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Fireside Charts: Dovish FED Doesn't Stop the Dollar, U.S. Stocks Decoupled from the Rest of the Global Economy, Companies Cautious on Growth

April 29, 2019

According to a chart on what is mentioned during S&P 500 earnings calls, companies are pulling back on optimism. As we have mentioned throughout the month, small caps are being crushed by their counterparts. Comparing the S&P 500 against the MCSI all world ex. U.S. index, U.S. equities are sharply outperforming the rest of the world. We also saw this occur at the end of 2018. What does it mean? The ...

Fireside Charts: The FED Adopts New Inflation Strategy, South Korea Contracts, What  Happens if Oil Reaches $100/barrel

April 26, 2019

With 20% of companies reported, S&P 500 1st quarter earnings are up 0.2% year over year, which is the slowest growth trend seen since Q1 2016. Federal Reserve Chairman Jerome Powell and his committee have made an important shift in their strategy for dealing with inflation targeting. How will this play out if the change is implemented, especially in this slowing market environment? Initial jobless claims rose above last year's level. Why we have been paying such close attention to energy lately: See the impact on global growth ...

Fireside Charts: The Goldilocks of Investment Grade Bonds, The Price of Oil, Another Disappointing FED Survey

April 24, 2019

Stocks have recovered better than the earnings outlook anticipated and Jurien Timmer's take on the S&P 500 price index is that it is higher than it should be. Moving to credit, investment grade bonds perform best in a moderate growth environment- not too low, but not too high either. As the world's number one export product in 2018, crude oil production in the U.S. rose to over 10 million barrels a day last year. Next, yet another disappointing regional FED survey. Finally, number of international home buyers in the U.S. dropped 6% YOY.

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Fireside Charts: Capital Gains Taxes, the Manufacturing Slump, and a Long-Term Look at U.S. Debt

April 22, 2019

With some European and Asian markets closed this Easter Monday, we turn our attention first to the U.S. budget. Next, a look into U.S. Federal debt over time - can you guess which year the country first accumulated major debt? U.S. businesses are suffering from slowed output, new orders, and hiring, especially in the service and factory sectors. A not-so-welcome trend has appeared in the Philly FED Manufacturing Index. Lastly, a look at how Germany and France are faring in the manufacturing space. 

Fireside Charts: Regional Business Conditions, Tech "Unicorns" and their IPOs, Mixed Growth Results in Japan and Australia

April 19, 2019

The Chicago FED's regional business activity indicators have softened. From another regional scope, business conditions for all U.S. regions weakened in March with the exception of the South. In light of Pinterest and Zoom Video Communications set to IPO yesterday, a look at IPO's of other tech giant and their cumulative profits since then. While Japan's manufacturing has been in contraction ...

Fireside Charts: China GDP Results, LEIs are Saying the Worst is Over, and U.S. Companies Lack Pricing Power

April 17, 2019

China's first-quarter GDP growth has held up better than some had feared. Beijing is allowing local governments to issue more bonds. Is this part of a larger stimulus effort? In the United States, Q2 industrial production results may hint that Q1 data will disappoint. Yet, leading indicators point to a rebound in economic activity. In an update on profit margins for S&P 500 sectors, tech margins are nearly 3x the median S&P 500 sector. U.S. companies show limited pricing power and may not be able/willing to pass on higher ...

Fireside Charts: Growth Stocks Haven't Been this Expensive since Dot-Com Bubble, Jobless Claims hit 50-Year Low, How Americans Spend their Money

April 15, 2019

Wishing you a happy and safe Patriot’s Day from Boston! The MSCI World Value Index is showing global value stocks are near cheapest versus growth stocks in 19 years. U.S. retail gasoline prices have been rising for 57 days as of last Friday. How will this affect the SUV trend? On a more positive note, the fewest people in nearly 50 years sought unemployment benefits last week, making jobless claims hit a half-century low. The latest news on Brexit shows if the electorate has changed its mind, and less bad news is good news for Europe's industrial ...

Fireside Charts: Small Caps Stock Lag, Brent Crude Settles at $71 Per Barrel, China’s Stimulus Through the Years

April 10, 2019

For the first quarter, Energy, Materials, and Technology stocks are expected to see the largest earnings contractions. Small-cap earnings increasingly lag their large cap peers. Brent (oil) is trading above $71 per barrel, but is the futures curve predicting lower prices? We all know lower prices means lower demand and thus are a possible recessionary indicator. When the Fed is on hold, Treasury yields tend to move lower. Meanwhile, Italian bond yields are at the lowest levels in almost a year. Just how much is China stimulating its economy? Three times ...

Fireside Charts: U.S. Dollar Up From Previous Lows, Changing Landscape for Government Spending, and World Trade Indicators

April 8, 2019

Did you know? On this day in market history, President Franklin D. Roosevelt signed the Emergency Relief Appropriation Act to create $5 million in work relief programs during the Great Depression. This public assistance package remains the largest in U.S. history. Today, we begin with an update on the U.S. Dollar, which has advanced from its previous lows. We are seeing discretionary shrink among U.S. government spending. Greece's bond yield is at 2.32%. Do you know how that compares to ours? Finally, a look into home ownership across ...

Fireside Charts: Global Earnings Halved, Housing Markets, and Are We Seeing an Emerging Market Rally?

April 5, 2019

 

Industrials, Financials, and Consumer Discretionary are expected to lead sector earnings for the rest of the year. Global economic data momentum has deteriorated to multi-year lows. In Europe, the February German factory orders report was sobering. An example of how data sets can mislead: we refute the claim that Tokyo housing prices have barely budged since the beginning of this century. Finally, we are crossing our fingers on Emerging Market data.