The Sandbox Daily

Markets in review

EQUITIES: Russell 2000 +0.37% | Dow +0.35% | S&P 500 -0.10% | Nasdaq 100 -0.43%

FIXED INCOME: Barclays Agg Bond +0.49% | High Yield -0.03% | 2yr UST 4.398% | 10yr UST 4.848%

COMMODITIES: Brent Crude -0.51% to $72.69/barrel. Gold -3.02% to $4,017.6/oz.

BITCOIN: -4.08% to $60,827

US DOLLAR INDEX: +0.17% to 101.58

CBOE TOTAL PUT/CALL RATIO: 0.92

VIX: -4.41% to 18.63

Quote of the day

“Yesterday’s the past, tomorrow’s the future, but today is a gift. That’s why it’s called the present.”

- Bil Keane, American cartoonist

When market wisdom contradicts itself

In personal finance, one of the most significant – and perhaps underappreciated – pitfalls is the prevalence of maxims.

The truisms we rattle off that don’t gel with the average person.

On nearly every financial topic, there seems to be a pithy phrase ready to guide your decision-making.

Turn on financial television, scroll through social media, listen to market commentators, or chat with a seasoned investor, and you’ll hear them. These aphorisms are short, memorable, and often sound incredibly wise – as if they were handed down from some investing prophet on a mountaintop.

Wall Street, in particular, is obsessed with them.

Part of the appeal is understandable. Markets are complicated. There are millions of participants, endless streams of information, and an uncertain future. A catchy phrase provides a shortcut. It compresses a complicated idea into a sentence that can be remembered and repeated.

A good saying gives the illusion of certainty.

The problem is that shortcuts are often poor substitutes for actual thinking. What’s more, many of these sayings directly contradict one another.

Consider these two familiar rules of thumb:

“Never try to catch a falling knife.”

“Buy stocks the same way you’d buy any other product: when they’re on sale.”

The first would tell you to stand safely on the sidelines during a market decline. If prices are falling, wait. Let someone else absorb the downside risk.

The second would tell you to do exactly the opposite. If stocks are cheaper today than they were yesterday, that’s precisely when you should be interested. After all, nobody walks into a store and insists on paying full price for something they could buy at a discount.

So, which saying is correct?

The answer, of course, is that both can be correct – and both can also be wrong.

A stock that is down 10% may be a wonderful bargain. It may also be the first step toward a 50% loss. The saying itself doesn’t tell you which situation you’re facing. That requires analysis, judgment, and an understanding of what you actually own.

This isn’t unique to those two examples. The investing world is full of contradictory wisdom.

“Buy low and sell high.”

“Be fearful when others are greedy.”

“The trend is your friend.”

One encourages patience and consistency. Another encourages opportunism. One tells you to move against the crowd. Another tells you to follow it. Depending on the circumstances, each may contain a kernel of truth.

The larger lesson is that sayings are not principles. They are not investment processes. They are not strategies.

They are mental shortcuts.

The danger comes when investors mistake a memorable phrase for genuine wisdom. A saying can be useful if it reminds us of an important concept. It becomes dangerous when it replaces critical thinking.

In fact, one reason sayings persist is that they can always be retroactively explained. If the market rebounds after a decline, investors celebrate buying when stocks were “on sale.” If the market continues to fall, they remind you that you should never have tried to “catch a falling knife.” The saying that turns out to be correct is often determined after the fact.

Real investing is rarely that simple.

Most successful investors I know don’t rely on sayings. They rely on frameworks and a process. They have principles about valuation, diversification, risk management, time horizons, and asset allocation. Those principles may occasionally align with a popular saying, but they don’t depend on one.

A good framework helps you make decisions when conditions are uncertain. A saying merely gives you something clever to repeat.

So, the next time you hear a piece of market wisdom packaged into a catchy phrase, pause for a moment. Ask yourself whether it is actually helping you think through the situation – or simply helping you avoid thinking about it.

Because in investing, the most dangerous words are often the ones that sound the wisest.

Goodbye for now.

That’s all for today.

Blake

Questions about your financial goals or future?

Connect with a Sandbox financial advisor – our team is here to support you every step of the way!

Welcome to The Sandbox Daily, a daily curation of relevant research at the intersection of markets, economics, and lifestyle. We are committed to delivering high-quality and timely content to help investors make sense of capital markets.

Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. The information and opinions provided within should not be taken as specific advice on the merits of any investment decision by the reader. Investors should conduct their own due diligence regarding the prospects of any security discussed herein based on such investors’ own review of publicly available information. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily. Any projections, market outlooks, or estimates stated here are forward looking statements and are inherently unreliable; they are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.

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When stock selection matters most

Blake B. Millard — Tue, 23 Jun 2026 20:56:35 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

a market of winners and losers

Let’s dig in.

Blake

Markets in review

EQUITIES: Dow -0.09% | Russell 2000 -0.96% | S&P 500 -1.44% | Nasdaq 100 -3.29%

FIXED INCOME: Barclays Agg Bond +0.08% | High Yield -0.09% | 2yr UST 4.198% | 10yr UST 4.946%

COMMODITIES: Brent Crude -0.34% to $75.61/barrel. Gold -1.75% to $4,129.3/oz.

BITCOIN: -3.26% to $62,389

US DOLLAR INDEX: +0.36% to 101.39

CBOE TOTAL PUT/CALL RATIO: 0.92

VIX: +12.79% to 19.49

Quote of the day

“Rest is not idleness, and to lie sometimes on the grass under trees on a summer’s day, listening to the murmur of the water, or watching the clouds float across the sky, is by no means a waste of time.”

- John Lubbock, The Use of Life

Stock picker’s market?

Investors often refer to a “stock picker’s market” as an environment in which company-specific fundamentals matter more than broad market forces.

One way to assess whether such an environment exists is through stock correlation, which measures how closely individual stocks move together.

When correlations are high, macroeconomic factors tend to dominate and stocks often rise or fall in unison.

When correlations are low, returns become more differentiated, creating a wider gap between winners and losers – and potentially more opportunities for skilled stock selection. These are environments where active management can perform well and add incremental value.

As the chart below illustrates, correlations typically spike during periods of market stress, including the 2008 Global Financial Crisis, the 2011 European debt crisis, and the 2020 pandemic.

In contrast, correlations tend to decline when innovation, competitive positioning, and company execution play a larger role in driving returns.

Today, the CBOE’s measure of implied correlation among the largest S&P 500 stocks sits near its lowest level in more than two decades, suggesting that investors may be operating in one of the most favorable stock-picking environments in recent memory.

I believe the current backdrop is largely being shaped by the disruptive impact of artificial intelligence.

As AI reshapes industries, companies enabling the technology are seeing expanding growth opportunities, while others face increasing competitive pressures and business model disruption.

This divergence is creating a market characterized by greater dispersion in outcomes – a hallmark of a stock picker’s market and an environment in which active security selection may have a greater opportunity to add value.

Source: FactSet

That’s all for today.

Blake

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We love simple rules of thumb, but they can mislead us

Blake B. Millard — Mon, 22 Jun 2026 23:41:32 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

three rules of thumb broken by the post-pandemic cycle

Let’s dig in.

Blake

Markets in review

EQUITIES: Russell 2000 +0.83% | Dow +0.29% | Nasdaq 100 -0.19% | S&P 500 -0.37%

FIXED INCOME: Barclays Agg Bond -0.27% | High Yield -0.09% | 2yr UST 4.232% | 10yr UST 4.943%

COMMODITIES: Brent Crude +0.58% to $77.89/barrel. Gold -0.85% to $4,209.7/oz.

BITCOIN: +2.47% to $64,161

US DOLLAR INDEX: +0.14% to 101.01

CBOE TOTAL PUT/CALL RATIO: 0.91

VIX: +2.98% to 17.28

Quote of the day

“One day or day one, you decide.”

- Paulo Coelho

We love simple rules of thumb, but they can mislead us

We spend our days immersed in data: identifying trends, digesting news, and studying past episodes.

Historically, many variables move together in predictable ways. Extrapolating these trends is one way to anticipate what lies ahead.

However, the pandemic cycle has broken a number of past relationships, making it more difficult than ever to identify turning points in the cycle.

The list of failed rules of thumb – also known as heuristics – includes:

Two quarters of decline define a downturn.

How do we determine when a recession has started? The answer, of course, is not straightforward because this is finance after all.

In practice, a recession requires a nuanced review of a wide band of economic data, determined in arrears by the National Bureau of Economic Research (NBER). More colloquially, recessions are characterized by two consecutive quarters of economic contraction, or negative GDP, which is the simple mark that Wall Street often applies.

The U.S. economy declined during the first two quarters of 2022. But despite widespread fears, no recession took root. Job gains continued, consumer demand sustained, and business investment stayed buoyant. The launch of ChatGPT on November 30, 2022 likely prevented a further economic downturn and lengthy bear market for stocks.

Details are important when analyzing economic growth. The decline in 1H2022 was driven by unusually large shifts in highly variable components: inventory accumulation and net trade. Both of those series were whipsawed by pandemic disruptions. Final private domestic demand, which includes only consumption and investment, has grown throughout the cycle.

When the yield curve inverts, the economy is in trouble.

We expect short-term yields to offer a lower return than long-term yields, reflecting the term premium required by investors to lock their money up for a longer time and account for a higher probability of default.

When this relationship inverts – as it did in the summer of 2022 – it can indicate that something is amiss.

While inversions have preceded most recessions, the curve gives us zero clues as to the timing, cause, or severity of the recession to follow.

The limitations of the yield curve inversion as a leading indicator have come under great scrutiny over the last few years as the economy and stock markets have prospered throughout.

Also, one major challenge in using the yield curve as a cycle indicator is identifying what aspects of the fixed income market are out of equilibrium. For example, if the short end falls because the Fed is lowering rates due to lower inflation, then the inversion can be corrected without a recession.

The “Sahm Rule” called every recession since WWII.

Economist Claudia Sahm sought a more timely way to diagnose the onset of a recession than waiting for NBER’s expert judgment.

The Sahm Rule states a recession is unfolding when the three-month moving average of the national unemployment rate rises by 0.5% or more from its prior-year low.

The Sahm rule officially triggered in July 2024. This occurred when the three-month moving average of the national unemployment rate rose to 4.3%, which was 0.53 percentage points above its 12-month low.

