In this article, I will elaborate on my previous point about S P 500 profit margins; I will also discuss the latest updates surrounding the healthcare vote on Thursday. These two topics both hit on the catalysts which will move stocks, namely earnings and fiscal policy. Stocks got a free pass in 201
The 10-year bond continued its rally on Wednesday as its yield has fallen about 22 basis points from its high in mid-March. This is a powerful signal that the market has soured on the reflation trade. It has begun to reject the notion that 2017 GDP will accelerate from the morbid growth of 2016. To
The stock market finally fell 1% on Tuesday as all the major averages plummeted. As you can see in the chart below, the streak without a 1% decline in a day made it to the top 10 longest in history. There was only one streak in the 1990s which was longer than this streak which
On Tuesday, the stock market sold off as it finally followed the recent trend in the 10-year bond and dollar. I have mentioned in a previous article that the 10-year bond yield decline is a sign inflation expectations and GDP growth estimates have diminished. Some may have postulated the 10-year yie
While the major stock indices remain near their record highs and show no sign of having their first 5% correction in a few months, there has been changes to the underlying drivers of equities. The changes afoot are that fiscal policy must replace monetary policy in supporting the market and that ear
Over the weekend, I was speaking with my cousin about a pawnshop he went to. He told me the owner told him that no one comes to the store to pawn items anymore. The owner said he should turn the store into a regular retailer. That is a sign of the economic times. Pawning an
There are a few major alarm bells ringing which signal a top in this bull cycle could occur in the next few months. I will review those ominous signals in this article. Then I will review the latest news in the battle to get healthcare reform passed Congress. The one obvious positive the GOP has
In my last article, I mentioned the big difference between the NY Fed and Atlanta Fed’s model for Q1 GDP growth. I tended to side with the Atlanta Fed’s model because it has a longer track record and was closer to the street’s average estimate. Today both estimates updated. The Atlanta Fed’s model s
In this article, I will review the latest bank loan growth data, but first I will discuss what’s driving this market higher and what the Q1 GDP growth may look like. It will be interesting to see what the actual Q1 GDP growth rate turns out to be because the Atlanta Fed GDP Now forecast
As I mentioned in my previous article, the Fed didn’t unwind the balance sheet because it can’t. Interest rates would rise to such high levels the federal government would have a tough time paying off the interest on the debt. The idea that the Fed isn’t using the balance sheet to affect the economy
