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Monthly Insights from Chief Economist, Hal Eddins

• March 2025

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  Weatherwise, March is famous for in like a lion and out like a lamb. I’m hoping the market follows suit, and history indicates this might potentially happen. Last month we talked about the two big “T’s” hanging over the market: Trump and Tariffs and those two certainly shaped the markets’ recent behavior. It’s been a whirlwind. The NASDAQ had its worst decline since the dark days of summer in 2022, so let’s try and put it into perspective.

• February 2025

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  If I say “China,” odds are the first thing that pops into your head starts with a T—either Trump or tariffs. Well, that might be yesterday’s news. Money tends to chase the best deal, and lately, that deal doesn’t seem to be where most expected. Since last fall, the Far East has been quietly making a case for itself.

• January 2025

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  How would you describe 2025 so far? A bit bruising? Disorienting? Those are accurate, but I think 'grinding' might be best. The Dow peaked on January 4th at nearly 43,115 and has been heading down since.

• November 2024

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  The election is finally over, and the market is letting out a big sigh of relief. I like a lot of what I see so far: markets have rallied sharply, but so have interest rates and that raises some concerns. Rising rates have also affected the U.S. Dollar and that makes me wonder about the potential ripples from that.

• October 2024

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  Anyone remember those rough selloffs in early August? I sure do. I was catching a flight to San Francisco and up early at 4:30 a.m. My stomach turned when I saw those premarket quotes—it looked like prices had taken a bungee jump off Niagara Falls. It wasn’t fun at the time, but the best buying opportunities rarely are.

• September 2024

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  The Fed finally cut rates. After twiddling his thumbs all summer, Jerome Powell realized it was time to play catch-up. So, let’s break it down. The Fed Funds rate is the overnight lending rate, basically what the Fed thinks shortterm interest rates should be. With the 50-basis point cut, it’s now at 5%

• August 2024

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  Finally, we're seeing interest rates head in the right direction—down. The Fed, after overshooting inflation concerns, has kept rates too high, but that might be changing. The Fed’s preferred inflation gauge, the PCE Index, is sitting at 2.6%, but they’re keeping rates at a whopping 5.25%. That’s some seriously tight monetary policy—capital T tight—and it’s putting a potential chokehold on growth. Something's got to give, and there may be a good chance we'll see a rate cut at their September meeting. The Fed Fund Futures are currently pricing in a 66% chance of a 25-basis point drop, bringing rates to 5%. It's a start

• July 2024

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  Observing the Russell 2000 Small Cap Index over the past two years reminds me of the advice Kurt Vonnegut, the celebrated author of "Slaughterhouse-Five," gave to aspiring writers. Vonnegut believed that awful things must happen to the main characters, regardless of how likable they are, because readers want to see what they’re made of.

• June 2024

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  It’s a relief to have this month’s CPI report out of the way. Despite what it feels like at the grocery store, inflation is actually dropping. The May CPI was flat, which was a surprise since most economists expected a .1% gain. Economics is a game of inches, and that small CPI win feels huge right now.

• May 2024

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  I’ll be blunt. November, you’ve got competition. I’ve always loved November for Thanksgiving, the crisp air and historically strong market returns. But May is making a move to become my favorite month. With Memorial Day, the perfect amount of daylight, and a market winning streak with stocks rising in 9 out of the last 10 years – what’s not to like. May 2024 seemingly continues the tradition with a 5% increase in stocks so far this month. It’s incredible what falling interest rates and cooling inflation can do for stock prices.

• April 2024

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  I’ll be honest, after four months of talking about a selloff, I felt like the boy who cried wolf. In late March, the skies were clear – the S&P was up 10% and the Nasdaq was up 9%. The artificial intelligence stocks felt like they were powering the entire market, and the Nvidia/AMD hype helped the semiconductors to a 29% first quarter gain. Everything was great until reality set in for the highfliers. On March 7th, AMD was up 45% year to date, but there was a slight problem.

