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  • Finance 0

    EC New Jobless Claims: Down 16K, 63rd Week Under 300K

    Here is the opening statement from the Department of Labor: In the week ending May 14, the advance figure for seasonally adjusted initial claims was 278,000, a decrease of 16,000 from the previous week’s unrevised level of 294,000. The 4-week moving average was 275,750, an increase of 7,500 from the previous week’s unrevised average of 268,250. There were no special factors impacting this week’s initial claims. This marks 63 consecutive weeks of initial claims below 300,000, the longest streak since 1973. [See full report] Today’s seasonally adjusted 278K new claims, down 16K from last week’s 294K, was above theI...
    On May 19, 2016 / By
  • Finance 0

    Unintended Consequences, Part 1: Easy Money = Overcapacity = Deflation

    Somewhere back in the depths of time the world got the idea that easy money — that is, low interest rates and high levels of government spending — would produce sustainable growth with modest but positive inflation. And for a while it seemed to work. But that was an illusion. What actually happened was textbook, long-term, surreally-vast misallocation of capital in which individuals, companies and governments were fooled into thinking that adding new factories, stores and infrastructure at a rate several times that of population growth would somehow work out for the best. China, as with so many other things, was the epicenter of this delu...
    On May 19, 2016 / By
  • Finance 0

    A 40-50% Move Coming In Stocks?

    A May 16 article outlined the concepts shown below in detail; big moves often come in the stock market after long periods of consolidation. Normal Retracement Or New Trend? Is there anything else historically that says a big move may be coming in equities? Yes, the concept of Fibonacci retracements (see chart below). It is normal and to be expected that in the context of an established downtrend to see countertrend moves back to one of the three major Fibonacci retracements (Fibs). So far, in 2016 the sharp rally off the February lows has not exceeded “normal retracement” territory. In this case, retracement refers to the retracement ...
    On May 19, 2016 / By
  • Finance 0

    Monsanto Moves Higher After COO Gaffe Forces Confirmation Of Takeover Bid

    Shares of Monsanto (MON) moved higher Thursday after the herbicide and genetically-modified seeds company confirmed receipt of a takeover bid from Germany’s Bayer (BAYRY). Weighing in on the news, Wall Street analysts laid out the difficult financials involved in such a deal and downplayed the likelihood of Monsanto agreeing to the initial offer. MONSANTO CONFIRMS MERGER TALKS: Forced to correct the record after Reuters published an interview Wednesday with Monsanto COO Brett Begemann stating that recent takeover rumors were “all wild speculation,” the company disclosed that it has in fact received a takeover bid from Bayer....
    On May 19, 2016 / By
  • Finance 0

    Baidu: Chinese Investigation Dragging Stock Lower

    Baidu (BIDU), the largest internet search engine company in China, has come under fire as of late after one of its users, a 21 year old university student Wei Zexi, died after trying an experimental cancer treatment he found advertised on the website. Once the treatment failed he took to social media to blast Baidu for promoting false medical claims. China’s cyberspace administration is now investigating and the company has until May 31st to comply with the government. Chinese regulators are proposing limits on health care related advertising and stringent practices for vetting marketers. Baidu has already began terminating relationshi...
    On May 19, 2016 / By
  • Finance 0

    3 Things: Everyone Gets A Trophy, Inflation & RCube

    Earnings: Everyone Gets A Trophy The ongoing process of the “wussifcation of America” has now spread from Main Street to Wall Street. When I was growing up, we played sports. Coaches yelled at us, when we got hurt we were told to “rub some dirt on it” and “walk it off.” When we won a game we were cheered by our parents and coaches, when we lost we were disappointed. Guess what? We got over it. Come the end of the year, the top three teams received trophies, the rest were relegated to realizing that next year they would have to practice harder, work harder and play harder in order to win. What was learned is that the higher ...
    On May 19, 2016 / By
  • Finance 0

    Visa Stock Will Keep Charging Higher

    Visa (NYSE:V) may have cut its forward looking guidance recently but this has more to do with global economic weakness as opposed to the company’s fundamentals. In fact, Visa still pulled in $1.7 billion in GAAP net earnings despite having to deal with worsening economic conditions in China and Brazil. Furthermore with the dollar index going from around the 80 mark in July 2014 to presently well over 94, Visa has still been able to grow on a constant dollar basis which many other US multinationals have been unable to do over the last 24 months or so.  This is what investors need to understand. Even with the dollar index well over 90...
    On May 19, 2016 / By
  • Finance 0

    The Price Of Steel And Iron Will Be Falling, But Not Long

    In December 2014, we posted on the falling producer price of steel and iron in 2014 and on further fall in 2015-2016. This prediction was right and the PPI of iron and steel has been falling from 226 (January 2014) to 173 (February 2016). The overall PPI has also dropped by 20 points since 2014.  Here we report that we foresee no general change in the declining trend in the short-term. In 2017, we expect that the producer price index of iron and steel will reach its bottom and start to grow, likely during the next decade. Moreover, the overall PPI will stop falling and dragging consumer prices down. For price prediction of various commodi...
    On May 19, 2016 / By
  • Finance 0

    Philly Fed Region Negative Again, Eighth Time In Nine Months

    Whether the economy is in recession remains to be seen, but the manufacturing recession continues without a doubt. The Empire State region went back into contraction this month and the Philadelphia Fed Region is back in contraction for a second month after a one month jump higher in March. This was the eighth negative reading in nine months for the Philadelphia region. The Philly Fed region disappointed again this month with a reading of -1.8 vs. a Bloomberg Econoday consensus estimate of +3.0. Highlights After popping higher in March the Philly Fed index has been dead flat since, at minus 1.6 in April and now minus 1.8 for May to point t...
    On May 19, 2016 / By
  • Finance 0

    Bears Are Slaying Price Action

    Of course there should be about 15 more dead cat bounce attempts between now and the close, but I have to say, I am pleasantly surprised that the bears have the price action down below 2039. That is where it should be, but my expectations were diminishing rapidly over the past week for that ever coming to actual fruition.  Now is the market selling off bad for me?  NOPE! In fact couldn’t be better. I did cover my short yesterday in Alphabet, aka the company formerly known as Google (GOOGL) for a smidge of a profit (+1%) as a precaution because the bears simply could not break that neckline. However, I added another short position ...
    On May 19, 2016 / By