US manufacturing is coming back with a vengeance. Orders are soaring and inventories remain low, raising the odds that the recovery in manufacturing has life left in it. That said, August’s 56 is up substantially from April’s 41.5. Historically, the … Continued
Tech stocks rallied massively in the past four months, with the leaders outpacing the soldiers by a wide margin. Last week, post-earnings reaction to several tech stocks including MSFT indicated a ‘sell the news’ phenomenon. This week, four of the … Continued
Stocks have diverged from sharp deterioration in fundamentals. At the lows, several indicators were at washout levels, resulting in the massive rally that followed. But at this point in time, they may be responding more to the Fed’s monetary backstop … Continued
The post-Great Recession recovery has been uneven. Jobs have been one of the bright spots. In the dying months of last year, job openings – both non-farm and small-business – weakened. It is too early to declare a trend has … Continued
Amidst mixed signals in the economy and divergences with the bond market and crucial metals, among others, US stocks continue to rally to new highs. US inventories are building – again. In October, manufacturing and trade inventories rose 0.2 percent … Continued
Small-caps broke out last week. This comes amidst earnings deceleration and softening in several macro data. If things turn up as they did in early 2016, bulls would have been vindicated. Their conviction level will be put to test by … Continued
US Manufacturing has contracted for three months now. Markets are not a least bit bothered. They are hoping the Fed’s three rate cuts this year would boost a decelerating economy. In the futures market, non-commercials are betting with record net … Continued
Major US equity indices staged a massive reversal last Thursday, with more strength Friday. This probably bodes well for bulls near term. For this to translate into medium-term momentum, investors need to embrace risk-on. Real GDP growth has softened. Four … Continued
The FOMC meets this week. No change in expected. But in the remaining four scheduled meetings, markets have priced in at least two cuts. The Fed has a juggling act in hand. The unemployment rate is near a six-decade low, … Continued
Markets are aggressively beginning to price in at least two cuts in fed funds this year. It is a little too early, but the Fed is beginning to come around to this dovish scenario. It is easy to get convinced … Continued