Fortunately for us, Claudia Sahm is still a practicing economist, offering real-time commentary.

She downplayed her own indicator throughout 2024 and 2025 due to a variety of factors: the absolute level of unemployment rate was rising from a 50-year low, unique post-pandemic factors like a burst in labor supply from increased immigration artificially created a false positive, and clarified the signal as a coincident marker and not a predictive rule.

Bottom line

We love simple rules of thumb because they help us make sense of a complex world. But when we treat them as immutable laws, they can lead us astray.

History remains one of our most valuable guides. But successful investors study the underlying forces driving past relationships rather than blindly extrapolating them into the future.

Many relationships have failed in this cycle. The pandemic introduced a series of extraordinary distortions – lockdowns, shortages, inflation, excess savings, revenge spending, supply chains, capital flows, etc. – that have led to a series of new patterns.

The mistake wasn’t that the indicators were “wrong,” but that investors elevated simple heuristics into laws of nature.

Context matters. History should be used as a guide, not gospel.

Markets reward those who remain curious enough to question old assumptions and flexible enough to adapt when conditions change.

Intellectual humility is what keeps us in the game.

Sources: National Bureau of Economic Research, St. Louis Fed, Bloomberg

That’s all for today.

Blake

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The Fed's new frontier under Kevin Warsh

Blake B. Millard — Thu, 18 Jun 2026 20:33:16 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

a new frontier under Kevin Warsh

Let’s dig in.

Blake

Markets in review

EQUITIES: Nasdaq 100 +2.48% | Russell 2000 +2.12% | S&P 500 +1.08% | Dow +0.14%

FIXED INCOME: Barclays Agg Bond +0.29% | High Yield +0.35% | 2yr UST 4.177% | 10yr UST 4.898%

COMMODITIES: Brent Crude -0.16% to $77.27/barrel. Gold -3.31% to $4,236.2/oz.

BITCOIN: -2.04% to $63,067

US DOLLAR INDEX: +0.70% to 100.79

CBOE TOTAL PUT/CALL RATIO: 0.86

VIX: -11.06% to 16.40

Quote of the day

“Peace is the result of retraining your mind to process life as it is, rather than as you think it should be.”

- Wayne W. Dyer

The Fed’s new approach under Kevin Warsh

There’s a new sheriff in town at the Federal Reserve and his name is Kevin Warsh.

Yesterday, the Fed voted unanimously to hold interest rates steady in the 3.50%-3.75% range, exactly as expected. But, rates may not stay unchanged for long. Even though Warsh was nominated by President Trump with an expectation he’d quickly lower interest rates, the central bank signaled that rates might actually go higher this year; 9 of 19 officials projected a rate hike coming this year after none did so in March.

Of much greater significance, Kevin Warsh’s first Fed meeting wasn’t even about changing interest rates. It was about changing the role of the Federal Reserve itself.

Warsh’s Q&A discussion was a forum to send a much bigger message: focus on inflation, stop trying to handhold markets, and rethink assumptions that have defined central banking since the Global Financial Crisis.

Here are 10 things that stood out to me:

• This wasn’t even about interest rates. Nobody expected the Fed to cut or hike rates yesterday. The real story was the unveiling of Warsh’s vision for the institution itself. Nearly every major signal coming out of the meeting pointed toward a different approach to communications, policymaking, and the central bank’s tools.

• The Fed is talking less. The post-meeting statement was the shortest in decades and resembled the brief communications common during the Alan Greenspan era. Investors have become accustomed to increasingly detailed explanations. Warsh appears to be moving in the opposite direction. The statement was just 130 words, a massive cut from the 341 words in the final Powell-led Fed meeting on April 29. See the graphic at the bottom.

• Credibility over predictability. This may be the most important takeaway from the entire meeting. For years, the Fed tried to reduce uncertainty by telling markets what it expected to do next. Warsh seems to believe the Fed’s credibility comes from delivering low inflation, not from making markets comfortable. He appears willing to tolerate more uncertainty if it helps restore confidence in the Fed’s inflation-fighting commitment.

• The era of forward guidance is likely ending. Warsh has openly criticized the Fed’s habit of signaling future rate moves. He has argued that excessive guidance can constrain policymakers and encourage markets to focus on Fed forecasts instead of actual economic conditions.

• Fed watching just got harder. Investors have spent years dissecting speeches, statements, forecasts, and press conferences for clues. If Warsh follows through on his philosophy, there may simply be fewer clues available. Markets may have to rely more on incoming data and less on Fed messaging.

• Warsh is conducting a top-to-bottom review of the institution. He immediately launched five task forces examining communications, inflation frameworks, data sources, productivity, and the Fed’s balance sheet. Most Fed chairs inherit the institution they are given. Warsh appears determined to evaluate whether the institution itself needs reform. The savvy veteran Keith Fitz-Gerald had this to say: “The tools it uses are antiquated and don’t reflect modern economics.”

• The Fed’s footprint in markets may shrink over time. One of those task forces will examine the Fed’s massive balance sheet, which expanded dramatically after the financial crisis and pandemic. While this won’t happen overnight, Warsh has long questioned whether the central bank has become too involved in financial markets.

• The most important dot was the missing one. Warsh declined to submit his own rate projection to the Fed’s famous dot plot, as 18 of 19 Fed policymakers submitted projections. That may sound insignificant, but it was a direct signal that he may not believe the Fed should be providing investors with a roadmap for future policy decisions.

• Inflation is back at the center of the Fed’s mission. The defining quote of Kevin’s inaugural press conference was simple: “This committee will deliver price stability.” Warsh rarely emphasized employment and repeatedly returned to inflation on about a dozen occasions. The message was clear: the 2% inflation target is not being reconsidered and remains the central bank’s “North Star.”

• Nothing changed and everything changed. Interest rates stayed exactly where they were. But the framework investors use to think about the Federal Reserve may have shifted meaningfully. Under Powell, the Fed often tried to tell markets what it was going to do. Under Warsh, the Fed may simply do it.

As strategist Dario Perkins put it after the meeting: “Fed watching just got harder.”

That may be exactly what Kevin Warsh intends.

Chart source: Fisher Investments

That’s all for today.

Blake

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Fundamentals tell me what to buy. Technicals help me decide when.

Blake B. Millard — Thu, 18 Jun 2026 00:03:40 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

three technical indicators worth your attention

Let’s dig in.

Blake

Markets in review

EQUITIES: Russell 2000 -0.72% | Dow -0.98% | Nasdaq 100 -0.99% | S&P 500 -1.21%

FIXED INCOME: Barclays Agg Bond -0.36% | High Yield -0.37% | 2yr UST 4.184% | 10yr UST 4.929%

COMMODITIES: Brent Crude -0.53% to $76.72/barrel. Gold -1.67% to $4,281.7/oz.

BITCOIN: -2.18% to $64,359

US DOLLAR INDEX: +0.84% to 100.38

CBOE TOTAL PUT/CALL RATIO: 0.84

VIX: +12.37% to 18.44

Quote of the day

“Everybody in my MBA class at the University of Chicago was very smart and very hard working. But hard work and intelligence are mere table stakes. Not everybody has fortune smile on them; not everybody gets lucky.”

- Howard Marks, Oaktree via Barry Ritholtz in Serendipity: The Role of Luck in Your Life and Career

Three technical indicators worth your attention

If there were ever a time when investors needed a second opinion, this market is it.

One day, AI is the greatest thing ever and stocks surge. The next day, investors worry AI will disrupt entire industries and those same stocks sell off. Markets are constantly weighing new information, changing narratives, and shifting expectations.

My investment process is built on fundamental analysis. I focus on economic conditions (interest rates, inflation, confidence surveys, etc), management teams, growth prospects, and valuation to determine which assets deserve a place in a portfolio.

That said, I don’t ignore technical analysis. Outright dismissing it is a mistake.

Fundamentals help determine what a rational investor should do. Technical analysis helps us understand what investors are actually doing.

In TA, charts reflect the collective actions of market participants – rational and irrational alike – and can provide useful context when making investment decisions.

I view technical analysis as a second opinion, not a substitute for fundamental and macro research. Once I’ve identified an asset class or theme I want to own, technical indicators can identify potential support and resistance levels, help assess sentiment and positioning, and improve entry points.

With that in mind, let’s look at three technical tools I use most often: simple moving averages, relative strength (RSI), and volume.

1. Simple moving averages (SMA)

Moving averages are basic, yet important, and widely monitored technical indicators that help to visualize the overall trend of a stock. A moving average is, as the name implies, an average based on prior closing levels for the stock. It is moving in that every day that average must be updated to reflect the latest period.

A 50-day SMA represents the average closing price of a stock over the past 50 days. It “moves” because each day, the most recent closing price is factored in, while the oldest closing price, from 51 days ago, rolls off. The 50-SMA is helpful because it shows the recent trend of price action.

A 200-day SMA is the average closing level over the past 200 days. This metric is helpful because it filters out recent, cyclical noise and focuses more on structural trends playing out over longer time frames.

While there are many ways to use moving averages, we like to keep it simple and look to them as long-term levels of support or resistance.

When the stock is trading above the SMA, then the SMA is viewed as support, or a level that can hold as a near-term floor. When a stock is trading below the SMA in question, then it’s viewed as resistance, meaning that level is going to be hard to break through and continue higher.

In technical analysis, the Polarity Principle states that prior resistance, once overcome, turns to support; and vice versa, prior support, once broken, becomes resistance. A stock’s current market price versus these moving averages informs us of key support/resistance levels.

Technical analysts may look to use two separate moving averages – often in conjunction with one another – to determine where a stock goes next. Notable patterns technicians will call out that use two SMAs are the Golden Cross (bullish and can indicate more upside) and the Death Cross (bearish and can indicate more downside).

2. Relative strength indicator (RSI)

This is a momentum metric – measuring both the speed and magnitude of a move. It is used by technical analysts to determine whether a stock has reached overbought or oversold territory.

Do not confuse overbought and oversold, which speak to the speed and magnitude of a move in a given time, with overvalued and undervalued, which refer to valuation.

The RSI measures momentum by comparing the strength of “up days” versus “down days,” generally over 14 days.

This indicator oscillates between zero and 100. A reading under 30 is indicative of a stock being “oversold” and a reading over 70 signals an “overbought” condition.

