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Tag Archives: Economic Policy

Weighing the Week Ahead: Can Earnings Growth Justify Current Stock Prices?

We have an array of interesting data in the week ahead including inflation news, more employment numbers, and sentiment from consumers and small businesses. Most importantly we have the start of earnings season. Despite this, the political story will dominate, at least for a bit longer. While this is newsworthy, it is not the key element for investors. What best depicts this challenge to find the right focus? Let us turn to Chance the Gardener! The simple-minded gardener who knows only what...

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Weighing the Week Ahead: What Can Investors do about Gridlock?

We have another normal week for economic reports, featuring retail sales and housing data (NAHB Index, building permits, housing starts). Industrial production is from November, so it is a bit stale. Jobless claims continue to be a current and reasonably reliable indicator. The economy remains secondary for market participants. It has been ignored for months, so why change now? Attention has mostly been on more fiscal stimulus, with daily market moves registering even small hints of progress....

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Weighing the Week Ahead: Will Algos Go Wild?

We have a big economic calendar jammed into three trading days. The reports are of moderate interest – consumer confidence, personal income and spending, durable goods orders, and new home sales. In the current environment these will not provide market-moving news. With most of the A-Team taking the week off (and even B-Team players leaving early on Wednesday), trading volume will be lower. Normally this means low volume and little volatility. Perhaps not this time. The field is open for...

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Weighing the Week Ahead: Learning from Swiss Cheese

We have a normal economic calendar, and the earnings season is winding down. There is interesting data on housing and retail sales – the strong parts of the current economy. Jobless claims remain important as does industrial production. The economic calendar remains less interesting than politics, market gyrations, and the coronavirus. Those will be the media topics. A bigger challenge is finding a way to identify what is important and to determine the causal relationships. It is time to...

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Weighing the Week Ahead: What Should Happen? What Will Happen?

We have a big economic calendar, with featuring reports on sentiment, personal income and spending, and an especially interesting first estimate of Q3 GDP. The election campaign continues at high intensity and the COVID news grabs daily headlines. It is a huge week for corporate earnings, an important independent read on the economy. None of these stories will dominate, allowing investors to choose their own focus. In my continuing effort to call attention to the truly important stories, I...

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Weighing the Week Ahead: Investment Effects of the Changing Political Landscape

The economic calendar is a modest one featuring the JOLTS report and inflation data. NFIB optimism and Michigan sentiment continue to be important since confidence is part of the current economic issue.  The relative lack of economic news leaves plenty of time for the punditry to offer “explanations” for each 1% market move.  The main competition will be the developing political stories.  As I frequently emphasize, we should not base our investment decisions on our political views.  That...

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Weighing the Week Ahead: What Determines the Agenda for Investment News?

The economic calendar is one of the lightest, and a long holiday weekend impends. How will this news vacuum be filled? Probably with celebrity news, following the latest tweets, analyzing any new Democrats running for President, and interviews with B-level guests. Rather than guessing which of these will dominate – an exercise in futility – I will take the suggestion of a wise reader. He encouraged me to choose what I thought was most important. That was good advice. We should all be...

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16/2/19: Deep Crises: past, present, future?

Venezuela's economic (and political, social, public, etc) woes have been documented with exhaustion, although no one so far has produced a half-meaningful outline of solutions that are feasible and effective at the same time.Take for example, the @IIF pitch in: "Venezuela’s economic collapse is almost unprecedented in recent history. Zimbabwe in the last 20 years and the collapse of the Soviet Union are the only comparable episodes." This accompanied the following chart: What is,...

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16/2/19: Deep Crises: past, present, future?

Venezuela's economic (and political, social, public, etc) woes have been documented with exhaustion, although no one so far has produced a half-meaningful outline of solutions that are feasible and effective at the same time.Take for example, the @IIF pitch in: "Venezuela’s economic collapse is almost unprecedented in recent history. Zimbabwe in the last 20 years and the collapse of the Soviet Union are the only comparable episodes." This accompanied the following chart: What is,...

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