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…

Weekly Economic Release Summary: Employment Growth In Decline

For months, our interpretation of JOLTS (BLS Job Openings and Labor Turnover Survey) has been that employment growth will be slowing. JOLTS again this past week continues to reaffirm the slowing growth forecasts. The graph below shows the general correlation between non-farm payrolls (red line) and JOLTS (blue line). As we have been forecasting based…

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…

More Fed Money Printing In The Near Future Would Have No Positive Effect On The Real Economy

Federal Reserve Chairman Jerome Powell and other Fed officials are monitoring the implications of the trade war and “will act as appropriate to sustain the [economic] expansion.” Powell even seems warm to the idea of bringing back quantitative easing (aka “QE”) and removing the “unconventional” stigma from it in order to make it a more…

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.…