Major Economic Trends: All Downbeat

The business cycle still exists no matter what the folks on TV or the politicians say. The major economic trends continue to weaken. Yield Curve Inversion Bond yields have fallen dramatically recently. The equity markets reflect nervousness. The yield curve is now inverted to the rates “administered” by the monetary authority. The Fed Funds rate […]

Where’s The Recession, You Ask? Reprise

The narrative is that the “soft patch”, now so evident in U.S. data, is temporary, related to factors like weather, the government shut-down, and/or trade/tariffs. The Atlanta Fed, where GDP forecasts always seem to come out on the high side, put Q1’s real GDP growth at just +0.3%. And, the N.Y. Fed’s model says +0.9%. […]

Heightened Volatility! Blame the Fed

Volatility returned to financial markets with a vengeance in October. In the 12 market sessions between October 4th and October 19th, eight were negative (a total of -2,324 Dow Points) while four were positive (+940). In those 12 sessions, seven were triple digit; unfortunately, five of those triples were negative. Why the sudden turn and […]

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 […]

How Will Markets React to Growth Deceleration?

Economic fundamentals were ignored as if they were merely background noise as markets attempted once more in early August to breach their record high levels put in late last January. The common theme in the business media is that, due to great corporate earnings (24%+ in Q2), the equity markets are cheap. Never mind that […]

Slower Growth, Inflation, the Fed, and End of Cycle Indicators

The U.S. economy itself appears to be doing well, but we see many end of cycle signs, including less than 4% unemployment, rising interest rates, emerging consumer inflation, a strained housing market, slowing growth worldwide, and huge instability now developing in the emerging market space. Economy Still Healthy The 0.8% rise in retail spending in […]