Article Category: Inflation

Profits and Home Prices Remain Healthy

China and the U.S. slapped $34 billion worth of levies on each other's exports last Friday, and today the markets said, "yeah, whatever," and marched higher. The questions is, why?

Market moves often baffle investors, but this one shouldn't. Fundamentals are strong, corporate profits appear to be rising nicely, the trade skirmish represents a tiny portion of overall GDP, and stocks have been punished for six-months straight. Add to that small incidentals such as the market's P/E falling by about two handles, as well as these tariffs already being priced in, and you have the recipe for a nice rally.


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Posted in: Earnings Economy Gold Inflation Interest Rates Recessions

Charts Galore

As someone who studies the markets on a daily basis, and writes about them frequently, sometimes I get tired of talking ... or rather, writing. So today, I'm going to allow charts to do most of the talking, with some comments thrown in where needed.

As they say, a picture is worth a thousand words ... so get ready for at least 12,000 words of wisdom, not including the nonsense that comes out of my mouth, of course.


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Posted in: Economy Federal Reserve Inflation Momentum

Euro Problems Again?

As you've probably heard, global markets tanked today, thanks to Italy. On Sunday, Italian President Sergio Mattarella blocked the formation of a coalition government formed from the anti-establishment 5 Star Movement and the League parties. The reason: concern for the euro.

The anti-establishment coalition represents a threat to Europe's common currency, and had proposed Paolo Savona, a euroskeptic, as economy minister. Now that the new government has been blocked, a new vote is likely, and that suggests anti-euro forces could emerge even stronger.


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Posted in: Dow Theory Federal Reserve Inflation Interest Rates Primary Trend

Conditions Are Stabilizing

With each passing day it looks increasingly likely that the February swoon was simply a run-of-the-mill correction, as opposed to the beginning of a full-fledged bear market. But that doesn't mean we're out of the woods just yet. Major averages may be reluctant to set new lows, but they're also in no hurry to get back to new highs.

During periods like this, one of the best moves we can make as investors is often no move at all. Like a pilot flying through thick cloud cover, we're better off keeping a light touch on the controls, with our eyes focused squarely on what our instrument panel is telling us.


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Posted in: Corrections Dollar Earnings Economy Inflation Interest Rates Oil

As Good As It Gets?

It's really quite amazing how one comment, from one individual, can set the market's tone for months to come. Normally, this power is reserved for people like the president, or the chairman of the Federal Reserve, who have the power to make decisions that will affect the entire economy.

But at the start of this earnings season, the CFO of Caterpillar, Bradley Halverson, made a statement that changed the narrative of this market. After delivering very strong first quarter results in which sales rose 38%, Halverson said on the earnings call that the first quarter could be the "high-water mark for the year." Caterpillar shares promptly sold off 6%, as did the broader market.


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Posted in: Earnings Economy Federal Reserve Inflation Interest Rates

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