Fund Manager’s Survey We’ve looked at some of the results from the BAML fund manager’s survey in a previous article. Let’s look at some more results to help us forecast where asset prices are going. The chart below shows the z scores of a few assets. When the z score is high, it is overbought
Extreme Positivity The stock market was down marginally on Tuesday. GE is getting blamed for a lot of the selloff, but, since the Dow is price weighted and GE stock is in the teens, it has very little effect on the index. With such a big fall, some are wondering if GE will be kicked out
Relative Valuations We’ve seen a coordinated stock market rally in about every index globally. The chart below compares the recent Shiller PEs of the American, Japanese, European, and Emerging stock markets. The dotted lines are the average since the start of this bull market in 2009. As you can see
More On Q3 Earnings Not only are the percentage of companies reporting beats and the beat rate better than average, but also the percentage of companies issuing negative guidance is lower than average. 58 companies have issued negative guidance and 28 have issued positive guidance. Just like how com
Fed’s QET To End Between 2020 2022 The chart below brings light to the timetable I’ve been discussing with regards to the Fed’s balance sheet unwind. I stated that it would be unlikely for the ECB to start an unwind before the next recession because its QE program will end in late 2018 or
Tax Plan To Be Worked Out This Week Last Thursday the Senate released its plan to cut taxes which sent the market falling because the tax cuts start in 2019. The Senate’s amendment process starts on Monday. That’s when the details will be hashed out. We will probably see the market move on headlines
Summary Of Fed Policy The chart below is a great summary of the monetary policy situation. It shows the S P 500, the current Fed balance sheet, the future balance sheet, the Fed funds rate, the Fed funds futures, the long term expectations, and the dot plot. Now that stocks have done well for a coup
Houses Too Expensive? This sentiment indicator for housing is interesting because it isn’t a contrarian indicator. Usually when you see investors euphoric about stocks, you want to sell. In this poll, the slightly over heated market is being met with skepticism. People in the housing market are much
Credit Card Debt Is Over $1 Trillion The consumer is at a crossroad. If wage growth accelerates in 2018, everything will be fine, but if the economy turns south, the consumer will be in a world of hurt. Some readers might say that if the economy goes south, the consumer will always be in pain.
Slack In The Labor Market We’ve discussed wage growth in many articles. The chart below is a great depiction of what might occur in the next few months. It shows the spread between the U6 unemployment rate and the U3 unemployment rate. This shows the amount of people who are underemployed. The axis
