SVP Paul Nolte Interviewed on WGN Radio 1.4.22

Kingsview SVP Paul Nolte discusses New Year’s resolutions, plus the market going up, the effects of the rising cost of goods and services, and consumer spending.

Click here to listen to the interview.

6:48

SVP Paul Nolte Interviewed on WGN Radio 12.28.21

Kingsview SVP Paul Nolte discusses what could be ahead in 2022. He talks about how many companies are buried with paperwork on Rollover IRAs and Roths, plus breaks down the financial markets’ “Santa Rally”.

Click here to listen to the interview.

6:13

SVP Paul Nolte Interviewed on WGN Radio 12.21.21

Kingsview SVP Paul Nolte discusses how the DOW is up and how the Federal Reserve just announced they will be buying less bonds and trimming their balance sheet to address higher than expected inflation reports.

Click here to listen to the interview.

6:50

SVP Paul Nolte Interviewed on WGN Radio 12.17.21

Kingsview SVP Paul Nolte discusses volatility in the stock market and if it’s time to get rid of the word “transitory” when it comes to inflation.

Click here to listen to the interview.

4:58

SVP Paul Nolte Interviewed on WGN Radio 12.14.21

Kingsview SVP Paul Noltediscusses stock market updates, the effect of the omicron variant, inflation and commodity prices.

Click here to listen to the interview.

6:19

SVP Paul Nolte Interviewed on WGN Radio 12.7.21

Kingsview SVP Paul Nolte discusses updates on the stock market in relation to the pandemic and Covid-19 variants. He also talks about the job market and interest rates.

Click here to listen to the interview.

6:48

Nolte Notes 12.6.21

December 6, 2021

“Well, here’s another nice mess you’ve gotten (us) into.” In describing the current economic conditions, Fed Chair Powell admitted what everyone has known for some time, inflation is not transitory and may require a bit more aggressive Fed policy. From a quicker tapering of the bond purchases to maybe raising rates quicker in 2022, the markets are reacting negatively to the thought that the very easy monetary policy that has been in place for the past 20+ months is coming to an end. The employment report on Friday was the exclamation point on the strong economic data. While the total number of “jobs created” came in at half of what was expected, the employment rate dropped to the lowest levels since the start of the pandemic. Wage growth remains well above 5% annually. The coming week we’ll get a read on consumer prices as well as how many folks are quitting jobs. With the money that has been pushed out by the government over the past two years, many, especially older workers, have decided to leave the workforce entirely. It is a Covid effect on the job market that is likely to have an impact for many years to come.

The change in tone from Chair Powell coincides with the economic data coming in “hotter” than expected and a huge boost to GDP estimates. Based upon the Atlanta GDP model, estimates are for over 8% economic growth in the fourth quarter. Much of the supply chain problems can be attributed not to the lack of workers (yes that is part of the issue) but the huge jump in demand for goods. Looking at retail sales, historic growth has generally moved between 3-7% growth vs. year ago levels. Even coming out the recession in ’08, retail sales briefly touched 10% annual growth. Today that growth has been over 10% nearly the entire year with the most recent reading at almost 15%. With demand so far above historic trends, even accounting for the economic shutdown of a year ago, it is little wonder that prices are rising. This will be the Fed’s biggest challenge over the coming year or two; how to cool the economy without pushing it into another recession.

The number of stocks making new yearly lows has expanded to a level last seen during the depths of last March’s decline. Volume has increased with the market decline. On the NYSE, three consecutive days of declining volume exceeding advancing volume by at least three times has usually marked at least a short-term bottom in prices as investors bail on the market. Some of the measures of momentum and selling pressure are at levels usually seen around market bounces as well. So, just maybe the Santa rally is still in place. Worries about the Covid variant is also having some impact on stocks as investors fear reinstatement of some forms of economic restrictions. Hopefully lessons have been learned over the past year as we deal with the residual impacts from the virus and shutdowns.

The bond market is signaling a slowing of economic activity in 2022. Whether that is driven by the Fed or just the ending of various government support programs, the market move is unmistakable. So too is the change in difference between junk yields and government bonds. The change in the bond market is worth watching over the coming weeks to confirm the signal and by extension, a deeper reaction from the stock market.

The recent decline in stocks has impacted the growth part of the market more than value. Having been the darlings since last March’s bottom, growth stocks have been all the rage. The valuation differences between growth and value in the largest stocks hasn’t been seen since the late ‘90s. During the years following the market top in 2000, value, small and international stocks all did well in both absolute terms as well as relative to the broad market averages. Whether the coming years will be a 20+ year reprise of the tech wreck we’ll only see in a few years. But investors should do well to focus on the neglected parts of the market that still have solid fundamentals and underappreciated growth prospects.

