Macro

Senate testimony revealed Lockheed had paid tens of millions of dollars in bribes to foreign officials, including in Japan and the Netherlands, to win aircraft orders. The scandal toppled governments abroad, battered the already federally-rescued defense contractor, and led to the Foreign Corrupt Practices Act reshaping how US multinationals do business.

Defense sector sentiment is bearish this month, weighed down by the widening Lockheed bribery scandal now implicating foreign officials, as highlighted by a Senate panel investigation. The unfolding probe has intensified scrutiny on international arms deals and compliance practices across the sector, overshadowing broader geopolitical tensions that might otherwise support defense spending. Investor caution is mounting amid reputational and regulatory risks tied to major contractors.

A calm, healing year: a booming Q1 economy lifted power demand and stable low rates supported our valuations, with fuel costs no longer spiking.

Bullion bottomed near $103 an ounce, less than half its 1974 peak, weighed down by IMF and US Treasury sales plans and cooling inflation. The low marked the launch point for gold's spectacular four-year run to $850.

The raw materials sector is broadly neutral this month, despite a negative signal from the IMF’s first gold auction amid official demonetization efforts, which weighed on precious metals sentiment. However, broader commodity markets remained resilient, supported by steady industrial demand and stable pricing in base and energy materials, offsetting gold-specific pressures. The sector’s diversified composition diluted the impact of gold’s underperformance, resulting in an overall neutral read.

A booming economy (Q1 GNP +9%), low inflation, and stable rates carried the housing recovery forward; the property owner enjoyed steady, improving conditions.

OPEC fractured into a two-tier price system, with Saudi Arabia and the UAE raising prices 5% while eleven members imposed 10%. The split highlighted Saudi swing-producer power and kept oil markets guessing about crude costs central to the inflation outlook.

The energy sector is trading cautiously bullish this month, supported by OPEC's divergent positioning in Doha, where Saudi Arabia's restraint on price increases contrasted with more aggressive calls from other members. This split signals tighter coordination risks but also underpins current price stability, allowing markets to price in sustained supply discipline. Against a steady macro backdrop, the dynamic has tilted sentiment modestly upward, reinforcing confidence in near-term price floors.

A strong recovery (Q1 GNP +9%) lifted capital-goods orders through spring before growth moderated in a mid-year pause; a solid but cooling year.

Strong recovery, ad boom, Dow above 1,000

Steve Jobs and Steve Wozniak founded Apple Computer to sell the hand-built Apple I. Though tiny at the time, the company would anchor the personal computer industry that became a defining equity-market theme by decade's end.

The tech sector sentiment is buoyant this month, lifted by the symbolic founding of Apple Computer in a Silicon Valley garage—emblematic of innovation emerging from minimal resources and catalyzing confidence in startup-driven progress. While the broader backdrop remains neutral, the event underscores a persistent narrative of disruptive potential originating from individual ingenuity, reinforcing sector-wide optimism. This foundational moment contributed to a +0.30 bullish tilt, reflecting renewed faith in long-term tech entrepreneurship.

A booming economy and an 18% Dow surge past 1,000 lifted broker and asset-management income early, though dollar weakness, the pound below $2, and Britain's IMF rescue reminded owners the currency regime was unstable. Mood was positive but leveled off in the back half.

Scientist Herbert Boyer and venture capitalist Robert Swanson founded Genentech to turn recombinant-DNA research into products. The startup created the biotechnology industry, a wholly new equity sector that would electrify Wall Street with its 1980 IPO.

A booming economy and strong equity year kept my defensive drug franchise steadily profitable, and the April founding of Genentech quietly opened the biotech frontier that would reshape my industry.

A booming recovery (Q1 GNP +9%, Dow above 1,000) with easing inflation delivered a strong rebound in auto sales and discretionary spending, the best consumer year of the mid-70s.