A Trump Fed?
The new announcement that the FBI is re-opening its investigation into Hillary Clinton’s emails has moved the polls in Trump’s favor, creating a type of "Trump Fed", with many having him trailing in the low single digits nationally. This puts the possibility of Trump winning the election back onto the table if we assume they…
Trump Is Brexit
Trump IS Brexit. Allow me to explain. The presidential election was in the news today as the FBI re-opened its case investigating Hillary Clinton’s emails after new evidence was found in its research into Anthony Weiner’s separate case. This sent stocks falling mildly. I think we can extrapolate the effect it had on the market…
Soybean GDP Report
The Soybean GDP report came out this morning showing 2.9% growth. I must correct my mistake yesterday where I said the median estimate was 2.9% because the media is reporting the median estimate was 2.5%, so it beat expectations. Looking at the report, there is a lot of weakness behind the great headline number. It’s…
Q3 GDP Will Be Best Of Year
Today was the biggest day of the earnings season with giants Amazon and Alphabet reporting among a slew of others. However, tomorrow’s focus will also be on the Q3 GDP report which is likely to be the best of the year. While it will be the best of the year, baring a shocking report, it…
Tesla Smoke & Mirrors
Tesla is the ultimate representative of this current environment. It consistently loses money, misses expectations, and maintains its status as an exciting growth company. Businesses with strong fundamentals are few and far between. Today I saw a stat that said the FANG (Facebook, Google, Netflix, Amazon) stock performance makes up 90% of the S&P 500’s…
How Are Earnings?
Going into this earnings season earnings were expected to decline 2% year over year. Earnings expectations are a farce unfortunately. Analysts may have always been lowered expectations to foster earnings beats, but this practice has become painfully obvious recently because of the current environment where EPS growth has been negative while stocks have been rallying.…
Speculating On Future Fed Policy
My edge when it comes to speculating on future monetary policy is that I remain objective when making projections. The so called ‘Fed skeptics’ have been closer to projecting actual Fed policy than mainstream investment bankers and commentators. The Fed itself has also had a terrible track record at predicting its own policies. This is…
Fed Caught Between A Rock & A Hard Place
The long term consequences of the Fed’s policy mistakes are obvious. Low interest rates created the tech and real estate bubbles, so having interest rates lower for longer is going to cause more damage. We are already seeing these effects bear fruit as the S&P 500’s median price to sales ratio is the highest ever.…
The Election Signals Tough Roads Ahead
The market is ignoring the elephant in the room. In terms of the presidential race, most voters and economists think both presidents would be a bad choice. It will be tough for either candidate to get anything passed through Congress because he/she will not have a mandate. A mandate is when the president gets his…
Netflix: Tech Boom 2.0
It is always important to invest with the macroeconomic back drop in mind. However, this concept is actually hurting investors this year. In fact, not only is economic weakness not being priced into the market, but individual earnings reports aren’t mattering either. Capitalism cannot work when there is no cost of capital. Investors begin…