Why the Equity Markets Are Out of Touch
Low Date of Low 12/31/22 6/30/23 Chg fr Low to 12/31 Chg fr Low to 6/30 Chg fr 12/31 to 6/30 S&P 500 3,577.03 10/12/22 3,839.50 4,450.38 +7.34% +24.41% +15.91% Nasdaq 10,321.39 10/14/22 10,466.48 13,787.92 +1.41% +33.59% +31.73% DJIA 28,725.51 9/30/22 33,147.25 34,407.60 +15.39% +19.78% +3.80% Russell 2000 1,655.88 9/26/22 1,761.25 […]
Despite Black Friday/Cyber Monday – Holiday Sales Will Likely Disappoint
It’s Black Friday/Cyber Monday weekend. Consumers are looking for bargains. Despite what may be a better-than-expected start to the holiday season, for reasons discussed below, the indicators that measure the state of the U.S. consumer are mainly downbeat, and we think that overall, holiday sales will disappoint. So, while we might see an initial surge […]
Bubble Markets Display Bizarre Behavior
Right Before They Tumble Like the Dot.Com bubble of the late ‘90s, the typical signs of an approaching bubble bust were on full display in the equity markets last week (week ending January 29th). GameStop (GME) and other failing or troubled companies (AMC, Blackberry, Nokia, Bed Bath) have become the darlings of the WallStreetBets (WSB) […]
The “Excess Savings” Hypothesis vs. Economic Deceleration
There is some speculation that because only a little more than half of the buildup in savings from the stimulus checks and enhanced unemployment benefits was spent through July, Q4 economic activity will continue to show recovery as the “savings” continues to be spent. Call this the “Excess Savings” Hypothesis. Unfortunately, the incoming data makes […]
Main Street Boom Frightens Wall Street
On Friday, November 2nd, the Dow Jones Industrials ended down 110 points in a wild day in which the index swung over 500 points from its intraday high to its intraday low. This occurred despite one of the most stellar employment reports in recent memory, a report that raised hopes that the economy would continue […]
Deflation’s Persistence Implies Yields Will Be Lower for Longer
Despite what you hear from the TV pundits, the U.S.’s second quarter ended on weakness, and there is little evidence that economic acceleration occurred. In previous years, slow GDP growth in Q1 was followed by 3%+ in Q2. Not this time! The Atlanta Fed GDPNow model, which uses a lot of sentiment indicators, is all […]