When we last left you, the R & R crowd (Reddit and Robinhood) had roiled the stock market, launching several hedge funds and brokerage entities into existential crisis. Politicians were predictably incensed and promised to punish those that were manipulating the stock market with another round of regulations. That fiction distracted them from their immediate task to dispense $1.9 trillion in stimulus to a waiting audience. Jumping ahead, the short squeeze has unwound, leaving…

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CJ Update – January 29, 2021

The Retail Trade Scores a Rare Win on Wall Street The Retail Trade, comprised of individual investors, has usually come out on the short end when competing with the Big Money on Wall Street. The Big Money is defined as the major investment firms, banks, and hedge funds that employ financial engineering, high-speed trading, and algorithmic science to move the markets in a desired direction. As investors for whom fundamentals matter, we’ve frequently lamented the inexorable transformation of the stock…

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CJ Update – January 8, 2021

Investors Focus on Policy, Not Politics The stock market opened the New Year with a thud rather than a bang. Monday’s sell-off could be ascribed to uncertainty surrounding the Senate election in Georgia that could impart a significant change in current US fiscal policy. Adding to the suspense is the dramatic surge in COVID cases and hospitalizations, coupled with a slower than expected vaccination rate. Monday’s unexpected election result officially ceded control of Congress to the Democrats and confirmed the…

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CJ Update – December 24th, 2020

Ho, Ho, Ho, Santa Delivers Again to Investors This week began with the DOW plunging more than 400 points on Monday’s opening, only to see it close in positive territory with the S&P 500 and NASDAQ nursing only small declines. Tuesday’s results were mixed as well and could be attributed to the second stimulus package being volleyed back and forth between Congress and the White House to where it stands now: approved by the Senate and the House but threatened…

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CJ Update – December 18, 2020

Ho Hum, Another Record Setting Week for the Market As we go deeper into the holiday season, it wouldn’t be surprising to see the market quiet down a bit. 2018 and 2019 were exceptions as we saw a holiday blow-off and melt-up of the averages in those years, respectively. This year the stock market appears to be coasting into year-end on a high note, aided by momentum from a record November rally triggered by news of two COVID vaccines being…

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CJ Update – December 4, 2020

The Market Meanders to a New Record After a relatively quiet, holiday-shortened week that saw the DOW30 penetrate the 30,000 level for the first time, stocks have since persisted in their grind higher across the board. As Value/Income issues continued to outperform Growth we saw record intraday highs this week, not only for the DOW but for the S&P 500 and NASDAQ as well. Naturally, this roused speculation of this advance being the start of a “Santa Claus” rally such…

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CJ Update – November 25, 2020

A Mostly Quiet Record-Setting Week We were expecting a relatively quiet, holiday-shortened week. Monday started off as expected with mixed results as investors took profits in the mega-cap issues that led the market this year. The rotation from Growth to Value/Income stocks is now fully engaged as profits taken in the mega–caps are being redeployed into those Cyclical issues that should benefit from the more full recovery we anticipate in 2021. We then saw this “quiet” week punctuated by Tuesday’s…

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CJ Update – November 20, 2020

A Brief Reality Check for the Market Following last week’s Vaccine Rally, the stock market consolidated some of that gain this week as investors turned their focus once again to COVID and the growing number of lockdowns occurring throughout the states. It would seem that, just as we checked the box for vaccine development, we’re confronted by the details of timing and distribution of the vaccine amidst a surge in the spread of the virus. That was enough to accelerate…

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CJ Update – November 13, 2020

An Unexpected Shot in the Arm for the Election Rally This week, we were greeted by news of Pfizer’s development of a COVID vaccine with a purported 90% efficacy rate. We always knew there’d be a Vaccine Rally in our future, we just didn’t know when. Most investors were expecting sometime in early 2021. This result came as a pleasant surprise and launched Monday’s rally of epic proportion that took the major averages to new bull market record highs. It…

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CJ Update – November 6, 2020

Investors Are Betting on Gridlock This week began with the stock market launching into rally mode in the days before the election and then following through with the biggest post-election day advance in history. That leaves the benchmark averages within whispering distance of their record highs. Uncertainty over the election result seemed to peak last week as any good news was viewed as a reason to sell. This week, expectations for a contested presidential election failed to dampen enthusiasm for…

