Facebook Stock Gets Knocked Down By Cambridge Analytica Story
International Markets Drive Revenue Growth It’s not a surprise the small caps, which are mostly domestically focused, have lagged the S&P 500 in terms of margin expansion and revenue growth because the domestically focused firms in the S&P 500 have had slower growth than international firms for the past few quarters of this expansion. This…
Small Businesses The Most Optimistic Since 1983
Small Businesses Optimistic Even though it seems impossible, the small business optimism increased even more in the most recent report. As you can see from the chart below, the index was up 0.7 points to 107.6. The improvements came because of the tax cuts and the improvement to the regulatory situation. We often hear about…
Strong Manufacturing In February, But Weak Q1 GDP Likely
Growth Expected To Fall My favorite indicator for studying future economic growth is the ECRI weekly leading index. While the ISM reports told you growth was accelerating in the first two months of the year, the ECRI forecasted growth would fall. Not only did it likely get the forecast right, it also told you this…
10 Year Yield Sentiment Is Very Bullish
10 Year Bond Yield The 10 year bond yield fell about 1 basis point to 2.82% on Thursday. The yield is about 1 basis point above the March first low. I have become increasingly bullish on long term bonds. I am bullish because growth expectations should be coming down in the next few weeks. As…
First Half Of 2018 To See Weak Economic Growth
Stocks Decline Over Trade War Fears The Dow had the worst day of the major indexes as it fell 1%. It underperformed because Boeing fell 2.5%. Boeing is a high priced stock which matters in the price weighted Dow. The S&P 500 was down 0.57% as it makes its way back to the mid point…
Soft PPI & Retail Sales Reports
PPI Inflation Index Echoes Recent Trend The recent data for February shows inflation isn’t reaching the same rate it was at in January. It appears analysts got too excited about the reports to start the year. Everyone got on the inflation bandwagon because of low unemployment and the length of this business cycle, but those…
Could Tariffs On China Hurt Stocks?
The Market Is Still Range Bound Stocks had a poor day on Tuesday as the S&P 500 fell 0.64% and the Nasdaq fell 1.02%. The Nasdaq was hurt by Qualcomm which was down 5% because the merger with Broadcom was struck down by President Trump on Monday night. I still think the market is stuck in its range. At…
Mild CPI Report Changes The Markets’ Tone
Inflation Data Shows Modest Price Increases After a few months of acceleration in inflation, the CPI and PCE reports have become the most important economic reports to the market. Investors and economists expect a big pick up in inflation this year. I have switched from being bullish on inflation to being bearish on inflation based…
Stocks Fall After Revenue Beats Expectations
Beat Expectations, Stock Falls Anyway In the Q2 2017 earnings season, the market was acting weirdly. Stocks were falling when firms were beating sales expectation. My guess was that stocks priced in great results, so investors weren’t enamored after results were beat. In the Q1 2018 earnings season we’re seeing the same phenomena occur. As…
Most Jobs Added Since At Least 2000
Labor Force Participation Rate Even though I’ve already done two articles on Friday’s labor report, there’s still more to unpack. The ADP report showed 235,000 jobs added. For an apples to apples comparison with the BLS report, you look at the private payrolls. Month over month, the private payrolls were up 287,000. While both will be revised, as…
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