Executive Summary The S&P 500 Index rose five consecutive days last week, ending the week nearly 6% higher. However, note this move up is on the heels of a roughly three-month down move (see first graph). Simply speaking, technical market analysis of markets based on 20-day moving [...]
Executive Summary Third quarter real GDP grew at a 4.9% annualized rate, yet many people are expressing concern about rising interest rates and soaring prices. So, are things rosy? Remember that 70% of GDP comes from consumer spending, which was the main contributor to third quarter growth [...]
Executive Summary Forecasting corporate earnings seems to be an exercise in futility, and Wall Street analysts are always going to error on the optimistic side – even in an economic downturn. The second graph illustrates the profit drop of the pandemic, the resulting spike caused by extreme [...]
Executive Summary Some investors think “valuation” is a dirty word and is some type of market timing indicator. On the contrary, valuation determines whether prices are reasonable based upon historical standards. Economist Dr. John Hussman has done extensive research on the accuracy of valuation methodologies, and the [...]
Executive Summary As a result of the COVID19 pandemic, student loan payments were suspended. However, on October 1 the payments resume, which will affect around 28 million borrowers. On average these payments will be about $350 per month, which reallocates around $7-8 billion per month from consumer [...]
Executive Summary As a result of the COVID19 pandemic, student loan payments were suspended. However, on October 1 the payments resume, which will affect around 28 million borrowers. On average these payments will be about $350 per month, which reallocates around $7-8 billion per month from consumer [...]
Executive Summary Long-term (secular) bear markets are normally much shorter than long-term bull markets. However, they usually return stock prices to an undervalued state. Currently the valuation methodology of the Shiller P/E is 30, with the long-term average being about 16 (See first graph). Since the turn [...]
Executive Summary Recently crude oil prices have risen to over $90 per barrel, largely a result of production cuts by OPEC. Many have felt the pain at the pump (see 2nd graph). Demand has not dropped after the summer travel season, thus keeping prices on the rise. [...]
Executive Summary The Fed’s response to the 2008 Financial Crisis initiated programs which grew their balance sheet from $900 billion to $4.5 trillion by 2014. In 2018 the Fed began reversing course and reducing their balance sheet. However, by mid-2019 markets and the economy were showing weakness [...]
Executive Summary This week’s newsletter will be abbreviated as is the Labor Day work week. The inverted yield curve, which has preceded most recessions, seems to be indicating recession (see first graph). Two consecutive quarters of negative GDP is generally accepted as a recession. However, in 2022 [...]