Tail Risks Reviews: China Is Number 1

Tail Risks: Trade War Tail risks for August - the monthly Merrill Lynch fund manager survey is out. As you can see from the chart below, the August risks have changed from July. The risk of a trade war is about the same. This makes sense because there hasn’t been a resolution nor an escalation…

Dollar Rallies to Its Highest Point Since June 2017

Dollar Rallies - Stocks Rebound On Tuesday Dollar is set against the world stage. The word contagion was used constantly in the media on Monday. Anything is possible, but it was always extremely unlikely that a Turkish collapse would hurt the stability of the EU. And certainly not the stability of the dollar. It looks…

Q3 Earnings Growth Is Expected To Be 22.61%

Q3 Earnings and market correction may not necessarily go hand in hand. Q3 Earnings - Those claiming a 40% or great correction is coming are suffering from recency bias. The market is healthy despite the worries about this being the longest bull market in American history. The failed analogy to gravity in that ‘what goes…

Turkish Crisis Used As An Excuse For Pullback

Turkish Crisis - Stocks Selloff On Monday Although I mentioned in a previous article emerging market weakness could be a catalyst which helps cause the American economy to decelerate in 2019, I think the Turkish crisis is being used as an excuse for an overbought market to selloff. The S&P 500 declined 0.4% and the…

Turkey Signaling An Emerging Market Slowdown?

Turkey Signals Weakness In Emerging Markets Turkey and the markets are revisiting 2014 since global synchronized economic growth has peaked and emerging markets are weakening. The stress in Turkey is only one example of the weakness. If Turkey was the only catalyst of strife in emerging economies’ currency and equity markets, you would easily be…

Turkish Crisis Causes Modest Decline in U.S. Stocks

Turkish Crisis - Stocks Fall As Expected Turkish Crises, among other reasons led to the stock market falling as expected. Personally, I had been bearish on stocks in the near term because they were overbought according to the CNN Fear and Greed index. The S&P 500 fell 0.71% and the Nasdaq fell 0.67%. The VIX…

S&P 500 Fails To Reach New Record

S&P 500 Stocks Flat Again The S&P 500 has been within 1% of its record high for a few days. It still couldn’t break out on Thursday. It was down 0.14%. The Nasdaq was up 0.24% which means it extended its winning streak to 8 days which is its longest streak since October. Amazon stock…

Recession Not In Sight

Recession and Strong Jobless Claims Recession and jobless claims: the jobless claims report was strong again as claims fell from 219,000 to 213,000. Quite frankly, if you asked economists 3 years ago if such a report was possible, most would have said “no.” This cycle has seen record lows in the ratio between the labor…

China Increases Its Tariff Rate To 25%

China Tariff Dispute Intensifies Recently, China announced it will retaliate against America’s latest round of tariffs against it. Also, China will put a 25% tariff on $16 billion worth of American products. These 333 goods include large passenger cars, motorcycles, various fuels, and fiber optic cables. China is also taxing coal, grease, Vaseline, asphalt, plastic…

Consumer Spending Up, While Leverage Modest

Consumer Spending - Stocks Not Overhyped Consumer spending is up. Whether stocks are showing signs of exhaustion depends on which indicator you review. The CNN Fear and Greed index makes me cautious about stocks in relation to consumer spending, but the Investor Movement Index seen in the chart below shows investors are still cautious. TD…