Latest Posts
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Finance 0
The Yield Curve Is Essentially Inverted Already
Jeff Snider wrote a fascinating post yesterday on the yield curve and its usefulness as an economic indicator. Many have suggested recently that we won’t see a recession without first seeing the yield curve invert. Jeff contracts this idea by suggesting that, due to increasingly aggressive monetary policy over the past several decades, its the relative change in the yield curve not the absolute change that should be measured in this regard: In past cycles an inverted curve has appeared months before the onset of recession, so the fact that there is still positive spread in the calendar maturities is being taken as if credit is suggesting ... -
Finance 0
The Shift To A Cashless Society Is Snowballing
Love it or hate it, cash is playing an increasingly less important role in society. In some ways this is great news for consumers. The rise of mobile and electronic payments means faster, convenient, and more efficient purchases in most instances. New technologies are being built and improved to facilitate these transactions, and improving security is also a priority for many payment providers. Image courtesy of: Raconteur However, there is also a darker side in the shift to a cashless society. Governments and central banks have a different rationale behind the elimination of cash transactions, and as a result, the so-called “war on cash... -
Finance 0
Investors Know The Price Of Everything & The Value Of Nothing
“The stock market is filled with individuals who know the price of everything but the value of nothing.” – Phillip Fisher Newcomers and seasoned investors alike often fall into the trap of conflating price and value. The two are different, however, and often don’t equal in the stock market or in other arenas of finance and life. Some will say that a stock’s worth is whatever someone will pay for it. Well, if it’s overvalued – I won’t pay for it. There is no value to be had for me. Someone else though may pay whatever price the greater market affords to a stock based on optimism and other factors. Price is easier to obtain ... -
Finance 0
Why 2,900 Is The Most Important Number In The World For US Equity Bulls
What happens if – just as it did in Aug 2015 and Jan 2016 – the S&P 500 starts caring about Chinese stocks? The answer, as BofAML’s Stephen Suttmeier explains, is “nothing good.” The rallies for the Shanghai Comp (SHCOMP) and S&P 500 (SPX) both started with double bottoms off January/February lows and both could end with head and shoulders tops off the March-May highs. The SCHOMP broke 2900 on May 9 to confirm its head and shoulders top and the S&P 500 moved closer to support at 2039-2033, where a downside break would confirm its head and shoulders top. SHCOMP below 2900 = bearish signal The br... -
Finance 0
April 2016 Residential Building Situation Is Soft
Be careful in analyzing this data set with a microscope as the potential error ranges and backward revisions are significant. Also the nature of this industry variations from month to month so the rolling averages are the best way to view this series – and the data remains in the range we have seen over the last 3 years (although permits is at the low end of the range). The slowing of building permits continues to be to softness in multiple family dwellings. The unadjusted rate of annual growth for building permits in the last 12 months has been around 10% – it is a -13.1 % this month. Construction completions are lower than permi... -
Finance 0
4 Oil Stocks To Buy As Crude Hits 6-Month High
A combination of supply disruptions and a turnaround in the stance of a major investment bank boosted oil prices to a six-month high on Monday. A demand supply gap had pushed prices down for an extended period. This was an outcome of a fall in demand to worldwide economic sluggishness and oversupply from major oil producing nations. However, the continuing impact of supply side disruptions and the possibility of a further decline in shale output have changed the outlook on oil. The rest of the year is likely to see higher prices which make this a good time to add oil stocks to your portfolio. Supply Shortages Spark Price Gains Oil prices rebo... -
Finance 0
Silver Price Forecast 2016: Massive Silver Rally During The Coming US Dollar Index Crash
Silver Price Forecast: I have written extensively about how the current silver bull market is similar to the 70s. Despite these similarities, silver will (ultimately) perform much better than during the 70s. The fractal analysis of the US Dollar Index (below) shows some more similarities and differences between the 70s era and now. I believe that these further supports the expectation that silver will perform much better than it did during the 70s. On the chart, I have marked two fractals (1 to 3). Both fractals exist in similar conditions – relative to the relevant Dow/Gold ratio peaks (1966 and 1999). Both fractals span over the period... -
Finance 0
Housing Starts Bounce, Momentum Flatlines: Fundamental Strength Or Soft?
Housing starts bounced 6.6% from last month’s dismal plunge of 8.86%. Last month Bloomberg Econoday cited “fundamental strength“. This month, Bloomberg curiously describes starts as “soft“. Which is it? Highlights Housing starts and permits picked up in April but the pace is moderate. Starts rose 6.6 percent to a 1.172 million annualized rate but the year-on-year rate has sunk into the negative column, to minus 1.7 percent. Permits rose 3.6 percent in April to a 1.116 million rate but here too the year-on-year rate is negative, and more so at minus 7.2 percent. The year-on-year weakness, however, reflects multi-family units which ... -
Finance 0
Home Depot Earnings Report
Home Depot (HD) is the one of world’s largest home improvement retailer. The company offers a level of service unprecedented among warehouse-style retailers. Home Depot stores cater to do-it-yourselfers, as well as home improvement, construction and building maintenance professionals. The Home Depot currently operates in the USA, Canada, Chile, Puerto Rico, and Argentina. The company also operates EXPO Design Centers across the U.S. and Villager’s Hardware in New Jersey. Home Depot today reported sales of $22.8 billion for the first quarter of fiscal 2016, a 9.0 percent increase from the first quarter of fiscal 2015. Comparable ... -
Finance 0
Getting The Most Out Of Gold
What does a portfolio need: bullion or stocks? Gold is making a comeback. Quite a comeback. But think back a year. Bullion’s up about four percent over the past 12 months. Gold stocks, proxied by the VanEck Vectors Gold Miners ETF (NYSE Arca: GDX), have gained more than 19 percent since last May. Which exposure would have done your portfolio the most good? For many people, the answer is painfully obvious. Who wouldn’t want a 19 percent gain rather than a four percent uptick? Other folks, though, would be concerned about the route taken to attain those gains. After all, gold stock prices are inherently more volatile than the cost of metal...
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