Wal-Mart Stock Crashes The biggest news item of the day on Tuesday was the crash in Wal-Mart stock after disappointing earnings. The stock’s decline of 10.18% was its worst trading day since January 1988. This decline made the Dow the worst performing of the major indexes. Earnings per share were $1
Declining Labor Momentum The chart below shows the net number of states with increasing or decreasing unemployment rates. This is like a breadth indicator for the labor market. As you can see, there are about 23 more states with decreasing unemployment rates than increasing rates. The number likely
Home Buying Conditions Weakening The chart below shows the upper income home buying conditions compared with autos and large household durables. The chart aims to show the business cycle is ending because the buying conditions have fallen below the autos index. I think this indicator isn’t that grea
Tech Leads The Way The table below shows the year to date performance of a few different assets. As you can see, the tech sector has done well which is consistent with their mostly great earnings reports. The sector outperforming the market during the correction is a good sign because tech needs to
Retail Sales Hurt GDP As it turns out, Q1 2017 had poor GDP growth because of weak consumer spending growth. The poor January retail sales means Q1 2018 might have weak GDP growth. As a result of the retail sales report and the CPI report, the Atlanta Fed GDP Now estimate for real consumer spending
Stagflation Fears Not Valid Yet The two top stories of the day on Wednesday were the retail sales report and the CPI report. The combination of a weak consumer and heightened inflation brings about the fear of stagflation which is a stagnant economy and high inflation. This is probably an extreme wo
Top Crowded Trades The chart below shows the fund managers’ opinions on which trades are the most crowded. As you can see, the long bitcoin trade has become a less popular choice which is understandable because it crashed. Surprisingly, my top call ended up being correct. Recently the total cryptocu
Review Of The Fund Manager Survey It's useful to check the Bank of America fund manager survey to see where money managers are positioned. The great thing about the fund managers survey is it provides depth to your understanding of the market because fund managers often have the opposite opinion of
Record ETF Selling Last Week As you can see from the top chart below, there was record S P 500 ETF selling last week. Obviously, that’s an incomplete statistic because total ETF holding are much larger now than in 2008 during the financial crisis. The bottom chart tells the whole story as the percen
Global Earnings Drive Growth If an analyst states “the fundamentals are sound” on financial T.V. during a correction, he/she gets mocked because the fundamentals have no relationship to the near term trading action. However, it is an important assertion because if the fundamentals are sound, the sel
