Executive Summary The S&P500 has been pushed back to speculative highs. The 0dte options activity, discussed in previous newsletters, by large investment firms creates a very risky environment for individual retail investors. Pundits point to excess liquidity in the market as the reason for the highs; however, [...]
Executive Summary Consumer loans, credit cards and other revolving debt now exceed $1 trillion, far above the pre-Financial Crisis and pre-COVID balances (see first graph). Whenever consumers need to borrow money, those who extend credit create new methods to fulfill the need. The latest method is called [...]
Executive Summary 2024 will present significant obstacles for regional banks. Simply stated, regional banks use depositors’ funds to make loans or invest in Treasury and Agency securities. The sharp rise in interest rates in 2023 created significant unrealized losses from Treasury securities. During 2024 and 2025, over [...]
Executive Summary The stock market move this year has primarily been a result of the Magnificent 7 stocks, as well as the change in options trading. The options market is now 11% bigger than the stock market in terms of assets deployed. Utilizing zero days to expiration [...]
Executive Summary Speculators in the stock market are betting on the Federal Reserve Bank lowering the Federal Funds Rate. Although, Jerome Powell has said rates will not be lowered until inflation reaches their 2% target. The first graph below compares the inflation rate of 3.2% (measured by [...]
Executive Summary With last quarter’s credit and government-spending inspired 5.2% annualized GDP print, combined with the Atlanta Fed’s November 22 GDPNow estimate for annualized fourth quarter GDP growth at 2.1%, calls for a recession have moved to calls for a “soft landing.” The ISM November Manufacturing PMI [...]
Executive Summary Citing strong retail sales, financial pundits are espousing a strong consumer. However, they appear to be omitting the impact of inflation. “Real” or inflation-adjusted sales have been flat or down compared to last year (see first graph). Many, who had paid down credit card balances [...]
Executive Summary The bear market rally of the last three weeks reversed the previous three-month downturn. Technically speaking the markets were very oversold and now have flipped to overbought territory. The reason for the speculative change appears to be a hope for the Federal Reserve to pivot [...]
Executive Summary With mortgage rates fluctuating between 7-8%, consumer sentiment for house buying conditions has dropped to the lowest level since 1982 (first graph). However, housing prices have not fallen substantially due to low inventory (third graph). Once supply levels sufficiently exceed demand, and if mortgage interest [...]
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 [...]