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New Market Highs: It’s Not the Economy (Stupid)!

It had been 210 days since the S&P 500 had made a new record high, but, on Friday, August 24th, after several days of struggle, the market finally broke to a new high (2874.69). The struggle actually began the prior Tuesday (August 21st). During that trading day, the S&P 500 actually pierced the old record high intra-day (during the trading session). But Wall Street has its own set of quirky …Read More

The Middle Class Continues to Fall Behind

February’s job growth was significantly stronger (+313,000 Establishment Survey) than market expectations (200,000).  Strangely, though, the unemployment rate (U3) remained at 4.1% (Household Survey) for the fifth straight month.  Why?  Because a significant number of those who had previously stopped looking for work rejoined the labor force, perhaps indicating more labor force slack than the unemployment rate would indicate.  The biggest disappointment, however, was the slowdown in the growth of …Read More

Turning a Sow’s Ear into a Silk Purse

It wasn’t a big surprise that Wall Street advanced the narrative that the havoc wreaked by Hurricanes Harvey and Irma is actually a positive for the economy, now aided and abetted by the strangest employment report, perhaps of our lifetimes. (Conveniently ignored is Hurricane Maria, which completely wiped out Puerto Ricco’s economy, Hurricane Nate, and the California Wine Country conflagration.) The Recent Data Let’s begin with the most recent underlying …Read More

At Recession’s Onset, There is No Bell, Bugle, or National Anthem

From my reading of the business media, there are few business economists who believe, like I do, that the probability of a recession in the next 12 months is greater than 50%.  A recession is generally viewed as two consecutive quarters of negative real GDP growth. Looking forward, a recession isn’t inevitable, as there have been ‘soft landings’ in the post-World War II era.  Nevertheless, from my lens, there doesn’t …Read More

Hope is Not a Good Investment Strategy

According to the Bespoke Investment Group, every year, Wall Street analysts declare that the stock market will rise, and since 2000, the annual average forecast has been for a 9.5% gain.  The reality is that the market has only risen at a 3.9% rate over this time frame.  The 2008 forecast was for a market increase of 11%; the reality was -38%.  To say that Wall Street promotes the stock …Read More