Weekly Commentary

  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. […]

  The political silly season is in full swing and it would be laughable if it weren’t so serious. In an effort to add some rationality to the passionate debate, let’s review the impact of a trade war and isolationist policies on the U.S. economy. The backdrop to much of the anxiety that many American’s […]

  It appears the one trend we wanted to see a reversal in continues on a downward trajectory…. Earnings. Each week we see more analysts push back their expectations for a recovery in earnings growth of the S&P 500 companies. This week was no exception. While earnings growth has been negative the last three periods, […]

  In last week’s post (link) we discussed an inflection point in the markets that would likely play out over the course of the week. We wanted to see how market participants would react to a continued absence of corporate earnings growth vs. the growing U.S. Economy. We got our answer! The U.S. Equity markets […]

  It sounds like the title to a really good suspense movie. While it’s not a movie title, it certainly reflects this precise moment in time that the U.S. Economy and corporate earnings are at. On the one hand, we have continued strength in the U.S. Consumer. Retail sales were up in January 3.4% over […]

  Last week marked another inflection point in a series of volatile weeks for the stock market. [i] We still maintain one of the main drivers of the volatility is that global investors are realizing Q4 2015 corporate profits being reported are abysmal. While this should be no surprise to our readers as we have […]