Economic Reports Scorecard Two reports over the last two weeks epitomize the bifurcated nature of the US economy. The durable goods report last week was just plain awful from top to bottom. Orders down 4% month to month and 6.4% year over year. Ex-transportation -0.5% month to month and -3.6% year over year. Core capital goods orders up slightly month [...]
The news Friday that 2nd quarter GDP expanded by a tepid 1.2% from the previous quarter (annualized) marks a change that needs to acknowledged. The last two years we have seen a pattern of a weak first quarter - for which economists have been searching frantically for an explanation - followed by a second and third quarter rebound. Fourth quarters [...]
Economic Reports Scorecard The economic data the last two weeks was deja vu all over again. The US economy has been growing at roughly 2% the last three years and I see no reason - yet - to expect that is going to change any time soon in either direction. Certainly there hasn't been anything in the data to support [...]
Anticipation for comparable year-over-year earnings growth is building…but not necessarily for the current earnings reporting season that is just beginning. The decline of approximately 6.7% in year-over-year EPS comparisons in the first quarter is expected to be the bottom of the four quarters of consecutive earnings declines for the S&P 500. And, although earnings season for the second quarter has [...]
I am raising the budget for risk assets this month. For the moderate risk portfolio, I am raising the risk allocation to 45%, reducing the bond allocation to 50% and adding a 5% cash position. The narrowing of credit spreads necessitated a move in the allocation as investors are clearly willing to take on additional risk right now. This is [...]
Economic Reports Scorecard The response to the much better than expected employment report today is quite interesting although not in a good way. Stocks will surely get most of the attention, assuming they continue to trade higher by the end of the day (they did), but other markets - bonds and gold - are not confirming the strength of the [...]
Even before the Brexit vote, momentum was shifting to defensive sectors. The rally in weak dollar sectors - other than the gold/silver mining industry - was looking very overbought and tired anyway, so Brexit was a good excuse to take some profits. Whether the dollar can retain the strength it has gained on this historic vote is the big question. [...]
Economic Reports Scorecard While everyone was focused on the potentially negative impact of Brexit, the Census Bureau was reporting evidence of actual economic weakness in the form of the durable goods report. The report was weak pretty much across the board but the weakness in autos is particularly concerning. The auto industry, along with construction, has been a leader in [...]
A pretty wild day for the markets today after the UK voted to leave the European Union. Well, actually, it was just a referendum and non-binding but ignoring the will of the voters is not a good way to keep hold of the levers of power. So it probably does mean the UK will leave the EU. It certainly means [...]
Recently Cumberland Advisors published a report titled, "LCR: Is The Fed's Balance Sheet Too Small?". While we have the greatest respect for David Kotok and his firm, we disagree with this analysis. Jeff Snider's response (my contribution was merely editing) was sent to David Kotok last week. Not only did he respond but he invited us both up to Leen's [...]
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