Multiples Have Fallen The 3rd Most In 40 Years

Multiples - Apple & Amazon Fall, But Stocks Rally The S&P 500 rallied 0.56% on Monday. Berkshire Hathaway’s Class B shares rallied 4.7%. That's because the company bought almost $1 billion of its shares back in August. In the fist 9 months of the year the firm purchased $24.4 billion worth of shares. That’s over…

Strong Markit & ISM Services PMI for October

Strong Markit PMI Services The Markit PMI services index was similar to the manufacturing survey. Its final reading was very close to the preliminary mid-month reading. Final October reading of 54.8 beat the consensus and mid-month reading of 54.7. It beat last month’s report which was 53.5. Improved PMI is sharply divergent from the stock…

Fed Rate Hikes - 3 More Expected By December 2019

Fed Rate Hikes - Mixed Action On Friday Before delving into Fed rate hikes, let's review Friday's market action. With all the volatility in the past few weeks, it appears investors aren’t focused on the midterm elections. At worst, I think the election won’t affect stocks. At best, it will inspire a big rally. Stocks…

Apple Beats EPS & Revenue Estimates

Apple - Another Solid Rally On Thursday In the past 3 days the S&P 500 is up 3.75%. It was up 1.06% on Thursday. Nasdaq was up 1.75%, but that looks to be short lived. Apple fell after hours. Tussell 2000 increased 2.22% and the VIX fell 8.9%. Even though stocks have been roaring higher…

Wage Growth Is Not Excessively Inflationary

Wage Growth - Jobless Claims & Job Cuts Jobless claims and Challenger Job Cuts report didn’t match because one time layoffs boosted job cuts. The jobless claims report signals all is fine in the labor market. Number of claims fell from 216,000 to 214,000. There wasn’t much of an effect on the labor market from…

Strong ADP Report Shows 227,000 Jobs Created

Strong ADP Report The October ADP private sector jobs report showed 227,000 jobs were created as you can see from the chart below. This beat the consensus by a wide margin. Consensus was 178,000 and the highest estimate was 200,000. Year over year growth in the BLS jobs report has been slowing which is slightly…

Inflation Meets The Fed’s 2% Target

Inflation - Income Growth Misses Estimates & Inflation Meets Them Personal income growth in the September PCE report came in at 0.2% on a month over month basis. It missed the consensus for 0.4%. Stripping out taxes, real disposable income growth was 0.1%. As you can see from the chart below, year over year real…

Facebook Stock Rallies On EPS Beat

Facebook Stock - Correction Allowed Facebook To Rally Facebook reported a similar quarter to its last quarter. It beat EPS estimates, missed revenue estimates, and missed user estimates. The difference between this quarter and the last quarter is the price of the stock. Its stock was at $217.50 on July 25th. Heading into this report,…

Fixed Investment Hurts Q3 2018 GDP The Most Since Q4 2015

Fixed Investment - ECRI Leading Index Goes Negative The ECRI leading index has been bearish on the American economy since late 2017. Now that the stock market has had 2 corrections in 2018, ECRI can claim victory even though GDP growth has been strong in 2018. It’s interesting to see media commentators and investors who…

Q3 GDP Growth Of 3.5% Beats Estimates For 3.3%

Q3 GDP Growth - Solid October Consumer Confidence The University of Michigan consumer confidence reading came in at 98.6. It missed the prior reading and the consensus which were both 99. That’s not a big miss considering the volatility in the stock market lately. The final reading is down 1.8 points from the end of Septembet.…