With the stock market hitting all-time highs, everybody wants to know if we are in a giant bubble.
You can’t trade and make money if you’re not in the market. If the fear that we are in a bubble is keeping you out, then you’re not making money.
The honey badger doesn’t care. The honey (Read More….)
For the week, the DJIA gained 0.1%, the S&P 500 rose 0.8%, and the Nasdaq climbed 1.6%.
Economic data and Federal Reserve commentary virtually sealed the deal that a rate hike is coming at next month’s monetary policy meeting.
Trump needs to fire Yellen IMO. Trump has pledged a $1 trillion infrastructure spending program to (Read More….)
For the week the S&P 500 fell -1.9%, the DJIA fell -1.5%, and the Nasdaq plunged -2.8%. Last week the VIX shot back above 20 to trade at levels not seen since the June Brexit vote. The S&P extended its longest losing streak since 1980 with its ninth consecutive decline on Friday.
Oil was (Read More….)
As traders, we track the monthly Employment Situation report closely. The market often does a short-term move on the first Friday of every month when the Employment Situation report for the previous month is released. Do you understand what the Employment report is showing? I bet many traders do not. As traders, we have to (Read More….)
California, New Jersey, and New York have the most cities with rent control. Sanctuary cities in California like San Francisco and Los Angeles have some of the toughest rent controls. Rent controls hurt the local economy and make rental unit availability worse. Aggregate deadweight loss from rent controls across the country negatively impacts the US (Read More….)
We all love rising wages, but it is rising wages that will cause the next recession and Bear market.
Below is a chart of labor costs (red) versus corporate profits (blue).
A clear pattern emerges from the chart above. Profits rise after a recession as labor costs fall. When the labor market reaches (Read More….)
Warren Buffett’s favorite measure of market valuation is to compare total stock market capitalization to GDP. Warren Buffett said back in 2001 in a Fortune Magazine interview, “it is probably the best single measure of where valuations stand at any given moment.”
Below is a ratio chart of stock market capitalization to GDP with the (Read More….)
Pension funds in the US could be close to a collapse. There is an estimated $1.9 trillion shortfall in U.S. state and local pension funds because of low-interest rates and a sideways US stock market. Even stocks falling overseas is a problem for pension funds.
Credit Suisse published the chilling chart below on the funding (Read More….)
There is $1.103 trillion in outstanding auto loan debt in the US which is the highest level ever recorded.
We know that the economy has been slowing for a few years now so how could so many people still be taking out auto loans? If we overlay auto sales and auto loan debt, we (Read More….)
The velocity of money has hit the lowest level ever recorded as I wrote about here. I believe the crowding out effect is at least partially to blame for the slowdown in the velocity of money.
President Obama has run the national debt up to nearly $20 trillion, more than all President’s before him combined. (Read More….)
The ISM Non-Manufacturing PMI index dropped to 51.4 percent in August of 2016, well below market expectations of 55. It is the lowest reading since February of 2010 as activity, employment, and new orders all slowed.
Here’s the real terrifying part. The last two times that the ISM fell below 52 percent, it was (Read More….)
I’ve been warning you about the seasonal lie from the Fed and Wall Street analysts that the second half of 2016 was going to strengthen. In fact, I removed the GDPNow forecast graphic from the sidebar of the GuerillaStockTrading blog because it proved itself to be just another market manipulation tool from the Fed that (Read More….)
Trading volumes could finally start to pick up after the Labor Day holiday as institutional traders return to their desks. Watch out, money managers often clean house after Labor Day.
September is the worst month of the year for the S&P 500 so again, watch out. September is usually a bad month for markets.
Last (Read More….)
Last month I dropped coverage of GDPNow after the GDP forecast was dropped by a huge amount right before the actual GDP release. Immediately after the GDP release, they release a Q3 GDP estimate that was at 3.7% which supported the Fed’s yearly lie that the economy was set to strengthen in the second half (Read More….)
In 2016, foreign countries have dumped a shocking $192 billion worth of U.S. Treasury bonds. This dumping of bonds is the biggest selloff of U.S. debt since 1978.
China, Japan, France, Brazil and Colombia are the leading countries that are dumping U.S. debt.
U.S. Treasury bonds are the safest investments in the world. Countries often (Read More….)
The mainstream financial media has created a new classification, an “earnings recession”. Earnings have been falling among S&P 500 companies for about a year now to which we assign +1 point to the Bears in the stock market prediction algorithm.
Folks, there is no such thing as an “earnings recession”. There is only a (Read More….)
US GDP was a colossal disaster in Q2, coming in at a seasonally adjusted annual rate of 1.2%. Analysts forecasts were more than double that at 2.6%. The miss on GDP was the largest since Q2 2001.
The Wall Street Journal writes…
The economy has grown at less than a 2% pace for three (Read More….)
Last week was a big week for trader psychology with multiple economic reports showing the US economy was not in free fall. The Fed Funds Futures market is pricing in a 43.3% probability of a rate hike by December 14, 2016.
Below is a quick breakdown of the better than expected economic reports last week.
The yield curve continues to flatten at an alarming rate. The spread between the two years and the 30-year bond is the lowest since 2008.
In a note to clients, Deutsche Bank writes…
Since the UK referendum the US yield curve has flattened to new post-crisis lows… This relentless flattening of the curve is (Read More….)
China’s manufacturing sector continues to contract. The Caixin China General Manufacturing PMI for June came in at 48.6. For the last three months in a row, China’s PMI has come in below 50.
Chinese corporate bond market defaults are on the rise. So far in 2016, 34 defaults are on the record books totaling (Read More….)