Draghi To Announce Tapering At Jackson Hole?

What Will Draghi Say? Yellen is speaking on Friday at 11AM. The same day, at 3PM, ECB chair Mario Draghi is speaking. There are conflicting reports about whether he will give new guidance about the tapering. I always thought he would give guidance in October or November because it’s closer to when the bond buying…

Could The Dollar Rise By The End Of The Year?

The Dollar We don’t know for sure what caused the dollar’s weakness, but one aspect that is probably hurting the dollar is the accelerating growth in China, Japan, and Europe. Looking at future price performance, we must consider the possibility of a dollar rally. The chart below shows the speculative positioning in the dollar. When…

Debt Ceiling Is Even More Politically Charged

The stock market sold off on Wednesday because of the threat President Trump made in his speech on Tuesday to shut the government down if he didn’t get funding for the southern border wall. This is in direct conflict with the Treasury Department which is asking Congress to raise the debt ceiling. Usually presidents are in…

$450 Billion Loophole To Cut Taxes

Tax Cut Talk Heats Up The rally in stocks on Tuesday was said to have been caused by the tax cut talk. The S&P 500 rallied 0.99% and the Nasdaq rallied 1.36% as both inch closer to revoking the 2% selloff. I don’t know how much of the rally is about the tax cuts because…

The Economy Is In The Expansion Phase Of The Cycle

Predicting economic cycles is difficult. This cycle has been especially tough because of central bank interventionism, the fact that the recession was worse than any other one since the Great Depression, and that the recovery has been weak. All those three points mean the recovery will be longer than usual. QE and low interest rates…

The Next Recession Not Coming In At Least 5 Years?

Many investors want to predict the next recession. There’s no imminent sign of a recession, but there is the risk of one in a few years since the economy has been recovering for over 8 years. One of the best signals of a recession is the yield curve. When the Fed raises rates enough, it…

Golden Age For Stock Pickers

ETFs Still Small But Growing Fast The biggest trend when it comes to fund flows is the movement from mutual funds to ETFs which are passive investments. The trend is important because it effects markets. It’s also rare historically in the sense that the strategies that most non-professional investors use to save for retirement and…

E-Commerce Takes More Retail Share: Now At 8.9%

Slight Correction, Nothing Serious The stock market fell slightly Friday with the S&P 500 down 0.18%. The market had a bad week as the S&P 500 is about 2% off its high. CNBC has a weird headline saying the market rallied on Steve Bannon’s resignation from his role in the White House even though it…

Is the E-Commerce Bubble In A Mania Stage?

The Bank of American Merrill Lynch surveys should be taken seriously. I’m not saying, I agree with them always, but they usually have interesting perspectives. It’s weird how this survey usually has contrarian bets because most surveys reflect what the market is expecting. It’s possible that fund managers might acknowledge that something they are long…

The Fed Could Become More Hawkish To Pop Stock Market Bubble

Let’s review a couple of the minor points worth nothing...made in the latest FOMC statement  The first is about the interplay between fiscal and monetary policy. Things have changed since the beginning of the year where the Fed wanted to raise rates to make up for the fiscal stimulus which was supposed to come in…