Thursday , October 17 2019
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The author Gregor Samsa
Gregor Samsa
This site is designed as a “go to” source for traders, investors, policymakers and any interested in markets and the global economy. We provide informed opinion, timely market information, sources, and links.

Global Macro Monitor

Most Overvalued Equity Markets – IMF

October Datafest October is always a month of feasting for us macro data junkies as the IMF releases several of their annual reports and databases, such as the World Economic Outlook (WEO) and the Global Financial Stability Report (GFSR).   We have a preference for the IMF economists as they don’t have a pom-pom/cheerleading bias in their analysis with a BTFD or “the market is cheap” tint to their narratives as do many sell-side and buy-side analysts, who almost always seem to be...

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Watch This [WeWork] Space

15 Oct – 08:14:04 PM [RTRS] (9984.T) – WITHOUT ADDITIONAL FUNDING, WEWORK IS POISED TO RUN OUT OF CASH BY MID-NOVEMBER – CNBC — Alastair Williamson (@StockBoardAsset) October 16, 2019 A very smart friend of mine thinks WeWork could be the Lehman-like trigger that causes risk premiums, including equity,  to blow out.  Jamie to the rescue with a $5 billion line of credit? And to think investors almost got stuffed with what was originally valued close to a $50 billion IPO of this...

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Brexit Market Rockin’

The PredictIt market on a Brexit by November 1st is up over 50 percent in the past 24 hours. The Rules Prior to 12:00:01 a.m. November 1, 2019 London time, the United Kingdom shall exit the European Union. – PredictIt Driven by a tape with the following headlines, this one from the WSJ. Still, the market is only pricing around a 30 percent probability of an October 31 Brexit, which may be due to the potential for a temporary extension of the deadline to conclude negotiations. We don’t...

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How Far Can The Stock Market Run?

Very little to the upside.  Very much to the downside. Macro Valuation Metrics Lots of incoming over our S&P Shooting Star post, most of which can mostly be summed up to the effect, “Why so bearish?” Seriously?   Our predisposition to the market is always anchored in time tested valuation metrics, which are hard to manipulate.  That is why we like market capitalization deflated by some macro variables, such as nominal GDP or wages. Micro measures, such as Price-to-Earnings are way...

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Brexit Market Plummets – “The Clock Is Ticking”

After negotiations in Brussels failed to produce a  breakthrough, the odds at PredictIt of an official Brexit by November 1 tanked into the teens on big volume.  The market was only pricing around a 30 percent probability of a deal by October 31,  however. Here’s some commentary by the FT, Boris Johnson’s hopes of sealing a Brexit deal in time for a critical EU summit later this week were in jeopardy on Sunday evening after two days of intensive negotiations left Brussels baffled about...

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Heads Up! Friday’s Rare S&P Shooting Star Candlestick

We’ve been ignoring the daily noise of the stock market given the futility of trying trade against the blatant market manipulation but especially, after the S&P met our target of 3025, which we posted on April 1st, If you have been reading GMM,  you know our thoughts on equities.  The sheer momentum of such a strong first-quarter carries over into the rest of the year, which is the justification of our year-end S&P target of 3025.  –  GMM, April 1st Check.  The S&P peaked...

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Another Potemkin Trade Deal

Chalk up another meaningless, photo-op trade agreement with the recent U.S.-Japan Trade Agreement.   The country and, especially, American farmers would have been much better off staying in the Trans Pacific Partnership (TPP). The Japan deal is just another Potemkin trade agreement that will not move the needle one centimeter in bringing jobs back to the United States as was promised. The dominant loop in the algo to predict President Trump’s behavior with respect to just about...

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It Begins

YYes  It is starting to get real, folks.  The U.S. is in the midst of a major and potentially very destabilizing Constitutional Crisis. Don’t listen to the talking heads flapping their jaws.   Everything is not awesome.  Any strength or rallies are a gift to reduce risk and/or get shorty.  Buckle the f$&k up! Share this:Like this:Like Loading...

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How The Rich Get Richer And The Poor Get Poorer

The power is off in Northern California but we want to get this out even though it is still in draft form.  We are working off desk and not sure when power will be restored.  Take this as our first cut or swing in one of four at-bats.    Summary– We analyze the various components of the household balance sheet that drove net worth for the different percentile groups from Q1 2000 to Q1 2019– The Top 1% are the ownership class, who hold over 60 percent of their assets in equity, in both...

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Private Sector Job Growth

Just a follow-up chart to our weekend post, Job Creation: Reality v. Politics,  to reflect the sharp downshift in private-sector job creation.  The 3-month moving average of the change private-sector payrolls is now at its lowest level since July 2012. As we said, it is a difficult proposition to generate robust job growth with a shrinking labor pool and an unemployment rate at 3.5 percent, which we believe is a flawed measure.  See here.  Share this:Like this:Like Loading......

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