It may be cold outside, but individual investors have really warmed up to stocks in a big way. According to the weekly sentiment survey from the American Association of Individual Investors (AAII), bullish sentiment increased to 59.75% from 52.65% last week. If that sounds like a high reading, that’s because it is! Not only is this the third straight week where bullish sentiment has been above 50%, but it’s also the second highest reading in bullish sentiment of the bull market! The only week that saw a higher reading was back in December 2010 when it reached 63.3%. After stubbornly resisting the rally for several years now, individual i...
When considering valuation metrics, the obvious choice has always been Price-to-Earnings ratio as calculations based on earnings are easy and come in handy. However, Price-to-Sales has emerged as a convenient tool to determine the value of stocks that are incurring losses or are in an early cycle of development, generating meager or no profits. While a loss-making company with a negative Price-to-Earnings ratio falls out of investor favor, its Price-to-Sales could indicate the hidden strength of its business. This underrated ratio is also used to identify a recovery situation or ensure that a company’s growth is not overvalued. A stock...
This might seem a frivolous question, while the dollar still retains its might, and is universally accepted in preference to other, less stable fiat currencies. However, it is becoming clear, at least to independent monetary observers, that in 2018 the dollar’s primacy will be challenged by the yuan as the pricing medium for energy and other key industrial commodities. After all, the dollar’s role as the legacy trade medium is no longer appropriate, given that China’s trade is now driving the global economy, not America’s. At the very least, if the dollar’s future role diminishes, then there will be surplus dollars, which unless the...
EUR/JPY posted its best reading in nearly two years today pushing through the 136.00 by morning US trade. The pair is signaling that market is looking for synchronous global growth that will tighten monetary policy everywhere but Japan allowing the pair to make a move towards the key 140.00 level over the next few weeks. Today’s strong ADP data has the market thinking that NFPs will be solid as well, and if the number proves to be strong in both payrolls and wages USD/JPY should verticalize well above the 113.00 level and pull EUR/JPY along with it, making the 140.00 target within reach....
My economic forecast for 2018 is moderately positive, as I explained in recent articles detailing predictions for consumer spending, housing, and business capital spending. But things could go wrong, even so far as a recession. Anyone who is absolutely convinced that we cannot avoid a recession this year is far too overconfident in his or her ability to understand the economy. The same is true for anyone who thinks a recession could not possibly begin this year. In short, we live in an uncertain world. Dr. Bill Conerly based on data from The Wall Street Journal Estimated risk of a recession beginning in the next 12 months. The risk of re...
After a great performance in 2017, the good times for the British pound look set to continue. While manufacturing and construction PMIs announced earlier this week missed expectations, services PMIs beat optimistic expectations. Given the forward-looking nature of PMI surveys, upcoming GDP growth should remain strong. As services dominate the UK’s exports, this news was well-received in foreign exchange markets and the pound rose following the announcement. Looking onto the horizon, we believe the pound can continue rallying thanks to strong regional growth, moderate sentiment and the historically low value of the pound relative to other cu...
Private businesses in the US created 250,000 in December, according to the ADP Research Institute report. The highest in nine months and beat the 190,000 estimated by economists. “The job market ended the year strongly,” Mark Zandi, chief economist of Moody’s Analytics Inc. in West Chester, Pennsylvania, said in the statement. Moody’s produces the figures with ADP. “Robust Christmas sales prompted retailers and delivery services to add to their payrolls. The tight labor market will get even tighter, raising the specter that it will overheat.” Increase in job creation remains consistent with the tight labor market that is p...
Are you a frequent visitor to retail drugstores? Then you must have come across at least one of the more than 13,200 drugstores operated by Walgreens Boots Alliance, Inc. (WBA – Free Report). This Illinois-based company is the first global pharmacy-led, health and wellbeing enterprise. Currently, Walgreens Boots has a Zacks Rank #3 (Hold) but that could change following its impressive first quarter fiscal 2018 earnings report which has just released. We have highlighted some of the key details from the just-released announcement below: Earnings: Walgreens Boots’ adjusted earnings per share of $1.28, up 16.4% year over year surpass...
After closing at a record low last night below 9, VIX is trading with an 8 handle this morning (amid somewhat chaotic trading). VIX has never traded below 9 two days in a row… ever. As we noted yesterday, it’s only traded below 9.0 on seven days since the index was created 28 years ago – six of them in the last six months, the other in Dec 1993. And The Dow tops 25,000 – the fastest 1000-point leap in history… (Dow first crossed 24k on 11/30) Time for a new Dow 30k hat soon? Meanwhile the yield curve continues to collapse to new cycle lows… ...
Jobless claims rose for the third straight week, rising to 250K from last week’s level of 247K. That was 10K above the consensus forecast of 240K and the highest weekly print since 11/10/17. Even with three straight weeks of increases, though, jobless claims are nowhere near 300K, which is a level they have been below for 148 straight weeks now. With the recent increases, the four-week moving average of claims has been ticking higher the last two weeks to its current level of 241.25K. That’s 10K above the cycle low of 231.25K that we saw back in early November, but given the recent trends in claims, it doesn’t look like we will be ge...