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CJ Update – October 30, 2020

Virus Worries Add to Investor Anxiety This week, earnings season maintained its upward trend on the wings of results from Big Tech. While the news was generally favorable and accompanied by a record GDP growth number for Q3, the stock market looked the other direction and lost its purchase on the famous “Wall of Worry”. That’s the term used by investors to describe a rising stock market in the face of distressing headlines. It’s well documented that investors often look…

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CJ Update – October 23, 2020

Navigating Through the Fog of Election Uncertainty This week, earnings season kicks off in earnest as more than 400 companies report third quarter results. As expected, many of the best-performing companies were those whose stocks are among this year’s market leaders. Results have been generally positive and this has imparted a mildly bullish bent to the averages amidst the ongoing rotation into Cyclical issues and the building uncertainty surrounding the future of US fiscal policy. In the background, the noise…

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CJ Update – Oct 9, 2020

The Market Pendulum Swings With the Headlines This week was light on economic data and all about a second stimulus package, or lack of one. At the start of the week the market moved higher on speculation that a compromise would be reached. It reversed course Tuesday on news of negotiations breaking down. Bad news, right? Apparently not bad enough to keep stocks from rallying ferociously higher on Wednesday even as doomsayers and aggrieved business owners paraded their outrage on…

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CJ Update – October 2, 2020

A Busy Week Foretells of an Eventful Quarter Ahead This week was newsworthy in that we saw the release of some critical economic data, the close of the third quarter, and two grumpy old men shouted at each other on television. First, the data: The final number for Q2 GDP came in at -31.4%. That came as no surprise, and therefore was seemingly not a concern for investors who instead focused on a rosy forecast of 30%+ GDP growth in…

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The End of Recession or Just a Pause?

Our latest Investment Outlook noted the prevailing forecast for the end of recession at the close of the third quarter and what that might mean for stocks. While we anticipate the return of expansion to the economy, we don’t view that as a reason to increase exposure to the market at this time. We’d reiterate our view that a smaller, slower economy will be emerging from this recession. To what level the economy recovers remains uncertain due to several factors,…

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Perspective On a Post-Recession Stock Market

As the close of Q3 approaches, investor focus is turning away from a grim and gritty 2020 toward a better 2021, or so we hope. However, the path dead ahead to that better next year is beset with uncertainty surrounding the next stage of the pandemic, the policy response and its effect on the economy, and the upcoming election. All of which will have an effect on the stock market. Recent forecasts predict the economy returning to pre-pandemic levels of…

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CJ Update – September 4, 2020

Not a Market Bubble….Yet Last week we highlighted the Fed’s shift in policy allowing for a period of higher inflation beyond the 2% target threshold where previously it would begin to normalize (raise) key interest rates. We noted that allowing the economy to inflate was more acceptable and easier to remedy than the alternative: deflation leading to a depression. History has shown that the massive injection of liquidity such as we’re seeing can have a side effect. Investors tend to…

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CJ Update – August 28, 2020

Is the Fed Inflating the Economy or a Market Bubble? That’s what investors are asking this week following a statement from the Fed that threw new light on how it would implement monetary policy in pursuit of its mandate. You know, the mandate that characterizes stable prices as a rate of 2% inflation? That rate, in the past, has sounded the starting gun for the Fed board of governors to beginning normalizing interest rates. In the parlance of investing, that…

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CJ Update – August 21, 2020

A Week for Setting Records Last week we got a quick peek at what the much-talked-about market rotation might look like. Following a massive reversal of a broad-based rally in the Cyclicals that occurred a week ago Tuesday, the S&P 500 embarked on a slow march upward that culminated in that index posting a new record high this past Monday. That put an end to any further speculation about a failed bear market rally and marked its advance from the…

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CJ Update – May 14th, 2021

Some Perspective on Inflation Since our last Update, we’ve seen investors turn a blind eye to an impressive Earnings Season, a ransomware attack shut down a major pipeline, a semiconductor shortage slow auto production, and a stumble in the employment numbers. The market has swung between record highs and a mild pullback with some segments descending into correction and even bear market territory. There’s also the elephant in the room, the revival of inflation fears that has triggered a tug…

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