LinkedIn Says The Labor Market Is Strong

The chart below supports my point that the ADP private sector payrolls report was too negative on the labor market. As you can see in the chart below, the LinkedIn hiring rate in June is up 12.1% year over year as it remains at the highest level in the past 24 months. The past two…

A Look At How Small Businesses Are Doing

The chart below shows a new tailwind the stock market has going for it now that the earnings recession is over. As you can see from the chart on the top, the green line showing operating earnings has surpassed the combination of dividends and buybacks. This decline in capital returned to shareholders is only because…

Yellen Sings A Dovish Song With Brainard

Janet Yellen’s testimony before the House committee was what drove markets on Wednesday. The key takeaway from the testimony was that she was moderately more dovish than she was previously. This dovishness led to a rally in stocks and bonds. The S&P 500 rallied 0.73%, the Russell 2000 increased 0.80%, and the VIX fell 5.42%…

Potential Further Yield Curve Steepening

Earlier this year I used the positioning in the 10-year bond to predict a rally which lasted for over 3 months. It ended recently as yields have risen about 35 basis points in the past few weeks. Now we’re at a similar point with the 2-year bond. As you can see from the chart below,…

Earnings Estimates Are Stagnant (Which Is Great)

It’s important to recognize that there are many people in the financial industry who will never change their minds regardless of the facts. When you realize that, you become more skeptical of every opinion, which is a great skill to hone. For example, mutual fund managers are always optimistic about the long term because they…

The VIX Is Near An All-Time Low

C&I lending is one of the most important indicators used to determine the health of the economy. I was questioning the importance I give this metric because it predicted a recession, yet nothing happened. With the report which was released Friday, the C&I lending had a sharp move higher, passing the previous peak in November. This…

Quarter Ends With A Whimper For Long Bonds & Nasdaq

With the end of the first half of the year in the books, we’re seeing an interesting divergence between the recent trading and the total results for the past 6 months. The Nasdaq had its best first half since 2009 as it was up 14.1%. At the same time, it also had a rough June…

Q1 GDP Wasn’t So Bad: 1.4% Annualized Growth

On Thursday, instead of rallying, the S&P 500 fell 0.86% and the Nasdaq fell 1.44%. The S&P financials sector was up 0.65% and the technology sector was down 1.83%. The selloff was blamed on investors rebalancing their portfolios since it is the penultimate day of the quarter. In a normal market, this wouldn’t even be…

Stocks Are About As Expensive As In 2000

Banks To Rally As The Fed Accepts Capital Return Plans The big news on Wednesday afternoon was that the Federal Reserve didn’t have a problem with any of the 34 banks’ capital return plans. You can look at this as a positive or a negative. It’s clearly a positive for the near term because it…

Draghi Is Now Dovish? He Changes Quickly!

It's turning out to be tough to analyze what ECB President Mario Draghi means in his statements. It was widely reported by media outlets and interpreted by the markets that the ECB would taper bond buying after Draghi made upbeat statements about the economy. However, Draghi clarified his statements on Wednesday, saying the ECB isn’t…

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