Credit Spreads Tighten For 18 Months
The chart below shows the situation the bond market is currently in. The tightening of credit spreads has occurred for the past 18 months as the ECB’s bond buying has been combined with animal spirits creating a great scenario for risky bonds. As you can see, this is the longest period of tightening since the…
Q3 Earnings To Be Impacted By The Hurricanes
It appears the healthcare debate is over for the time being. The conversation will now move towards tax reform in the next few weeks. The chart below is a great representation of how each reform measure would affect people in various income groups. Each color represents one of the 6 reform measures being discussed. Of…
Valuation Won’t Be A Catalyst
Q3 GDP Will Be Impacted By The Storms The chart below shows the NY Fed’s GDP Now estimate for Q3. It’s been consistently the most negative forecast out of any I follow. As you can see, it’s estimate improved 0.22% from last week mainly because of the lift from the building permits data. The current…
No Lines For iPhone 8 In China
A couple of the stories we’ve been watching this week had notable information released about them. The first news was that Apple’s iPhone 8/ 8 Plus was met with little excitement in China which caused AAPL stock to fall again. There were barricades put up in front of the Apple store on the day the…
Economy Recovering From Hurricanes
Graham-Cassidy Vote Coming Mid To Late Next Week The deadline to pass the Graham-Cassidy healthcare bill in the Senate is September 30th which is in 8 days. If it does pass the Senate, the House will have enough time to vote on it. The issue is never going to be time. Deadlines are the catalyst for Congress…
Warsh Has A 28% Chance Of Being The Next Fed Chair
Fed Pick Pivotal A previous article reviewed the Fed’s guidance for interest rates over the next few years, but I think the chart below does a unique job at contextualizing the situation we are in. As you can see, the trend of interest rates having lower peaks is continuing. The difference between this cycle peak…
AAPL - iPhone 8 & 8 Plus Have Tepid Pre-order Sales
AAPL Will Rely On iPhone X & China The Nasdaq was the only index that was negative on Wednesday. It was down because Apple pulled it lower. AAPL was down 1.68% on Wednesday; it is down 4.86% from its all-time closing high on September 1st. There were a few catalysts that pushed it lower. The…
FOMC Day: Fed Unwind To Reach Peak Rate In October 2018
The Fed’s decision day is finally here. We’ll review the new information we received on Wednesday from the Fed in this article. The headline wasn’t a surprise as the Fed didn’t raise rates and it said the $10 billion per month unwind will start in October. The new information we got on the unwind is…
2017 Has The Third Lowest Annualized Volatility Ever
Low Volatility As we’ve discussed many times, the volatility in the stock market is barely existent as nothing seems to phase it. This has been caused by a Goldilocks scenario where growth is just right. If it was too hot, there would be inflation and the Fed would raise rates more than they have. If…
ECB May Extend QE Because Inflation Estimates Are Falling
Macroeconomic investors will be focused on Draghi’s decision on the CSPP which is the corporate sector purchase program where the ECB buys 60 billion euros per month in corporate bonds. The plan ends in December which means Draghi will need to decide whether to extend it; if he extends it, he needs to decide for…
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