7 Macro-Drivers for Capital Markets in 2016

Global Growth Recession risks are low and growth should improve in 2016. Excess supply is especially apparent in the raw materials/commodities sectors. This state of overcapacity/supply and a strong dollar combined from 2014-2015 to create an environment of falling prices and sluggish growth in global manufacturing. The services sector continues to perform well. Continued expansion in the…

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Not A Done Deal

Last week’s employment report raised the odds of a December rate hike considerably and the consensus at this point seems to be that it is a done deal. The employment report was pretty good with the unemployment rate down to 5%, 271,000 jobs added and a pay hike to boot. Year over year average hourly…


The Weekly Snapshot

Top News Headlines Obama sticks a fork in Keystone after company withdraws request. Valeant troubles continue; CEO sells stock after margin call. Bill Ackman having a very bad month. DOJ ratchets up scrutiny of drug pricing. Seeking information from MRK, LLY and, of course, VRX. Berkshire Hathaway’s profit more than doubles; other earnings news last…


It All Went So Quickly

It seems a very long way from here, but it was only December 23rd when the economy was taken as “booming.” That was the day that excited economists under direct confirmation, allegedly, that this time was different. The Commerce Department had reported Q3 GDP up to 5%, raising estimates for business investment and consumer spending….


If Sentiment Were A Currency

The ECB having announced and then implemented at least some kind of QE plan, the entire economist community has adjusted their economic projections upward in uniform, flocking fashion. They haven’t had to make much of an adjustment because they never downgraded economic expectations much to begin with. That is why almost every news story about…


Is The Long Awaited Correction At Hand?

It’s been almost 4 years since the last 10% correction in US stock prices, one of the longest stretches on record. Historically, on average, we get a 10% correction about every 18 months. More severe bear markets, declines of 20% or more, are associated with recessions which are hard to predict and fairly rare. Corrections…


Economy and Stocks

It is often very easy to fixate on the S&P 500 as if it were the only current proxy of the broad universe of stocks. Like the Dow Jones Industrial Average before it, the 500 has attained synonymy with stocks as it is the most widely publicized and recognized value. But just like the DJIA,…


Global Means Global; ‘Dollar’ Means Trouble

In addition, and very much related, to durable and capital goods disappointment, some major bellwether earnings have weighed on jubilation over the “robust” economy. Caterpillar in particular was troubling, but as the lineup of excuses expands, the idea of “decoupling” is now even more pronounced. So, in addition to the energy sector dragging down earnings,…


2014’s ‘Robust’ Jobs Market Produced No Wages, And Now No Spending

For all the hype about jobs and the booming (GDP) economy, the major portion of the retailer calendar around Christmas was a total bust. In many ways it was worse than last year, which emphasizes simply how the business “cycle” as it was understood in textbook economics no longer applies. The US economy, indeed the…


Stock Market ‘Dilemma’: Future Wage Growth Or Slashing Capex?

Turning attention to that last bastion of monetary surety, equities, the oil slump might be the greatest challenge yet to the non-stop stock escalator. Earnings especially for the S&P 500 are being revised lower as energy companies weigh on results. And while there may be a tendency to dismiss energy as its own problem, there…