• March 2024

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  I raced a 5k race once in Asheville. I was amped up and ready to roll when the starting gun went off. In hindsight, maybe too amped up. I did the first mile in 5 minutes 35 seconds and then it went sideways in a hurry. It was like I had a giant rubber band attached to me that kept on stretching and stretching. After cleared that first mile in 5:35, that rubber band reached the maximum amount of flex and it started pulling back……HARD! I finished the race with a good time, but I also learned an important lesson about pacing.

• February 2024

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  This market is like a UFC cage match. In one corner we have the defending heavyweight champion: interest rates. The challenger is a young upstart called artificial intelligence. I feel inflation is defeated, but rates are (much) higher than they should be. High rates typically hurt the market, but AI is saying otherwise. The productivity gains that AI may bring are potentially spectacular and AI-related stocks are almost single-handedly dragging the market higher.

• January 2024

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  I’ll be honest, I love election years. I don’t care for politics, but elections and markets are a magical combination. I have three favorite things about election years. 1. Election years are positive 74% of the time. This goes all the way back to 1932 and FDR. 2. Election years can be volatile. I’ll share the details below. 3. Election years are rich in data.

• November 2023

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  Wut are you thancfle for? That’s the question Charlie the Turkey asked our family this Thanksgiving. The “correct” spelling would be “what are you thankful for”, but I prefer 6-year-old Kennedy’s version. Everyone wrote their gratitude on a paper feather and the results were taped to the wall to create Charlie’s feathers. (see below) I thought my answer was solid – thankful for friends and family, both old and new. But, looking back, I forgot to say just how thankful I am for the S&P’s 11% rally from October 27th through November 27th.

• October 2023

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  I thought October was supposed to be easy. History says that after a rough August and September, the market finished October higher 90% of the time. Not in 2023. We were on track for a solid return until October 18th. Since then, a 2% market gain turned into a 4% loss – a 6% drop in a flash. Ten-year US Treasury rates skyrocketing from 4.5% to 5% over that time might have had something to do with that.

• September 2023

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  Jerome Powell’s Federal Reserve press conference last week took me back to my childhood. Powell’s message was that rates will be “higher for longer” and it made me think about the games we used to play when I was little. Just when you thought you’d won, the other person changed the rules, and you were right back to where you started from. Powell’s handling of interest rates feels similar this year. Stocks had a good head of steam and went into August on a high. Since then, the spike in rates helped the S&P peel off 7% in August and September.

• August 2023

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  I used to have great memories of Jackson Hole, Wyoming. I skied there during spring break and fell in love with the beauty of the Tetons. Unfortunately, Fed Chair Jerome Powell has diminished my love for Jackson Hole over the last two years. The Federal Reserve holds their annual symposium in Jackson in late August. For most of my career, it’s been a nonevent for markets but that changed last year. At the 2022 summit, Powell started his war on inflation and declared he would vigorously bring down consumer prices by any means necessary. Markets didn’t like it and the S&P dropped 12% from August 26 through October 12, 2022.

• July 2023

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  If you’re negative on the markets, you may want to look away. Investors hoping for a market selloff may be disappointed as it looks like the Dow Transportation Average may have just given the secret handshake to the Dow Jones Industrial Average. According to the Dow Theory, the new 52 week high in the Trannies combined with the Industrial’s new high indicates better times may be on the horizon. My S&P 500 data set shows that the S&P rallies an average of 11% after a Dow Theory buy signal is registered. That would put the market at 5054 if history holds true in 2023.

• June 2023

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  I’ve had a busy spring of speaking engagements and I like to finish my talk with two things: a highlight reel and a question. Let’s look at the high light reel before moving on to my question. Here’s 2023’s list of things going right:

• May 2023

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  The following question is stuck in my head. If everything is so bad, then why is the S&P up 9% year to date? Why is the semiconductor average up more than 30% this year? Why is the NASDAQ 100 up 25% in 2023?

