October’s CPI report showed continued disinflation since peaking last year at four-decade highs. Concurrently, Walmart, which commands a wide consumer reach with nearly $600 billion in annual sales, rather ominously commented that the company was more cautious than it was … Continued
Most traders on Wall Street grew up in a low-interest-rate, low-inflation environment. It is hard for them to relate to why Volcker acted the way he did in the late-‘70s/early-‘80s. Greenspan, Bernanke and Yellen operated at a time when inflation … Continued
It is a seasonally strong period for stocks. Bulls are wasting no time getting ready for this. Stocks are rallying. In the best of circumstances, there is room to run still, with the caveat that an important inflation report is … Continued
Small-caps are lagging. With a large domestic exposure, these companies offer a reliable way to take a pulse of the economy. Rates have gone up a lot and will rise even more. A recession is imminent next year. Large-caps’ recent … Continued
Inflation is all the focus right now – for the central bank, for stocks and for the average household. The Fed is tightening and wants to see consumer inflation make a dash toward its two percent target. There are incipient … Continued
US equities surprisingly were surprised by Powell’s hawkish message on Wednesday. He seems very determined to bring inflation down no matter what the cost to jobs and the economy. This will have repercussions for earnings, which then will reverberate through … Continued
The Fed is selling its treasury holdings, foreigners are buying. Non-commercials are shorting 10-year note futures, the US budget deficit is narrowing. Amidst these supply-demand dynamics, the 10-year T-yield is at risk of forming a potentially bearish technical pattern. The … Continued
With a couple of tough weeks, both large- and small-caps last week suffered a slight breach of support, but not decisively just yet. Concurrently, VIX is flashing signs of fatigue. For equity bulls, if there is going to be a … Continued
Most valuation metrics in US equities are stretched. This at a time when the Fed is tightening. Depending on how inflation behaves in the months and quarters ahead and how monetary policy evolves, unwinding of overbought conditions can cause pain. … Continued
Things are slowing down. From job creation to real GDP, there are signs of deceleration. CEOs are beginning to sound pessimistic. Often, this can act as a self-fulfilling prophecy. Amidst this comes the sell-side’s overly optimistic estimates for small-cap operating … Continued