Stock market uncertainty is as high as I can ever recall. The pandemic, economic shut-down and civil unrest have all hit at the same time. Still, the US stock market is within 5% of it’s all-time high from February. How can this be possible? Puzzling. Let’s break it down. Below I outline the top 3 […] Read the full article…
• The Fed cut rates for the third time since July on Wednesday • The target lending rate is now 1.5% – 1.75% • In the last four times the Fed cut rates, when they stopped at three cuts the economy avoided recession As expected by the market, the Fed cut rates again today. Jerome […] Read the full article…
• Manufacturing signals remain weak • Jobs and consumer confidence remain positive • Phase 1 China trade deal gave market a boost • Overall, GDP growth has slowed but remains persistently positive for now We started October with a flurry of economic reports. The reports have been mixed and the result has been a choppy […] Read the full article…
The financial press and markets don’t like the inverted yield curve By itself, the inverted yield curve is a weak predictor for near term recession Credit markets, employment, and production factors should be considered The yield curve model is predicting 20% chance of recession while the more complete model is projecting recession risk in the […] Read the full article…
• Initial jobless claims for the week ending April 6 fell to 196,000 • Unemployment claims are a leading indicator for the economy • March non-farm payroll was solid with 196,000 new jobs created Some economists had feared that weak jobs data in February may have been signaling a weaker economy. However, job creation in […] Read the full article…
• Morgan Stanley’s Michael Wilson, chief US equity strategist, sees further downward revisions in earnings for 2019 • Jurrien Timmer, Fidelity Director of Global Macro, is more bullish based on looking at the context for the earnings revisions • We find the weight of the arguments in favor of glass half full and continue to […] Read the full article…
• Gundlach thinks recession signals are close, but not signaling recession right now. • Interest rates are a wild card as the Fed switches from ‘pragmatic’ to ‘put’ mode. • Gundlach thinks European equities are a value trap. He likes emerging markets (still). • His strongest warning was to avoid junk bonds and beware of […] Read the full article…
• Bear market is defined as a drop of more then 20%. • Since 1945, recessions have followed 8 of the 13 times the market went into a bear market. • In the five cases where the market dropped 19%, a recession followed one time. As of today, the S&P 500 is trading at about […] Read the full article…