With nearly all of the S&P 500 companies having reported their Q4 numbers, we can safely claim that it was a very bad earnings season. It may seem incredulous to categorize the quarter that way given that EPS growth (as reported) was +29%, but even that rate tells us something significant about how there is, actually, a relationship between economy [...]
Why aren’t there more homes for sale? The lack of inventory continues to stifle the real estate market, but there aren’t any good reasons offered for what seems on the surface a bit of a paradox. The total volume of resales, according to the National Association of Realtors, was in the prior month (January 2017) the highest in more than [...]
The ISM Manufacturing PMI registered 57.7 in February 2017, the highest value since August 2014 (revised). It was just slightly less than that peak in the 2014 “reflation” cycle. Given these comparisons, economic narratives have been spun further than even the past few years where “strong” was anything but. The ISM’s gauge of orders increased to the highest level in [...]
The greatest mistake any statistician can make is to confuse correlation for causation. It is quite natural to do so, of course, a limitation not limited to modern society where information can at times seem limitless. There are also cases where you are left with little other alternative. But within them requires even more robust evidence and more thorough examinations, [...]
If the economy is repeating the after-effects of the latest “dollar” events, and it does seem more and more to be that case, then analysis starts with identifying a range for where it might be in the repetition. New orders for durable goods (ex transportation) rose 4.3% year-over-year in January 2017 (NSA, only 2.4% SA), the highest growth rate since [...]
Rather than bury this chart in my earlier discussion of liquidity preferences, I felt it deserved its own piece to highlight what it shows. By all traditional and orthodox Economics, this just should not be possible. Yet, there it is and it’s not the only example of violation. For very different markets as robust as each one is, there should [...]
The hedge fund industry is not quite dead yet, meaning that it can still cause a great deal of disruption before it expires. It is here where things like rehypothecation and the bastardization of prime brokerage functions were perfected, such that we might use that term in this manner. Despite so much outward attention paid in this direction, very little [...]
It is largely irrelevant, but still the political theater is fascinating. As is now standard operating procedure, whatever comes out of the Trump administration immediately is conferred as the standard for awful. This is not my own determination, mind you, but that of the mainstream, whatever that is these days. And so it is with the first set of budget [...]
My colleague Joe Calhoun likes to remind me that markets and fundamentals only sound like they should be related, an observation that is a correct one on so many different levels. Stock prices, in general, and GDP growth may seem to warrant some kind of expected correlation, but it has proven quite tenuous at times especially in a 21st century [...]
Right now there are two conventional propositions behind the “reflation” trade, and in many ways both are highly related if not fully intertwined. The first is that interest rates have nowhere to go but up. The Fed is raising rates again and seems more confident in doing more this year than it wanted to last year. With nominal rates already [...]
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