Stock Market Has a Terrible Wednesday

On Wednesday, the stock market had its worst down day since September 2016. Many headlines claimed the stock market fell because of political controversies involving the firing of FBI director James Comey, but I’m skeptical of that conclusion because the market has ignored this story for days. In Monday’sarticle, I predicted that the VIX would…

Lending Standards Tightening

There was so much information given in the NY Fed’s household debt and credit report, I will add some more analysis of the report in this article. One of the most interesting findings of the report was that credit card loans which are considered seriously delinquent increased. The percentage of credit card loans considered to…

Household Debt Reaches A New Record

The NY Fed updated the household debt statistics reflecting Q1 numbers. The total household debt reached a new record high. Total debt rose $149 billion to $12.73 trillion which is $50 billion higher than the previous record high in Q3 2008. There’s two things to keep in mind when reviewing this headline metric. The first…

Stocks Barely Move In Weeks

The stock market action has almost been nonexistent in the past few weeks. There has been many important economic reports and political stories swirling, but the movement has become minuscule. The movement is so small, it’s probably the biggest story of the year. There’s quite a few shocking charts I will show in this article…

Industrial Production Beats Expectations

The estimate for Q1 GDP by the Atlanta Fed’s Nowcast increased from 3.6% to 4.1% as you can see in the chart below. One of the reasons for the increase was the solid industrial production report released on Tuesday. It caused the forecast for real final sales to private domestic purchasers growth to increase from…

Stocks Reach All-Time Highs As Volatility Stays Low

The S&P 500 and Nasdaq rallied to all-time closing highs on Monday. The market was driven by materials, energy, and financials. Energy rallied because oil was up 2.1% to a two-week high. The energy ministers from Saudi Arabia and Russia agreed in a statement that the production cuts should extend another 9 months to March…

Q1 2017 Was The Peak In Earnings Growth

In previous articles, I have mentioned that wage inflation would have to grow faster to slow employment growth and push down profit margins. The chart below shows the correlation between unit labor costs and profit margins. When unit labor costs go up, margins fall. What I didn’t mention is unit labor costs can be higher than…

The VIX Sets A New Record: 15 Days Below 11

The stock market’s movement on Friday was almost identical to Thursday. The market fell slightly because of the weakness in retail; the VIX stayed below 11 for the 15th consecutive day. As you can see in the chart below, the streak of the VIX being below 11 made another new record, destroying the previous one.…

QE Has Overstayed Its Welcome

The stock market had a small decline on Thursday which was brought about by the collapse in brick and mortar retail stocks. Even with the decline in the S&P 500, the VIX continued its streak of closes below 11. The S&P 500 is still within 1% of its all-time high. The stock market is as…

Healthcare Costs Eating Into Wages & Salaries

Healthcare & Rent Costs Exploding I have discussed the relationship between the hourly earnings growth and the expansion of employment by small businesses. Small firms are very optimistic as is shown in the NFIB small business survey. With optimism and demand for labor prevalent, increasing wages should follow. The net compensation reading for April 2017…

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