Online Jobs Ads Indicate Weak Labor Market

I like to look at every type of economic metric in doing research. The current environment is somewhat unprecedented in a few ways. One of those ways is the jobless claims stats. The jobless claims 4-week average hit a 44-year low which makes no sense because the labor market has expended. Considering unit labor costs…

Amazon, Apple, Netflix, & Facebook Have Almost Identical Performance

In this article, I will review the latest earnings data as reported by S&P Dow Jones Indices. There was a two-week break in the data as the purveyor of it went on vacation. It’s always great to get a clear view of the bottom up earnings without any filters. Before I get into that information,…

GDP Growth Estimate Raised to 1.2% In Q1- Still Anemic

The first revision to Q1 GDP was released Friday. This is the report I was waiting for ever since the 0.7% growth report was released a few weeks ago. I have said that it’s important to take each first guess at GDP growth with a grain of salt because the number is subject to revisions.…

Stocks Up Dollar Down

Looking at the major stock market indexes it looks like the market has not cared that the U.S. macro surprise index has been negative while the European macro surprise index soars. Looking in more detail, there has been an underlying trend in markets which reflects the economic shift. The Russell 2000, which consists of firms…

The Unwind Policy Gets More Detailed

The Fed’s Minutes surprised many as it gave details about the balance sheet unwind. It was a smart idea to give some of the details since the FOMC has come to an agreement on the policy. Janet Yellen will have a press conference after the June meeting. Journalists and bankers can digest the new policy…

Stocks Have Become Bonds & Vice Versa?

The desire for yield seems to have caused an increase in the percentage of loans which are covenant lite. One of the biggest bubbles in this economy is in junk debt as the need for yield and the length of time since the last recession has made junk bonds highly coveted. The chart below shows…

Is This Market Cycle Different?

I think the best description of this current cycle is ‘this time is different.’ I’m not implying that the stock market will rally indefinitely and that a recession will never happen. I’m saying that most of the indicators I look at which have had a great track record have been wrong. The most pivotal one…

Housing And Auto Sales Have Peaked

This article will review the latest economic data. The chart below shows the latest seasonally adjusted annual rate of sales for lightweight vehicles and new homes. New home sales peaked in March at 642,000 and auto sales peaked in December 2016 at 18.3 million. April new home sales are down 11.4% from the peak and…

Bonds For Capital Gains & Stocks For Income?

The stock market has returned to where it has been this year as the VIX has gone back to below its median. The VIX is back below 11 and the S&P 500 is near its all-time high. Looking at the interplay between stocks and bonds, the bond market has undergone a seismic shift while the…

Neel Kashkari Argues Against Pricking Financial Bubbles

The Minneapolis Federal Reserve President Neel Kashkari is an outspoken thought leader on the Federal Open Market Committee. When he makes statements, it’s worth noting his points. I say he’s a thought leader, not because his points are correct, but because they can affect policy. I think his latest thesis was completely wrong. To summarize,…