Executive Summary Mortgage rates have nearly doubled from 2.65% to 5.22%, resulting in a slowing housing market. Add in a drop in real median household income, and now there is a record gap between housing prices and incomes (see 2nd graph). Meanwhile the supply of homes is [...]
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 [...]
Executive Summary Over the past month and a half, the stock market has experienced its fourth “bear market rally” since the start of the bear market at the beginning of this year. In every bear market there are strong bear market rallies. The current bear market rally [...]
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 [...]
Executive Summary This week I wanted to share a guest article from John Mauldin. He begins his analysis of "Forgotten Lessons" here: “Those who cannot remember the past are condemned to repeat it” is a well-known quote that’s also incomplete. You can remember the past vividly and [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]