Q3 Earnings Estimates Fall – Debt Ceiling Issue In Focus

Only 4.9% YoY Earnings Growth Expected In Q3 The FactSet weekly earnings presentations resumed this week. As you can see from the chart below, the finalized metrics from the Q2 earnings season show there was a negative bias to every type of report which meant even firms that beat estimates fell. This action was reversed…

Stocks Sell-Off As Irma Looms

The stock market had a minor move lower on Tuesday in the first day back from the Labor Day weekend. This is the start of the weakest month of the year. For some reason, the North Korean threat is now being considered an issue again even though the market ignored the missile launch by trading…

ISM Manufacturing Report Signals 4.9% GDP Growth

In previous articles, we’ve discussed how emerging markets are outperforming America after several years of underperformance. Emerging markets usually have a lower PE multiple than America and developed markets because their capital markets aren’t as trusted and their political systems are more uncertain. Lately, there has been a silly narrative that because President Trump appears…

35% Chance Of A Debt Ceiling Crisis

Debt Ceiling Resolved Soon? Goldman Sachs lowered its odds of a government shutdown, caused by the debt ceiling not being raised, from 50% to 35%. These numbers are somewhat arbitrary because there’s no way of knowing the precise odds of a shutdown. This situation is like when analysts come up with price targets which include…

Stocks Have A Great Week Despite Subpar Labor Report

Great Week For Stocks The main reason investors have been cautious heading into this week was because of the potential for a North Korean flare up. It turned out that the market decided to ignore the North Korean risk as the last week before Labor Day, when most people go on vacation, was fantastic. The…

7 Of The Top 8 Firms Are In Tech

The stock market ended the month of August positive making it the 10th straight month the S&P 500 was up on a total return basis. In the past two days, it seemed like someone wanted the market to be up for the month as it rallied just enough to achieve that goal. The last North…

Do Millennials Not Have Jobs?

Are Millennials Hurting? One of the biggest worries some people for the stock market is that baby boomers retiring will take money out of the stock market causing valuations to fall from their current lofty heights. Obviously, the next generation will put money into stocks eventually, but in the next few years there will be…

Hurricane Harvey To Impact GDP

We are in a new world this year in terms of the economic recovery. This year we’ve seen earnings beating the estimates from before the bar was lowered a few weeks before the reports. For the past few years we saw estimates lowered and the lowered estimates beaten. It was a game of misdirection as…

Employers Can’t Find Qualified Workers?

The chart below is blurry, but it still gets the job done in terms of showing you the most important trend in the labor market. The chart shows the spread between those finding jobs ‘plentiful’ vs ‘hard to get’ according to FactSet. As you can see, the ratio is above the level prior to the…

Stocks Can’t Be Stopped By Natural Disaster Or Nuclear War Threats

Stocks Rally Despite Headline Risk The stock market has been amazingly resilient in the past few days as the S&P 500 is only down about 1.2% from the all-time high despite the increased threat of nuclear war with North Korea and the devastating storm in Texas which brought catastrophic flooding. It’s possible 500,000 homes were…