RSI has been used and trusted for decades to signal swings in the broader stock market.

One important thing to remember is that an overbought or oversold indication can be worked off simply by some sideways action. So, the fact a stock is overbought/oversold does not indicate that it must pullback/bounce for that condition to be worked out.

In extreme market moves, it can be helpful to consider the RSI in conjunction with what you believe about the company’s fundamentals.

This happened earlier in the year to CrowdStrike. In the midst of the Q1 software selloff, CrowdStrike’s RSI fell to its second lowest level in the stock’s 2020s history. The move was extreme, with no specific fundamental reason other than general AI disruption fears in my view, to warrant it. The move seemed irrational. When a move is irrational and extreme, you generally want to be thinking about taking the other side of the trade. By combining technical tools like the RSI and the others discussed here, you give yourself the best chance at successfully stepping into weakness and buying a healthy businesses on sale.

3. Volume

Volume is how many shares are bought and sold in a given day. It sounds simple, but what that can tell us about a stock is important.

Think about every trade as a vote on a stock’s intermediate-term growth prospects and valuation – whether it is undervalued or overvalued — and in turn, where investors see the stock going in the future.

Trades on any given day serve as a sample size of the broader investor population. If a stock is going higher, it’s because investors are “voting,” or showing a willingness, to pay a higher price for a company’s earnings. Conversely, if a stock is going lower, that means investors want to pay less for earnings.

With every trade being a vote on valuation, technicians argue that the higher the volume, the more trustworthy the move in the stock. If a move is made on very low volume, then it can’t be trusted because the size of the vote on that day, the sample size, is small and therefore not truly telling of investor sentiment. A move on above-average volume, however, is considered more robust because more of the investor base is voting and the sample size is larger.

Share appreciation is a sign that demand is outstripping supply at the current price level. The reverse is also true. If a stock is selling off on heavy volume, the shareholder base more broadly believes the stock is indeed overvalued. A stock drops when there are more sellers than buyers.

That said, polls themselves can be flawed, either because the sample population was skewed in some way, or due to an issue with the polling methodology. The same can be said for volume analysis, which is why we cannot analyze it in a vacuum.

Things like short interest, news flow, broader sector and market dynamics, options activity, and much more can manipulate the signal from volume.

While volume is an important “lie detector,” it must be considered in the context of other metrics.

Bottom line

While there are countless indicators and tools that technical analysts rely on to forecast the future direction the stock market and the market of stocks, I think these three metrics – simple moving averages, momentum, and volume – are a good starting point for those looking to enhance their investment process and seek that “second opinion.”

The best part? These data points should be available on just about every brokerage platform out there.

So, while I focus on fundamentals first, I always incorporate multiple technical indicators for confirmation in my process and increase the odds in my favor.

That’s all for today.

Blake

Questions about your financial goals or future?

Connect with a Sandbox financial advisor – our team is here to support you every step of the way!

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Central bank policy beginning to diverge

Blake B. Millard — Wed, 17 Jun 2026 00:27:41 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

central bank policy beginning to diverge

Let’s dig in.

Blake

Markets in review

EQUITIES: Dow +0.64% | S&P 500 -0.57% | Russell 2000 -0.87% | Nasdaq 100 -1.89%

FIXED INCOME: Barclays Agg Bond +0.12% | High Yield -0.01% | 2yr UST 4.439% | 10yr UST 4.941%

COMMODITIES: Brent Crude +0.75% to $79.55/barrel. Gold +0.27% to $4,355.8/oz.

BITCOIN: -1.51% to $65,596

US DOLLAR INDEX: +0.01% to 99.54

CBOE TOTAL PUT/CALL RATIO: 0.89

VIX: +1.30% to 16.41

Quote of the day

“If you have a problem with me, text me. And if you don’t have my number, you don’t know me well enough to have a problem with me.”

- Christian Bale

Central bank policy pivoting away from easing bias

Global central bank policy remains broadly supportive of risk assets, even as inflation risks tied to the Iran conflict have narrowed the margin for error.

A majority of central banks are still in easing cycles, a backdrop that has historically favored stocks.

However, persistent commodity-driven inflation could push certain policymakers around the global toward selective tightening over the next 6-12 months.

With interest rate policy now more influential than balance sheet management, market outcomes will increasingly depend on whether inflation pressures prove temporary or require coordinated tightening.

The Fed is expected to remain on hold for now, supported by stable growth and anchored inflation expectations. I’d expect the Fed to remove its easing bias and turn neutral at tomorrow’s June meeting, and then stay on hold for the balance of the year. There remains a non-zero chance that the Fed itself may deliver a rate cut by year-end.

Elsewhere, a few central banks have already shifted course and more may follow.

The European Central Bank (ECB) and Bank of England (BoE) face greater pressure from energy-driven inflation and may each deliver one rate hike despite weaker growth. The Bank of Japan (BoJ) is continuing its gradual normalization, supported by stronger wages and inflation dynamics.

Across Emerging Markets, the easing trend largely remains intact, with China likely to ease further and other economies pausing or adjusting based on Fed policy and inflation trends.

Overall, while policy divergence is increasing, the global backdrop still leans supportive for equities, provided inflation does not force a broader shift toward tightening.

Chart sources: Ned Davis Research, J.P. Morgan

That’s all for today.

Blake

Questions about your financial goals or future?

Connect with a Sandbox financial advisor – our team is here to support you every step of the way!

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The SpaceX IPO isn't even the main story

Blake B. Millard — Wed, 10 Jun 2026 22:10:35 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

SpaceX isn’t the story

Let’s dig in.

Blake

Markets in review

EQUITIES: Russell 2000 -1.10% | S&P 500 -1.62% | Dow -1.87% | Nasdaq 100 -1.98%

FIXED INCOME: Barclays Agg Bond -0.06% | High Yield -0.19% | 2yr UST 4.135% | 10yr UST 5.027%

COMMODITIES: Brent Crude +1.77% to $87.17/barrel. Gold -4.18% to $4,107.2/oz.

BITCOIN: -0.17% to $61,560

US DOLLAR INDEX: +0.12% to 100.03

CBOE TOTAL PUT/CALL RATIO: 0.96

VIX: +11.83% to 22.22

Quote of the day

“The more a person depends on external stimulation, the poorer their inner life becomes.”

- Erich Fromm

SpaceX may be the most important IPO ever. That doesn’t mean it’s a great stock.

The SpaceX initial public offering (IPO) is arriving at a moment when investors are already being asked to finance the largest wave of capital spending in modern history.

SpaceX. OpenAI. Anthropic. Even public companies like Alphabet and Meta Platforms are weighing multi-billion dollar equity offerings to fund AI CapEx.

And this recent wave comes after several years of the artificial intelligence infrastructure buildout that has already seen the register rung to the tune of a trillion plus dollars.

The challenge isn’t finding investors who believe in AI. The challenge is finding enough capital to fund every AI ambition simultaneously.

That’s what makes the SpaceX IPO so fascinating.

At a rumored valuation around $2 trillion, SpaceX would instantly become one of the largest companies on Earth. Yet calling it a “rocket company” misses the point entirely.

It’s a communications company through Starlink. A defense company through its government partnerships. An infrastructure company connecting remote corners of the world. Increasingly, it’s an AI play after SpaceX acquired the artificial intelligence startup, xAI.

And, perhaps most importantly, it’s a company opening access to an entirely new frontier.

The most important companies in history didn’t simply dominate industries. They expanded the boundaries of what was economically possible.

Railroads connected continents. AT&T connected people. The internet connected information.

SpaceX may connect Earth to the next chapter of economic development. That’s why investors are struggling to value it.

What exactly is SpaceX?

Elon Musk? Aerospace? Communications? Defense? Technology? Infrastructure? The answer is probably all of the above.

Before a single share has traded, portions of Wall Street have already begun adapting around it.

Index providers have rewritten rules to accelerate inclusion. Exchanges, clearinghouses, and brokers have spent months preparing for unprecedented trading volumes. Passive funds are modeling billions in automatic purchases.

In other words, SpaceX is so large that parts of the market’s plumbing are being rebuilt around its arrival.

And that’s where investors should exercise caution.

History shows that great companies and great investments are not always the same thing.

Looking at the 10 largest U.S. IPOs since 2000, seven delivered negative returns over their first 12 months as public companies. The average first-year return was -26.8%.

The lesson isn’t that these were bad businesses. In fact, quite the opposite.

Meta is a cash cow. Blackstone runs a great business around private markets. Uber has transformed the way we think about transportation.

Many of these companies eventually rewarded long-term investors. The problem was price.

As Yale finance professor Roger Ibbotson recently observed, narrative enthusiasm can create a “superstar premium.” Investors don’t lose money because they identify the wrong company. They lose money because they pay the wrong price for the right company.

That risk feels especially relevant today.

SpaceX isn’t arriving in isolation. It’s arriving alongside a wave of AI-related spending and capital raising that likely stretch public markets in ways we’ve never seen before.

As Jim Cramer recently put it: “There are a lot of mouths to feed and not enough to eat.”

Every dollar that flows into SpaceX has to come from somewhere. Index funds may need to rebalance. Active managers will feel pressure to own it. Retail investors may sell existing winners to make room. In other words: volatility. Which arrived in spades over the past week.

The question isn’t whether investors want SpaceX. The question is what they’ll sell to buy it.

That’s why I keep coming back to the same conclusion.

SpaceX may eventually become one of the most important companies ever built. It may help define the future of communications, defense, artificial intelligence, and humanity’s expansion beyond Earth.

Even cosmology professor Brian Cox views SpaceX and private spaceflight as a monumental leap for humanity.

But history suggests that some of the greatest businesses in history don’t necessary align with the value assigned to it.

Wall Street has spent months debating what SpaceX is worth. I think that’s the wrong question.

The more interesting question is: where does the money come from?

The SpaceX IPO matters because it is becoming a stress test for the financial system itself.

Chart Sources: Exhibit A, Bloomberg

That’s all for today.

Blake

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Stocks wobble after historic rally

Blake B. Millard — Wed, 10 Jun 2026 01:47:29 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

stocks wobble after historic rally

Let’s dig in.

