Weak ISM PMI, Geopolitical News, & Fed Minutes Hurt Stocks

Stocks Fall As Expected It’s not surprising stocks fell on Friday. The market was very overbought and the airstrike that killed Soleimani gave investors an excuse to take profits. Also, the Fed Minutes were hawkish. Plus, the ISM manufacturing PMI missed estimates.  If you believe the ISM numbers, the stock market priced in a manufacturing…

Low Wage Workers To Get A Pay Hike

Low Wage Workers Getting Another Raise A big negative for workers in 2020 will be the rise in headline inflation because of the increase in oil prices. In the next few months, comps will get tougher, but oil prices will likely rise this year. Fundamentals of the labor market look great for middle and low…

Another Rally, But Geopolitical Issues Loom

Market Starts The Year Extremely Overbought On Thursday, the market continued where it left off in 2019 by rallying sharply. Markets might face trouble on Friday. For now, let’s review the action that has occurred already. S&P 500 rose 0.84% on Thursday. Predictions of renewed volatility this winter goes against the recent action in the…

Manufacturing Sector Had a Weaker December

Apple Larger Than Energy Despite the huge growth in American oil production to a record high due to advancements in fracking, the energy sector’s weighting in the S&P 500 is the lowest since at least 1990. Part of that weakness might be because some view this production as unsustainable due to high decline rates.  A…

2020 Predictions: No Rate Cuts, No Recession, Sell Apple, Buy Energy

Monday’s Decline The stock market has been on a rampage in the past few weeks. It has been due for a correction. Personally, I expect the start of 2020 to be volatile and see 3% to 5% gains in 2020. If you buy at the correction trough, it will be like a normal year of…

2020 Forecast: Election To Cause Volatility?

Trade Balance Helps GDP Estimates Let's first discuss the latest report on trade which boosted GDP estimates. Then, GDP Nowcasts and ECRI leading index which don’t include this latest data yet. Either way you look at it, GDP growth should be very close to 2%. That’s what I predicted back in November. If the PCE…

Sentiment Suggests A Pullback Is Near

Stocks Stay Overbought Stocks were on their way to another solid day, but they fell in the afternoon; the rally in the last few minutes of the session didn’t cancel out all the losses. Alas, the Nasdaq wasn’t able to hit a record high for 11 straight days. That would have been the longest such…

Improved Core Capital Goods Orders & CFO Confidence

Solid Core Capital Goods Orders Growth There are a few details that cloud the November durable goods orders report making headline growth not very useful. Some have argued that we should just look at the headline numbers because there are always one time factors that cloud them. Firstly, if there is always a reason to…

10 Straight Records For The Nasdaq

Stocks Rally Yet Again: Extreme Greed Remains Large cap stocks obviously increased on the day after Christmas since the stock market has a lot of momentum and it’s a great time of year calendar-wise. The stock market has been overdue for a correction for a couple weeks. But we haven’t expected one to occur in…

Strong December Holiday Shopping Sales

Consumer Looks Great Consumers had a great December which should boost PCE growth and GDP growth. Expectations for a strong holiday shopping season appear to have been met. But let’s wait until the retail sales report comes out before we declare victory. Wal-Mart, Amazon, Costco, and Target all did great. Sales are shifting online. But…

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