Jun 13 2025
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Urgent update

Israel strikes Iran

Good morning, last night Israel attacked Iran’s nuclear and military targets.  We will not be discussing politics, or the optics of what happened, instead we would like to share with you our opinion on economics and market outcomes from the attack. 

The first reaction is a much higher oil price, based on the risk of war plus the mechanism for importing and exporting oil.  One-third of all oil passes through the strait of Hormuz. Unfortunately, this flow of oil can be majorly disrupted if Iran chooses to block or attack ships passing through the region.  The US maintains a large naval fleet in the area. The markets have now attached a risk premium to the price of oil that will stay until this conflict is resolved or clarified.  Additionally, the futures are pointing to a downturn today. Stock markets usually overreact to major events with the attitude of: “shoot first and ask questions later.”  Depending on what actions take place next by Isreal or Iran, it may continue for a little while. 

We are monitoring all actions in case we might have to adjust allocations. Today will affect your portfolios in the short term. However, at this time, no action needs to be taken. Pragmatically, Isreal’s and Iran’s percentage of global GDP is a little over 1.28% combined.  While the perception of trade shutting down will impact markets, the long-term impact will be de minimis because of the percentage of Global GDP.

If the situation persists and escalates quickly, markets will deteriorate. If an all-out war breaks out in the region, it will obviously affect everything in some way. Please remember, the action taken by two foreign countries is a force majeure, and not a natural economic decline.

Any questions or comments please feel free to call and discuss

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May 19 2025
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US Debt downgrade

US Debt was downgraded by Moody’s on Friday after the stock market closed.   While this seems disconcerting, the effect of this downgrade will be de minimis in its outcome.  While we may see higher rates on the 30-yr treasury at over 5% yield. The downgrade will have a relatively small effect. 

If you are looking for other options in fixed income bear market outside of a traditional bond portfolio, please call Lyle Himebaugh at 203-210-7814

Apr 07 2025
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Panic and Valuation – A game of chicken

The markets are looking to open down again as the US administration offers no tariff concessions. We have espoused the markets were expensive for a while and earnings need to grow into the valuations. One of the main ingredients when looking to buy or sell stocks or an index is the price earnings ratio (PE). That is calculated by taking the stock or index price and dividing it by the earnings. As example. If the S&P 500 was trading at 10.00 and earned a 1.00 the price earnings ratio would be 10.

The dramatic fall in stock prices this past week have brought us down to about 16 x price earnings (P/E} ratio for 2026. The is well below the 10-year average of 18 and is about at the 20 year average. Today the markets will open at about 15 x 2026 earnings. This is a valuation that we have not traded on a fundamental basis in years. From a technical perspective, the markets are oversold on a short-term basis.

This is not an economic secular decline. While we understand the risks of a prolonged tariff war, we believe that this is a force majeure and the US, and the China tariff will eventually get resolved. The question is: When? According to reports, 50 countries have come forward to negotiate. We can’t imagine this lasting all year. If it does, this would put us in a recession. The price earnings multiple and the markets could go lower as it did in 1974 (8.5 x earnings), 2002(11x earnings), 2009 (8.5 x earnings), and 2020(11 x earnings).  We are not suggesting that we go to those valuations, as those were anomalies. The markets are at their historical long-term average. If the economy weakens, we could see a further downside. Please understand that those who bought during those times did very well over the long run.

We are not calling a bottom as there is no clear winner in this game of chicken. It is very hard to catch a falling knife.  What we are saying, because of current valuations, this is a much better time to start dipping the toe into the proverbial water at these valuation levels, than it was just two months ago. One way to do it, is if you have 100 dollars, invest a quarter now and invest a quarter if/ when there are further market dips.

Further downside would cause a more proactive buying approach.

Nathan Rothschild said: “The time to buy is when there’s blood in the streets, even if the blood is your own.”

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Mar 07 2025
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Current downturn in the Market

It is Friday afternoon March 7th, and the markets are down for a 3rd week in a row and is now
negative on the year in most asset classes.


There is an enormous amount of uncertainty in the market right now as we all digest the changes
in economic policy coming from the White house. As of this moment, Large Value, International
and Emerging markets are the few sectors that are actually up for the year. The real culprit in this
downturn is not the economy, but valuations. We have talked about this in our commentaries for
the last couple of quarters. Current P/E on the S&P 500 is 21.2 this year’s numbers down from
22.5 times earnings. The ten-year average is 18.1 times earnings which means in the short-term
the S&P is still overvalued. This S&P earnings number includes all the tech and AI companies
trading at 30+ times earnings. If you look at the technology action in the market, those sectors are
being hit the hardest, and coming down to more reasonable levels, but we are not there yet.

