There are many signals investment professionals use to gauge the health of the economy and more importantly, to determine when a recession is about to occur. Since asset prices, including stock prices, plummet during recessions, investors and professionals who can avoid losing money during a Bear market find themselves with a rare opportunity to buy … Read more
Stocks started the day higher after the Federal Reserve sent one of its members to pump stocks and after the Trump Administration pumped a potential end to the trade deal. Treasury yields were also pushed higher on the news, but both stocks and yields started to fade their move higher in early trading. While much … Read more
Fourth-quarter 2018 GDP growth was revised lower from 2.6% to 2.2%, with expectations this year’s GDP growth will be 3%, which is hard to believe since the economy couldn’t achieve that target last year despite a massive stimulative tax cut. First-quarter estimates from the Atlanta and New York Fed models put GDP growth around 0.5%. … Read more
After shrugging off recession fears, U.S. equity futures rose in overnight trading, only to fall in early trading as U.S. Treasury yields continue moving downward. Equities and Treasury yields tend to follow each other, so either stock prices need to fall, or bond yields need to rise, to validate each other. For the moment, it … Read more
Twenty-four hours after recessionary fears hit Asian stock prices, those fears have subsided as expert after expert has hit the wires telling investors not to worry. In overnight trading, Asian stocks rebounded, European stocks were up slightly, U.S. equity futures were bid higher and U.S. Treasury bond yields also ticked up a bit. Housing Starts … Read more
In overnight trading, Asian equities were down as fears of a recession mount since long-term interest rates are falling below short-term interest rates, which historically has been a very strong signal of a recession. U.S. equities started the day lower but fought back into positive territory in early trading, while U.S. Treasury bond yields broke … Read more
More footage from the ‘bomb cyclone’ that devastated the farming region of our country is being released each day. Nebraska and other nearby states have experienced record flooding, which has left farms completely underwater. Grain storage containers have split in half, causing corn and soybeans to spill into the flooded waters. Early estimates are indicating … Read more
Every economic contraction and expansion always begins with the Federal Reserve, including the current one. Investors believe the Fed will drop interest rates to zero and implement Quantitative Easing 4 the next time the stock market drops. Unfortunately, the notion the Fed will tighten or ease monetary policy based on changes in stock prices is … Read more
In overnight trading, German and Eurozone Manufacturing PMIs continued to contract. The Argentinian economy has collapsed the most since the last recession. German 10-year yields are back at zero. Japan March factor output is falling at the fastest pace in three years. U.S. equities started the day modestly lower as Treasury yields fell strongly in … Read more
Either Fear of Missing Out is hitting equities this morning, or Apple is buying back all the shares they can before they are forced to enter their blackout period. Either way, investors are misinterpreting the Fed’s pause to mean they are easing. As I covered in my Wednesday night video, it just means that short-term … Read more