The stock market roared higher on Monday because Macron appears to have locked up the French presidential election. He beats Le Pen in all the polls by at least twenty points. This makes me wonder what it takes for stocks to fall. Stocks rallied after the populist wins which were Brexit and Trump. T
Inflation Decelerates Before I get into the latest market moving headlines this week, I want to emphasize the recent movement in inflation. While I have mentioned the decelerating inflation in passing, I didn’t give it enough coverage considering the large movement the CPI had in March. As you can s
The stock market was down modestly on Friday as the S P 500 remained within the recent trading range it has been in. The bulls have prevented a 5% correction, but the market hasn’t made a new closing high since March 1st. The pace the market was rallying at earlier in the year was unsustainable. The
The question of where American productivity growth has gone is plaguing policymakers. Without productivity growth, the economy must rely on credit growth to boost GDP. Credit growth is like food. If you eat a normal amount, you’ll be fine. If you eat too much food, you gain wait and become unhealthy
The stock market rallied on Thursday as it appears the mini 3% correction is over. As I’ve mentioned, there is a large group of investors who are dying to get into the market. Whenever there is a 5% correction, they plow money into stocks. Because 5% corrections have become rare, these bullish inves
In this article, I will discuss the findings posted in the IMF’s Global Stability Report and some of the latest economic statistics. The IMF’s report was shocking as it has graphs that look like what economic realists like John Hussman and David Stockman publish. When the bearish narrative leaks int
The three news items which drove equities on Wednesday were the drop in oil prices, the drop in IBM’s stock, and the Fed’s Beige Book. I recently called IBM a zombie stock because of its revenue declines. The weakness is finally being reflected in the stock as it is down about 11% since March 1st.
The latest movements in markets are starting to be in sync with a slow growth economy. This makes sense as the blue-chip GDP forecast has been decelerating quickly. The global trend in declining bond yields can be see below. The range the U.S. ten-year bond was in for the beginning of the year has b
The previous discussion about the labor market showed how it’s tough to quantify the slack in the labor market. The Fed has been relatively dovish at the end of this cycle even though the unemployment rate suggests the labor market is near full employment. Another reason why the Fed hasn’t been hawk
I can analyze the economy in specific detail for endless articles, but the health of the economy has had declining relation to the stock market returns lately. I calculated the correlation between quarterly GDP and the S P 500 from 2008 to 2016. The correlation coefficient is 0.973 which signals the
