Yesterday, as I was researching the data on the Fed’s balance sheet as it relates to the future direction of interest rates, I stumbled across an interesting piece of analysis. The chart below shows the deviation of the market from the underlying liquidity provided by the Fed’s balance sheet. Not surprisingly, in 2006-2007 as the deviation reached extremes, market liquidity became problematic. While we only recognized this in hindsight, the correlation is important to consider. Currently, this “Brawny Market” has become the “quicker picker-upper” of market liquidity. The issue becomes, as discussed yesterday, with the Fe...
While still up .7% over the last year, Toronto home prices fell for the 7th consecutive month in December, down 8.9% since May–the largest seven-month decline in data tracked since 2000. Falling 3.5% since November, the average sale price in Toronto is still–a wildly un-affordable for most–$735,021 ($1.2 million for single detached homes.) See Toronto home prices fall for seventh month as lending tightens. Here is the chart. Still with Canadian households at record indebtedness, and new lending restrictions just biting this month, the long overdue slowdown in the real estate sector is barely just started in Canada. The economy which h...
While still up .7% over the last year, Toronto home prices fell for the 7th consecutive month in December, down 8.9% since May–the largest seven-month decline in data tracked since 2000. Falling 3.5% since November, the average sale price in Toronto is still–a wildly un-affordable for most–$735,021 ($1.2 million for single detached homes.) See Toronto home prices fall for seventh month as lending tightens. Here is the chart. Still with Canadian households at record indebtedness, and new lending restrictions just biting this month, the long overdue slowdown in the real estate sector is barely just started in Canada. The economy which h...
Week 52 of 2017 shows same week total rail traffic (from same week one year ago) contracted according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors remain in expansion, but the decline in the last week of the year negatively affected all the averages. Analyst Opinion of the Rail Data We review this data set to understand the economy. If coal and grain are removed from the analysis, this week it declined 8.0 % (meaning that the predictive economic elements worsened year-over-year). The decline likely was due to a holiday mismatch between 2016 and 2017 – and that is why we primarily use ...
A second consecutive month of excellent jobs figures from Canada: 78.6K jobs gained and the unemployment rate falls to 5.7%. This comes on top of a similar report for November. The participation rate is also up to 65.8%. Wages are up 2.7%, slightly higher than in the US. USD/CAD crashes to 1.2374. Here is the move on the chart, quite impressive: Only the trade balance missed with a deficit of 2.5 billion. Yet the Canadian economy seems to be on fire and the loonie likes it. Canada was expected to show a minor rise of 1000 jobs in December after a whopping jump of 79.5K in November. Back then, the unemployment rate dropped to 5.9% and i...
As previously reported, BofA Merrill Lynch analyst Tal Liani upgraded Cisco (CSCO) to Buy from Neutral, as he sees the company being in the early stages of a positive transition to software. While noting the strategy shift is not new, Liani said he is also incrementally more positive on Cisco’s stability following years of software-defined networking and public cloud uncertainty. The analyst, who also points out that Cisco still trades at a valuation discount to its peers, raised his price target on the shares to $46 from $37. ...
This morning we are going to discuss the following charts listed in sequence below. Today is Non-Farm Payrolls Friday and this report is a stock market mover. ****Charts Reviewed In Sequence Listed Below***** $UUP $BABA $TCEHY $SONC $AUPH $BNCL $CAMP $TZA...
Facebook CEO, Mark Zuckerberg on Thursday expressed his interest in cryptocurrency technology and its potential usage in strengthening Facebook services going forward. In the 2018 mission statement, Zuckerberg emphasized the limitation of centralized technologies, while at the same time highlighting the danger of unregulated decentralized technologies. “With the rise of a small number of big tech companies — and governments using technology to watch their citizens — many people now believe technology only centralizes power rather than decentralizes it,” he stated. “There are important counter-trends to this –like e...
The Treasury market’s 10-year estimate of future inflation rose above the Federal Reserve’s 2% target this week – the first time that level has been breached for this maturity since last March, based on daily yield-spread data via Treasury.gov. Official inflation numbers, which are published with a lag, continue to reflect pricing pressure that’s modestly below the Fed’s target. The Treasury market, however, is betting that inflation will accelerate this year. The implied inflation forecast based on the yield spread for the nominal 10-year Treasury less its inflation-indexed counterpart ticked up to 2.01% on Thursday (Jan. 4), the h...
Every New York stock exchange trading day I’m posting a daily dividend stock or fund review. I’ll share the three chief qualities of just one equity or fund that could be selected for a dividend stock portfolio I’ve named the Safari to Sweet Success. This week’s slot in the Safari portfolio is reserved for the basic materials sector. That sector includes thirteen industries all related to mining or making commodities. Industries include: agricultural inputs, aluminum; building materials, chemicals, coal, copper, gold, industrial metals, lumber & wood, paper, silver, specialty chemicals, and steel. Today I’...