First, the China Manufacturing “Flash” PMI had “markets” exhaling relief since an increase from 50.2 to 50.5 meant, Manufacturing Rebound Relieves Growth Concerns. A week later, however, that PMI increase disappeared as the final PMI for September came in at an even 50.2 instead – which altered the commentary from “rising” manufacturing to “thankfully” steady manufacturing. So both rising and [...]
IBM blames the cloud for its dismal results, but the fact is that IBM should own the cloud outright (figuratively, of course). If the business has changed so much in the past few years due to customer shifting, then why wasn’t IBM leading that process? Why are they now actually admitting what amounts to a dereliction of managerial duties? Since [...]
The big “trick” with liquidity is trying to discern and work out “where” and “when.” A good deal of that is about liquidity as it actually exists; not what you see today but what it may look like tomorrow. That vital disparity can be nothing but havoc, especially when conditioned to look at correlations as something durable – which is [...]
There was a surge in new home sales reported last week, breaking the current flat trend that extended back well beyond last year’s MBS problems. The huge increase in sales, so out of character with other indications recently, suggests possible noisiness in the data. That is particularly true when existing home sales fell in August according to the NAR, and [...]
Continuing on with the valuation theme, there are a couple of additional “market” indicators that are also at or above dot-com levels. While not strictly a valuation technique, the level of margin debt and really customer net worth gives us an insight into one aspect of multiple expansion. Margin debt for FINRA accounts (which includes both NYSE and what used [...]
With last week’s release of the Financial Accounts of the United States (formerly known as the Flow of Funds; still designated Z1 by the Fed’s system) we can add to yesterday’s examination about bubbles and market risk. Putting the figures together, the composite picture is one where stocks are as stretched in terms of valuations to a degree only seen [...]
Shorter version on secular stagnation and Jackson Hole equivocation on QE's end: “We had to blow bubbles because that’s the only way to get the economy to grow, and now we have to start thinking about the inevitable consequences of that.” As does the bond market. There is nothing yet, however, to break the rationalization streak in stocks. **Shiller CAPE [...]
To add more concreteness and weight to today’s observations about home construction (and renovation), comparable store sales at both Home Depot and Lowes confirm the slowing of real estate construction. It is nice, if not so often, when hard dollar figures imitate to even a small degree what is being shown of adjusted statistical probabilities. Lowes has not yet reported [...]
While the orthodoxy continues to try to reassure everyone that the economy is still moving to plan, revised innumerably over the years imperceptible as progress has been, there are signs that even mainstream outlets are at least starting to question whether or not that is actually preferable. Not a lot of dots are connected yet, and certainly not from A [...]
There is something very much broken in the media, particularly with regard to economic reporting. I have already commented more times than I care about the overemphasis on logical fallacies, but the proportionality of the disconnect only grows with share price inflation. Under the headline, Bull Market Shows No Sign of Death With Yellen Support, this Bloomberg article begins, “The [...]
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