Blake

Markets in review

EQUITIES: Russell 2000 +0.41% | Dow +0.17% | S&P 500 -0.26% | Nasdaq 100 -1.12%

FIXED INCOME: Barclays Agg Bond +0.20% | High Yield +0.10% | 2yr UST 4.147% | 10yr UST 5.014%

COMMODITIES: Brent Crude +1.18% to $86.67/barrel. Gold -1.31% to $4,231.1/oz.

BITCOIN: -2.09% to $61,497

US DOLLAR INDEX: +0.09% to 100.02

CBOE TOTAL PUT/CALL RATIO: 0.96

VIX: +5.02% to 19.87

Quote of the day

“We’ve got two lives – one we’re given and the other one we make.”

- Mary Chapin Carpenter

Stocks wobble after historic rally

Stocks have experienced historically strong returns off the March 30th bottom, so this latest episode of volatility has some investors a bit unnerved.

Part of the Q2 market strength could be described as a “relief rally.”

Specifically, the conflict in the Middle East has had less of an economic impact than many originally feared, despite higher oil prices. Corporate earnings have also been strong and there is growing enthusiasm for a wave of upcoming initial public offerings.

Perhaps most interesting is the fact that the bond market has faced a more challenging environment as interest rates have drifted higher and remain high. Rates have risen along the entire yield curve this year, with the 10-year Treasury yield, for instance, hovering around 4.5%.

The bond market is sometimes described as the “smart money,” meaning that bond investors tend to more closely analyze the underlying trends in inflation, growth, and Fed policy compared to the stock market.

Whether this is the case or not, the bond market has been signaling that interest rates may stay higher than some had hoped, even as the stock market has rallied.

It’s not too surprising, then, that the stock market has recently reacted to these same developments.

This is particularly true for Technology and AI-related stocks, which are highly sensitive to interest rates. The Nasdaq experienced its largest single-day fall in a year, with the index declining -4.2% on Friday, June 5. Today, more of the same.

Bank of America noted that clients over the last week have significantly lightened their Tech exposure, which saw its largest outflows in their data history since 2008 (or largest since early 2014 as a percentage of market capitalization).

Counterintuitively, Friday’s avalanche of selling pressure followed a strong jobs report, which is good news for the broader economy but bad news for stocks because it raises the possibility of a Federal Reserve rate hike by the end of the year.

At the same time, a brief re-escalation of the conflict in the Middle East has fueled concerns that the delicate ceasefire agreement between United States and Iran may be unraveling in real time.

Now, investors are wondering if record new stock issuance via SpaceX, OpenAI, Anthropic, and Alphabet is a bit too heavy handed for the market to absorb.

While it’s normal for the stock market to experience periodic downdrafts, this recent volatility has caught some by surprise given how resilient stocks have behaved throughout Q2.

Just as architects design buildings to withstand not just sunny days but all types of conditions, investors should remember that periods of strong returns are not a reason to forget about risk management and portfolio balance.

While it’s important to appreciate when the market performs well, it’s during the good times that investors are best positioned to prepare their portfolios for whatever lies ahead.

After all, even with the latest pullbacks, major market indices have still experienced healthy gains this year.

Source: Bank of America, Prof G Media

That’s all for today.

Blake

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What will matter most for markets in the second half?

Blake B. Millard — Wed, 03 Jun 2026 21:25:34 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

looking ahead to the 2^nd half

Let’s dig in.

Blake

Markets in review

EQUITIES: Nasdaq 100 -0.29% | S&P 500 -0.74% | Dow -1.21% | Russell 2000 -1.31%

FIXED INCOME: Barclays Agg Bond -0.21% | High Yield -0.28% | 2yr UST 4.082% | 10yr UST 4.991%

COMMODITIES: Brent Crude +0.88% to $88.18/barrel. Gold -1.29% to $4,461.4/oz.

BITCOIN: -2.76% to $65,009

US DOLLAR INDEX: +0.31% to 99.53

CBOE TOTAL PUT/CALL RATIO: 0.73

VIX: +1.84% to 16.06

Quote of the day

“I’ve had a lot of worries in my life, most of which never happened.”

- Mark Twain

What will matter most for markets in the second half?

Ask ten strategists what will drive markets in the second half of the year, and you’ll get ten different answers.

For many, the votes are fairly evenly split between:

inflation and monetary policy
AI/CapEx
earnings

While each deserves attention, the answer may ultimately be a combination of A and B: inflation and the Fed’s policy measures will determine the backdrop, while AI determines the winners.

At present, the Iran conflict and the inflationary pressures that ripple outwards have the bears foaming at the mouth. Even if geopolitical tensions ease, inflation is unlikely to quickly return to pre-conflict levels.

Higher energy prices, commodity costs, and lingering supply chain disruptions are already filtering through the economy. So far, inflation surprises have remained relatively benign, but investors will spend the second half debating a familiar question: how much is temporary and how much is becoming entrenched?

If inflation proves sticky, the Federal Reserve may be forced to maintain a tighter stance for longer, creating headwinds for both stocks and bonds.

Yet it remains difficult to escape the gravitational pull of AI and capital spending.

Massive investment by hyperscalers continues to reshape the market landscape. Unlike prior technology booms, today’s spending is mostly being funded largely by extraordinary cash flows rather than speculative financing.

The eventual IPOs of companies such as SpaceX, OpenAI, and Anthropic, could create significant volatility despite the public’s excitement and attract capital away from existing holdings. After all, the S&P and Nasdaq altered their index construction methodologies to allow for immediate inclusion of these stocks.

We may soon need to stop talking about the “Mag 7” and start talking about the “Mag 10.”

The bridge between these two themes is earnings.

S&P 500 profit growth is on pace for its strongest performance since 2022, an unusual outcome this late in an economic expansion.

The challenge for investors won’t be whether earnings are growing, but whether expectations have become too ambitious – particularly for AI-related companies carrying much of the market’s weight.

One final observation: investor sentiment remains remarkably pessimistic.

Historically, major bull markets have not ended when individual investors are this skeptical.

While risks are real, the combination of strong earnings, resilient economic activity, and persistent pessimism suggests this bull market may still have further to run.

In the end, inflation may determine the market’s direction, but AI will likely determine its leadership.

Chart source: Exhibit A

That’s all for today.

Blake

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May: month in review

Blake B. Millard — Tue, 02 Jun 2026 21:25:57 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

May month in review

Let’s dig in.

Blake

Markets in review

EQUITIES: Russell 2000 +0.90% | Nasdaq 100 +0.48% | Dow +0.45% | S&P 500 +0.13%

FIXED INCOME: Barclays Agg Bond +0.03% | High Yield +0.08% | 2yr UST 4.045% | 10yr UST 4.964%

COMMODITIES: Brent Crude +1.05% to $87.24/barrel. Gold +0.26% to $4,518.2/oz.

BITCOIN: -6.03% to $67,493

US DOLLAR INDEX: +0.02% to 99.23

CBOE TOTAL PUT/CALL RATIO: 0.77

VIX: -1.74% to 15.77

Quote of the day

“The road to success is always under construction.”

- Lily Tomlin

May: month in review

May was a strong month for investors with many of the major indexes printing new all-time highs, despite the bond market facing renewed challenges from inflation concerns.

The S&P 500 climbed above 7,500 for the first time largely on the back of Tech stocks, which were led by Semis. At the same time, long-term interest rates rose to nearly two-decade highs before moderating later in the month as oil prices declined. Hopes for a peace deal in Iran also supported markets, although the situation remains highly volatile and fluid.

May also marked a leadership transition at the Federal Reserve for the first time since 2018, with Kevin Warsh sworn in as the new Fed Chair.

Key market and economic drivers in May

• The S&P 500, Nasdaq, and Dow Jones gained +5.1%, +8.4%, and +2.8% respectively in May. All three major US indices finished the month at new all-time highs.

• Volatility edged lower over the month. The VIX, a measure of stock market volatility, ended the month at 15.32.

• International Developed Markets (DM) returned +2.6% based on the MSCI EAFE Index in US dollar terms, while Emerging Markets (EM) returned +9.5% based on the MSCI EM Index.

• The 30-year Treasury yield reached 5.18%, its highest level in nearly two decades, before finishing the month below 5%.

• Oil prices fell with Brent crude closing at approximately $92 per barrel and WTI at $88.

• Gold ended the month slightly lower at $4,539 per ounce.

• First quarter real GDP was revised lower from 2.0% to 1.6%. April inflation showed headline CPI at 3.8% year-over-year and core CPI at 2.8%.

Long-term interest rates were on the up and up

One of the most significant developments in May was the volatility in interest rates.

The 30-year U.S. Treasury yield reached its highest level in nearly two decades during the month, before settling back below 5%. The 2-year and 10-year yields both rose as well, as expectations that interest rates would stay higher for longer grew.

The market now expects the Fed to hike rates once by the middle of 2027 in response to inflation concerns.

This is occurring because both the Consumer Price Index (CPI) and Producer Price Index (PPI) reports came in above expectations from higher energy prices. Rising inflation tends to push interest rates higher, since investors require more compensation if each dollar is worth less.

Higher interest rates matter because they affect all parts of the economy and markets, especially if they are the result of inflation. For consumers, there is a direct effect on the cost of borrowing including personal loans and mortgage rates. The same is true for businesses since it affects the cost of financing their operations.

When it comes to financial markets, higher rates mean that future cash flows are worth less today than they otherwise might be, affecting today’s asset prices.

At the same time, higher yields mean that bonds are now offering more meaningful income than they have in many years, which can support your bond holdings on a go forward basis.

Still, it’s important to maintain perspective on these moves. Markets have swung in both directions multiple times this year on changing expectations for a peace deal, and the situation continues to evolve.

I’d also note interest rates have also been impossibly difficult to predict over the past several years.

The stock market reached new heights

In spite of higher interest rates and headwinds to the bond market, the stock market continues to reach new all-time highs.

The S&P 500 surpassed 7,500 in May for the first time and there have been 22 all-time highs this year through the end of May. Tech stocks have powered the market higher over the last two months.

The fact that major indices reach new all-time highs is not unusual during a bull market. Historically, markets have trended upward over long periods of time, which means they often spend much of that time at or near record levels.

What matters more than the level of any single index is whether the underlying fundamentals remain healthy. And what we see there are corporate earnings that continue to grow at a healthy clip, with consensus estimates pointing to further growth in the coming year. Strong corporate earnings growth has helped keep valuations stable, even as the market has reached new heights.

