Don’t Fight The Fed

The stock market continued its trend of not doing much on Tuesday as the S&P 500 eked out a 0.06% gain. The main political story in the news is the Senate’s vote on whether to approve Judge Gorsuch’s nomination to the Supreme Court, so there’s not much market moving stories coming out of Washington D.C.…

Follow The Fed Pension Fund’s Actions

Fed Pension Fund Bearish? I disagree with almost all the Fed’s monetary policy decisions, but I have found one Fed related vehicle which I agree with. The vehicle I agree with is the Fed’s pension plan because it has been lessening exposure to equities. The Fed’s plan is not run by Fed members. However, it…

Volatility Second Lowest Ever

Lately I’ve been focusing on the bond market and the dollar more because the stock market simply is not doing much. I sometimes joke that the stock market isn’t on or is broken because there have been so many days where it closes nearly unchanged. In Q1 2017, the Dow had 15 days where it…

Ten Year Yield Falls To 2.33%

Monday was the first day of the second quarter which usually means new money is flowing into the stock market. However, there was a minor sell off led by financials. Besides it being the first day of the month and quarter, another reason why I thought stocks may have rallied Monday is because Senator Rand…

Productivity Fell 0.2% In 2016; Stocks Rose 5.5% In Q1

The first quarter is now in the books. It was quite an interesting three months as President Trump was sworn in and stocks had an amazing run as they maintained the post-election momentum. The chart below shows the powerful rally in the S&P 500 since the election. The S&P 500 was up 5.5% for the…

WTI Was Up 5.5% This Week

In this article, I will review some of the trends I have been discussing and the news surrounding them. Then I will discuss the latest movements in oil. After the crash to the upper $40s, the commodity has moved back above the $50 level this week. This is great news for the American shale firms.…

Record Margin Debt Makes Stock Market Vulnerable

In this article, I will tie up some loose ends from a previous article. I’ll give more supporting facts to further my points. Then I will contextualize the recent statements made by President Trump and NY Fed President Bill Dudley. I have an interesting chart which supports my analysis on the likelihood of various fiscal…

Auto & Student Loan Bubbles

The markets have reversed some the recent trends where the Trump trade was unwinding. This could mean there will be a pause or a continuation of the Trump trade into the spring. The S&P 500 is up less than 1% from the lows of the mini-correction. There are many dip-buyers who are praying for a…

What Is The True Aggregate S&P 500 Earnings?

Before I get into the meat of this article, I will provide supporting evidence and clarification for points I made in a previous article. I described the recent political polarization which has occurred in consumer sentiment surveys. In the Gallup survey below, you can see how Republicans have become more likely to make a major…

Fuzzy Tax Reform Math

Much is being made of the GOP’s fiscal policy because of the shift in monetary policy towards hawkishness and because there’s a high amount of uncertainty over what legislation will be passed and when it will be passed. The chart below is Barclay’s estimation of when various policies will be passed along with some key…