CEOs Call Stock Market Correction An Overreaction
CEO Confidence Is High? Let's review the details of the coronavirus, valuations, and the decline in rates. Skittishness in markets is potentially unlike anything we have seen in the last 10 years. Last year, CEO confidence was pointed out by the bears as a signal of a recession. Low confidence needs to be combined with…
Another Wild Friday As Stocks Avoid The Worst Declines
Another Crazy Friday Friday’s market was exactly like the previous Friday in that stocks were down sharply and exploded into the close. It’s common to hear chatter about investors not wanting to own risk assets into the weekend. But the reality is short sellers don’t want to be betting against stocks into the weekend. They…
Coronavirus Has No Impact On The Labor Market In February
Huge Difference In Services PMIs February ISM services PMI was so strong that it was the equivalent to 3% GDP growth. By the way, the Atlanta Fed GDP Nowcast was updated on Friday. It shows 3.1% GDP growth in Q1. If it wasn’t for the coronavirus, 2020 would have been a turnaround year. Q1 growth…
Chinese Stock Market Is Up 19% Year To Date
Another Big Down Day S&P 500 fell 3.39% on Thursday as volatility continued to wreak havoc on Wall Street. VIX rose to 7.63 points 39.62 as it is closing it on its high last week. Now, the market will likely test its correction low in the next couple days. But if you have a time…
Coronavirus Starts To Impact Economic Data
Markit Manufacturing PMI Falls Markit manufacturing report from February showed business is starting to wane as the coronavirus catalyzes a slowdown in global growth. PMI fell from 51.9 to 50.7. Good news is this is only a tick lower than the flash reading. It's surprising that activity didn’t decelerate quicker in the 2nd half of the…
Massive Rally In Stocks & Treasuries Finally Fall
Another Huge Move In Markets As Stocks Surge Wednesday had yet another awe-inspiring move in stocks and bonds as the S&P 500 rose 4.22% and there were many volatility clusters. However, if the market avoids another big decline, we will see a return to normalcy where stocks grind higher. The chart below shows how unusual…
Supply Chain Hit By Coronavirus
Bullard Talks Down March Fed Decision Fed did an emergency cut on Tuesday. Questions are now being asked about the March 18th meeting as we only have a couple more days before the Fed’s quiet period starts (Friday). When asked about future Fed action Bullard stated, “We certainly can keep our options open there, but since…
10 Year Yield Falls Below 1% In Monumental Rally
Another Wild Day For Stocks The stock market had a very wild day as it was down in the morning, briefly rallied after the Fed’s emergency cut, and then crashed sharply. In markets volatility clusters which means when the previous day had high volatility, the next day has a greater than average likelihood to also…
Fed Does An Emergency Cut, But Markets Continue To Panic
Yield Curve Just Predicts Fed Action Many of us thought the Fed wouldn’t cut rates until its March 18th meeting. But instead it did an emergency 50 basis point cut on Tuesday. This decision didn’t calm markets. Before we get to what Powell stated and the impact it had on markets, let’s look at what did…
Long Bond Is At An Extreme Level
Buy Everything? Monday’s market was similar to the rally on Friday afternoon. It was a very strong across the board rally. 79% of stocks rose which didn’t meet the threshold set on December 26th, 2018. That's the one in which 96% of stocks rose, but we wouldn’t call Monday’s rally disappointing. Dow rose 5.09% which…