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    February 2017 Leading Index Review: Trends Are Mixed

    This post is a review of all major leading indicators follows – and their trends are mixed.  Analyst Opinion of the Leading Indicator Forecasts Most of the leading indicators are based on factors which are known to have significant backward revisions – and one cannot take any of their trends to the bank. I continue to pose the question – “what good is a leading indicator where the data for that month is continued to change for many months after it is issued?”. The only indicators with minimal backward revision are ECRI, RecessionALERT, and the Chemical Activity Barometer. Unfortunately, the Chemical Activity Ba...
    On April 21, 2017 / By
  • Finance 0

    ISM-PMI Divergence Widens: Markit Estimates 2nd Quarter GDP At 1.1%, Says Profit Squeeze Underway

    Unlike their counterparts at the ISM, Markit sees growth in both services and manufacturing weakening with U.S. private sector growth at a seven-month low in April. Markit notes that a profit squeeze on businesses. Input prices are rising faster than final prices on goods and services. Markit’s chief economist keeps his 1st quarter GDP estimate at 1.7% but estimates the 2nd quarter will get off to a rocky start at 1.1%. Key Findings Flash U.S. Composite Output Index at 52.7 (53.0 in March). 7-month low. Flash U.S. Services Business Activity Index at 52.5 (52.8 in March). 7-month low. Flash U.S. Manufacturing PMI at 52.8 (53.3 in March). 7-...
    On April 21, 2017 / By
  • Finance 0

    Tesla Inc. Stock Little Affected By Parking Brake Recall

    Tesla Inc (TSLA) stock rallied on Friday, recovering a good chunk of the value it lost on Thursday after the company announced a safety recall. The problem is related to the brakes in the Model S and Model X vehicles that were built between February and October 2016. Given that this time period includes more than half the vehicles the company has manufactured, it’s rather surprising that its stock didn’t fall much further than it did. Then again, this is probably just a symptom of the mindset Tesla investors are usually in. Blomst / Pixabay Tesla (TSLA) issues safety recall The EV maker announced the recall in a statement on its webs...
    On April 21, 2017 / By
  • Finance 0

    Maxim Falls After Automotive Growth Stalls, Peers Follow Lower

    Shares of semiconductor companies that make automotive chips are underperforming the broader market and the sector this afternoon after Maxim (MXIM) suggested a slowdown in automotive may be on the horizon, despite reporting third quarter earnings yesterday that came in ahead of expectations. Earlier today, Evercore ISI downgraded shares of Maxim. EARNINGS BEAT: For the quarter, Maxim reported earnings per share excluding items of 56c on revenue of $581.22M, beating analysts’ estimates of 53c and $575.73M, respectively. EPS for the current quarter were forecast at 59c-65c on revenue of $590M-$630M. Prior to the earnings report, analysts...
    On April 21, 2017 / By
  • Finance 0

    Stocks Jump As Trump Promises Plan For “Biggest Tax Cut Ever” Next Week (Again)

    It’s deja vu all over again… *TRUMP SAYS HE WILL UNVEIL TAX PLAN NEXT WK: AP *TRUMP SAYS PLAN TO INCLUDE `MASSIVE’ CUT FOR COS., INDIVIDUALS And the machines fell for it… As AP reports, President Donald Trump says businesses and individuals will receive a “massive tax cut” under a tax reform package he plans to unveil next week. The dollar and bond yields are moving higher also…...
    On April 21, 2017 / By
  • Finance 0

    Yields, Dollar Jump On “Massive,” “Bigly,” “Phenomenal,” Tax Cut Promise

    “Bigly,” “tremendous,” “terrific people,” “phenomenal tax cuts,” “very powerful armada,” “big league,” and other bullshit platitudes. That’s what this administration lives on, and by extension, so does this market. Which is why this… TRUMP TELLS AP HE WILL UNVEIL TAX PLAN NEXT WEEK WHITE HOUSE TO RELEASE TAX PLAN NEXT WEEK, TRUMP TELLS AP …and more specifically this… TRUMP TO REVEAL ‘MASSIVE‘ TAX CUTS …leads to this… Via Bloomberg Treasury futures drop from near session highs after President Trump tells AP in interview that he will release a tax reform package next week, which will include ‘massiv...
    On April 21, 2017 / By
  • Finance 0

    FV Why India ETFs Are Soaring In 2017

    Video length: 00:08:00 Emerging market ETFs are surging in 2017 and within that space, India ETFs are the best performers. Foreign investors continue to pour money into Indian stocks as optimism about economic growth and structural reforms continues to rise. Since his election in 2014, Prime Minister Modi’s government has pushed through a lot of reforms in India. Foreign investors continue to believe that he will be able to take necessary actions to promote foreign investments, revamp tax system, promote infrastructure and reduce corruption. Modi’s party recently had a big victory in an important state election, which suggests that he’l...
    On April 21, 2017 / By
  • Finance 0

    Taxes Are Worse Than You Thought

    “It is a paradoxical truth that tax rates are too high today and tax revenues are too low, and the soundest way to raise the revenues, in the long run, is to cut the tax rates.”  – John F. Kennedy (Yes, a Democratic president back in the Camelot days of the early ’60s wanted to slash taxes.) This week’s Outside the Box will make half of my readers indignant and the other half feel righteously vindicated in their thinking. I have no idea which half you are in. What is so controversial? Who pays taxes and why they should. Today’s letter was sent to me by reader Tom Bentley. It bears the in-your-face title “Taxes Are Worse Than ...
    On April 21, 2017 / By
  • Finance 0

    E Gold And Unrealistic Expectations – Gold Is Not An Investment

    Gold has been characterized as insurance, a hedge against inflation/social unrest/instability, or, more simply, just a commodity.  But it is treated most of the time, by most people, as an investment.   This is true even by those who are more negative in their attitude towards gold.  “Stocks are a better investment.”  In most cases, the logic used and the performance results justify the statement.  But the premise is wrong.  Gold is not an investment.  And, there have also been extended periods of time when gold outperformed stocks.  (To read more about gold’s performance versus stocks see:  Gold: Warren Buff...
    On April 21, 2017 / By
  • Finance 0

    The Most Dangerous Narratives Are Usually The Smartest

    You’ve probably read a million market narratives that sound super smart. But have you ever read one that was so over-the-top smart that it just sounded like it had to be true? I consider myself to be a pretty smart market participant and in recent years I keep coming across narratives that sound so smart that I actually believe they might be true. Then I dig a little deeper and find that, like most market narratives, the explanation is just someone trying to explain a random price move in markets where most of the short-term movements are exactly that – random. A common narrative of late is this crash narrative being blamed on automated s...
    On April 21, 2017 / By