Weekly Commentary

  The Good On Friday, it was reported that American Consumers are finally opening up their wallets, recording the biggest consumption increase in a year. U.S. retail sales surged 1.3% in April, the largest increase since March 2015, as Americans stepped up purchases of automobiles and a range of other goods. [i] Excluding vehicles, sales […]

  For months, we have been tracking the fact that U.S. corporate earnings are in a growth slump, or as we’ve been calling it, an earnings recession. With 87% of S&P 500 companies reporting earnings for Q1 2016, we can now confirm we will have a 4th consecutive quarter of negative earnings growth. While the […]

  NowCasts on GDP growth, as we have been discussing in prior posts (here), have come to fruition with the official reporting of U.S. GDP for Q1 2016. The U.S. Economy grew at a paltry 0.5% in Q1 2016, consistent with prior Q1 reports of the past. [i] While real wages continue to grow for […]

  For the past 8 years, Global Central Banks (agents for governments) have been fighting deflation using extraordinary policy tools, such as near zero interest rates, buying mortgages, buying corporate bonds, negative interest rates, and in some cases, buying equity in corporations. Their desire to fight deflation has been well documented; in theory, avoiding episodes […]

  Finally, economists have surrendered. Or at least, tacitly admitted their ability to forecast recessions or significant changes in the business cycle or the economy is limited, if not completely faulty. Instead, many economists are now using a different approach to qualified estimations of future events. The process is called Nowcasting. While it’s not new, […]

  I spent the last week in Havana Cuba seeing firsthand what a communist/fascist country looks like, not just economically, but emotionally for its citizens. Needless to say, the infrastructure is abysmal, but more importantly, the citizenry is fearful and certainly lacks the “animal spirits” to take risks… all for good reason. What struck me […]

Wow! That’s all one can say about the wild ride Wall Street provided investors during Q1. The S&P 500 was down a whopping 11.11% before rallying back 14.6%, all in the same quarter! I believe that these are both record events to start any year off; the drop and the subsequent rally. With the end […]

  As we near the end of Q1 and what started off as the worst start to a year in U.S. stock market history, perhaps it’s time to look at what actually drives most corporate earnings: Consumption. In one form or another, the U.S. consumer drives corporate sales which should lead to corporate profits. There’s […]

If there was any doubt about what has been sending equity prices higher, that doubt should be eliminated. It’s clear to me global coordinated Fed/Central Bank policy is driving equity markets. Last week the Federal Reserve met and released their expectation for interest rates for the remainder of 2016. According to the Fed’s press release […]

  U.S. equity markets have been on a tear as of late. In fact, from our post, Inflection Point, where we wrote the “U.S. investor would need to choose a set of data to focus on;” we have our answer. They are clearly focused on macro trends and discounting the lack of corporate earnings growth. […]