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 [...]
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 [...]