Consumer credit is at a record high, including auto loans. Already stretched, consumers are now having to deal with higher rates. Evidently, consumer sentiment remains suppressed. This has the potential to seriously impact retail sales next year – negatively, of … Continued
This week is crucial. The FOMC meets, and an inflation report that could potentially impact monetary policy next year is on deck as well. Leading up to this, both large- and small-caps met with heavy selling pressure at crucial resistance. … Continued
VIX flashed a spike reversal last week. If history repeats itself, this probably means downward pressure on volatility, and higher stock prices. This is near term. Medium- to long-term, it will take time to heal the technical damage inflicted this … Continued
US home prices continue to rise at an accelerating pace but may be in the process of cooling down. This can have implications for consumer sentiment, hence consumer spending. In June, home prices nationally shot up 18.6 percent year-over-year. This … Continued
Major US equity indices were down last week, but recovered from the lows, as dips were bought at important support. Jerome Powell’s Friday speech at Jackson Hole this week is important in that a possible announcement of tapering of bond … Continued
There is an air of invincibility among equity bulls. A contrarian-minded investor may find this uncomfortably lop-sided, but nothing says it cannot continue in a seasonally favorable period. The recent jump in investor sentiment is yet to translate into consumer … Continued
Small-caps and tech continue to diverge. Post-vaccine news, longs are gravitating toward the former and leaving the latter. Amidst this, signs of fatigue are also showing up on the S&P 500, while VIX acts like it wants to rally. The … Continued
Economic data are coming in mixed after recent lows. In the aggregate, there is no V as far as the economy is concerned. In contrast, the S&P 500 completed a perfect V, which came about over six months. As things … Continued
Elevated multiples have not bothered equity bulls. In recent months, the Fed too has come to their aid. Investor optimism is dangerously elevated going into the 4Q19 earnings season. The 4Q19 earnings season kicks off this week. Banks and brokers … 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