Fed’s Balance Sheet Increases This Week

Houses Too Expensive? This sentiment indicator for housing is interesting because it isn’t a contrarian indicator. Usually when you see investors euphoric about stocks, you want to sell. In this poll, the slightly over heated market is being met with skepticism. People in the housing market are much more rational than stock speculators. Although the…

Consumers Take Out Gobs Of Debt

Credit Card Debt Is Over $1 Trillion The consumer is at a crossroad. If wage growth accelerates in 2018, everything will be fine, but if the economy turns south, the consumer will be in a world of hurt. Some readers might say that if the economy goes south, the consumer will always be in pain.…

Is The Bitcoin Bubble Like The Tulip Bubble?

Slack In The Labor Market We’ve discussed wage growth in many articles. The chart below is a great depiction of what might occur in the next few months. It shows the spread between the U6 unemployment rate and the U3 unemployment rate. This shows the amount of people who are underemployed. The axis where the…

Inflation Won’t Cause Problems If The Increase Is Moderate

How Much Will Inflation Pick Up We’ve discussed inflation in previous articles. I think it will increase because the M2 money velocity is up, the NY Fed underlying inflation index is up, and the ISM manufacturing index is up. There has also been a further decline in the unemployment rate which should lead to inflation…

2018 Expected To Have The Fewest Countries In A Recession Ever

Most Assets See Low Volatility The stock market had a slightly negative day as the S&P 500 was down 0.02%. The Russell 2000 - RUT was a big laggard as it was down 1.26%. Ever since I warned about it being overextended, it has fallen. The VIX actually had a big up day which was…

Dudley Resigns Opening The Door For A Revamped Fed

More Fed Changes Over The Weekend Over the weekend Bill Dudley announced his resignation increasing the turnover at the Fed which was already about to be large with all the empty positions from previous resignations. The Fed officials recognize that President Trump is cleaning house which appears to be why they are resigning. There isn’t…

Q3 Earnings Growth Expected To Be 5.9% (Up From 4.4% Last Week)

Earnings Season Forever Changed By Regulation FD Earnings season is mostly done, so it’s fair to say this was a great reporting period. Usually I only have the stats on the percentage of firms beating estimates in the past 4 years. The chart below gives us more data to look at to further contextualize the…

261,000 Jobs Added In October

As I expected, the labor report showed 261,000 jobs created. It was far below the 310,000 expected as the hurricane effect didn’t turn out to move as many jobs from September to October as economists thought. The jobs report is always tricky to project. Adding the weather into the mix only made it more challenging…

Tax Reform Bill Released

Productivity Growth Returns The biggest economic change in 2017, in my opinion, is the improvement in productivity. Growth in productivity is the key to economic expansion. Without productivity growth, we just have nominal growth driven by inflation. Productivity grew 3% on an annualized rate in Q3 which is the fastest growth rate since Q3 2014.…

Will AAPL Be The First $1 Trillion Stock?

Apple - AAPL Reaches A $900 Billion Market Cap Arguably the most important company in the stock market, AAPL, reported earnings a day before the iPhone X goes on sale. The company beat estimates for $1.87 per share by reporting $2.07 in EPS. Revenues of $52.6 billion beat estimates for $50.7 billion. Q4 iPhone sales…

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