Does It Really Reduce Inflation?

2022-08-09T16:19:36+00:00August 9th, 2022|Categories: INVESTMENT|

Executive Summary On Saturday, August 6, the Senate passed what is ironically titled the Inflation Reduction Act, which outlines $485 billion in new spending. After massive stimulus packages during the pandemic (2020-2021), Federal deficits increased by 38% and inflation is now around 9%. The third chart below [...]

What Are Corporate Earnings Indicating?

2022-07-26T15:55:47+00:00July 26th, 2022|Categories: INVESTMENT|

Executive Summary Stock analysts’ earnings estimates tend to error on the optimistic side, as shown in first graph below 2023 estimates start at the peak and go up. Analysts often revise estimates down so corporate earnings will “beat” estimates, even when earnings decrease over prior year. During [...]

How Strong is the Employment Situation?

2022-07-12T15:44:54+00:00July 12th, 2022|Categories: INVESTMENT|

Executive Summary Financial media proclaims the job market is strong, citing 372,000 jobs created in June according to the Establishment Survey. However, digging into the details reveals some ignored discrepancies. Since March 2022, the Establishment Survey shows 1.124 million jobs created where the Household Survey shows 347,000 [...]

Is the U.S. In a Recession?

2022-07-06T16:20:48+00:00July 6th, 2022|Categories: INVESTMENT|

Executive Summary During the first quarter, economic growth fell 1.6%. Many expected a rebound in Q2. Unfortunately, according to the Atlanta Fed’s GDPNOW forecasting model, the economy shrank again in the second quarter by an estimated 2.1%. Two consecutive quarters of negative growth is what many pundits [...]

Will It Be Inflation or Deflation?

2022-06-28T20:02:16+00:00June 28th, 2022|Categories: INVESTMENT|

Executive Summary Inflation, or general price increases, are reported through the Consumer Price Index which is currently up 8.6% - a 40-year high (second graph). The Federal Reserve Bank contributed to inflation with loose monetary policy along with U.S. government stimulus programs.  In order to fight high [...]

Is TINA Gone?

2022-06-21T20:16:44+00:00June 21st, 2022|Categories: INVESTMENT|

Executive Summary Over the last ten years or more of loose Fed monetary policy, investors began to believe stocks would only go up in price. Extremely low-interest rates could not compete with the two percent  S&P 500 dividend yield. Investors took on more risk than what was [...]

Has the Stock Market Bottomed?

2022-06-14T15:38:17+00:00June 14th, 2022|Categories: INVESTMENT|

Executive Summary The S&P 500 Index hit technical bear market territory Monday, June 13, falling below 20%  year-to-date. Such large drops have many investors and pundits already attempting to pick the  bottom and recommending buying-the-dip. However, this time the Fed is in a tightening policy  which eliminates [...]

What Does Inflation Affect?

2022-06-14T15:54:41+00:00June 7th, 2022|Categories: INVESTMENT|

Executive Summary In addition to the massive rise in gas prices, almost all goods and services (see first graph) have  seen significant price increases, resulting in consumers changing spending habits. The reduction  in consumer demand will have a negative effect on corporate profitability (see 4th graph).  COVID [...]

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