• April 2023

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  I thought you’d be more excited. Ever have that experience? You’ve picked the perfect gift for your person and carefully wrapped it. Your anticipation is through the roof. Then you watch their reaction as they open it, and their facial expression is almost indifferent. Yikes! Tim Hucks and I talked on March CPI Day and we both thought the market might be more grateful for the solid CPI data. The market closed the day basically flat. It’s frustrating because if the CPI had come in hot with too much inflation, the market would have likely stumbled hard.

• March 2023

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  Think the world is ending? You’re not alone. Your news and Twitter feeds are likely full of the Silicon Valley Bank saga. Investors have voted with their feet and fled stocks – they sold $18 billion in stock exposure the 3rd week of March and are currently sitting on $5.1 trillion in cash. That’s even higher than the Covid summer levels of 2020. (Source: Bank of America) Investor sentiment numbers are also currently in the tank with only 22% of investors on the bullish side. (Source: AAII)

• February 2023

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  It’s hard to tell who’s having a tougher February: stock investors or weather forecasters. In Raleigh, we went from 45 degrees with driving rain to 80 and sunny in four days. With three seasons in a week, it’s impossible to figure out what to wear. Stocks are the same. The S&P rode into February sporting an 8% year-to-date gain. From Valentine’s Day through month end, that gain dwindled to only 4.5%. Last month’s Column’s read like a love letter to the NASDAQ. True to form, it’s still leading the charge but even the good ole NASDAQ 100 has seen its gains cut from 16% to 11%.

• January 2023

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  Don’t look now but after two long years in the wasteland, the tech sector has seemingly roared back to life. From November 2020 through December 31, 2022, the value-oriented Dow Industrials returned 23%, while the NASDAQ 100 actually lost 2%. The NASDAQ 100 apparently made a New Year’s resolution that included playing catch up to the Dow, as tech has started 2023 with a bang. The NASDAQ 100 has a year-to-date gain of 11% versus 2.5% for the Dow Jones Industrials. Sure, it’s only January, but I like the vibe tech is putting out there and the migration from value into growth may be just starting. 2022’s interest rate spike impacted tech values and reduced investor’s tech appetites, but the NASDAQ seems to be the latest “must-have” for your portfolio.

• November 2022

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  I love camping. The North Carolina mountains are wonderful this time of year - cool nights and that smell of wood smoke from a campfire. When you wake in the morning, the fire embers are still glowing and putting off heat. Before leaving, Smokey the Bear says to make sure the fire is completely out, so I stomp on it with my boots to make sure it’s good and dead.

• October 2022

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  Something interesting is brewing. Sure, the Fed talks tough, and rates are rising – nothing new there. The surprise is that stocks are generally going higher. The 10-year US Treasury yield jumped from 3.5% on September 30 to 4.1% this week. Conventional wisdom says that’s a death knell for the market. The market’s response has been impressive and has a little “hold my beer and watch this” vibe as stocks rallied 7% month to date. Remember it’s the market’s reaction to the news and not the news itself that matters. Maybe just maybe the market is looking ahead to 2023 and thinks the damage from higher rates may be done.

• September 2022

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  Ever noticed how pessimism is seen as the “smart” view. Being called an optimist feels like an insult. Something along the lines of “Don’t be naïve. Get your head out of the clouds and into the real world.” Optimism has been hard to come by lately, and that makes sense in a way. To be optimistic is to look beyond the current set of known facts. Yes, inflation is high. Yes, the economy is slowing. Yes, the energy situation in Europe is tough. Etc., etc.

• August 2022

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  I love to hear to the market’s song. It’s not always pleasant listening, but it’s full of hints and innuendo. Like a person, the market never tells you exactly what it has in store, but if you listen carefully, you sometimes get an idea of which way it may go next.

• July 2022

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  In my dad’s military days, he loved to STABO. So, what exactly is a STABO? For starters, STABO is the acronym for STAbilized Body. It’s is a rope extraction via helicopter. One minute you’re standing on the ground and the next you were flying through the air at 110 mph, hanging by a rope (with 3 other guys) from the belly of a helicopter. Nothing like a helicopter to get you out of trouble in a hurry. Google Ranger STABO extraction and the video gives you the full flavor.