Kevin Warsh sworn in as the new Fed Chair

Kevin Warsh was officially sworn in as the new Chair of the Federal Reserve in May, succeeding former Chair Jerome Powell.

Warsh previously served on the Fed’s Board of Governors during the 2008 Global Financial Crisis and is viewed by markets as a known quantity with experience in monetary policy and financial markets.

Fed leadership transitions happen infrequently by design, so they naturally raise questions about the path of policy in the years ahead.

Warsh is seen as a reformer, which can raise more uncertainty as to how a Fed under his leadership will conduct monetary policy. In his recent Senate testimony, Warsh emphasized that monetary policy independence is essential and that policymakers must act in the nation’s interest.

He has also signaled a preference for a more focused central bank, with a preference for less public signaling and fewer policy measures.

Regardless of what reforms Warsh might bring to the Fed as an institution, it’s clear that policymakers face a challenging economic environment.

The overall economy is still healthy, but inflation has accelerated in recent months while the labor market has been a bit soft. This creates a difficult balancing act, and markets have now flipped from expecting further rate cuts to at least one rate hike.

Bottom line

May brought new milestones for the stock market, extending a strong run for most investors.

While headlines around inflation, the new Fed Chair, and geopolitics will likely continue to generate uncertainty, the best approach for investors is still to focus on their executing their plan and staying the course.

Chart Source: Exhibit A

That’s all for today.

Blake

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How the Fed under Kevin Warsh may impact markets

Blake B. Millard — Wed, 27 May 2026 22:54:22 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

the new Fed under Kevin Warsh

Let’s dig in.

Blake

Markets in review

EQUITIES: Dow +0.36% | S&P 500 +0.02% | Russell 2000 -0.02% | Nasdaq 100 -0.09%

FIXED INCOME: Barclays Agg Bond +0.08% | High Yield -0.06% | 2yr UST 4.037% | 10yr UST 5.011%

COMMODITIES: Brent Crude -1.98% to $84.88/barrel. Gold -1.06% to $4,486.8/oz.

BITCOIN: -1.26% to $75,119

US DOLLAR INDEX: +0.04% to 99.21

CBOE TOTAL PUT/CALL RATIO: 0.82

VIX: -4.23% to 16.29

Quote of the day

“Embrace uncertainty. Some of the most beautiful chapters in our lives won’t have a title until much later.”

- Bob Goff

How the Fed under Kevin Warsh may impact markets

For the first time in eight years, the Federal Reserve has a new Chair. Kevin Warsh is bringing a distinct philosophy, a hawkish record, and an ambitious agenda for change.

Why does all this matter?

The Federal Reserve plays a central role in financial markets and the economy, and its importance has only grown in recent decades. From the 2008 Global Financial Crisis to the inflationary period of the past several years, investors follow every Fed decision carefully.

So, when leadership changes occur at the Fed, they naturally capture the attention of investors and the broader public. At the same time, it’s important to understand what the Fed does and does not control when it comes to long-term investing.

The economy has grown under many Fed leaders

Fed leadership transitions happen infrequently so it’s helpful to zoom out for some perspective.

The Chair of the Federal Reserve is nominated to a four-year term, while members of the Board of Governors serve rotating 14-year terms. The primary reason for this structure is to separate monetary, regulatory, and supervisory decisions from politics. This is often referred to as “Fed independence,” a concept that has been tested and debated across history.

It’s important to remember the U.S. economy has grown across the tenures of different Fed chairs, regardless of which president nominated them.

Each navigated unique economic challenges, from stagflation in the 1970s to the Global Financial Crisis, the pandemic, and the recent inflation surge.

In between, there have been numerous market and economic cycles which forced the Fed to react to new circumstances, in some cases by using their policy tools in new ways.

The Federal Reserve Reform Act of 1977 established a “dual mandate” to promote maximum employment and stable prices (i.e. inflation), which ideally should result in predictable long-term growth expectations as well as borrowing costs for consumers, businesses, and the government.

However, despite how the market often views the Fed, the central bank does not control all aspects of the economy. Many of their tools, such as the Federal Funds Rate, are often viewed as blunt instruments that work with what economists refer to as “long and variable lags.”

Economic shocks, technological change, demographics, and global events all play significant roles. For instance, the Fed can react to rising gasoline prices and the impact of AI on the job market, but they cannot control them directly.

What this means for investors is that while the Fed plays an important role, and interest rates do influence many parts of the economy and financial markets, focusing too much on each Fed decision can result in missing the forest for the trees.

Kevin Warsh believes in a more focused Fed

Like all government institutions, the Fed is imperfect and does not have a crystal ball as to where the economy might go next.

Instead, in making their decisions, they use the same public and private economic data on which all economists rely. So, it’s natural that there are frequent criticisms of the Fed in terms of specific policy decisions and as an institution.

As with all aspects of investing, it’s often important to set politics aside to better distinguish what the Fed might do from what we believe they ought to do.

In his recent Senate testimony, Warsh stated that he favors “a clearer, cleaner match between the Fed’s powers and responsibilities,” suggesting a preference for a more focused central bank.

He also emphasized that “monetary policy independence is essential” and that policymakers must act in the nation’s interest.

In the past, Warsh was seen as an “inflation hawk,” meaning that his policy preference would be to err on the side of higher interest rates to prevent inflation from rising, as well as promoting reform at the Fed.

A new framework?

When it comes to investing, there are at least three important implications based on Warsh’s public views and past actions.

1st, it will take time to fully understand how Warsh’s current views will impact policy in this inflationary environment, especially if they come into conflict with the White House’s preference for lower rates. He may need to address this as soon as his first press conference since high oil prices will weigh on upcoming Fed decisions.

That said, this would not be the first time there has been a conflict between the executive branch and the Fed since, naturally, elected officials prefer lower interest rates to boost the economy.

Famously, conflicts arose between President Ronald Reagan and Fed Chair Paul Volcker, and most recently between Donald Trump and Jerome Powell. This has occurred even when the Fed Chair is one appointed by the president.

2nd, while Warsh believes the Fed has overstepped on various historical policy initiatives, he has not argued for wholesale changes of the core of the institution.

Specifically, Warsh believes that crisis-era actions such as the expansion of the Fed’s balance sheet were appropriate, since, after all, he was in the room when many of those decisions were made.

Instead, he does believe that the Fed should “retrace its steps” once conditions normalize and the crisis is over.

In other words, the Fed’s balance sheet, which remains sizable at $6.7 trillion, is not where it ought to be now that the 2008 financial crisis and the pandemic are long over.

In theory, shrinking the balance sheet should tighten financial conditions, since this involves either selling or reinvesting less each month in Treasury securities and mortgage-backed securities.

This is often known as “quantitative tightening,” the opposite of the easing done during crisis periods.

3rd, Warsh believes that Fed policy, especially since the pandemic, has contributed to the growth of the federal deficit and national debt.

Just as with the Fed’s balance sheet, he argues that while spending may be justified in recessions, it should be symmetric and monetary policymakers should steer clear of fiscal commentary.

Of course, the Fed does not directly control federal spending, and it’s unclear what the new Fed Chair would do differently to influence budgets passed by Congress. To the extent the Fed does weigh in on the size of the budget deficit, it would either be with guidance or by controlling interest rates.

What to expect in 2026

For now, the new Fed Chair inherits a particularly challenging economic environment.

Inflation has accelerated in recent months due to higher oil and gasoline prices, driven by the war in Iran. Headline CPI was 3.8% year-over-year as of April 2026, with Core CPI at 2.8%, both still above the Fed’s 2% target.

On inflation, Warsh has floated the idea of moving away from Core PCE in favor of Trimmed Mean PCE.

At the same time, job growth has stalled over the past year.

This creates a difficult policy backdrop.

While many at the Fed and in markets had previously been expecting further rate cuts, Fed Funds Futures now reflect the possibility that the Fed may need to consider a rate increase by early 2027.

These market expectations should be taken with a grain of salt, as they shift frequently based on new economic data and global events. Still, they highlight the uncertain path ahead for monetary policy.

Bottom line

The most important takeaway is that markets and the economy have performed well across many different Fed leadership transitions and policy environments.

Changes at the top of the Fed naturally generate uncertainty, but they rarely alter the long-term fundamentals that drive financial markets.

Earnings growth, productivity, demographics, and innovation are ultimately the most important drivers of long-run returns.

Thus far, markets have generally responded favorably to Warsh’s nomination, viewing him as a known quantity with familiarity of the Fed and monetary policy.

Sources: YCharts, Clearnomics, Federal Reserve Bank of St. Louis

That’s all for today.

Blake

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Spring portfolio perspectives: stocks, IPOs, and higher interest rates

Blake B. Millard — Tue, 26 May 2026 22:18:36 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

portfolio perspectives: stocks, IPOs, and higher interest rates

Let’s dig in.

Blake

Markets in review

EQUITIES: Russell 2000 +1.79% | Nasdaq 100 +1.76% | S&P 500 +0.61% | Dow -0.23%

FIXED INCOME: Barclays Agg Bond +0.28% | High Yield +0.34% | 2yr UST 4.041% | 10yr UST 5.023%

COMMODITIES: Brent Crude -2.34% to $86.21/barrel. Gold -0.36% to $4,540.1/oz.

BITCOIN: +0.07% to $75,951

US DOLLAR INDEX: -0.09% to 99.15

CBOE TOTAL PUT/CALL RATIO: 0.85

VIX: +2.53% to 17.01

Quote of the day

“The most difficult times for many of us are the ones we give ourselves.”

- Pema Chödrön

A walk around markets

This month, the S&P 500 surpassed 7,500 for the first time, marking another milestone in a year that has seen 18 new all-time highs, just a few shy of the average of 21 per year since 1990.

This is positive for the average long-only investor, especially because many sectors have contributed to this rally off the late March lows. These strong dynamics across global equity markets have also sparked enthusiasm for IPOs, particularly ones related to artificial intelligence, after years of relatively few companies going public.

This is occurring despite ongoing concerns over high oil prices, inflation risks, and an Iran peace deal that remains elusive.

In contrast to the stock market, these challenges have weighed on the bond market, pushing long-term interest rates higher. The 30-year U.S. Treasury yield, for instance, briefly reached a nearly 20-year high before settling back toward 5%.

