In many ways it is surprising the bond sell-off hasn’t been bigger. After all, the recovery narrative of the unemployment rate has had almost everything going for it since February, at least in terms of perceptions playing into expectations. There was the usual spring rebound in economic data that aided in the “worst is past” argument, while oil prices and commodities rose furthering the market indications that “transitory” might have just been one year delayed. And after a brief scare coincident to the May payroll report (released at the start of June) and then Brexit later that month, it did appear on the surface that markets were...
On Monday silver prices broke below the fairly important support level we had penciled in at 19.20, and we said this old support is now new resistance. So far, it has proven to be a difficult hurdle for the metal to climb back over, reinforcing its legitimacy as resistance. Silver sits in a zone of support in the 18s from a long-term perspective; lows carved out during 2013/14, a peak in early 2015, then a recent swing low created on 8/29 at 18.37. Even though it is in that zone, it doesn’t mean it doesn’t have room to move about in either direction when looking at the very short-term. So for now, until silver gives us a good look on th...
Technical Outlook: S&P 500 (SPX) for a third straight day, tested the 2120 support level and held it. There hasn’t been a strong, sustained bounce off of this price level though to suggest the market is done with the current sell-off. On the SPDRs S&P 500 (SPY) volume has decreased for a second straight day – volume readings remain well above recent averages. Bounce attempt yesterday on SPX quickly faded into the afternoon to push the market lower on the day and form a Doji pattern. The potential for a bounce here is real, though yesterday’s failed attempt suggests the market still wants to move lower sti...
by Philip Pilkington I recently came across a rather interesting argument that the famous Post-Keynesian economist Abba Lerner made in relation to his well-known doctrine of Functional Finance. Basically Lerner said that labour-saving technological innovation in a below full employment economy was not particularly socially useful. Follow up: In a 2003 paper entitled Functional Finance and Unemployment: Lessons From Lerner For Today in the book Reinventing Functional Finance Matt Forstater laid out this argument. First he quotes Lerner himself to the following effect, When there is unemployment… it is not important or even useful to use...
Written by Jill Mislinski Here is the opening statement from the Department of Labor: In the week ending September 10, the advance figure for seasonally adjusted initial claims was 260,000, an increase of 1,000 from the previous week’s unrevised level of 259,000. The 4-week moving average was 260,750, a decrease of 500 from the previous week’s unrevised average of 261,250. There were no special factors impacting this week’s initial claims. This marks 80 consecutive weeks of initial claims below 300,000, the longest streak since 1970. [See full report] Today’s seasonally adjusted 260K new claims, up 1K from last week...
Vangaurd’s John Bogle has a simple formula for estimating future stock market returns which he has been using for 25 years and it’s worked the whole 25 years almost perfectly: Future Market Returns = Dividend Yield + Earnings Growth +/- Change in P/E Ratio. He says this formula currently gives him an estimate of stock market returns in the 4-6% range, well below the long-term average that falls in the 8-10% range. You could quibble with some of the details here but I like the fact that this is such a simple model. Written by: Ben Carlson Bogle has actually outlined this one before on many occasions. In his book Don’t Count On It he ...
Vangaurd’s John Bogle has a simple formula for estimating future stock market returns which he has been using for 25 years and it’s worked the whole 25 years almost perfectly: Future Market Returns = Dividend Yield + Earnings Growth +/- Change in P/E Ratio. He says this formula currently gives him an estimate of stock market returns in the 4-6% range, well below the long-term average that falls in the 8-10% range. You could quibble with some of the details here but I like the fact that this is such a simple model. Written by: Ben Carlson Bogle has actually outlined this one before on many occasions. In his book Don’t Count On It he ...
Photo Credit:Peter Kaminski Oracle Corporation (ORCL) Information Technology – Software | Reports September 15, After Market Closes Oracle is scheduled to report first quarter earnings and kick off its fiscal 2017 today after the opening bell. The tech giant is typically one of the earlier reports in the season that doesn’t officially kick off until Alcoa’s report. Oracle is coming off a strong fourth quarter, delivering improving growth and better than expected sales. The expected rollout of new products and the integration of Netsuite should help bolster sales as the company switches its focus to a subscription based model. Even ...
I’ve been forecasting low-$60 oil by the first quarter of 2017 since earlier this summer. As I mentioned last week, the signals I saw in New York and London recently, which essentially telegraphed an end to the supply glut and a firming “floor” of price support, only strengthen the case. In the meantime, a bit of idle speculation by Boston Fed chief Eric Rosengren about an interest rate hike and news of lower demand have thrown some cold water on what had been a strong 23% rally. Then, predictably, the scaremongers used weather as a reason to call for prices to slide even further. Here’s the thing… None of that reall...