Wednesday , October 16 2019
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Tag Archives: Stocks

Technically Speaking: Bulls Get QE & Trade, Remain “Stuck In The Middle”

“Clowns to the left of me,Jokers to the right, here I am,Stuck in the middle with you” – Stealers Wheels __________________________ The lyrics seem apropos considering we have Trump, China, Mnuchin, the Fed, along with a whole cast of colorful characters making managing money a difficult prospect recently.  However, the good news is that over the last month, the bulls have had their wish list fulfilled. The ECB announces more QE and reduces capital constraints on foreign banks. The Fed...

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Mauldin: Social Security Is Screwing Millennials

Social Security is a textbook illustration of how government programs go off the rails. It had a noble goal: to help elderly and disabled Americans, who can’t work, maintain a minimal, dignified living standard. Back then, most people either died before reaching that point or didn’t live long after it. Social Security was never intended to do what we now expect, i.e., be the primary income source for most Americans during a decade or more of retirement. Life expectancy when Social Security...

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Technically Speaking: This Is Nuts & The Reason To Focus On Risk

Since the lows of last December, the markets have climbed ignoring weakening economic growth, deteriorating earnings, weak revenue growth, and historically high valuations on “hopes” that more “Fed rate cuts” and “QE” will keep this current bull market, and economy, alive…indefinitely. This is at least what much of the media suggests as noted recently by Rex Nutting via MarketWatch: “‘Recessions are always hard to predict,’ says Lou Crandall, chief economist for Wrightson ICAP, who’s been...

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Confidence Drives The Economy & Trump’s Trade War Is Killing It

Economic growth isn’t random. It comes from individual decisions to buy, sell, or do nothing. We all make dozens every day. Corporate CEOs and CFOs make bigger decisions, like whether thousands of people get hired or a factory gets built. That means, the economy generally does better when business leaders see growth opportunities, and worse when they don’t. Right now, the latter is happening. We know why, too: President Trump’s erratic trade policies make long-term planning difficult, to say...

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ESG Investing & The Quest For Sustainability

Almost anywhere you look there is commentary on sustainability. What used to be known fairly narrowly as “socially responsible investing” has now grown into a broad effort captured by the acronym “ESG” (environmental, social, governance). These issues range from climate change to sustainable food production to better versions of capitalism. It is easy to infer from all this coverage that sustainability is something we should be talking about. It is far less clear, however, what we should...

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Mauldin: Economics Is Like Quantum Physics

I often say a writer is nothing without readers. I am blessed to have some of the world’s greatest. Your feedback never fails to inspire and enlighten me. My last week’s That Time Keynes Had a Point letter brought many more comments than usual. Apparently Keynes is still provocative 73 years after his death, no matter what you say about him. But my real point was about the twisted economic thought that is having dangerous effects on us all. And we can’t blame it just on Keynes. Today I want...

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GDP Estimates Collapse After Dismal ISM Report

GDPNow and other GDP estimates took a dive today on weaker than expected manufacturing reports. The GDPNow forecast for third-quarter GDP fell to 1.8% today on weak economic reports. Gold and Treasuries Rally GDP Estimates Q3 GDP growth estimate changes on FridayMorgan Stanley ⬇️ from 2.1% to 1.5%Macro Economic Advisors ⬇️ from2.2% to 1.6%NY Fed ⬇️ from 2.24% to 2.04%Atlanta Fed ⬆️ from 1.9% to 2.1%— UPFINA (@UPFINAcom) October 1, 2019Oxford Estimate Real Final Sales The...

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Technically Speaking: The Risk To The Bullish View Of Trade Deal

In this past weekend’s newsletter, I discussed the bullish view of a trade deal with China.  “Assuming we are correct, and Trump does indeed ‘cave’ into China in mid-October to get a ‘small deal’ done, what does this mean for the market.  The most obvious impact, assuming all ‘tariffs’ are removed, would be a psychological ‘pop’ to the markets which, given that markets are already hovering near all-time highs, would suggest a rally into the end of the year.”  This is not the first time we...

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Earnings Season & The Truth About Wall Street Analysis

Earnings results for the third quarter is fast approaching, and investors are getting excited for the “beat the estimate” game where Wall Street continually lowers estimates so companies can beat them. As I noted previously: One of the reasons given for the push to new highs was the ‘better than expected’ earnings reports coming in. As noted by FactSet:  “78% have reported actual EPS above the mean EPS estimate…The percentage of companies reporting EPS above the mean EPS estimate is above the...

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J.M. Keynes: The Time He Had A Point

John Maynard Keynes once said: “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.” While true, it doesn’t go far enough. The problem isn’t simply defunct economists or “scribblers of a few years back.” We are in the grip of economists who, far from being defunct, hold great...

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