Is A Cyclical Slowdown Coming In 1H 2018?

Economic Growth Weakening? The term ‘global synchronized growth’ has become a buzzword in the financial press in the past few months. Obviously, just because it is widely used doesn’t make it wrong; in fact, it has been an accurate portrayal of reality. However, it’s always important to question the mainstream opinion. We often see trend…

Stocks Rally As Shutdown Ends

Government Shutdown Ends The government shutdown matters to the economy; I talk it down because the media likes to exaggerate its importance. The good news is it looks like it will end soon as of Monday after it went on for just 3 days. The chart below shows all the government shutdowns since 1976. As…

The Dumb Money And Smart Money Love The Financials

The TINA Trade Examined As I mentioned in a previous article, some investors believe low real interest rates mean equity multiples should be high because that’s what happened in this cycle. However, usually the real rates being in the 2% to 5% range is the best because it implies economic growth is strong. Bond investors…

Shutdown Looms, But Retail Goes All In On Stocks

Shutdown Drama Dominates The Headlines The latest news on the shutdown potential is President Trump met with Senate Minority Leader Chuck Schumer. It will be a close call if there’s a shutdown because they said they made some progress, but there was no explicit deal. This meeting is a good sign that something will get…

Government Shutdown More Likely Than Ever

Government Shutdown Looms On Thursday, the chances of a government shutdown increased, so stocks sold off again. This has always been a confusing issue for me because I think the government will shutdown, but I also think stocks shouldn’t selloff because of it. The conclusion that thought process brings me to is that the shutdown…

Apple Invests $250 Billion In America

Extreme Bullishness Stocks hit a record high on Wednesday as the S&P 500 was up 0.94% and the VIX recoiled from its gains on Tuesday falling to 11.54. There hasn’t been much of an effect from the crash in cryptocurrencies as I expected. If stocks continue on this unprecedented streak, I could see the Fed doing a…

Government Shutdown Odds At 25%

E-Trade Survey Shows Retail Investors Are Optimistic Stocks rallied on Wednesday as good earnings reports helped the market regain momentum after Tuesday’s reversal. That means we can continue our discussion on how overly optimistic some investors have become. The table below shows an E-Trade of survey of retail investors. Some of the responses are remarkable. 9% of…

Government Shutdown Causes VIX Spike As Traders Take Profits In Stocks

Wild Tuesday In Stocks & Crypto Cryptocurrencies had a disastrous crash on Tuesday as most were down over 20% and some were down over 40%. The total market capitalization peaked at $830 billion two weeks ago. The latest check is $496 billion which is an over 40% decline. This is great news for the economy…

2018 Earnings Estimates Improve The Most Since 1996

Earnings Estimates Improve The Most In At Least 21 Years If you’re bullish on stocks because earnings are strong, you are sitting in the catbird’s seat because the estimates have been expanding at an unusual pace. As you can see from the chart below, the 2018 full year estimate has increased since December when the…

Stocks Maintain Euphoria

Fed Fund Futures’ Reaction To CPI The Fed fund futures for the March meeting show the chance of at least one rate hike went up from 68% before the data released to 73.7% after the data was released. Even though this is a small change, getting above the 70% threshold is pivotal because the Fed…

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