Predicting economic cycles is difficult. This cycle has been especially tough because of central bank interventionism, the fact that the recession was worse than any other one since the Great Depression, and that the recovery has been weak. All those three points mean the recovery will be longer tha
Many investors want to predict the next recession. There’s no imminent sign of a recession, but there is the risk of one in a few years since the economy has been recovering for over 8 years. One of the best signals of a recession is the yield curve. When the Fed raises rates enough, it
ETFs Still Small But Growing Fast The biggest trend when it comes to fund flows is the movement from mutual funds to ETFs which are passive investments. The trend is important because it effects markets. It’s also rare historically in the sense that the strategies that most non-professional investor
Slight Correction, Nothing Serious The stock market fell slightly Friday with the S P 500 down 0.18%. The market had a bad week as the S P 500 is about 2% off its high. CNBC has a weird headline saying the market rallied on Steve Bannon’s resignation from his role in the White House even though it
The Bank of American Merrill Lynch surveys should be taken seriously. I’m not saying, I agree with them always, but they usually have interesting perspectives. It’s weird how this survey usually has contrarian bets because most surveys reflect what the market is expecting. It’s possible that fund ma
Let’s review a couple of the minor points worth nothing...made in the latest FOMC statement The first is about the interplay between fiscal and monetary policy. Things have changed since the beginning of the year where the Fed wanted to raise rates to make up for the fiscal stimulus which was suppos
The North Korean fears are gone from the market completely as the stock market digests the great earnings reports and great economic reports. I can not think of a better scenario for stocks as we have a dovish Fed, U.S. growth accelerating, record corporate profits, regulation cuts, and emerging mar
The Atlanta Fed released some surveys which we will look at to get an idea of the direction of the economy in the 6th Federal Reserve district which includes Mississippi, Florida, Georgia, Alabama, Louisiana, and Tennessee. The headline survey was about inflation, but there’s not much to discuss wit
The economy has been improving in 2017 as global trade lifts off. We’ve had one of the most unusual scenarios take place this year. As you can see in the chart below, the Fed loan officer survey shows that the credit conditions have eased despite the Fed raising rates That’s not usually how it works
An interesting analysis talking point is the cyclical improvement in the global economy spurred by the emerging markets. The chart below shows the improvement in global trade. Everything the mainstream economists and investors said about the global economy last year was wrong. They misunderstood the
