Tuesday, August 14, 2018

Charts of the Day: Small Business Owners Feeling Good About Their Prospects!

Being that small businesses employ 2/3rds of American workers, we take the National Federation of Independent Business (NFIB) monthly survey seriously.

Here are the three areas we track, updated this morning with July's results (note today's look versus heading into past recessions [red shaded areas]):   click to enlarge

Monday, August 13, 2018

The Week's Message: Near-Term Mixed

Here's the summary for our market/economic analysis for this week:

The Technicals (long-term trends)

Our long-term technical trend analysis remains notably bullish for the S&P 500. 

Saturday, August 11, 2018

America Prospers From A Prosperous China

In my August 6 blog post I made mention of the following recent commentary by the President:
Over the weekend he boasted that the U.S. market is "stronger than ever" and that Chinese stocks are "down 27%". The U.S. is therefore "winning the trade war."
After updating readers on the returns of U.S. stocks vs. Chinese stocks since the 2016 election (it's a dead heat by the way), I stated the following:

Hugely Broad Tariff Risk! But imagine the upside if/when cooler heads prevail...

UBS compiled its list of companies "most at risk from President Trump's trade war." 

I entirely agree that the present trend toward protectionism puts the listed companies at serious risk. But, my, we're only talking the tip of the iceberg here! 

Friday, August 10, 2018

Market Update: Why Shorts Have Been Losers This Year (video)

In this morning's video I update you on the state of the current market correction as well as general conditions:

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:

Wednesday, August 8, 2018

Chart of the Day: U.S. Government Borrowing -- and Foreign Investors Lending -- At Record Pace

Three key takeaways from the chart and highlight below:

Our Latest Log Entry: Washington's Pushing the Needle

Sharing the latest entry to our log:

8/7/18 (Tuesday)

The market continues to hold up remarkably well given the trade war threat, which I attribute 100% to favorable general conditions, as there’s absolutely nothing bullish in the prevailing rhetoric. 

My "remarkably well" comment notwithstanding, given the hugely strong setup coming into the year, the exceedingly positive Q1 earnings results, and I’ll say notably positive Q2 results, tax cuts, etc., the fact that the broad market isn’t up considerably more speaks to the ill-effects/uncertainty of protectionism.

Tuesday, August 7, 2018

Is Capitalism Only For the Elites?

Yesterday The Economist posed the following question to its readers:
"Is capitalism rigged in favour of the elites?"
 Its own Callum Williams set the stage for the debate with:

The Data Say There's Something Wrong With The Present Narrative

In my world -- and, most importantly, on behalf of our clients -- I can't let my politics cloud my thinking. And of course cloudy, no, make that foggy with virtually zero visibility, would be the state of my economic thinking if my guide happened to be a given political narrative. 

Monday, August 6, 2018

In Terms of The "Trade War" and U.S. vs China Stocks, If We Must Go There, Both Sides Are Just Now On Equal Footing

Given the passion many folks have for their politics, I find myself prefacing more blog posts these days with the blunt reminder that we do not play politics at PWA. If, therefore, we strike a nerve, know that that's never our intent. That said, we're willing to run the risk, for if we weren't this investment/economic blog would be of little use to anyone, except perhaps for those only interested in commentary that jibes with their political ideology. We'll assume that's not you, or you'd have unsubscribed long ago. 

For our investment client readers, our willingness to remove our political biases from the business of economic research and portfolio management has to be utter music to your ears, for obvious reasons!


In a recent CNBC interview the President said "we're playing with the bank's money", then followed with a proclamation that the market is up 40% since his election. Over the weekend he boasted that the U.S. market is "stronger than ever" and that Chinese stocks are "down 27%". The U.S. is therefore "winning the trade war."

Sunday, August 5, 2018

This Week's Message: General Conditions Remains Strong, But We're Seeing Some Cracks Here and There

For this week's message we're sharing the general conditions summary of our weekly analysis, which includes my view of the possibilities going forward: 

Open Letter to National Economic Council Director Larry Kudlow

Dear Mr. Kudlow,

On occasion over the years when I tuned into your old CNBC talk show I found my self appreciating your mostly free market way of thinking

Today I'm hoping you can shed some light on your recent change of heart.

Saturday, August 4, 2018

Chart of the Day: Copper's Flashing A Warning Sign!

Copper, the ubiquitous industrial metal, is considered an economic indicator in and of itself. In fact, its price is one of the 84 inputs to our macro index.

Friday, August 3, 2018

Quote of the Day: Service Sector Remains Strong, But....

The good news in today's QOTD is that the service sector is still humming along fine, signaling that -- for the time being -- we need not worry about recession (ISM above 50 denotes confidence and continued expansion). The bad news is that sentiment has waned a bit  of late, and the cause is a totally avoidable top-down creation:

The Trade Gap Widened In June, Great News for the U.S. Treasury!

Good news today for the U.S. Treasury!
"The total deficit in goods and services rose to $46.3 billion for the month, from $43.2 billion in May, the Commerce Department reported Friday. Imports increased by $1.6 billion, to $260.2 billion, while exports declined by $1.5 billion, to $213.8 billion."
Yep, no kidding. Despite all that you're hearing, a widening of our trade deficit is a good thing given the current state of U.S. government affairs.

Thursday, August 2, 2018

Quotes of the Day: "Had we frozen the economic structure in 1950"

The consensus estimate for the July employment report (due out tomorrow morning) is for 192k new jobs created. The unemployment rate is expected to come in at 3.9%.

This morning's jobless claims number extended the record below-300k streak to 178 weeks.

Wednesday, August 1, 2018

The ISM June Manufacturing Index: Telling It Like It Is!

The Institute for Supply Management's monthly manufacturing and services sector surveys are hugely important economic indicators. They essentially give you the take on present conditions and future prospects by the nation's purchase and supply executives. Who better to listen to?