U.S. corporates refuse to get tempted by consumer-spending signal

posted in: Credit, Economy | 0

Non-residential fixed investment contributed 0.68 percent to the four-percent growth in U.S. gross domestic product in the second quarter.  A much larger 1.69 percent came from personal consumption expenditures.  Back in 1Q08, non-residential fixed investment peaked at $1.99tn, preceded by … Continued

ZIRP-induced interest-rate dynamics between income and payment

posted in: Credit, Currency, Economy | 0

There is probably no other price as important as the price of money – that is, interest rates.  They are what grease the wheels of an economy.  Simplistically, when rates are high, people are incentivized to save more.  When they … Continued

20-percent-plus move in CSCO past six months prices in fair amount of optimism, stock vulnerable at least near-term

posted in: Derivatives, Equities, Technicals | 0

Unlike a consistent Steady-Eddie CSCO of the past, the company’s quarterly results of late have been a hit-and-miss.  In the U.S., business capex is lackluster but steady.  In November last year, CSCO spooked investors with a downbeat outlook.  In February … Continued

Bond yield/earnings yield ratio lousy metric in present circumstances

posted in: Credit, Economy, Equities | 0

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

Mismatch between capex-cautious but profit-rich corporations and already-levered but ready-to-take-on-more-debt consumers

posted in: Economy, Equities | 0

The 1Q14 GDP print was a shocker, to say the least!  Real GDP inched up a mere 0.1 percent SAAR, versus consensus expectations of 1.2-percent expansion.  Sure, it is the advance estimate, with two more still to come.  Sure it … Continued

An ‘escape velocity’ that keeps escaping

posted in: Economy, Equities, Technicals | 0

Are we there yet?  Have we yet reached the escape velocity?  You know the 6.96 miles-per-second speed needed to break free from the gravitational pull of the earth.  I am of course figuratively referring to the prevalent expectations that the … Continued