Core Inflation Is Just 1.8%
Inflation Stays Moderate On Wednesday, the Fed’s Beige Book said inflation was moderate in most districts. That was a reflection of past data. I mention this because the latest Personal Income and Outlays report shows the previous trends have continued. As you can see from the chart below, the year over year PCE was 2%…
Stocks Fall On Fears Of A Trade War
Italian Situation Resolved Global market action has been unreal this week. As you can see from the chart below, the Italian 2 year bond had a panic moment where it went from a negative yield to almost 3%. Now it has fallen back to below 1% in just 2 days as traders act as if…
Stocks Rally, Forgetting About The Italian Political Crisis
Fed No Longer Too Dovish There was so much happening on Tuesday, I didn’t get to the effect the Italian political drama had on the Fed funds futures. The Fed funds futures were leaning towards 4 rate hikes in 2018 up until the Fed Minutes which dampened the market a bit. Still, the Fed pushing…
Trump-Kim Meeting Will Occur On June 12th
June 12th Meeting With South Korea Back On On Tuesday, the White House announced the Trump-Kim summit on June 12th in Singapore is back on, reversing the claim made last week that it was cancelled. The actual language was that the meeting is “expected.” It seems like it will happen, but the term ‘expected’ implies…
Italian Political Risk Causes U.S. Treasury Buying
Huge Day For The Political Headlines Tuesday wasn’t a great day for investors who are only focused on the fundamentals of the American economy and earnings as political risk was the star of the show as 3 major news events occurred today which affected the markets. First, the Italian President rejected the economic minister proposed…
18.17% Earnings Growth Expected In Q2 2018
Great Q1 Earnings: Potential Headwinds Q1 2018 earnings growth was 24.68%. As I have documented for the past few weeks, this quarter has been unlike the historical average as growth estimates improved dramatically and the heightened expectations were beat. EPS estimates were raised heading into this quarter for the first time in 7 years. Therefore,…
Oil Down 4%, Dollar Hits 6 Month High
Oil Crashes On Friday The stock market sold off modestly on Friday as the S&P 500 was down 0.24% and the Nasdaq was up 0.13%. The oil market was hit hard as WTI oil fell 4% to $67.88. This was based on reports that OPEC and non-OPEC nations could increase supply. That was WTI’s worst…
May Was A Great Month For The U.S. Economy
Very Strong Kansas City Manufacturing Report Across the board, manufacturing has been strong according to the regional Fed manufacturing indexes. As you can see, in the chart below, they have all turned up. The most recent report is from the Kansas City Fed. Its index was 29 which was above the highest estimate of 25,…
Stocks Fall As North Korean Summit Was Canceled
President Trump Kim Summit Nixed The North Korean negotiations with America before the summit were more important than the actual summit. Getting the details in order about how the meeting will be secured and what will be discussed are far more important than the actual meeting. This isn’t like a business deal where real negotiations…
Stocks Rally After Fed Minutes
Target Reports Weak Results The stock market was down slightly on Wednesday morning as Target’s poor earnings results hurt market sentiment. The market rebounded to close positive after the Fed’s Minutes. The S&P 500 was up 0.32% and the Nasdaq was up 0.64%. I think it’s relevant to look into Target’s numbers because I’m focused…