Lowest Volatility Since The 1960s
Single Family Housing Not Available In previous articles, I have been discussing the lack of construction of single family homes which is causing prices to increase. The chart below shows the inventory of single family homes for sale on a seasonally adjusted basis. As you can see, inventory levels are the lowest since 1994. This…
Fed Chair Pick To Be Made In 2 Weeks
Small Caps Stall The stock market was mixed on Tuesday. One of the new trends we’re seeing is weakness from the Russell 2000 which was down 0.34% on Tuesday. It’s now down 7 of the last 10 days. Even with that weakness it’s off less than 1% from its peak. This was to be expected given the…
Not Enough Leverage For A Recession?
With the business cycle lasting over 8 years, many are wondering when it will end. Because the last recession was so severe, people have been making a business out of spreading fear. There were two large drops in about a 10 year period making some think bull markets always end in devastation. Many people avoided…
ECB Considering 30 Billion Euros Of Tapering
After a few months of coming close, the yield curve has finally met the flattest point since before the last recession. The difference between the 10 year and the 2 year bond yield is 76 basis points which is tied with the summer of 2016 for the lowest difference this cycle. Meeting the low could…
Q3 Earnings Were Hurt By Hurricanes
Q3 Earnings Update This week is when earnings season starts to pick up as Netflix - NFLX headlines the reports. Up until this week, 28 companies in the S&P 500 have reported earnings. Considering the fact that earnings growth is only expected to be 2.1% according to FactSet’s numbers, looking at explanations for why the…
Buyback Stats
Buybacks are surprisingly controversial. You wouldn’t think buybacks would be such a big deal because they are just an alternative way to give excess cash back to shareholders. However, they are blamed for the lack of productivity in the economy and juicing EPS numbers. If firms buyback stock instead of investing in capex, then it…
Tech Stocks Are Dominating The S&P 500
Stats On The Tech Sector I think the technology sector is the most interesting sector because most of the top firms are in it and because it is driving earnings growth. We will look at some charts which show the direction of the sector. The chart below shows the secular upward trend in net margins.…
The 2nd Calmest Year Ever
Bullish Streaks The stock market was down slightly on Thursday, but the amazing year for stocks continues. The chart below shows the maximum drawdown for stocks in each year. This year, the biggest decline in the S&P 500 has been 2.8% which is the second lowest maximum drawdown ever. The Investors Intelligence sentiment is showing…
JOLTS Report Shows Modest Weakness
Fed Doubles Down On Heightened Inflation Expectations In Minutes The Fed’s Minutes were released on Wednesday. There wasn’t much new to digest. The Fed seems to be locked in with its decision to raise rates a quarter point in December. The market agrees with the Fed as there’s an 88% chance the Fed raises rates…
John Taylor Surges In The Fed Chair Betting Market
Global Monetary Policy The chart below is unique because it shows 9 central banks, giving a more complete picture of the liquidity being added to the financial system. As you can see in the description, this includes the expectation that the ECB will taper to 30 billion euros per month for 9 months and then…
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