Equity Bulls Later Last Week Used Bad Data To Load Up On Stocks, More Gains Likely Ahead

posted in: Credit, Economy, Equities, Technicals | 0

Last Thursday, bulls used initial weakness in major equity indices owed to 4Q22 productivity report as an opportunity to buy. Friday, they bought more. More gains are likely ahead. Fed funds futures are very volatile. Traders are actively reacting real … Continued

As Good As It Gets?

Chart 1 shows decent relationship between year-over-year change in the S&P 500 large cap index and the ISM manufacturing index. U.S. manufacturing activity has picked up – from 49.4 last August to 57.5 in February.  The 8.3-point six-month jump is … Continued

Recent Uptick In Unit Labor Costs Unlikely To Sustain

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The latest productivity report had observers buzzing more about unit labor costs than output per hour. In 4Q16, unit labor costs jumped at an annual rate of 1.68 percent, up from 0.18 percent in 3Q16. This comes in the wake … Continued

Fed Giveth, Fed Taketh Away?

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Seven weeks of sideways action on the S&P 500 large cap index has been resolved.  Last Friday, the index dropped 2.5 percent, for a weekly drop of 2.4 percent.  This comes on the heels of an important breakout in July. … Continued

Divergences Abound But Can End With Vengeance

To say that stocks have diverged from a whole host of things ranging from earnings to Treasury bonds to crude oil to economic data is an understatement. This is not some new phenomenon … has been going on for a … Continued

Fed’s Hawkish Desire Versus Uncooperative Macro Data

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The Fed is in a tight spot. Yesterday, on the day it told us it continues to have a slight tightening bias it published capacity utilization and industrial production for May.  Utilization dropped 0.4 percent month-over-month to 74.9 percent, a … Continued

Stagnant U.S. Productivity And Decelerating Corporate Earnings

posted in: Economy | 0

U.S. productivity continues to leave a lot to be desired, and that can have repercussions for corporate earnings. Non-farm output per hour grew a mere 0.26 percent year-over-year in the second quarter, down from 0.63 percent sequentially.  Quarter-over-quarter, it rose … Continued

U.S. Productivity Trends Not Conducive To 2H Earnings Expectations

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For U.S. corporations, there was a trio of bad news in yesterday’s revised productivity numbers for the first quarter, and this potentially has earnings repercussions. U.S. non-farm business output per hour year-over-year was revised lower from growth of 0.6 percent … Continued

Wages dynamics in U.S. economy, and why productivity is crucial

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U.S. wages stuck in mud, more so for supervised employees than for supervisory ECI for private sector has been trending higher since 1Q14; sustainable? Productivity crucial for employers’ ability to absorb wage hikes If there is one consistency in the … Continued

U.S. corporations setting aside fewer profit dollars for software, R&D

posted in: Economy | 0

Share of U.S. corporate profits in national income barely off all-time highs Share of software plus R&D in U.S. private fixed investment falling since 2009 As good a hint as any for corporates to send current margins unsustainable long term? … Continued