In overnight trading, China’s Composite Purchasing Manager’s Index (PMI) fell from 53.1 to 52.0 in October, China’s Manufacturing PMI further contracted for the sixth straight month from 49.9 to 49.3 in October, and China’s Non-Manufacturing, or Services, PMI fell to its 8-month low of 52.8. All three PMI’s signal a slowing Chinese economy. Markets fell … Read more
The U.S. business sector has entered a recession as confirmed by today’s third-quarter GDP report. Consumers are holding the U.S. economy up, but their ability is waning. Consumer spending will follow the business sector lower, as it usually does with a lag. ADP reported nonfarm payroll growth of +125k in October against expectations of a … Read more
The South China Morning Post and the Trump Administration confirmed this morning that a signing ceremony for “Phase One” of the trade agreement will take place in Chile on November 17. This is an agricultural commodity agreement that obligates China to purchase the same level of goods they were prior to the trade war. It … Read more
In overnight trading, China’s industrial profits fell -5.3% on a year-over-year basis following a -2% decline in August. Profits from China’s automobile sector declined -16.6% YoY and profits from China’s oil, gas, and other fuel processing industries declined -53.5% YoY in January through September. U.S. equities and Treasury yields opened above Friday’s close, creating a … Read more
It is not every day you get a front-row seat into the biggest monetary policy mistake in the last decade. On Friday last week, the Federal Reserve announced the resumption of Quantitative Easing, but we are not supposed to refer to it as Quantitative Easing since it is not, even though it is. Just like … Read more
Amazon missed its third-quarter earnings expectations and guided lower for the fourth quarter, but investors were undeterred this morning as they bought Amazon, which fell -8% after posting earnings after the markets closed last night, in a bid to break the S&P 500 above its all-time highs. Helping boost stock prices, a phone call with … Read more
China announced it will resume purchasing $20 billion per year in U.S. agricultural goods, the amount it was purchasing prior to the start of the trade war, if “Phase One” of the trade deal is ratified. Once the agreement is in its second year and all punitive tariffs are removed China may increase its purchase … Read more
Investors shrugged off disappointing earnings reports from Boeing and Caterpillar to push the broad equity indices up slightly in early trading. Treasury yields gapped slightly lower in overnight trading and yields were trying to rise in early trading to close the gap. Validating my view that high long-term interest rates are hurting the economy, mortgage … Read more
Stock and bond investors continue to duke it out with stock investors trying to bring the bond market down in order to flush bond investors back into stocks. Stock investors are running out of time as the market is being led by only a few stocks now and volatility is low. Bond investors know the … Read more
Without any economic news to drive U.S. markets today, investors are hopped up on Brexit and trade optimism. White House advisor Kudlow said this morning that the December increase in tariffs could be canceled based on the outcome of the upcoming trade talks. Johnson is pushing for another Brexit vote today that could pass, which … Read more