Q1 2019 EPS Growth Expected To Be Just 3.55%

Q1 2019 - Earnings Estimates Start To Fall Off A Cliff The stock market is rallying way too much compared to how much earnings estimates are falling. As you can see from the table below, Q1 EPS growth estimates have fallen from 5.54% at the start of the year to just 3.55% as of January 23rd.…

Trade Meeting Between China & America Canceled

Trade Meeting - Weak Tuesday The stock market fell sharply on Tuesday. It was overbought, and the existing home sales report was shockingly bad. Also, the White House canceled the trade meeting with China. S&P 500 was down 1.42%, Nasdaq was down 1.91%, and Russell 2000 was down 1.69%. I don’t think the government shutdown…

Philly Fed - Non-Manufacturing Index Craters To Lowest Level Since October 2011

Philly Fed - What The ECRI Leading Index Means For Stocks Previously, we looked at how stocks act when the ECRI leading index is down 6% or more for the first time in 12 months. That analysis makes sense in this specific situation because the index recently fell over 6% year over year. ECRI also has a…

S&P 500 - Recent Gains In The 99th Percentile

S&P 500 - The Incredible Rally Continues The rally this year has been relentless and unbelievable. It has wiped out the shorts who were calling for a recession in 2019. The S&P 500 is now up 6.54% year to date as it has surpassed many year end forecasts within the first month. On Friday the S&P…

Netflix Reports Weak Guidance As It Ramps Content Spending

Netflix - Another Rally: The Froth Bubbles Further The stock market rallied again on Thursday. S&P 500 was up 0.76%, the Nasdaq increased 0.71%, and the Russell 2000 increased 0.86%. The stock market is very overbought. Stocks rallied on the report in the Wall Street Journal that America would lower tariffs on China to get…

Global Economic Political Policy - Highest Uncertainty In Over 20 Years

Global Economic Political Policy Uncertainty Explodes 2018 wasn’t a great year for the global economy as countries like Germany and China saw sharp growth deceleration. There is heightened political and economic uncertainty in 2019. As you can see from the chart below, global economic policy uncertainty is higher than it has been since at least…

Goldman Sachs & Bank Of America Soar On Great Earnings

Goldman Sachs - Financials Lead Market Higher The stock market became more overbought on Wednesday. S&P 500 increased 0.22%, Nasdaq increased 0.15%, and Russell 2000 increased 0.66%. Even with this rally, the VIX increased 2.37%. This increase in the VIX is probably meaningless. Even with the VIX’s increase, the CNN fear and greed index increased…

Negative Beige Book Signals Fed Will Be Dovish

Negative Beige Book Fed’s Beige Book was released on Wednesday. It’s no surprise that the Fed has become more cautious on the economy. To be clear, the Beige Book doesn’t affect my own analysis on the economy and shouldn’t affect yours either. We follow this report to understand Fed policy. Fed’s analysis is usually late…

Stock Market Is Frothy

Stock Market Speculation Is Back The stock market is seeing modest froth. This was unthinkable back in December when the stock market was at the trough of its 20% decline. Instead of a recession in the first half of 2019, traders have been greeted with a major rally. In my opinion, investors were pricing in…

PPI-FD Falls The Most Since August 2016

PPI-FD - Q4 Will Be Solid, While Q1 Growth Is Unpredictable It’s interesting to see the dichotomy between Q4 2018 GDP growth and Q1 2019 growth. Q4 2018 seems like an easy to predict quarter while Q1 2019 looks like a mess because of the government shutdown. As you can see from the table below, the estimates…

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