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Finance 0
The Reason Not To Sweat The 2018 Stock Market Drawdown
This has been a smooth year for the S&P 500. So smooth, in fact, that so far this year, the market has had one of the smallest drawdowns ever. A drawdown is measured from any high and low during the year, indicating the maximum amount prices could have fallen in each year. Throughout 2017, it has been just a 3% decline. We have to go back to 1994 to find the last time this occurred. That year, the S&P 500 also dipped just 3%. And that’s why this year has felt so smooth for the markets — there hasn’t been a sell-off. But with a historically low drawdown in 2017, we can’t expect the same next year. Take a look at the drawdowns ... -
Finance 0
Ever-Flowing Streams
Markets started the session wobbling between positive and negative; waiting for word on tax legislation. Then a political bombshell dropped. The major averages hit their session lows on the report, with the Dow Jones industrial average briefly dropping 350 points. Mike Flynn, former National Security Adviser, pleaded guilty to one count of lying to the FBI about contacts with Russia’s ambassador. Prosecutors said he consulted with a senior official in Donald Trump’s presidential transition team before speaking to the envoy. Flynn became the first member of Trump’s administration to plead guilty to a crime uncovered by the special coun... -
Finance 0
Real Disposable Income Per Capita Gains In October
With the release of yesterday’s report on October Personal Incomes and Outlays, we can now take a closer look at “Real” Disposable Personal Income Per Capita. At two decimal places, the nominal 0.39% month-over-month change in disposable income was trimmed to 0.25% when we adjust for inflation. The year-over-year metrics are 2.52% nominal and 0.92% real. The trend since 2013 has been one of steady growth. The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2... -
Finance 0
If Tax Bill Fails, How Far Over Our Skis Are We?
If the GOP tax bill fails, how far over its skis is the current stock market? CNBC’s Jim Cramer says 500 points will come off the Dow instantly. Others more or less concur. Even Treasury Secretary Steve Mnuchin warned that if a tax bill is not passed, market participants can expect a major pullback in equities. Keep in mind that even if Republicans in the Senate are able to right their ship in short order, coming to terms with the vastly different House tax reform bill will require even more heavy lifting. And with the track record of this Congress so far — a total of zero major legislative passages in the 10 months since the 115th U.S. C... -
Finance 0
Fertilizer Industry Gaining Stability: 3 Stocks To Buy Now
The fertilizer industry is showing signs of stability of late, taking succor from improved pricing and demand dynamics for certain major crop nutrients and a firming farm economy. While still-weak agricultural commodity prices remain a roadblock, strong usage in major consumer markets is driving demand for primary crop nutrients. Needless to say, the ever-growing world population and the concomitant need to beef up food supply to feed more mouths remains a prime catalyst for fertilizer demand growth. The Zacks Fertilizers industry has outperformed the broader market over the past three months. While the industry has gained roughly 12.1%, th... -
Finance 0
Economic Data Continues To Point To An Economy That Is Good, Not Great
Domestic and geopolitical politics are seriously heating up; we’ve seen phenomenal bitcoin volatility all while the equity markets continue to grind higher and higher even after the quick pullback in trading today. That slippage reflects not only the delay in the Senate tax reform vote, but also the revelation that former Trump national security adviser Michael Flynn pleaded guilty today to lying to the FBI about conversations with Russia’s ambassador and disclosed that he is cooperating with the special counsel’s office. All of this should make for an interesting weekend and what transpires over the next few days is poised to set the t... -
Finance 0
Mid-December Cold Supports Natural Gas Prices
Natural gas prices settled up modestly on the day, but seemed to sputter into the weekend as most gains came overnight with prices gradually declining through the day today. Prices seemed to bounce right off the $3.12 resistance level, unable to find much of a sustained footing after 8 AM Eastern. Part of the reason was that cash prices today were incredibly weak in the face of very strong weekend warmth that will kill heating demand. We warned our clients about this risk in our Morning Update today after correctly identifying yesterday afternoon that overnight weather model guidance would help natural gas prices bounce off the support they... -
Finance 0
Gold Price Outlook Hinges On Senate Tax Plan Vote
Talking Points: Gold price outlook hinges on Senate tax cut vote result Crude oil prices struggle despite output cuts extension Gold prices declined as a swell in risk appetite pushed Treasury bonds lower and sent yields higher alongside share prices. Not surprisingly, that undermined the appeal of non-interest-bearing assets epitomized by the yellow metal. From here, all eyes are on the US Senate, where lawmakers are due to vote on a tax cut plan. If it passes and isn’t watered down by delays and counter-cyclical provisions, gold is likely to fall further. Crude oil prices were unable to build higher after OPEC and like-minded pro...
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