The current prime age (25-54 years old) unemployment level hovers around multi-decade lows of 3% – essentially full employment – while the prime age labor force participation rate is far from its peak – implying less than full employment. Since the female workforce rose to maximum participation rates in the…
The Trump – China trade dispute, peak profit margins and downward earnings growth forecasts will keep stock prices on the defensive in the months ahead. The equity Bull market can be sustained and a recession avoided in 2019, however it will require a resolution on the trade front and likely further…
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…
With the heart of the current earnings season for stocks running from October 16th to November 14th, it’s early to prognosticate with confidence, but there appears to be a shift in how the market is responding to good and bad news. In 2017 and most of 2018 bad news was…
Debt default contagion fears seem to surface every decade. Rolling debt bubbles in the 1980’s from Latin America led to Billions in handouts from the 1st world banking system. The Asian currency default contagion among the Asian tigers was eventually contained in the late 1990’s. More recently the more menacing…
October correction phase will continue until election day and beyond should Trump lose control of Congress to his rivals with echoes of the 2016 election uncertainty saga. On 09-28-18, three days prior to the the record stock market peak on October 3rd, our newsletter warned of an October correction parallel…
On September 28th ( https://execspec.net/stocks-election-oil/ ) we forecasted an October correction with this chart, warning of a parallel to the pre-election pause in October 2016. The uncertainty and contentiousness parallel to 2016 favors sideways to lower stock prices into the November 6th election. A further investment correction scare in November…
Trump’s claim of bringing back American manufacturing jobs is boastful with some truth. Since the manufacturing halcyon days of the 1970’s, the US Dollar was allowed to depreciate and cheap labor abroad sent US factory jobs into a multi-decade tailspin. Manufacturing output rose, but 8 Million jobs were lost. In his first…
Milton Friedman promulgated the Phillips Curve interpretation that posits a tight labor market generates higher inflation. Since 1967 this has been the primary tool of Central Banks and economists in forecasting inflation. During the previous generation it appeared that falling unemployment during an economic recovery would always trigger a strong…
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