19 Year High In Consumer Comfort
CEO Confidence Improved CFO confidence improved in Q4, but most see a recession in the intermediate term. That's a positive because firms are planning to raise wages quicker and expect earnings to increase faster. Businesses being more conservative can lessen the risk of a slowdown turning into a recession. Leverage makes weakness worse. If consumers…
Bed Bath & Beyond Craters While Tesla Hits Hyper-Speed
Stocks Recover After Geopolitical Fears Fade New trends appears to be: a geopolitical event occurs, stocks selloff, and then they recover to new highs. Obviously, that’s an oversimplification of the action because stocks are also reacting to earnings and economic reports. U.S. defense secretary stated the attacks on the bases that house U.S. military only…
Strongest Small Business Job Creation Since January 2019
Redbook Retail Sales Growth In the week of January 4th, Redbook same store sales growth fell from 7.8% to 6.1%. The month looks to be starting off on solid footing. It will be interesting to see the impact of the minimum wage increases. A modest decline in the expectations index in the Conference Board consumer…
Geopolitical Worries Cause After-hours Selloff Tuesday
Stocks Fall Slightly (Geopolitical Risk Increases) The stock market fell slightly on Tuesday, but that might be just the beginning of the decline. Stocks fell after hours because at least 12 ballistic missiles were fired at an Iraqi airbase that hosts American troops. Iran claimed responsibility for this action. In response to this S&P 500…
Weaker Motor Vehicles Sales & Improved Services PMIs
Motor Vehicle Sales Weaken December motor vehicle sales report put a dent in any thesis that December retail sales growth will be strong. Motor vehicles and parts category has the highest weighting in the retail sales report. I still think non-store retail sales growth will accelerate. However, motor vehicles and parts weakness can counteract that…
Stocks Reverse Course As Geopolitical Concerns Fade
Stocks Recover From Morning Selloff (Fed Futures Correction) S&P 500 rallied steadily after opening the trading session lower. In this bull market, most of the gains have occurred late into the night in the after-hours session. That makes this rally unusual. S&P 500 increased 0.35% on the day. From its low, which was at the…
Housing Price Growth Bottoms & Residential Construction Increases
Home Price Growth Bottoming Home price indexes are always delayed a couple months. But home price growth is important, so let's review them. Based on recent reports, it seems like yearly home price growth is bottoming. It is being helped by low rates and easy comps. However, I don’t think home price growth will reach…
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…
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