Disillusionment In Europe
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. What I mean…
People Aren't Buying Highs; They Are Buying Dips
U.S. equities slide for a fourth consecutive session on mixed earnings although stocks parred losses to end the day nearly unchanged. One of the top stories today was President Trump meeting with various heads of top Pharma companies (LLY, MRK, etc.), and the group has seen a bounce (biotech as well) following commentary he will…
Consumer Confidence Falls- AAPL Earnings Coming
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…
Volatility Returns- Much More To Come
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 off today…
Signs of Volatility Emerging?
Stocks started lower…finishing there as well…with major averages posting one of their worst sessions in months amid uncertainty following the immigration policy enacted by the Trump administration this weekend. The news weighed heavily on transportation stocks - airlines specifically. President Trump today signed an executive order to slash regulations and said will reveal his Supreme…
German CPI Spikes To Highest In 3.5 Years
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 chart below. This…
A Low Volatility/High Risk Marketplace with Plenty of Opportunities
Stocks ended the day little changed, trading in a very narrow range throughout (an 8-point range for the S&P 500), as markets felt “tired” given the recent surge to all-time highs this week. The Dow Industrials topped the 20K level for the first time on Wednesday and the S&P 500 the 2,300 level yesterday, holding…
The VIX, Auto Bubble & Bitcoin
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 beating expectations…
GDP & Durable Goods Orders
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 for 2.9% growth.…
The Border Tax
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…