• June 2022

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  How best to describe 2022? Bruising? Disorienting? Those are accurate, but I think grinding might be best. The Dow peaked on January 4th at nearly 37,000 and hit the skids not long after. It’s been tough ever since – every upward move seems to be followed by a grinding selloff. But maybe this week’s rally will be different.

• May 2022

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  Growing up in Charlotte, I often went to Carowinds. There was a ride called the oaken bucket. You stood up against a rounded wall and then the floor started spinning. Once critical mass was reached, the floor dropped out beneath your feet, and you were pinned against the wall by centrifugal force. Eventually, the spinning slowed, the floor rose, and the ride was over. Your stomach was queasy, and things were just a bit off. It was great fun as a kid.

• April 2022

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  In the mid-2000’s, I was on vacation in London watching the world’s greatest soccer team, Arsenal. I had an interesting conversation with a local Brit. We were discussing sports heroes and he said that in England, they love to build people and things up so they can tear them down. It sounded ruthless and his comment always stuck with me. The action in big cap tech feels similar this week.

• February 2022

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  Oh Vlad, you’re an unwelcome guest; it’s time for you to go home. If the markets didn’t have enough to worry about, Vladmir Putin rattled his saber and got everyone in an uproar. As my wife loved to say, here’s that attention you ordered. Putin’s like a 13-year-old on TikTok: look at me, look at me! If history rhymes like it has sometimes in the past, we may be thanking Vlad for the buying opportunity. Dig into the major geopolitical events of the last 100 years, and we find markets are both higher three and six months later with average gains of 11% and 15% respectively. (Urban Carmel). The Ukraine incursion may provide a solid setup for a move higher later this year.

• January 2022

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  I loved bowling with my son when he was little. The bowling alley usually set up lanes for kids and put inflatable bumpers in the gutter. With bumpers, everyone’s a winner. It was impossible to put the ball in the gutter and you were definitely going to knock down some pins. I look at the Federal Reserve’s actions over the last two years and those inflatable bumpers come to mind. I see people bragging about their investment wins on Twitter. Who needs a job when you can just invest in crypto or meme stocks like Gamestop? It feels like those E*trade ads from 2000 about making your own raise. What could go wrong?

• December 2021

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  The Friday after Thanksgiving is typically a sleepy affair on Wall Street. Skeleton crews on trading desks struggle to stay awake. Not this year. Black Friday lived up to its name with 90% of the trading volume on the downside. The Dow peeled off 900 points and ended the holiday week on a nasty note. In hindsight, it feels like media overreaction to Omicron, but the market likes to shoot first and ask questions later.

• November 2021

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  I think the market has a discipline problem. When I was a kid, I liked to misbehave. It’s part of being young. When my mother caught me, she would give me “that look” and say I’m counting to three and suggest that you stop what you’re doing before I reach three. Thinking back, I don’t think she ever reached three when she was dealing with me. Her record spoke for itself, I did not want any part of what happened after 3. My sister was different story, but that’s a story for another time.

• October 2021

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  September was nasty and October started slowly but the market has roared (finally) into life. As of Thursday, October 21, the market was up 7 days in a row for the first time since July. I’m impressed with the relative nonchalance the S&P has shown the roadblocks thrown in its way. We’ve heard the Fed declare an earlier than expected end to its stimulus program and interest rates have jumped as well. The market seemed to respond with a “hold my beer and watch this” attitude. I sometimes find the market’s reaction to the news to be more revealing than the news itself.

• September 2021

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  Let’s talk about inflation. I weigh 150 pounds. Well, it depends on the scale. My mental scale says it’s 150 pounds exempting Magnums and Wicked Weed Pernicious. Let me explain. Magnums are chocolate covered ice cream bars and Pernicious is the greatest beer produced today. Give the Magnums a try and you can thank me later.