Almost all of Wall Street expects at least a 10% downturn in a normal healthy market. One step
back, two step forwards is the best way to understand what is going on. We need a valuation reset
so that we can move higher again. While things may seem scary based on the constant media’s
enlargement of fear about government actions / potential government shutdown, etc…, the truth is
the S&P 500 is down 2% for the year not 20%. A 2% negative number on the market in the short
run is not concerning, especially since most of this downturn comes from the same 7-10 stocks
that put us up here to begin with.

While investors are concerned with market downturns, the ones that are the real culprits are the
monster downturns. Ten percent downturns happen roughly 50% of the time after a big up year,
so it is quite common to have the market make moves like this. We are monitoring every aspect
of the economy and the markets, and this correction has not even hit the 10% correction threshold
yet but most likely will. That is healthy and normal and good for markets.


Have a great weekend and if you have any questions or concerns, please feel free to reach out to
us to discuss in further detail!!!!

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Jun 27 2024
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Stock Market vs a Market for stocks

The S&P 500 is hitting new highs, but very few people are feeling good about our economy!  Many people would say that this makes no sense. We agree. Let’s look at what is actually happening in the stock market vs the current market for stocks.

            The cumulative returns of all markets from Jan 1, 2022 through May 30th of 2024:

Russell 2000               -7.80

Russell Mid Cap         -1.56   

International                12.3%

Emerging Markets      -7.3

S&P 500                     10.73%

As you can see, markets have not been up that much since the downturn of 2022, and some sectors are still down, yet we are currently reaching new highs so what is really going on?

For the first time in history, 10 stocks accounted for 96% of the S&P return in 2023; and so far in 2024, 4 stocks account for 46% of the S&P’s return.  This has been a market for a few stocks.  

Why is this important?  History has shown that returns regress to the mean over time.  Business cycles are roughly 7-10 years.  Once focus returns to fundamentals rather than the promise of AI, the market should spread out over time with the behemoths returning to normalization in valuation.  We have seen this story before in 1999 and everyone knows what happened to the S&P 500 from 2000-2002.

With the economic backdrop of Higher for longer, spending slowing, economy slowing and markets and S&P 500 near 23 times 2024 and 19.5 times 2025 earnings, GGA believes this cannot be sustained at the premium to the historical average. We believe this is a time of caution in the near term for the large cap market.  The allocations to midcap, small cap and emerging markets managers are good – and these managers are top drawer.  It’s a matter of time until the market recognizes those sectors.

It has not been a stock market; it has been a market of a few stocks which was last seen the 1960’s.

Please call us to discuss the above or if anything has changed that would dictate a change in allocation.

Dec 08 2023
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BLOOMBERG RADIO

Click here to listen to Granite Group’s take on what to expect going forward.

Granite Group Advisors is a reliable wealth management practice. We are a client advocate the applies skill and care with vigor. Our goal is your peace of mind.

If you want to learn more for your endowment foundation, family or seeking managed portfolios and employee investment education for your company’s retirement plan, please call Lyle at 203-210-7814

Or click here to schedule an appointment.

Nothing ventured, Nothing gained!

Apr 05 2023
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Bloomberg Radio

Listen now to Granite Group’s take on what to expect going forward.

Please click at 25:20 minutes to hear Lyle’s latest.

https://www.bloomberg.com/news/audio/2023-01-30/streaming-trends-market-forecast-ford-mach-e-price-cut-radio

Call your advisor for help. No advisor? Call 203-210-7814

Jan 31 2023
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Bloomberg Radio

STREAMING TRENDS, MARKET FORECAST, FORD MACH-E PRICE CUT

Click here  (or use the link below) to listen to Lyle Himebaugh…he starts at 25:30

https://www.bloomberg.com/news/audio/2023-01-30/streaming-trends-market-forecast-ford-mach-e-price-cut-radio

Dec 16 2022
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Bloomberg Radio

Listen to Granite Group’s Lyle Himebaugh’s opinion on the markets looking forward!

Click here to listen to Lyle’s most recent Bloomberg interview.

Oct 12 2022
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Which sectors will combat Economic Headwinds

Click the link below to listen to the latest interview with Lyle Himebaugh on Bloomberg. If you would like your employees to have real time advice on their 401k accounts, please call Lyle Himebaugh at 203-210-7814

https://www.bloomberg.com/news/audio/2022-10-10/which-sectors-will-combat-economic-headwinds-audio

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