The Dow Jones Industrial Average has recently attempted to break through the challenging 27,000 landmark. However, as it stands, the index has failed to surpass this psychologically significant threshold. In our view, this may actually be advantageous.
Though not always obvious, the stock market typically has a loose correlation with the overall economy. Over extended periods, as gauged by the price-to-earnings (P/E) ratio, it experiences fluctuations between periods of undervaluation and overvaluation. Ultimately, the market tends to revert to its mean P/E ratio, often overshooting and undershooting during its cycles.
One major unintended effect of fiscal and monetary policies is the distortion of this relationship. Policies designed to stimulate the economy often end up inflating financial markets instead. At times, these inflationary measures can cause a significant disconnect between the stock market and the real economy. Continue reading
The lead-up to the presidential primaries offers a quirky mirror of American society. Political aspirants, strategists, and former candidates turn to focus groups, attempting to gauge what they believe the electorate desires. They distill these insights into hollow slogans, which are then reiterated mindlessly.
Catchphrases such as Change We Can Believe In, Feel the Bern, Make America Great Again, Sí Se Puede, and many more have become the norm. They serve to simplify complex ideas into easily digestible messages, feeding the appetite of political followers.
These slogans, while often absurd, also provide keen observers with insight into potential future threats. For instance, presidential contender Elizabeth Warren’s motto, “Warren Has a Plan for That,” is emblazoned on official merchandise sold for $30 per shirt and $35 per tote bag. Quite the deal for political memorabilia! Continue reading
In the fall of 2018, a junior staffer at the New York Stock Exchange found himself extremely anxious. He had made an honest error—one that could forever label him as incompetent.
After a period of stagnation, the Dow Jones Industrial Average was on the rise. When it closed at 26,828 on October 3, it seemed poised to cross the 27,000 mark, much to the excitement of many, including commentator Jim Cramer.
This was precisely what the NYSE employee feared the most. He had neglected to order commemorative hats for the milestone. It would be a disgrace for Wall Street’s most esteemed index to achieve such a historic moment without any hats for the traders to celebrate.
Fortunately, a twist of fate intervened. The Dow unexpectedly declined instead of rising. A week later, much to the employee’s relief, the hats arrived, just ahead of the anticipated 27,000 mark.
Now, nearly eight months later, the 27,000 target remains unfulfilled. After the initial setback in October of last year, the Dow attempted to reach the mark again last month but fell short once more. Consequently, the hats remain tucked away in a back closet. Continue reading
The onset of war often brings about a sense of clarity and purpose: good versus evil, right versus wrong. It’s a time characterized by drawn lines, spirited songs, and confident celebrations.
Calls for a “jolly little war” are often received with enthusiasm and optimism, much like the commencement of a trade war. Regardless of where you are—from Scranton to Suzhou—the intensifying conflict between Trump and Xi appears to embody a righteous cause; both sides believe they are justified.
In the United States, this perspective is clear-cut. Americans feel that their rightful share of prosperity is finally within reach. After a string of indecisive leaders, the nation now boasts a president with the courage to seize the opportunities for his fellow countrymen. Why not?
Years of competition with low-wage labor in China have left U.S. workers eager for retribution. They have transitioned from well-paying manufacturing roles to low-wage service jobs, and this relentless shift has been demoralizing. With the right opportunities, American workers are confident they can excel. Continue reading
