‘Dumb Money’ Most Bullish 2000

The S&P 500 rallied 0.72% on Tuesday, ending the sell-off which was driven by the GOP’s failure to deliver healthcare reform. The hope trade is not going away easily even though many of the market supporting factors have gone away or gotten weaker. The stock market is like a Jenga game. Taking away healthcare reform…

Is The Credit Market Signaling Recession?

Stocks are slightly off their all-time high, but remain over extended according to most valuation metrics. The hope investors have is for tax cuts. Even though the GOP appears dysfunctional, all its members want to cut taxes. All hope for a tax cut isn’t lost, but the difficult part is finding cuts in the budget…

The Trump Trade Seems Mostly Reversed

The stock market sold off moderately on Monday due to the continued negative momentum caused by the failed GOP healthcare bill. There is talk of Paul Ryan possibly being removed from the Speaker of the House position which is something I discussed previously. Ordinarily, that would be bearish for stocks because it adds to the…

Real Economic Weakness?

The stock market doesn't seem to be reflecting the economic weakness we are seeing. The bullish counterpoint to any negative data is that the economy will improve due to fiscal stimulus. The latest blunders in the attempt to pass healthcare reform makes fiscal stimulus seem less likely. To simplify this further, the bears say the…

Stocks Drop On Ryancare Failure

The stock market fell slightly on Friday because Ryancare failed to pass the House once again. In my last article, I laid out two possibilities for why President Trump pushed ahead with wanting a vote on Friday. It ended up that the GOP didn’t have the votes and he was expressing frustration with the process.…

Loan Growth Signals Possible Recession

The latest news regarding the healthcare vote is it will happen on Friday. That could either mean enough votes have been gathered for it to pass or it could mean President Trump is frustrated with the process and wants to get it over with even if it could fail to get a majority. I don’t…

Ryancare Vote is Delayed

The stock market sold off in response to the news that the healthcare bill’s vote in the House of Representatives wasn’t going to take place Thursday. As I said, the leadership usually doesn’t put up a vote if it knows it will lose. Once leadership realized it would lose, they postponed the vote. While the…

Profit Margins Won’t Meet Estimates

In this article, I will elaborate on my previous point about S&P 500 profit margins; I will also discuss the latest updates surrounding the healthcare vote on Thursday. These two topics both hit on the catalysts which will move stocks, namely earnings and fiscal policy. Stocks got a free pass in 2015 when earnings fell…

Are Financials The Sector To Be In?

The 10-year bond continued its rally on Wednesday as its yield has fallen about 22 basis points from its high in mid-March. This is a powerful signal that the market has soured on the reflation trade. It has begun to reject the notion that 2017 GDP will accelerate from the morbid growth of 2016. To…

Big Ryancare Vote On Thursday To Impact Markets

The stock market finally fell 1% on Tuesday as all the major averages plummeted. As you can see in the chart below, the streak without a 1% decline in a day made it to the top 10 longest in history. There was only one streak in the 1990s which was longer than this streak which…