Sales of new homes are struggling to maintain their earlier momentum. The three-month moving average flat-lined for nearly a year before peaking at 448k (SAAR) in January this year. Those for sale (supply) has been gradually inching up as well … Continued
Nasdaq stocks are attracting some bids. As has been the case for so long, volume continues to remain uninspiring, but price action overrides all. For now. The index has managed to trade north of its 50-day moving average, and has … Continued
Non-commercial futures traders’ bet in recent weeks on a declining VIX was spot-on. Toward the middle of March, these large speculators were net short a mere 1k contracts. VIX (spot) was around 15 at the time. Technically, there was room … Continued
Any economist or investment professional who knows a thing or two about what is going on in the U.S. job market knows not to be misled by the rapid decline in the unemployment rate. From the cycle high 10 percent … Continued
In discussing the dynamics behind the U.S. bond market early this week, an important variable got left out. The chart below plots the budget situation of the U.S. government against issuance by the Treasury of notes and bonds. This gives … Continued
As 2014 began, growth expectations were very high for the U.S. economy. In fact, every year since the recession ended mid-2009, economists’ GDP forecasts have been on the optimistic side, only to be progressively cut back as the year progresses. … Continued
One valuation tool equity bulls consistently use to justify current stock valuations – as well as to argue for further multiple expansion – is by comparing bond yield to earnings yield. There is a metric known as ‘bond equity earnings … Continued
The phrase quantitative easing elicits diverse reaction. For some, QE was what saved the U.S. economy post 2007/2008 crisis and boosted both housing and stocks. For others, all it did was create this huge asset inflation, and further widen the … Continued
Unlike in the past when equities have shown a strong correlation with each other, increasingly they are marching to the tunes of different drummers. Consider the DJI. It has flat-lined for five months now, and it feels like it is … Continued
The euro has been in an incessant rally mode since July 2012, and particularly since July 2013. This has surprised a lot of observers as this has come in the face of what in ordinary circumstances could/should have resulted in … Continued