The New York Fed created a new inflation gauge. What does it mean for the gold market? The standard inflation measures are the CPI and the PCEPI. They are useful indicators of changes in consumer prices. However, they omit producer prices, commodity prices, or asset prices. Hence, the central banks’ focus on consumer prices makes them blind to asset prices bubbles and the broad inflation pressure. This was the case of both the Great Depression and the Great Recession: the CPI was stable, so the Fed did not perceived its monetary policy as easy, despite the impressive rise in stock and real estate markets. Therefore, the Fed has fi...
Ten years ago, December 2007, was the start of the Great Recession. Have US housing markets recovered? My go-to source for regular updates on the US housing market is “Housing Markets at a Glance,” a monthly chartbook published by the Housing Finance Policy Center at the Urban Institute. Here are some snapshots from the most recent (November 2017) issue. The total value of US housing can be broken down into homeowners’ equity and the mortgage debt still outstanding. As this figure shows, during the fall in housing prices from 2006 to 2011, the total value of US housing fell by about $7 trillion–a fall of roughly 30...
What are the long-term trends for multiple jobholders in the US? The Bureau of Labor Statistics has two decades of historical data to enlighten us on that topic, courtesy of Table A-16 in the monthly Current Population Survey of households. At present, multiple jobholders account for just 4.9 percent of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the current relative sizes of which are illustrated in a pie chart. The distinction between “primary” and “secondary” jobs is a subjective one determined by the survey participants. Note: Not included in the statistics ar...
After two warnings to investors (but no bans) from the SEC on ICOs, alt-coins like Ethereum and Litecoin have exploded higher in the last 24-48 hours, pushing the former over $60 billion market cap – bigger than GM and Aetna. Interest in cryptocurrencies has been surging since futures launched (but volume in Bitcoin futures tumbled today relative to yesterday)… Spot Bitcoin prices are holding near record highs… But it seems investors in the crypto space are diversifying across the entire alt-coin space… And as Cryptocurrencies soar, gold is getting hammered… Gold up 7.5% YTD, Bitcoin +1675% ...
We are not quite three months from my last piece on AutoZone (AZO), which back in mid September was in the midst of a nasty stock price decline, and now investors seem to feel a lot better about the company’s business. Of course, this is bizarre because AZO is a very large player ($11 billion of annual revenue) in a very stable industry and should therefore be mostly insulated from stock market volatility and immense shifts in short-term investor sentiment. Below is the five-year stock price chart of AZO I shared back in September when investors were overwhelmed with negativity: And here is an updated version that shows the last 12 months: ...
Guess what? Retail investors are fading the tech rally without even realizing it. Or so says JPMorgan. Part and parcel of the idea that this market increasingly resembles what Howard Marks has variously described as a “perpetual motion machine” is the idea that passive flows into cap-weighted indexes are creating a self-fulfilling prophecy. Here’s Marks (more here): The large positions occupied by the top recent performers – with their swollen market caps – mean that as ETFs attract capital, they have to buy large amounts of these stocks, further fueling their rise. Thus, in the current up-cycle, over-weighted, liquid, large-ca...
With such a lack of seemingly high-quality new issues, it’s hard to get excited about the IPO market these days. It’s worth remembering, though, that all of today’s largest companies got their start somewhere. For the largest publicly traded company in the world, that start was 37 years ago today. That’s right, Apple Computer (AAPL) began its life as a publicly traded company on 12/12/1980, just after Ronald Reagan was elected President and a month before the Iran hostage crisis came to an end. A lot has changed over the last 37 years, and there have been some major swings for Apple and the US stock market, but at this point, things ...
My Swing Trading Approach Stocks have rallied for a good three days, at this point, I want to move my stops up while being careful about how much additional exposure I take on right here. Indicators VIX – The sacredness of a sub-10 reading has lost its thrill and become more of a normal reading of late. Possible to see a move below 9 today, if the rally continues, though the chances of a bounce is very strong here. T2108 (% of stocks trading below their 40-day moving average): Moved 3% to 60%. The indicator is improving, but notably lower than its October highs. Moving averages (SPX): Currently trading above all major moving ave...
The Producer Price Index year-over-year inflation grew from 2.8 % to 3.1 %. Analyst Opinion of Producer Prices The Producer Price Index again surged year-over-year. Here is what the BLS said in part: In November, three-fourths of the rise in the final demand index is attributable to a 1.0-percent increase in prices for final demand goods. The index for final demand services climbed 0.2 percent. This much gain in the Producer Price Index was not expected – and unless you are the twisted follower of the Fed – this increase is not good economically. The PPI represents inflation pressure (or lack thereof) that migrates into consumer p...
A fact which is lost on many of the proponents of Brexit is that when the UK leaves the EU it will also step aside from the 50 or so trade deals that it has with other nations around the world meaning that the UK will have to run very, very fast just to stand still. The most recent addition to this cannon of agreements is an EU-Japan free trade deal which was agreed on Friday and now needs the ratification of the EU states and the European parliament before it can come into force. The free trade deal with Japan not only establishes one of the world’s most extensive economic areas, but is a symbolic gesture beyond its economic value and of g...