Article Category: Inflation

Dollar Breakout Threatens Rally

The story of 2018 has been one of U.S. growth, but not necessarily global growth. While most major economies around the world are still expanding, they have been decelerating or holding steady, whereas the U.S. economy has been picking up steam.

As is typically the case, a stronger relative outlook for the U.S. has led investors to bid up the dollar, which is causing a reshuffling of the cards. Currencies always have a way of sharing and redistributing growth around the globe, and this time is no different.

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Posted in: Bonds Dollar Economy Federal Reserve Inflation Recessions

Interesting Stats and Their Implications

Over the years, stock market enthusiasts have come up with at least a billion or so novel ways to forecast future performance. Some of the more well known indicators include the January Barometer, the Super Bowl indicator, and the old adage, "Sell in May and go away."

Most of these indicators lack statistical significance, implying that they're more or less coincidence, but it can still be fun to explore what they have to say. This is especially true when you're in the midst of a boring economic expansion where nearly every data set is pointing towards higher prices.

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Posted in: Corrections Federal Reserve Inflation Interest Rates Volatility

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

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