Thursday, November 30, 2023

Morning Note: Pricing Power and the Price of Labor

FYI, for the next few weeks (to year end), I'll be a bit less active, and less voluminous, here on the blog, as I'll be devoting the time normally spent organizing, then articulating, my thoughts for the daily message to what, as usual, will be a several part year-end message (delivered over the final two weeks of the year)..

So, for this morning, just the following graph (H/T BCA Research), followed by my brief assessment, and some critical investment wisdom from the late great Charlie Munger:

 

Wednesday, November 29, 2023

What Election Year Stimulus Portends, And Not a Great Short Term Look From Yields & the Dollar (video)

Bloomberg's Cameron Crise this morning speaks to what has stocks green at the open:

"When you are a bull, everything looks like a red cape, which kind of explains how the market is likely to interpret this morning’s data. The salient features were a downward revision to the Q3 core inflation index, a downward revision to last quarter’s household spending, and downside surprises to October inventory data (which should produce a  downgrade to current-quarter growth estimates.) That all casts a dovish hue on the policy backdrop..."

All of which denotes a slowing economy, which of course is to be expected if the 2024 recession narrative is to play out... In the meantime, as is typical at this stage, confirmation of such, is, ironically, bullish for stocks. 

Tuesday, November 28, 2023

New Sherriff In Town!

I can’t emphasize enough how markets, (monetary) policymakers and politicians are so stuck between the proverbial rock and a hard place... Folks are asking if next year’s election gives us any pause in our economic assessment (recession odds elevated), for, as we know, all conceivable strings are pulled by incumbents to bolster the economy as election times near.  

Monday, November 27, 2023

Morning Note: Simply Can't Ignore Breadth, Your Weekly Sector, Region and Asset Class Update, and Into Thin Air

Yes, we've touched on this plenty of late, but, again, per our weekly results update below, the divergence among equity sectors this year has been utterly shocking... And while indeed a serious broadening (the 8 of 11 sectors that are, let's say, not having a magnificent year playing catch up) may be in the offing, history offers up some serious red flags to consider.

Allow me to illustrate.

Friday, November 24, 2023

Economic Update: Good and Bad Earnings Commentary, A Stressed Macro Backdrop and a Quick Look at Stocks and Sentiment (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:


Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Wednesday, November 22, 2023

Quote of the Day: Wall Street "Running With No Protection"

Comments made by Hedgeye CEO Keith McCullough in today's Macro Show resonated with me, and has me calling up the following from my video commentary this morning:  

"Let's see this for what it is; this is not a time, from these levels and from this stage in the cycle, to expect that the next new raging bull market is about to begin...

The "Cult 6", a Moment in Time, Cisco Then/Nvidia Now (video)

Toward the end where I mention jobless claims, I suggested that a weak number would be bullish for stocks (given the present character of the trading), I actually meant that a strong number (denoting a weak labor market) would be bullish... Now, go figure, the number was weaker than expected (denoting a strong labor market) and equity futures didn’t budge... Although, I should add that last week’s number was revised up (weak sign), and Nvidia didn’t whiff yesterday...  Hmm...

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:


Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.