Auto sales were responsible for the weak durable goods orders in the GDP report. It could be the catalyst of a recession. Therefore, it’s critical to focus on every new data point available in the car market. The latest information we have is in the chart below. As you can see Nissan, Toyota, Fiat C
The new trend I am focusing my attention on is the deceleration of soft data. I am predicting this decline because soft data usually doesn’t surprise to the upside for long. It’s also clear that the hard data isn’t following suit which means the economy isn’t strong. The weak GDP report acts as a si
There’s an anomaly which is playing out in Q1. Earning growth is accelerating, while the economy is decelerating. This is a point I’ve been making for a few weeks. I expect the Q1 earnings growth rate to be the peak of the year and I expect GDP growth to remain weak throughout the year. This
Stocks sold off on Friday despite the earnings beats from Amazon and Alphabet on Thursday afternoon. They helped the Nasdaq be the best performing index for the day as it was down 0.02%. Because the big technology firms have no impact on the Russell 2000, it fell 1.18%. The weak GDP report was the n
As I mentioned in a previous article, earnings estimates vary widely. Anything can happen in a sense. The bull case before the election was that margins would increase to record highs. With the Trump tax cuts potentially in place, there are further tailwinds to earnings rising quickly. On the bear s
The Q1 GDP report will be released on Friday. Leading up the report, the Atlanta Fed’s GDP Now released its final estimate for Q1 which came in at 0.2% growth. This is down from 0.5% growth which makes it an outlier compared to the consensus GDP estimate. The estimate for real consumer spending grow
In the lead up to the tax plan announcement, I made the point that if Trump was vague about his plan, stocks would rally on hope. Trump was vague, but it didn’t boost stocks because he was vague on the most important point stocks care about which is the repatriation tax holiday. Stocks care about
The biggest question investors focused on earnings are trying to answer is how the gap between small cap and large cap firms’ margins will be closed. Either large cap firms will have their margins fall off the peak or small cap firms will see their margins rise to the 2013 peak. It’s possible that t
Although some earnings reports have beaten expectations, it’s surprising to see the stock market whistling passed the grave yard as uncertainty on the fiscal front is heightened. Trump’s presidential legacy will be made in the next few months. The worst-case scenario would be a government shutdown w
As was mentioned in a previous article, the 12-month earnings which includes Q1 2017 are below the Q3 2014 peak. This 6.3% decline cannot be emphasized enough given misleading headlines about earnings growth driving stocks higher. If earnings falling didn’t push stocks lower, you can’t make the case
