Soybean GDP Report

The Soybean GDP report came out this morning showing 2.9% growth. I must correct my mistake yesterday where I said the median estimate was 2.9% because the media is reporting the median estimate was 2.5%, so it beat expectations. Looking at the report, there is a lot of weakness behind the great headline number. It’s…

Q3 GDP Will Be Best Of Year

Today was the biggest day of the earnings season with giants Amazon and Alphabet reporting among a slew of others. However, tomorrow’s focus will also be on the Q3 GDP report which is likely to be the best of the year. While it will be the best of the year, baring a shocking report, it…

Tesla Smoke & Mirrors

Tesla is the ultimate representative of this current environment. It consistently loses money, misses expectations, and maintains its status as an exciting growth company. Businesses with strong fundamentals are few and far between. Today I saw a stat that said the FANG (Facebook, Google, Netflix, Amazon) stock performance makes up 90% of the S&P 500’s…

How Are Earnings?

Going into this earnings season earnings were expected to decline 2% year over year. Earnings expectations are a farce unfortunately. Analysts may have always been lowered expectations to foster earnings beats, but this practice has become painfully obvious recently because of the current environment where EPS growth has been negative while stocks have been rallying.…

Speculating On Future Fed Policy

My edge when it comes to speculating on future monetary policy is that I remain objective when making projections. The so called ‘Fed skeptics’ have been closer to projecting actual Fed policy than mainstream investment bankers and commentators. The Fed itself has also had a terrible track record at predicting its own policies. This is…

Fed Caught Between A Rock & A Hard Place

The long term consequences of the Fed’s policy mistakes are obvious. Low interest rates created the tech and real estate bubbles, so having interest rates lower for longer is going to cause more damage. We are already seeing these effects bear fruit as the S&P 500’s median price to sales ratio is the highest ever.…

The Election Signals Tough Roads Ahead

The market is ignoring the elephant in the room. In terms of the presidential race, most voters and economists think both presidents would be a bad choice. It will be tough for either candidate to get anything passed through Congress because he/she will not have a mandate. A mandate is when the president gets his…

Netflix: Tech Boom 2.0

            It is always important to invest with the macroeconomic back drop in mind. However, this concept is actually hurting investors this year. In fact, not only is economic weakness not being priced into the market, but individual earnings reports aren’t mattering either. Capitalism cannot work when there is no cost of capital. Investors begin…

When Will The Monetary Madness End?

            The U.S. economy is in an interesting situation. The manufacturing economy started weakening in 2014. Industrial production has declined for 13 straight months which is the longest streak outside of a recession ever. Earnings peaked in 2015 and have been declining ever since. Both the Russell 2000 and the NYSE peaked in 2015. All…