Stocks & Treasuries Are Living In Separate Worlds

The stock market and the bond market are in two separate worlds. Ever since the March bottom at 2.64%, the ten-year bond has been rallying. The selloff after the all-time low in yields in the summer of 2016 didn’t even get the yield to have a higher high. The downtrend in yields is still intact.…

The Stock Market Barely Moves As It Awaits Fed Meeting Next Week

The stock market on Monday had another sluggish day as the trading range was tight. In the past 27 years the S&P 500 has had 15 days with ranges of less than 0.25% and four of them have been in the past month. It’s quite unusual action. I think this trend of low volatility begets…

Earnings Expectations Have Declined Less Than Average

The S&P 500 earnings season is almost completed. Q1 operating earnings, which are 97.3% completed, were $27.90 on a bottom up basis. That’s the third highest earnings in history. On an as reported basis, earnings were $27.60 which is the highest ever. Operating margins increased from 8.75% in Q1 2016 to 9.89%. It was a…

The VIX Has It’s 4th Lowest Close (9.75)

The weak jobs report was ignored by the stock market on Friday. The S&P 500 was up 0.37% and the Nasdaq was up 0.94% bringing both to a new record high. The small correction at the end of May was a great buying opportunity as the S&P 500 is up 3.5% since then. This ‘buy…

Margins Might Not Expand In The Next Few Quarters

The stock market closed at a new record high on Thursday. The main reason for this rally is seen in the chart below. It shows year over year quarterly operating earnings growth since 1995. The mini-decline in earnings growth in 2015 and 2016 is like the one in 1998. Earnings growth had been sinking prior…

BLS Report Shows 138,000 Jobs Created

The ADP May private sector jobs report on Thursday signaled a great BLS jobs report would come on Friday. Sometimes the ADP report doesn’t indicate how the BLS report will be. This was one of those months as the BLS report was bad across the board. It looked like the online job listings report that…

Are Economic Earnings Weakening?

The last article was about corporate earnings. There are many ways to measure earnings. The top measurements are GAAP results and operating earnings. As I have shown in past articles, the BEA’s measurement of corporate profits shows lower growth than bottom up GAAP analysis. The BEA’s estimate is a top down analysis which looks at…

Earnings Beat Rate Was 74.01% In Q1 (Highest Since At Least Q2 2013)

In this article, I will discuss some more of the details of the aggregate earnings reports as of May 22nd. Unsurprisingly, energy is the sector which is expected to have the highest projected annual 5-year earnings growth rate. This isn’t surprising because the sector is starting from a low base. Some of that growth is…

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,…