The harsh decline in growth stocks over the past few weeks that has bled into the broader market may be setting up for the highly anticipated Santa Claus rally. If coal gets delivered, 2022 could be a tough year.

The opinions expressed in the Investment Newsletter are those of the author and are based upon information that is believed to be accurate and reliable but are opinions and do not constitute a guarantee of present or future financial market conditions.

2:30

SVP Paul Nolte Interviewed on WGN Radio 11.30.21

Kingsview SVP Paul Nolte discusses stock market numbers in relation to COVID-19 variants. He also talks about the Treasury market and interest rates in the long run.

Click here to listen to the interview.

6:48

Nolte Notes 11.29.21

November 29, 2021

The “Nu” variant of the Covid virus is making the rounds in South Africa and has put the fear back into investors that we are once again heading for economic lock/shut down. Friday’s trading is usually very quiet with a few folks coming in to trade a bit and head back home to finish off the Thanksgiving leftovers. However, this year, trading was the worst in 70 years as investors sold anything that benefits from an open economy. Even energy prices fell 10%. The economic data from earlier in the week was solid, with the weekly jobless claims the lowest since 1969 and consumer spending still robust. That all got tossed out the window Friday. The weekend should provide some information that may help investors assess the economic and markets risks heading into December. As usual, technology did better, and bond prices rallied as investors warmed to working at home longer and a Fed that is not likely (now) to be raising rates. If the focus turns more toward the latest variant, then the economic data won’t matter as it will be considered “old news”.

The markets have been trading poorly over the last two weeks, with only one day showing more stocks rising than falling. Friday was the culmination of a bad string, with nine times more declining volume than advancing on the NYSE. The last occurrence was back in September, just before the markets bottomed, resulting in a big October run. At least in the short-term, the selling may have peaked. That doesn’t mean stocks trade higher but expect more ragged trading as we get deeper in the Christmas season. Much of the trading next week will likely center on the path of the new Covid variant. If it is determined to be relatively mild, stocks could regain much of the losses. However, if it poses more risks, then stocks could trade lower still. The employment figures will end the week. The report should be very good and could bolster the markets. Although stocks may be once again beholden to the path of the virus.

As stocks declined, bonds rallied, and interest rates declined. Investors are now expecting the Fed to slow down their pace of tapering their bond purchases and are willing to keep interest rates low. The yield curve has continued to flatten and is now the flattest in eight months. One other concern is the high yield spreads, which are widening. This combination, were it to continue for a few more weeks, could put additional pressure on stocks. For bond investors, treasuries will likely also be a safe port in a storm. The decline in interest rates is likely to continue as commodity prices are showing more signs of rolling over as well. If demand for goods and services wanes in the coming months, prices (and inflation) are likely to moderate.

Friday’s decline was across the board and left few parts of the market unscathed. As mentioned above, the bond market is beginning to signal that stocks could be facing some headwinds in the coming months. Historically, when we see the difference in yields between high yield bonds and treasuries widen out, the stock market runs into trouble down the road. The lead time is anywhere between three months to over a year, so it makes sense to begin watching the markets a bit more closely. The final part of the “market signal” is the flatter yield curve. When the difference between the two- and ten-year yields on treasuries begins to narrow, it is a sign that financial conditions are beginning to tighten. Again, this is not a call for the end of the bull market but is worth keeping an eye on in the coming months. Whenever the markets decide they have had enough, there are likely to be a few hiding places. Better parts of the market will likely be those that have not really participated over the past year, like value and international holdings.

Whether the new variant is at the center of the markets concern or a Fed that may be making a policy mistake, the markets are beginning to pay attention. If things begin getting rougher, treasuries will be a good hiding place.

The opinions expressed in the Investment Newsletter are those of the author and are based upon information that is believed to be accurate and reliable but are opinions and do not constitute a guarantee of present or future financial market conditions.

2:30

SVP Paul Nolte Interviewed By TD Ameritrade 11.23.21

TD Ameritrade interviews Paul Nolte, SVP & Sr. Portfolio Manager

Kingsview SVP Paul Nolte discusses how the U.S. Dollar has powered higher, and the possibility of seeing 95, 96ish, or even 100 on the Dollar Index in the next few weeks. He also talks about the idea that the markets are happy with the status quo of Fed Chair Powell and points out that gold (/GC) has been relatively rangebound in recent weeks.

Click here to watch the interview

9:45