With the S&P 500 now higher by 18.5% since the end of March, many investors remain cautious and are looking for a pullback. While headlines can create uncertainty for markets, maintaining perspective and balance are more important than ever.

Tech stocks, earnings are pushing stocks higher in Q2

While the Energy sector continues to lead the market (+33% YTD), Tech-related stocks have come roaring back and returned to their old form in Q2.

The Magnificent 7 – Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Tesla – now represents roughly 35% of the S&P 500. This emphasizes the importance of portfolio construction, since some investors likely don’t realize how much exposure they have to these individual companies today.

What has supported the market rally is not just improving sentiment and positioning, but more importantly, strong fundamentals.

S&P 500 earnings growth for Q1 has been running hot – an eye-popping +28% EPS year-on-year growth – and far above the 10-year average earnings growth rate of +10.3%, while all seven Tech behemoths delivered positive earnings surprises.

That said, valuations have also crept higher alongside prices.

The S&P 500 forward price-to-earnings ratio currently sits near 21x, above the historical average of 16x. Technology stocks specifically trade at a forward P/E around 24x.

While elevated valuations do not predict short-term market moves, they are an important consideration for long-term investors thinking about asset allocation.

IPO activity is returning to public markets

The stock market is constantly evolving. Companies merge, fail, or go public through IPOs, which means today’s investment landscape looks very different than it did a decade ago.

The Wilshire 5000 Index, for example, was originally designed to include roughly 5,000 companies but now holds closer to 3,400 as more businesses stay private longer.

Later this year, the buzz around companies like SpaceX, Anthropic, and OpenAI will overwhelmingly dominate headlines along their respective IPO launch dates and garner wide interest from investors.

Many of these firms grew through private capital, limiting access for everyday investors. As these companies eventually go public, broad market indices will add them over time, allowing index investors exposure without needing to chase IPO hype directly.

And hype is often exactly what IPOs create. While headlines can spark excitement about “getting in early,” institutional investors and insiders typically own shares long before the public offering.

IPO booms also tend to cluster during periods of easy money and strong market optimism, from the dot-com era to the recent SPAC wave, reminding investors why IPOs carry downside risks as well.

How big is the coming wave of equity supply in 2026? In one word: BIG.

Long-term interest rates have remained elevated

While the stock market has been climbing to new highs, long-term interest rates have also been rising. Higher rates are often associated with more challenging equity markets.

The rise in yields is primarily due to inflation concerns, complicating the path of Fed policy over the next year.

Higher interest rates have a wide range of implications across the economy and markets. Mortgage rates have moved up, with the 30-year fixed rate now around 6.5%, above the long-term average of 6.02% since 1990. Higher rates also influence the cost of capital for businesses and the discount rate applied to future earnings, which can affect stock valuations, particularly for growth-oriented companies whose value depends heavily on future cash flows.

At the same time, higher interest rates mean that:

1.) bonds are now offering more meaningful income and

2.) bonds compete more directly for capital.

Investment grade corporate bonds yield 5.3%, compared to a long-term average of 3.8%. Treasurys yield 4.4%, well above their historical average of 2.2%.

For more cash-flow oriented investors, this creates attractive opportunities across fixed income.

Bottom Line

Markets continue to climb higher on strong earnings and broad participation, but elevated valuations, rising interest rates, and renewed IPO enthusiasm are reminders that optimism and risk often move together.

In environments like this, long-term success is typically driven less by reacting to headlines and more by staying diversified, balanced, and focused on durable trends.

Sources: Exhibit A, YCharts, FactSet, Clearnomics, JPMorgan

That’s all for today.

Blake

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What makes up your credit score?

Blake B. Millard — Wed, 13 May 2026 22:43:49 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

credit scores

Let’s dig in.

Blake

Markets in review

EQUITIES: Nasdaq 100 +1.04% | S&P 500 +0.58% | Russell 2000 +0.04% | Dow -0.14%

FIXED INCOME: Barclays Agg Bond +0.04% | High Yield +0.05% | 2yr UST 3.977% | 10yr UST 4.467%

COMMODITIES: Brent Crude -2.06% to $105.55/barrel. Gold +0.22% to $4,697.1/oz.

BITCOIN: -1.48% to $79,432

US DOLLAR INDEX: +0.17% to 98.46

CBOE TOTAL PUT/CALL RATIO: 0.84

VIX: -0.67% to 17.87

Quote of the day

“Life can only be understood backwards; but it must be lived forwards.”

- Søren Kierkegaard

Your credit score

A question came up today during a meeting that seemed so obvious to answer, it should have been a layup. Truth be told, I shot an airball.

“What makes up your credit score?”

But, before we address score calculation, let’s review why credit scores are so important.

When you need to borrow money, you want to do it as cheaply as possible. This means you want a great interest rate and terms that help you repay your debt as efficiently as possible.

Generally speaking, the higher your credit score, the more likely you are to get the best interest rate and loan terms. Over the course of your life, a good credit score can save you a significant amount of money.

Alright, back to the question at hand.

The Fair Isaac Corporation, more commonly known as “FICO,” developed the FICO Score system in 1989.

Scores range from 300 to 850. The higher the number, the better your score.

Creditors use a credit score to assess your creditworthiness. In other words, it helps lenders decide the probability of you repaying a loan or a line of credit in a timely manner based on your past behavior.

The FICO ranges look like this:

Knowing what contributes to your credit score can help you get your score into the desired range.

FICO scores are calculated based on how a consumer handles debt and is weighted according to the following categories:

As you can see, FICO scores give the most weight to your payment history and amounts owed. Pretty straight forward.

FICO also considers your length of credit history (longer the better), credit mix (what kind of accounts you’ve had), and new credit (are you opening a bunch of new accounts).

Other providers exist as well. The three major credit bureaus are Experian, Equifax, and Transunion. Each has their own system but follow similar criterion.

Ultimately, credit card issuers, auto loan lenders, and mortgage originators will use different scores and methodologies to make its consumer lending decisions.

Bottom line?

Understanding the components to your credit score is crucial, and regularly reviewing it can help individuals and families gauge their financial health and make more informed decisions about loans or credit products.

That’s all for today.

Blake

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The war in the middle east, gasoline prices, and OPEC

Blake B. Millard — Tue, 12 May 2026 21:06:03 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

the war in the middle east, gasoline prices, and OPEC

Let’s dig in.

Blake

Markets in review

EQUITIES: Dow +0.11% | S&P 500 -0.16% | Nasdaq 100 -0.71% | Russell 2000 -0.97%

FIXED INCOME: Barclays Agg Bond -0.29% | High Yield -0.14% | 2yr UST 3.994% | 10yr UST 4.463%

COMMODITIES: Brent Crude +3.16% to $107.51/barrel. Gold -0.15% to $4,721.5/oz.

BITCOIN: -1.44% to $80,682

US DOLLAR INDEX: +0.36% to 98.31

CBOE TOTAL PUT/CALL RATIO: 0.74

VIX: -2.12% to 17.99

Quote of the day

“We won’t be distracted by comparison if we’re captivated with purpose.”

- Bob Goff

The war in the middle east, gasoline prices, and OPEC

The most visible way the conflict in Iran has reached American households is through the price at the pump.

The national average for gasoline has climbed to roughly $4.50 per gallon, well above the $3.05 average price paid over the last 10 years and a meaningful jump from levels seen just a few months ago.

In some parts of the country, gasoline is already above $6 per gallon.

And, because energy costs directly impact various components across the Consumer Price Index (CPI), headline inflation has moved higher – complicating an economic picture that was previously improving from 2025’s high levels of economic and political uncertainty and volatility.

For the older folks, this environment may bring back memories of the 1970s Arab Oil Embargo, when oil supply shocks led to skyrocketing inflation and gasoline rationing.

Fortunately, the world has changed considerably since then.

1st, the United States is now the largest energy producer in the world, pumping more than 13 million barrels of oil per day. This has helped to reduce the sensitivity of the U.S. economy to global oil disruptions.

2nd, the recent decision by the United Arab Emirates (UAE) to exit OPEC is another reminder of how the global energy landscape is constantly changing.

For decades, OPEC members played a central role in setting global oil prices. This was primarily done by agreeing on production levels, which to be fair, is difficult to achieve and verify across a dozen countries. Specifically, it is difficult to prevent OPEC member countries from producing more than their agreed-upon limits.

The UAE’s recently announced departure shows how the cartel is not as relevant as it once was, as member countries pursue their own national strategies and production capacities.

At its peak in the 1970s, OPEC accounted for at least half of the world’s oil supply. Today, it is closer to one-third.

With the UAE’s departure, estimates should drive OPEC’s share of global crude production below 30%.

To offset this, a broader group known as OPEC+, which includes Russia and other countries, was formed, but the same coordination challenges apply.

The declining relevance of OPEC doesn’t eliminate the risk of oil price shocks during geopolitical events, but it does mean that oil prices are not quite as sensitive to their decisions as in the past.

While this provides little comfort to households whose budgets are directly impacted by higher gasoline prices, it does help to explain why the effect on markets hasn’t been more dramatic in 2026.

Sources: YCharts, International Energy Agency

That’s all for today.

Blake

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Despite Iran conflict, the U.S. economy remains resilient to risks

Blake B. Millard — Thu, 07 May 2026 20:56:25 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

U.S. economy remains battle-tested

Let’s dig in.

Blake

Markets in review

EQUITIES: Nasdaq 100 -0.12% | S&P 500 -0.38% | Dow -0.63% | Russell 2000 -1.63%

FIXED INCOME: Barclays Agg Bond -0.24% | High Yield -0.37% | 2yr UST 3.907% | 10yr UST 4.382%

COMMODITIES: Brent Crude -0.07% to $101.27/barrel. Gold +0.66% to $4,725.3/oz.

BITCOIN: -1.71% to $80,123

US DOLLAR INDEX: +0.14% to 98.16

CBOE TOTAL PUT/CALL RATIO: 0.67

VIX: -1.78% to 17.08

Quote of the day

“You have to slow down to see the miracles.”

- Thích Nhất Hạnh, Vietnamese Monk and Peace Activist

Despite Iran conflict, the U.S. economy remains resilient to risks

Data since the start of the Iran conflict shows the U.S. economy has continued to expand.

Real GDP increased at a robust 2.0% annualized rate in Q1, led by AI-related capex. The Atlanta Fed’s GDPNow Model estimates an acceleration in Q2 at 3.7%.

