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Finance 0
May NFP Misses Headline – Focus Moves To ECB, RBA, FOMC
Talking Points: – May Non-Farm Payroll numbers came in below-expectations, with negative revisions for both April and March. Average hourly earnings increased by .2% for an annualized rate of 2.5%. – This has created another gust of weakness in the Greenback, and with a very busy next couple of weeks, we can certainly see volatility around this theme hasten. This morning saw the release of the last NFP report before the Fed goes into their two-day policy meeting on June 13th/14th. The headline number missed, printing at +138k versus the expectation of +182k. April NFP was revised-lower to +174k while March was revised down by -29k... -
Finance 0
Key Bounce Off Of Short-term Support
When you have a 15 point pullback in today’s market over a 3-day period, it becomes a ‘Generational Bottom’ or better yet, a ‘Generational Buying Opportunity’ for the bulls. Yesterday the market had a solid rally, a bit unexpected, as I didn’t think much of the market with it being a shortened holiday week. Nonetheless, the market moves to its own drummer, and once again, the indices led higher with small caps at the helm for once. The laggard in all of this? The Nasdaq. Large caps didn’t do much better, particularly the Dow 30 like Apple (AAPL), and other big tech names like Amazon (AMZN), F... -
Finance 0
Equity Market Climbing The Proverbial Wall Of Worry
The individual investor continues to express concerns for stocks when looking at their sentiment response. Yesterday’s Sentiment Survey report from the American Association of Individual Investors showed a nearly six percentage point decline in the bullish sentiment reading to 26.92%. This pushes the bullishness reading one standard deviation below the average bullishness reading. Confounding investors is the fact the equity market continues to move higher with the NYSE seemingly breaking out to the upside. Additionally, the common stock only advance decline line appears to be breaking through upside resistance as well. Lastly, as can... -
Finance 0
Is The Fed Really Going Raise Rates After This Disaster NFP?
Wages are stuck at 2.5% y/y. If the Fed is truly data-dependent, this data should hold them back from raising rates. And not only are wages poor, job gains also slowed down: only 138K jobs gained and a significant downwards revision worth a whopping 66K. If they do hike, they are basically trapped in their own setting of expectations. If they are indeed trapped, their only escape route is to make it a “dovish hike” – raising rates now but signaling a pause for the remainder of the year. Other figures are not that supportive of a rate hike: Q1 growth was only 1.2% annualized. It is not only Q1, growth in 2016 was a paltry 1.6%. This... -
Finance 0
Payrolls “Unexpectedly” Weak, Negative Revisions, Earning Poor: What Happened?
Initial Reaction Today’s establishment survey was a much weaker than expected at 138,000 jobs. The establishment survey was 47,000 under the Econodsay consensus and 115,000 below the ADP projection. ADP was also wildly off the mark in March, estimating 263,000. March is now revised at 50,000. BLS revisions took away a net 66,000 jobs in March and April. The household survey was even worse. Employment fell by 233,000. What Happened? The roots of this weakness go back to the April report, for March. I discussed today’s setup on April 7, in Wild Miss in Expected Jobs: Economists Blame the Weather. Here is the pertinent snip. Today’s emp... -
Finance 0
The Dividend Disconnect: Behavioral Finance Strikes Again
In the past we have discussed that some investors demand dividends. (Here is a nice post by Larry Swedroe on the topic and there are more holistic measures, such as shareholder yield, which are better predictors of future returns). A few posts we have on the topic highlight that CEOs cater to dividend demand,mutual funds “juice” the dividend yield, and examine the returns to dividend payers in payment months. These papers support the behavioral finance view of the financial marketplace. Behavioral finance experts, Samuel M. Hartzmark and David H. Solomon, have a new working paper titled, “The Dividend Disconnect,” which ex... -
Finance 0
Apptio Valuation Recovers After Post-IPO Dip
According to a MarketsandMarkets report, the global cloud-based ITSM industry is expected to grow 15% annually over the next five years to be worth $8.78 billion in 2021. Bellevue, Washington-based Apptio (Nasdaq: APTI), which listed last year is trying to make its mark in this industry. Apptio’s Financials Apptio was founded by Sunny Gupta, Kurt Shintaffer, and Paul McLachlan with the intention of offering a service that could help the CIOs of organizations manage the business of technology more efficiently. It soon developed a platform that integrates Cost Transparency, IT Planning, IT Benchmarking, Bill of IT, and Business Insights Sa... -
Finance 0
Bond Yields Plunge Through Key Technical Level As Dismal Jobs Data Sinks Stocks, Dollar
The market’s reaction to the dismal jobs data was uniform in its disappointment – while June rate-hike odds remain near 100%, September dipped a little (at just 30%), the dollar dropped, stocks fell, and bond yields tumbled. ‘Hard’ data is collapsing again to 13 month lows as soft data catches down. And September rate hike odds are stuck around 30%. 10Y Yields tumbled to 2.15 intraday – the lowest level since November 10th 2016… and broke below the key 200-day moving average. The Dollar Index tumbled, testing the 2017 lows. Gold jumped to 6-week highs, bouncing off its 50dma. And stocks double-dipped ba... -
Finance 0
US Payrolls Rise Less Than Forecast In May But 1-yr Gain Ticks Up
Employment at US companies increased 147,000 in May (in seasonally adjusted terms), according to this morning’s update from the Labor Department. The rise is below expectations, based on Econoday.com’s consensus forecast for a 173,500 jump in payrolls. The advance also represents a downshift from April’s 173,000 increase. But the softer monthly comparison was offset by a slightly stronger year-over-year change. On balance, today’s release suggests that the labor market remains on track for moderate if unspectacular growth in the near term. The weaker monthly increase is a bit disappointing, but monthly data is noisy. On several occa... -
Finance 0
Forex Weekly Outlook – June 5-9 2017
The US dollar was on the back burner throughout most of the week as data remained mixed and speculation about the Fed decision mounts. A rate decision in Australia, the ECB’s critical decision and the UK elections stand out in the first full week of June. Here are the highlights for the upcoming week. Fed members sent mixed messages. It seems that they are trapped in the expectations they created for a June hike, but they may make it a “dovish hike”. Their favorite inflation figure continued falling. In the UK, some opinion polls showed a tightening of the race, causing the pound to slide. But not all polls are equal and the only one ...
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