Executive Summary Over 50% of the stock options sold each day for the S&P 500 expire the same day. Translation, speculators are gambling on the daily movement of the market. In the graph below by economist Dr. John Hussman, one can see the market is as overvalued [...]
Executive Summary High interest rates and inflation have given the consumer pause. The University of Michigan Consumer Sentiment Index plunged 13% last month. The current reading suggests a recession is likely. Consumers, hit with high prices, have cut back on savings and ramped up their use of [...]
Executive Summary After the stock market was down in April, it rose over the last two weeks. The question now is whether the bulls or bears take control of the market in the short term. Last week Fed Chairman Jerome Powell fueled the stock market stating the [...]
Executive Summary As described last week, rising Federal debt combined with higher interest rates, translates to 2024 U.S. interest expense consuming nearly 62% of U.S. income tax revenue. As shown in the first graph below, GDP growth is slowing. The brewing crisis results from the uncontrollable fiscal [...]
Executive Summary The U.S. Federal debt skyrocketed from $8.8 trillion in 2007 to $34 trillion currently. Additionally, the average interest rate on that debt has gone from a low of 1.56% in 2022 to 3.22% - and new debt issued is even higher. Studies show that once [...]
Executive Summary The bear market rally since October 2023 appears to have been based on exorbitant speculation on hopes of six or more Fed rate cuts. According to Citigroup, when market euphoria reaches current levels (see first graph), this sets up an 80% probability markets will be [...]
Executive Summary Last week the monthly jobs report showed 303,000 new jobs created, exceeding expectations. However, the details reveal substantial increases in part-time jobs with significant losses in full-time jobs. According to one economist, part-time job growth over the last year has been 1.888 million versus a [...]
Executive Summary Some of the reasons used to justify the recent stock market bull market and bubble include: “Don’t fight the Fed,” too much liquidity in the market, zero percent Fed Funds rate, and corporate profits. The first graph shows how the Fed is tightening while the [...]
Executive Summary This week’s Update shares Warren Buffett’s comment regarding the current stock market exhibiting casino-like behavior. However, most of this week’s discussion includes excerpts from Economist Dr. John Hussman’s March 21 Market Commentary (link to full comment below). He points out that current market valuation extreme [...]
Executive Summary Last week’s issue compared the exuberance in AI stocks (specifically Nvidia) to the Technology Bubble (1990’s-2000) stocks such as Cisco Systems. This week will expand on the broader market (S&P 500) overvaluation for the same time frame. Back in 1999, 43% of stocks were trading [...]