Stocks Fell Finally, But Dip Buyers Swooped In

Extreme Optimism Leads To A Small Decline In Stocks The market finally took a breather on Wednesday. It wasn’t a major selloff because dip buyers appeared mid-day. It was healthy to see because the run had gotten ridiculous. The S&P 500 fell 0.47%. It was driven lower by weak Chipotle earnings and poor AMD guidance.…

The ECB Will Likely Be Hawkish On Thursday

ECB’s Big Decision The chart below shows the aggregate assets the 4 major central banks from developed market economies have been acquiring over the past 12 years. As you can see, the asset buying has slowed and accelerated in the past few years, but the aggregate share of GDP has almost never stopped going up.…

Caterpillar & 3M Show The Economy Is Strong

The Market Never Falls Anymore Even though the Dow was overbought heading into the week, the biggest determining factor for how it would go was earnings. This shows how technical analysis has its limits when news is released. The Dow rallied 0.73% because Caterpillar and 3M reported great results. These reports are evidence of the…

Quietest Market Since 1998

Drawdowns Of 10% Are Rare In Stocks & Bonds Even though the major indexes were all down on Monday, the S&P 500 still broke the record for the longest streak without a 3% correction. In searching for a volatility metric that the current streak hasn’t breached, I found the chart below. It shows the maximum monthly…

Big Earnings Week Ahead For Tech

Q3 Earnings Look Great So Far This is the first week where earnings summaries include a significant portion of reports from Q3. As of the end of last week, 17% of S&P 500 firms reported earnings. According to S&P Dow Jones, the insurance firms’ hurricane weakness caused Q3 financial sector earnings to fall from $7.04…

Latest Economic Reports Affected By The Weather

Beige Book Same As Usual On Wednesday the Fed released its Beige Book report. The report showed more of the same trends the economy has been going through. For example, the majority of Fed districts said there was only moderate wage pressure despite the low unemployment and jobless claims which we’ll review later. The Fed needs…

The Dow, Fed Chair Decision, and Tech Monsters

Dow Very Overbought Stocks had a fantastic run on Friday. A sign of the times was how GE stock rallied in the face of disappointing results to close up 0.97%. EPS was 29 cents, missing the estimates for 49 cents and the full year guidance was cut from $1.60-$1.70 to $1.05-$1.10.  The S&P 500 was…

Is President Trump Leaning Towards Selecting Powell As Fed Chair?

Weak iPhone 8 Results Push Apple - AAPL Lower Thursday was unusual for the stock market because for the first time in a while, the S&P 500 opened down about 0.5%. It shows how quiet the market has been that 0.5% is considered a big move. The selloff was driven by AAPL which I said…

Is Everything Expensive?

The chart below is interesting because it appears that profit margins are near their current peak. I expect Q3 margins to be down, but that’s only because of hurricane related weakness. My inkling is that the numbers here might be different because they are pre-tax margins. The stats I look at are all after taxes.…

Lowest Volatility Since The 1960s

Single Family Housing Not Available In previous articles, I have been discussing the lack of construction of single family homes which is causing prices to increase. The chart below shows the inventory of single family homes for sale on a seasonally adjusted basis. As you can see, inventory levels are the lowest since 1994. This…