No Rate Hike In March?

Today the Fed had its February meeting. There was almost no expectation for a rate hike today. The Fed met those expectations in a dovish manner. There were hopes that the Fed would boost the expectations for the possibility of a rate hike in March (have a hawkish tone). Heading into the meeting, there was…

Disillusionment In Europe

There are a few stories I’ve been following in Europe which I will discuss in this article. I will discuss the recent European CPI report, the problems facing Unicredit, and the political risk in France. All the issues in Europe are related. The seams of the social contract in Europe are fraying. What I mean…

Consumer Confidence Falls- AAPL Earnings Coming

Today the market is down again slightly, while the VIX is up again. This selloff isn’t enough to change the paradigm that the market is overvalued. It feels worse than it is because of the endless rally we’ve seen. It has been 149 days since the last time the S&P 500 corrected 5%. The longest…

Volatility Returns- Much More To Come

In my article last week, I mentioned the VIX was at unusually low levels. Today the market fell and the VIX finally increased off its near record-low levels. The VIX was up 12.29% to 11.88. This is still relatively low, but it’s no longer extremely oversold. The media narrative was that stocks sold off today…

German CPI Spikes To Highest In 3.5 Years

Today the German Consumer Price Index was released. The CPI showed price increases of 1.9% which was below expectations for 2.0%. Two percent is the inflation target the ECB has for the entire European Union. The 1.9% inflation in Germany is the highest rate since mid-2013, as you can see in the chart below. This…

The VIX, Auto Bubble & Bitcoin

In this article, I will focus on a few separate issues I have previously discussed. The first point is about how low the VIX is. Even though the market was broadly down, albeit modestly, the VIX fell to 10.58 which is very low. So far, earnings season has been filled with earnings adjustments beating expectations…

GDP & Durable Goods Orders

Friday, we received the durable goods orders and Q4 GDP report. The durable goods headline report of -0.4% growth month over month looked worse than it was because of sharp declines in defense spending. The 1.9% Q4 GDP growth rate headline was weak as it missed the Atlanta Fed’s GDP Now expectation for 2.9% growth.…

The Border Tax

The bears are waiting for a catalyst for stocks to crash, but they’ve been waiting for quite a while with nothing to show for it, but losses. Valuation has not been shown to work as a sell signal. The fundamentals of the economy and corporate earnings haven’t been able to move the market lower even…

The Dollar Ends Correlation With Trump Trade

Going into the year I predicted the Trump trade would unwind. This means I expected the dollar rally to end, interest rates on government bonds to fall, inflation to fall, and cyclical stocks to fall. I still hold this view and it’s too early to make a final judgement on this perspective. However, there’s been…

Snapchat Readies For IPO

I consider Snap to be the most interesting IPO of this year because of how fast it is growing and the potential $25 billion valuation it may receive. Snapchat is an app that teenagers and 20 somethings love, but transitioning to a real business is tough. The app which was known as a flirting device…