Our October report reviewed the limitations of the Phillips Curve in forecasting inflation as it relates to unemployment. Essentially economists interpretation of Phillips posit that lower unemployment equates to higher inflation. This view was created in the 1970’s post Gold/Currency Standard during the inflationary Baby Boom employment surge. Should the overall CPI rise above…
Our September warning of an October correction lasting until election day November 6th warranted a defensive posture for investors. Looking at the 200 day moving average (dma) of stock indices partially illustrates our subdued current outlook. Half way through the stock markets October plunge we witnessed the break of the vaunted 200 dma…
The stellar 2017 gains in all major stock indices were earnings driven. In 2018 it’s news driven. SP 500 earnings grew an excellent 16% in 2017 with a 19% gain in stocks and profits have expanded to an 8 year high of 25% growth in the first quarter of 2018, well…
In recent quarters we have exposed the hyperbole of doom and gloom evidence, while expecting a first quarter 2018 double digit stock market correction. We have shown that the stock market margin debt ratio is normal, credit card and mortgage default rates are calm, credit spreads, junk bonds, yield curves…
Copper and Oil are important barometers of economic direction. The weather vane for Copper’s direction isn’t as much supply, but demand. Chinese industrial activity and the commitment of traders are important demand side tells to observe. When Copper surged an impressive 10 cents a pound last week it was blamed on the…
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