Weekly Commentary

  Last week, the Federal Reserve finally acknowledged that they can’t explain what’s happening in the economy. Their long anticipated interest rate hikes, estimated to increase twice in 2016, has been marginalized by the voting members of the Federal Reserve Board. In fact, they published their expectations for interest rates for the next couple of […]

  The U.S. and World economies are suggesting more challenges are ahead as indicated by the drop in the U.S. Treasury interest rates. Investors around the globe are driving down yields on the 10-year note by buying up U.S. Treasuries. This has led to the yield decreasing 27% since the start of the year with […]

  Friday was a seminal day which presented both investors and global Central Bankers with something to chew on. The U.S. economy added a meager 38K to jobs in May, well below the 158K jobs analysts had forecasted. Sure, there was a Verizon employee strike. But even when adding back the 35K idled Verizon employees, […]

  As part of our on-going discussion on how Central Banks throughout the world are controlling valuations across multiple asset classes, it appears that the U.S. investor has acquiesced on the inevitable rate increase coming this June or, at the latest, July. Janet Yellen said in a speech last Friday, “It’s appropriate…for the Fed to […]

  Credit in America is booming. There is simply no other way to say this. Let’s take a look at the recent data. Credit card debt is expected to top $1 trillion by the end of 2016, which comes close to the peak that was set prior to the 2008 Financial Crisis. [i] [ii] While […]

  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, […]