A key inflation measure, the Personal Consumption Expenditures (PCE) index, remained unchanged year over year in July, per data released on August 31, 2017. It increased 0.1% in July on a monthly basis. Excluding food prices and fuel, core PCE measure — the Fed’s preferred measure of inflation — increased 1.4% in July year over year compared with 1.5% in June. However, it edged up 0.1% in July on a monthly basis. Therefore, it is still far from the Fed’s target of 2%. Consumer Confidence Although 236,000 people applied for jobless benefits in the week ended August 26, 2017 compared with 235,000 in the previous week, the labor marke...
In my calculations of utilization of labor and capital, there is a derivative of one equation that tells to what extent capacity and labor is being optimized. Here is the graph of current monthly data. As the lines get closer to 0%, they are more optimized. When they reach 0%, they are fully optimized. The graph shows that capacity is being fully optimized again as it was during the troubling 3rd quarter of 2104. Yet labor is being less optimized now. Capital has made improvements to their position, while labor has actually lost....
The stock market ended the month of August positive making it the 10th straight month the S&P 500 was up on a total return basis. In the past two days, it seemed like someone wanted the market to be up for the month as it rallied just enough to achieve that goal. The last North Korean action did nothing to stymie the market as the S&P 500 is within 1% of its all-time high. The VIX fell 5.61% to close the month at 10.59. As you can see from the chart below, this was the 4th lowest monthly close for the VIX since 1990. As you can see, the high is the highest on this list because of the brief worry about North Korea. Some stats don’t...
The planet-sized egos of rock & roll performers are legendary. Few things symbolize this better than the outrageous requests they often make when on tour. These requests are referred to as “riders”, and appear in the contract a tour venue receives in advance of the artist’s arrival. These contract riders specify the physical conditions that the singer/band requires to be in place before arriving to perform. Stage lighting settings, sound equipment, furnishings, etc — that kind of stuff. And these rider requests can get pretty funky – often extremely so — when it comes to backstage perks the performers w...
Fundamental Forecast for CNH: Neutral Asian Stocks Mixed Despite Strong China Data, US Payrolls Loom Asian Stocks Mixed As Jackson Hole Disappoints, Yuan Gains The Chinese Yuan had the largest weekly gain against the U.S. Dollar since January in the offshore market. The USD/CNH dipped 6.5442, a 14-month low level (high for the Yuan), following the release of a worse-than-expected U.S. Non-Farm Payroll (NFP) print. On the contrary, both the Chinese official and Caixin manufacturing prints released earlier beat forecasts, adding strength into the Yuan. Looking forward, China will have a heavy economic calendar, including Consumer Price Index...
A strong week helped keep the S&P 500’s monthly winning streak alive, although the red-hot NASDAQ had the first negative down month in recent memory. The devastation of Harvey and more provocations by North Korea were overlooked by investors in favor of strong GDP growth, potential tax reform, a friendly jobs report and views that central banks will remain accommodative. Weekly Returns: S&P 500: 2,477 (+1.4%) FTSE All-World ex-US: (+0.5%) US 10 Year Treasury Yield: 2.16% (-0.01%) Gold: $1,325 (+2.6%) EUR/USD: $1.186 (-0.4%) Major Events: Monday – Apple announced it will hold a product launch event on September 12th. Monday – G...
Shortly after topping $5,000 (according to several exchanges), Bitcoin began to tumble dramatically – now down almost $500 – erasing all the post-North-Korea missile anxiety gains. Ethereum has crashed even more. In fact, 9 of the 10 largest cryptocurrencies are all plunging this morning. While there is no specific catalyst for this drop, two events have been cited: in the US, regulators have begun officially cracking down on ICOs. It’s starting. pic.twitter.com/ZpfW8Kb9jT — BitCrypto’ed? (@Bitfinexed) September 1, 2017 Meanwhile, one of the world’s largest bitcoin exchange, Shanghai-based BTC China, a...
The Nasdaq hits all time highs in a ripping rally this past week, but AAPL displays heavy risk as indicated by the elevated implied volatility. You will want to watch this crucial Labor Day weekend video market update to find out the best trade opportunities for next week....
If you were following along last week, you know that more than a few commentators believe rates and the dollar have simply priced in too much pessimism around the U.S. economy and the fiscal outlook. No, the incoming data hasn’t exactly been what one might call “gangbusters” and the prospects for tax reform and fiscal stimulus seem to dim every time Trump opens his Twitter app or decides to deviate from the teleprompter, but with yields near YTD lows, the dollar struggling to get any kind of traction, and positioning stretched, one could make a contrarian case based simply on the proposition that it would be difficult for the outlook t...
The good news is: The Nasdaq composite (OTC) closed at an all time high last Friday. The sellers left town early last week. Volume disappeared, new lows disappeared and the secondaries outperformed the blue chips. The Negatives The market is overbought. The first chart covers the past 6 months showing the OTC in blue and a 10% trend (19 day EMA) of Nasdaq new highs (OTC NH) in green. Dashed vertical lines have been drawn on the 1st trading day of each month. New highs picked up last week, but the indicator is a long way from confirming the new index high. The next chart is similar to the one above except it shows the S&P 500 (SPX) in re...