Manufacturing PMIs showed continued sector growth in April. Consumer spending has softened amid rising inflation, but there is no evidence of significant demand destruction yet. Labor market conditions remain stable amidst this low-hire-low-fire environment.

Most recession indicators remain neutral, indicating low risk of recession in the near term.

Broadly speaking, recent economic data has been coming in line with expectations, supporting a continued bull market in equities.

Does that mean that the U.S. economy is impervious to the Iran war?

In short, no.

Oil prices, which are about 50% higher than pre-war, could drive up inflation by an estimated 0.5%–2.0% this year per estimates and subtract from real GDP growth. Other commodity prices have also increased, and global supply chain pressures have started to build, both posing additional upside risk to inflation and downside risk to growth.

The risks would become more pronounced if the war, now in its 3rd month, draws out further or intensifies and the Strait of Hormuz remains closed.

But there are near-term factors, such as larger tax refunds this year, a positive stock market wealth effect, and increased defense spending on the war, that are boosting the economy in the short run. This in addition to AI-related spending, which has been strong and shows no signs of slowing.

Let’s unpack these positive developments a bit further:

Tax refunds

Tax refunds this year are boosting disposable income and providing a cushion against the surge in gasoline prices and inflation more broadly.

Per the Tax Foundation, tax refunds are higher by 14-15% from the same time last year; cumulative refunds could be ~$50 billion higher than 2025. Consumers spend about 90% of their income, with the rest going toward interest payments, transfers, and savings. That is a lot of money that will find its way back into the economy.

Most of the additional spending and GDP growth from tax refunds is taking place in the first half of the year, so we should expect slower consumer spending in the 2nd half as the sugar rush wears off.

Household wealth generation

Despite slower income growth, the offset can be mitigated by continued growth in household net worth – driven by the ongoing bull market in equities.

Real household net worth rose 4.7% YoY in 4Q25, above the 3.4% average annual gain historically. It has supported consumer spending for most of the post-pandemic expansion, and will continue to do so in 2026. At least while the bull market remains intact.

Military spending

Increased national defense spending should give a short-term boost to the economy.

Per the Pentagon, the Iran war has cost the U.S. an estimated $25 billion in the two months since it started. On an annualized basis, that’s equivalent to $150 billion, or 0.5% of nominal GDP – potentially adding to growth in 1H26 and offsetting some of the initial impact of the Iran war.

Despite the resilience of the economy so far in 2026, declines in consumer and small business confidence show growing anxiety about the outlook, which is a downside risk to future spending growth.

Persistent geopolitical risk and high economic policy uncertainty are also headwinds to growth.

Although many economic drivers remain in place, it’s always paid to be mindful of downside warnings to consider where the next shoe might fall.

Sources: Exhibit A, Ed Yardeni, St. Louis Fed, Bloomberg

That’s all for today.

Blake

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What seasonal patterns like “Sell in May” mean for investors

Blake B. Millard — Wed, 06 May 2026 22:41:50 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

seasonal patterns

Let’s dig in.

Blake

Markets in review

EQUITIES: Nasdaq 100 +2.08% | Russell 2000 +1.47% | S&P 500 +1.46% | Dow +1.24%

FIXED INCOME: Barclays Agg Bond +0.43% | High Yield +0.30% | 2yr UST 3.865% | 10yr UST 4.348%

COMMODITIES: Brent Crude -7.72% to $101.39/barrel. Gold +3.06% to $4,708.5/oz.

BITCOIN: -0.19% to $81,657

US DOLLAR INDEX: -0.43% to 98.03

CBOE TOTAL PUT/CALL RATIO: 0.84

VIX: +0.06% to 17.39

Quote of the day

“Small disciplines repeated with consistency every day lead to great achievements gained slowly over time.”

- John C. Maxwell, Author

What seasonal patterns like “Sell in May” mean for investors

The human brain is excellent at finding patterns, a skill that has helped us evolve as a species over time across impossible odds.

However, it can also lead us astray when there’s no real pattern at all, such as when we see shapes in clouds and the sand.

When it comes to investing, this is relevant because some patterns are important, such as the long-term relationship between the market and the economy, while many others are more of the variety of statistical anomalies.

Distinguishing between what makes for interesting trivia versus true investing principles is a challenging but important part of achieving long-term financial success.

Over the years, investors have identified many calendar and event-based patterns, including “sell in May and go away,” the January Effect, the Santa Claus rally, the Super Bowl indicator, and many many more.

Just ask Jeffrey Hirsch of the Stock Trader’s Almanac who pioneered this stuff alongside his dad.

After all, even when flipping a coin, you would expect streaks of several heads or tails in a row due to pure chance.

To better understand these effects, the key is to separate random noise from facts of how financial markets truly function.

While there are many observable market patterns, it’s helpful to review seasonal trends as a whole.

The chart below breaks out the S&P 500 into two distinct periods – pre-Millennium (1928 to 1999) and post-Millennium (2000 to present day).

In the 20th century, some months were negative on average, while some were strongly positive.

For instance, May and September experienced declines of -0.1% and -1.0% on average, while December and January experienced significant positive returns.

It’s easy to see that the market hasn’t behaved the same each month, so it’s tempting to wonder if we should just simply invest during positive periods.

Yet, since 2000, several of these months have reversed earlier patterns. This may be because investors behaved differently after identifying this trend, something structurally changed in the market, or because it never truly existed at all.

Historically, these observations have fueled concepts such as “Sell in May,” the idea that the 6-month period leading up to May experiences better returns than the other half of the year.

To wit, the 6-month period returns and hit rates are notoriously poor from May to October. Here’s the data from Ryan Detrick:

What should investors make of all this?

It’s commonly said that the simplest explanation may be the best, aka Occam’s Razor. Conceptually, this is often described as being “fooled by randomness,” distinguishing the signal from the noise.

Because stock market returns are difficult to predict, any historical stretch will naturally contain periods that look better or worse than others.

This doesn’t necessarily mean there’s an underlying reason for those differences, or that they will continue. After all, just as we can see objects in the clouds or the sand, we can find interesting patterns even in a completely random dataset.

In statistics and economics, researchers use the concept of “statistical significance” to try to distinguish between patterns that could be real and those that are coincidental.

It’s also important to distinguish causation from correlation, i.e., whether there is something unique to a particular calendar month driving these patterns, or if events simply happened to take place during those months.

For investors, these concepts matter because a pattern that emerged by chance, or that was tied to a specific historical era, can be interesting but offers little guidance for the future.

The temptation to time the market, whether by trading daily price movements or by following seasonal rules of thumb, is natural and understandable.

After all, if there were a few simple patterns that worked, it would be much easier than staying disciplined, saving steadily, and sticking to your investment strategy and financial plan.

However, the fact that doing these things is hard is exactly why they are rewarded in the long run.

For most longer-term oriented investors, the growth of their financial assets is tied less to calendar and event-based patterns and more towards cyclical and structural growth patterns in economic and earnings cycles.

Sources: Clearnomics, Ryan Detrick (Carson Group), Exhibit A

That’s all for today.

Blake

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A growing economy is the foundation for long run returns

Blake B. Millard — Tue, 05 May 2026 22:21:04 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

a growing economy is the foundation for long run returns

Let’s dig in.

Blake

Markets in review

EQUITIES: Russell 2000 +1.75% | Nasdaq 100 +1.31% | S&P 500 +0.81% | Dow +0.73%

FIXED INCOME: Barclays Agg Bond +0.18% | High Yield +0.15% | 2yr UST 3.941% | 10yr UST 4.424%

COMMODITIES: Brent Crude -3.71% to $110.21/barrel. Gold +0.76% to $4,567.7/oz.

BITCOIN: +1.94% to $81,682

US DOLLAR INDEX: +0.11% to 98.48

CBOE TOTAL PUT/CALL RATIO: 0.87

VIX: -4.97 to 17.38

Quote of the day

“There is nothing noble in being superior to your fellow man. True nobility is being superior to your former self.”

- Ernest Hemingway

A growing economy is the foundation for long run returns

While the stock market and the economy are not the same thing, they are forever connected.

Over time, the market correlates to the direction of corporate earnings, and earnings (EPS for short) is driven by the path of economic activity.

This is why it is important to keep an eye on the broader economic cycle, even as markets move on a day-to-day basis for many other reasons.

The current business cycle has technically been running two-and-a-half years longer than the market cycle.

The last official recession, as determined by the National Bureau of Economic Research (NBER), was brief, but it was a sharp response to the global pandemic in 2020.

Since then, there have been quarters of slower growth and occasional predictions about recessions, none of which have taken shape.

Today, the economy is healthy by many measures despite three key areas that investors are watching carefully.

1st: oil prices above $100 per barrel, if sustained, could weigh on consumer spending and add to inflationary pressures.

2nd: the job market has slowed significantly, especially in areas such as technology. This raises questions about consumer spending, which has been robust over the past several years.

3rd: the size and scale of AI investments have raised questions about ROI and whether there is a “bubble.” This is understandable since many of today’s investors have lived through both the dot-com bust and the housing crisis.

Bubbles are notoriously difficult to identify in real time, and history shows that not every period of high valuations ends in a dramatic collapse.

So far in this cycle, unlike in past periods, earnings growth has supported valuations and many companies are making outsized investments from their profits.

For longer-term oriented investors, the key consideration is staying balanced across different parts of the market to benefit from growth while managing risk.

Sources: Exhibit A, Clearnomics

That’s all for today.

Blake

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Bull markets climb a wall of worry

Blake B. Millard — Mon, 04 May 2026 22:24:38 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

bull markets climb a wall of worry

Let’s dig in.

Blake

Markets in review

EQUITIES: Nasdaq 100 -0.21% | S&P 500 -0.41% | Russell 2000 -0.60% | Dow -1.13%

FIXED INCOME: Barclays Agg Bond -0.31% | High Yield -0.32% | 2yr UST 3.946% | 10yr UST 4.432%

COMMODITIES: Brent Crude -0.06% to $113.94/barrel. Gold -0.06% to $4,531.3/oz.

BITCOIN: +2.09% to $80,305

US DOLLAR INDEX: +0.33% to 98.48

CBOE TOTAL PUT/CALL RATIO: 0.76

VIX: +7.65% to 18.29

Quote of the day

“Discipline is choosing between what you want now and what you want most.”

