Tag: spy
We’ve been saying this here for the last 4 years as markets have continued to climb higher….
The 10yr/T-bill spread is telling a different story than the media….
Categories
The Dollar & Oil
“Davidson” submits:
“Dr Copper” as an economic measure is becoming popular again, but where has it been the past 8yrs when the US economy has been in an uptrend since 2009 as shown by IndProd.
Commodity prices are priced in US$ globally and cycle pricing is more about the Trade Weighted US$ and global capital flows than anything else! Global capital flows are shifting back to Intl markets as the US$ foreign policy swings back towards support for Democratic institutions after a period of support withdrawal. The US$ is beginning to return to its long-term trend and commodity prices are rising as a result. Oil prices which normally rise during periods of political stress fell with North Korea’s threats as there was a brief period of capital flows back into the US seeking safety with the ‘saber rattling’. Now that fear of military action appears to be behind us, the US$ appears to be resuming its return to the long-term trend.
The fear inspired by the Russia’s Ukraine invasion, the rise of ISIS and global terrorism resulted in a sharp rise in US$ in 2014-2016. US foreign policy has begun to reassert global Democratic protections. As investors perceive this to be effective, we can expect the Trade Weighted US$ Major Currency Index to fall another 25% from current levels as global capital flows normalize.
“Davidson” submits:
There are many calls today for a correction, but economic activity continues to move forward and markets follow. Lately it seems many well-known and media-popular forecasters have called for another market/economic correction.
Categories
Equities Rise Should Continue……
“Davidson” submits:
Economic data and equity markets are highly correlated over time. The correlation is not day-to-day or even month-to-month as the media attempts to connect the dots on a daily basis, but over several years the connections become apparent. Along the way, there are many using market trends to predict the trend of the economy and the next few months, even days, of market prices.
“Davidson” submits:
Equity prices have a long history of rising on positive surprises. Many believe markets to be an ‘efficient’ pricing mechanism of all that is known and unknown. If they believe this, then it is surprising that they are willing to pay more for unexpected positive news.
How can we have a record number of $SPY companies beating sales estimates, record profits and other record economic indicators with an economy growing just over 2%?? Maybe, just maybe, it’s because things aren’t as mediocre as they seem?
“Davidson” submits:
How do we achieve record employment, record earnings, record Personal Income, record Retail Sales, near record Industrial Production and still think that our economy is weak? The economic data from the St. Louis Fed speaks volumes and underscores the strength of the current economic cycle. Then, why the continued gloom?
“Davidson” submits:
CAB hit new high this week, the earnings surge predicted by this index 14mos ago in US Industrial Sector is being reported today.
Categories
T-Bills, Earnings and the US Dollar
“Davidson” submits:
T-Bill rates on a sharp rise as positive EPS surprise markets. T-Bill rates now at 1.17% and exceed Effective Fed Funds at 1.16%.
“Davidson” submits:
US$ has continued its dive towards the long-term trend in the 65-70 range using this Trade Weighted Index.