Tarullo Resigns- Trump Fed Picks Coming

Daniel Tarullo, the Fed’s top regulator stepped down on Friday, effective April 5th, 2017. Tarullo was chairman of the board’s Committee on Supervision and Regulation. He also was chairman of the Financial Stability Board’s Standing Committee on Supervisory and Regulatory Cooperation. He’s also a voting member of the central bank’s policymaking panel. He’s been a…

Earnings Estimates Head Lower

Every Friday FactSet releases the updated aggregate information on earnings. I will review the new data. It was a poor update, but clearly the market doesn’t care as it rallied to new all-time highs. The market hasn’t cared about earnings for this entire cycle. Amazon stock declined after having a disappointing earnings report, but it…

Snap Probably Isn’t The Next Facebook

I have been following Snapchat for a few years. I found myself wondering if the company would be able to do its IPO in time before the credit cycle ended. In fact, CEO Evan Spiegel himself seems to be knowledgeable about the perils of Federal Reserve money printing. It’s an interesting parallel as his company…

The Unlikely Rally Continues

The unlikely event that stock prices would rise this year given their expensive valuations to start the year is occurring. If you annualize the returns of the S&P 500, the market is on pace to return in the high 20% range for 2017. That goes against what I have been projecting. This is why I…

Positive Arguments For Stocks

The major indices all hit record highs Thursday extending the valuations to even more extraordinary levels. The dollar has been increasing in the past few days which may be a result of the border adjusted tax being discussed. I’d consider it a fat tail event. If Goldman’s estimation that there is a 20% chance of…

Is the Market Broken?

The stock market is reaching extreme levels in terms of the lack of volatility and high valuations. However, given the market’s ability to shake off bad news last year, it’s not surprising to see it rallying in the past few weeks. Earnings are finally growing again, the Fed is promising to remain dovish, and Trump…

Border Adjusted Tax

It’s trouble in paradise for the GOP led Congress. Their reward for winning the contentious election last year is to deal with the problems with the U.S. tax code. Considering the convoluted nature of the system, it sounds more like a penalty, to me. On the campaign trail, it’s easy for politicians to claim they…

Market Sentiment Is Way Too Optimistic

There’s an interesting dichotomy which is brewing in the market which is a recipe for lower stock prices. I will review this bearish signal in this article. The dichotomy is that investors are incredibly bullish while bank lending has started to seize up. Sentiment indicators can signal short term trend corrections if they get too…

French and German Elections

While 2016 was a massive year for elections, with the American and U.K. populist movements headlining the votes, 2017 will also be a pivotal year. There will be a government transition in China in the fall. There will also be French and German elections which will likely bring equity volatility due to the uncertainty about…

Low Returns Almost Guaranteed in the Future

Anecdotal evidence that the market is in bubble has hit me. I’m sure most people involved in finance have heard questions about the stock market from those not in the industry. It has become an exciting time to invest, so the number of questions I’ve received has increased recently. The reality is the stock market…