Housing Continues To Weaken
Weakness In The Housing Market There haven’t been any new data points on housing in the past few days. No economic reports came out on Veteran’s day. The next big reports will be the housing price index on November 19th and the starts report on November 20th. Even though there isn’t new data, I have…
Apple & Goldman Sachs Lead Stocks Lower
Apple & Goldman Sachs - Stocks Crater On Veteran’s Day The market was open on Veteran’s day. But the bulls wish it wasn’t as the S&P 500 fell 1.97%. Nasdaq fell 2.78%, and the Russell 2000 fell 1.98%. I was wrong to suggest stocks were a buy on Friday as the CNN Fear and Greed…
Global Growth Falters: Italy Faces A Recession
Global Growth Falters - Classic Late Cycle Economy The latest catalyst for stock market weakness is global growth. Global growth weakness matters a lot more when the American economy is also weakening. Fiscal stimulus delayed this weakness from impacting America for the first 3 quarters. But unfortunately global growth has fallen further. And, the fiscal…
Stocks Decline On Trade Jitters
Stocks Decline - End A Great Week On A Bad Note The stock market sold off sharply on Friday as the S&P 500 fell 0.92%. Nasdaq fell 1.65%, and the Russell 2000 fell 1.82%. VIX was up 3.83% to 17.36. CNN Fear and Greed index fell from 29 to 18 which is extreme fear. This…
Earnings Estimates Keep Falling
Earnings Estimates - Small Caps Undervalued? As you can see from the chart below, the forward PE of Russell 2000 firms is below the forward PE of Russell 1000 firms. At the end of October, the forward PE of Russell 2000 firms was 14.9 and the forward PE of Russell 1000 firms was 15.8. This…
Fed Avoids Discussion On Stock Market Volatility
Fed Changes Little In Its Statement As expected, the Fed kept the funds rate the same which is in between 2% and 2.25%. Since Powell took the helm as chair, the Fed statement has been short. It has provided little detail into the Fed’s thinking. After shrinking in the past few months, the November statement…
Stocks Exit Extremely Oversold Territory
Stocks Exit - Biggest Post Election Rally Since 1982 The stock market rallied sharply after the midterm elections. Dems won the House and the GOP held the Senate. S&P 500 usually rallies 0.7% after the midterms. Instead it rallied 2.12%. This is the biggest increase since 1982 when it increased 3.9%. It’s good to get…
FAANG Stocks Win The Midterm Elections
FAANG Stocks - Midterms Tell Us Economic Growth Is Strong The table below shows the historical midterm election results where the President is in his first term. In the 2018 election, the GOP lost about half of the House seats the Dems lost in 2010. They gained Senate seats unlike the Dems who lost 6…
Fed Rates - Kept Same On Thursday?
Fed Rates - Stocks Rally On Election Day With the 0.63% rally in the S&P 500 on Tuesday, the stock market is only down 6% from its September peak. It is up 3.06% year to date. This rally continues to vindicate my short term bullishness. I’m still bullish in the short term. CNN Fear and…
Consumer Confidence Extremely Strong
Consumer Confidence - Strong Redfin Sales Report The Redfin report showed year over year same store sales growth for the week of November 3rd was 6.1%. That beat the previous week’s growth of 5.9%. This is the strongest growth rate since the beginning of October. It signals the holiday shopping season is about to be…