There are a few stories I’ve been following in Europe which I will discuss in this article. I will discuss the recent European CPI report, the problems facing Unicredit, and the political risk in France. All the issues in Europe are related. The seams of the social contract in Europe are fraying. Wh
Today the market is down again slightly, while the VIX is up again. This selloff isn’t enough to change the paradigm that the market is overvalued. It feels worse than it is because of the endless rally we’ve seen. It has been 149 days since the last time the S P 500 corrected 5%. The longest
In my article last week, I mentioned the VIX was at unusually low levels. Today the market fell and the VIX finally increased off its near record-low levels. The VIX was up 12.29% to 11.88. This is still relatively low, but it’s no longer extremely oversold. The media narrative was that stocks sold
Today the German Consumer Price Index was released. The CPI showed price increases of 1.9% which was below expectations for 2.0%. Two percent is the inflation target the ECB has for the entire European Union. The 1.9% inflation in Germany is the highest rate since mid-2013, as you can see in the cha
In this article, I will focus on a few separate issues I have previously discussed. The first point is about how low the VIX is. Even though the market was broadly down, albeit modestly, the VIX fell to 10.58 which is very low. So far, earnings season has been filled with earnings adjustments beatin
Friday, we received the durable goods orders and Q4 GDP report. The durable goods headline report of -0.4% growth month over month looked worse than it was because of sharp declines in defense spending. The 1.9% Q4 GDP growth rate headline was weak as it missed the Atlanta Fed’s GDP Now expectation
The bears are waiting for a catalyst for stocks to crash, but they’ve been waiting for quite a while with nothing to show for it, but losses. Valuation has not been shown to work as a sell signal. The fundamentals of the economy and corporate earnings haven’t been able to move the market lower even
Going into the year I predicted the Trump trade would unwind. This means I expected the dollar rally to end, interest rates on government bonds to fall, inflation to fall, and cyclical stocks to fall. I still hold this view and it’s too early to make a final judgement on this perspective. However, t
I consider Snap to be the most interesting IPO of this year because of how fast it is growing and the potential $25 billion valuation it may receive. Snapchat is an app that teenagers and 20 somethings love, but transitioning to a real business is tough. The app which was known as a flirting device
The higher the market goes, the larger the crash will be when it unwinds. That’s the way I look at the latest rally in stocks which finally put the Dow over the 20,000 mark. The tight range was finally broken in a big way today as each major index, including the Russell 2000 was up