- Abraham Lincoln

Bull markets climb a wall of worry

It has now been more than three-and-a-half years since the bull market began in October 2022.

At that time, inflation was rising at its fastest pace in fifty years, the Fed was aggressively hiking interest rates, and ChatGPT was still a month away from being released to the public.

Since then, the S&P 500 has more than doubled in value, while the Bloomberg U.S. Aggregate Bond index has recovered from its vicious 18% drawdown.

Although the world has changed since quite a bit, the fact that there are market concerns in the headlines has not.

Each cycle brings new challenges and questions about whether the tried-and-true rules of investing are still relevant.

The reality is that each cycle is unique, with catalysts, innovations, and sources of uncertainty that are never quite the same. And yet, the underlying principles of investing and financial planning have remained consistent across decades, and have continued to point investors in the right direction this year.

Even though geopolitics continue to impact markets, perhaps the more important consideration for long-term investors is the overall market cycle.

With the market hovering near all-time highs, it’s natural for some investors to worry about market pullbacks and corrections. After all, these events can occur frequently, with the S&P 500 historically experiencing 3 to 4 pullbacks of 5% each year, on average.

While they are never pleasant, long-term investing depends much more on historical patterns over years and decades. This is one reason that overreacting to market swings can be counterproductive, since it may leave investors poorly positioned in the context of their long-term financial goals.

Investors often say that the market climbs a “wall of worry” on a regular basis.

Over the past several years, markets have overcome higher prices across the board, a banking crisis in 2023, multiple geopolitical conflicts spanning the globe, the possibility of a Fed policy error, AI-related market concentration, tariff-driven volatility, and much more. None of these concerns are trivial and yet, through all of them, the market has performed well.

The chart below helps to illustrate this pattern starting from World War II.

Over this 70-year period, bull markets have lasted far longer and generated larger gains than what’s lost in bear markets.

Specifically, bear markets have typically lasted 1-2 years on average, whereas recent bull markets have run as long as 10 years or longer. Even when market corrections occur during bull markets, the average decline is 14%, with the average recovery requiring just 4 months.

For instance, the bull market cycle that followed the 2008 Global Financial Crisis lasted nearly 11 years. Despite this, it is often referred to as “the most unloved bull market” since there was a constant stream of market and economic concerns.

In hindsight, it’s easy to see that even when these concerns were legitimate, such as around the state of the economic recovery or the size of the national debt, they didn’t justify changes to long-term portfolios.

Of course, the past is no guarantee of future results, and how quickly markets rebound depends on the specific circumstances. But the historical record makes it clear that trying to react to every market move has, more often than not, caused investors to miss much of the gains that eventually followed.

Sources: Exhibit A, Clearnomics

That’s all for today.

Blake

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What good is money?

Blake B. Millard — Thu, 30 Apr 2026 22:12:01 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

aligning money with meaning and purpose

Let’s dig in.

Blake

Markets in review

EQUITIES: Russell 2000 +2.21% | Dow +1.62% | S&P 500 +1.02% | Nasdaq 100 +0.98%

FIXED INCOME: Barclays Agg Bond +0.14% | High Yield +0.31% | 2yr UST 3.877% | 10yr UST 4.382%

COMMODITIES: Brent Crude -3.47% to $113.94/barrel. Gold +1.58% to $4,632.3/oz.

BITCOIN: +1.33% to $76,449

US DOLLAR INDEX: -0.87% to 98.10

CBOE TOTAL PUT/CALL RATIO: 0.93

VIX: -10.21% to 16.89

Quote of the day

“There are people who make things happen, there are people who watch things happen, and there are people who wonder what happened. To be successful, you need to be a person who makes things happen.”

- Jim Lovell

What good is money

For most of the last few decades, financial advice has had a clear scoreboard: returns.

Did you beat the market? Did you outperform that benchmark? Did you “win”?

It’s a clean framework. It’s also an incomplete one.

Because at some point – usually not at the beginning, but eventually – clients start asking a different question.

What is all this for?

Call it the pursuit of funded contentment – aligning financial resources with a life that feels purposeful, healthy, and complete.

The challenge, of course, is that humans aren’t wired for contentment. We adapt quickly.

More becomes normal. Normal becomes insufficient. The goalposts move.

Which is why the goal isn’t just wealth creation. It’s clarity around what wealth is meant to do.

One way to think about this is through the Four C’s of Contentment:

Control. Not over markets or outcomes, but over behavior. Good planning creates a structured framework, so decisions aren’t driven by fear or euphoria.

Commitment. Money is most useful when it’s tied to something that matters. A goal. A value. A direction. Otherwise, it’s just accumulation for its own sake.

Connection. Wealth has diminishing returns in isolation. Relationships, whether that be family, friends, or community, are where it compounds in ways markets can’t.

Contribution. At a certain point, the question shifts from “Do I have enough?” to “What can I do with it?” Giving, helping, building are often the highest-return uses of capital.

And yet, none of this shows up neatly on a performance report.

But it’s the difference between wealth as a number and wealth as a tool.

Great financial planning is never just about beating an index over an arbitrary timeframe.

It’s about helping people live better lives – with intention, with clarity, and, ideally, with a sense that what they have is enough.

That’s a different benchmark. And a better one.

That’s all for today.

Blake

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Fed Chair Jerome Powell's curtain call

Blake B. Millard — Tue, 28 Apr 2026 23:02:47 GMT

Welcome, Sandbox friends.

Today’s Daily discusses:

Powell’s curtain call

Let’s dig in.

Blake

Markets in review

EQUITIES: Dow -0.05% | S&P 500 -0.49% | Nasdaq 100 -1.01% | Russell 2000 -1.15%

FIXED INCOME: Barclays Agg Bond -0.04% | High Yield -0.14% | 2yr UST 3.834% | 10yr UST 4.342%

COMMODITIES: Brent Crude +2.74% to $111.20/barrel. Gold -1.78% to $4,610.3/oz.

BITCOIN: -0.70% to $76,441

US DOLLAR INDEX: +0.12% to 98.62

CBOE TOTAL PUT/CALL RATIO: 0.86

VIX: -1.05% to 17.83

Quote of the day

“The longer you wait to take that chance in your life, the shorter the future is going to be when you arrive there.”

- Daniel Arsham

Powell’s curtain call

At tomorrow’s Federal Open Markets Committee (FOMC) meeting, expect the Federal Reserve to stay on hold – with little change in tone relative to March – amid the ongoing uncertainties from the Iran conflict, in line with market expectations.

Nobody expects the Fed to do anything anytime soon, as long as there is a high degree of uncertainty over conflict resolution in the Middle East. In the meantime, inflation readings will remain elevated, while the unemployment rate remains historically low.

That’s a recipe for the FOMC to sit on its hands.

After Kevin Warsh’s testimony during his recent confirmation hearing, the market broadly sees policy on hold through 2026 – with the next interest rate cut expected sometime in 2027.

I’d refrain from fading this pricing given it broadly reflects the current distribution of risks. It will likely take sustained evidence of labor market tightening before market expectations materially shift in favor of more rate cuts, something President Trump is desperately seeking.

Beyond the FOMC statement and policy decision, the more noteworthy headlines tomorrow will center on Fed Chair Jerome Powell’s legacy.

Now that the Department of Justice has dropped its criminal probe against Jerome Powell and with Senator Tillis clearing the way for Kevin Warsh’s confirmation, Wednesday’s press conference will almost assuredly be Powell’s last as Fed Chair.

Powell’s term as Chair ends on May 15, 2026 after eight years leading the central bank, although his term as a member of the Fed’s Board of Governors technically runs until January 31, 2028. Powell remains undecided if he stays after vacating his Chair seat.

Powell will undoubtedly be asked to reflect on his time as Fed Chair.

Here is a brief account of Powell’s tenure:

The good: unemployment has been historically low, outside a once-in-a-lifetime pandemic spike

Under Powell’s 1st two years as Fed Chair, unemployment was notably low.

That changed in April 2020, when the onset of the pandemic pushed the figure up to 14.7%, the highest since at least 1948, when the modern unemployment rate was first published – largely driven by business closures, furloughs, and layoffs.

Unemployment has since cooled, and has hovered around the low 4% range for the past few years – a number that’s historically low but still a touch higher than when Powell took over.

Labor force participation has also weakened, reaching its lowest rate since the 1970s in March, excluding the pandemic.

The bad: inflation has remained stubbornly high

Inflation has remained stubbornly high during Powell’s time as Chair, with a rapid rise in 2021 and 2022 driven by highly accommodative twin monetary and fiscal policies from the pandemic as well as otherworldly consumer demand.

The chaos of the last few years has added to inflationary trouble on the supply side as well. Inflation was boosted by supply chain disruptions and dislocations caused during covid-19, further exacerbated by the start of the Russia-Ukraine war and high oil prices.

The year-on-year CPI inflation rate rose from 1% in late 2020 to its peak of 9% in June 2022. It cooled down to the low 2% range at the start of 2026, but reaccelerated in March this year due to the Iran war.

In hindsight, it’s easy to armchair quarterback and say the Fed acted too slowly in response to early inflationary impulses despite the difficulties of a chaotic and historic economic reopening. Perhaps some of the collateral damage could have been contained but it’s shortsighted to believe it could have been avoided.

The market fallout ensued after the FOMC carried out its fastest interest rate hiking cycle in history once it began tightening.

Right or wrong, inflation will dog the perception of Powell’s legacy in the years to come.

The great preserver: stressing Fed independence

Tensions over the last year between the White House and the Fed have brought the topic of Fed independence sharply into focus.

This is because there can be a natural friction between elected officials and the Fed, since they each have unique goals and incentives.

For instance, the President and Congress often prefer lower interest rates to spur economic growth and help fund the federal budget. In contrast, the Fed may need to make difficult choices around issues such as inflation and financial stability, based on longer-term considerations.

Preservation of independence was a common theme during Kevin Warsh’s hearing as many elected officials believe it to be paramount for economic and market structure going forward.

Powell’s unwillingness to bend to President Trump’s (very public) threats and sham lawsuit beautifully preserved the appearance of independence to even Powell’s most ardent critics.

Job well done here.

Oh yeah, one final thought.

Expect a parting shot at the President. I’d set the odds at -250.

Source: YCharts

That’s all for today.

Blake

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