Earnings Growth Expected To Increase From Here

Second quarter earning season kicks into gear in the coming week and a lower bar seems set by a number of firms. Downward estimate revisions are occurring in twice the number as upward estimate revisions. As it stands now, second quarter earnings are estimated to be lower than the same quarter last year by 1.9%,…

The ‘Everything Rally’ May Be Over – And That’s A Good Thing

This week may have marked the end of the vaunted “everything rally”, and that wouldn’t necessarily be a negative development. In the US, equities of course pressed to new highs, helped along by Jerome Powell’s testimony on Capitol Hill, where the Fed chair essentially confirmed that a July rate cut is, in fact, the base…

Rate Cuts Will Embolden Trump’s Trade Wars

The S&P 500 index is up ~17% YTD, pushing its record highs. This is in the face of trade wars and tariffs, overseas tensions, and strong performance from treasuries, gold, and the U.S. dollar. The market is betting on an easy Fed. Words like “patient”, “flexible” will drive the market performance and are important to…

This Chart Looks Nothing Like The Major Peaks In 2000 And 2007

Monthly Yellow Flags – March 2000 Last week’s post looked at a weekly volume-based breadth indicator. With June in the history books, it is a good time to review the message from monthly breadth charts. As shown below, the monthly NYSE Advance-Decline Line peaked in 1998 and thus was saying “pay closer attention” well before…

This Is A Crucial Moment In Market History

“While it would be unfair to say that either the Fed or the market is clueless, no one is sure whether we are facing the definitive downswing in the current economic cycle, or another mini-pause.” That’s from a short Friday note by SocGen’s Kit Juckes, who was weighing in on Paul Tudor Jones’s suggestion that…

JPMorgan’s Global PMI – Growth Is Slowing, Not Stopping

A PMI Is A Guide To Future Economic Activity As investors we obviously want to have a window onto the future. If we know what’s going to happen then we can position ourselves to benefit from it. Thus the value of indicators like a purchasing managers index. This is not, as with GDP, a reading…

Market Commentary – May 23, 2019

Deteriorating broad market trends suggest downside risks for the S&P 500 are growing more acute.The percentage of stocks and industry groups in uptrends is contracting and the new low list is expanding.Increased volatility has reduced investor optimism, but evidence of a marked increase in pessimism is lacking.

Market Update: Sovereign Wealth Funds And Volatility

By OpenMarkets Jack Bouroudjian explains how sovereign wealth funds are affecting recent market volatility. The top ten funds represent $10 trillion in global market value, and the re-weighting of the MSCI Index could have major implications. “Today, the funds are playing a large role in the direction of every market around the world,” Jack says.…

Weekly High Frequency Indicators: The Tariff Tantrum Takes Top Billing

Purpose I look at the high frequency weekly indicators because while they can be very noisy, they provide a good nowcast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. They also are an excellent way to “mark your beliefs to market.” In…

The Pivot In U.S.-China Trade Policy May Herald Long‑Term Tension

In any trade negotiation, the last few innings are usually the most fragile since that is when more difficult issues are addressed, and the U.S.-China negotiations in early May are certainly proof. We had shared in the growing optimism that a deal would be secured given the political appetite on both sides, although we did…