Thursday, September 19, 2019

Bonus Quotes of The Day: Not The Tone We're Looking For!

Not the tone we're looking for:

Quote of the Day: Life Is Funny!

Couldn't help it!

And, c'mon, just laugh... we could use a little bipartisan humor these days...

This Week's Message: The Market Still Looks Heavy (video)

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Wednesday, September 18, 2019

The Latest Consumer vs Business Data Match Our Index

As we've been reporting of late, the consumer is in pretty good shape. In fact, he/she is doing virtually all of the heavily lifting on behalf of the economy these days.

No Need To "Further' Spike The Punch Bowl...

Didn't do a pre-market video this morning, as any short-term technical signals can easily be blown out when the Fed announces its interest rate decision at 11am (pdt), and when Chairman Powell makes his followup statement and fields questions from the media.

Tuesday, September 17, 2019

No Worries In Today's Data Releases

I wonder if the members of The Federal Open Market Committee (the Fed) were too preoccupied by their discussions over the data today (day one of their two-day policy meeting) to take note of today's data? 

If not -- if they indeed took a peak -- those who favor little or no tweaking (the hawks) had to have looked at their dovish counterparts (those clamoring for a .50% rate cut) and said "see what we mean!"

Today's Log Entry: Call It (the market's odds tomorrow) 50/50

9/17/19 Tuesday

Something very weird is going on with overnight repo rates!

Pre-Market Update and A Quick History Lesson On Fed Rate Cuts and The Stock Market (video)

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Monday, September 16, 2019

Today's Log Entry

9/16/19 Monday

Before the weekend attack on Saudi oil production I had odds at better than 50/50 that the Fed would sound a hawkish tone, while cutting 25 bps; upsetting equity markets, gold (currently trading on prospects for lower-yields, as opposed to Armageddon) and bonds in the process. However, given the palpable geopolitical uncertainty the weekend wrought, my best guess, as I type, is that the fed will tilt dovish, while still cutting 25 bps; which could very well spark a notable rally in stocks.

Pre-Market Update (video)

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Sunday, September 15, 2019

What Might An Uber-Aggressive Fed Deliver?

So the Fed's September policy meeting will happen this Tuesday and Wednesday, with the market's pulse sure to be pounding come 11am (pdt) Wednesday. Yep, even though a quarter-point cut is almost certainly what they'll get, traders in all manner of asset classes will be locked and loaded just in case.

Saturday, September 14, 2019

Bonus Quote of the Day

Donald Broughton, founder and managing partner of Broughton Capital ("a deep-data driven quantimental economic and equity research firm") and the author of the Cass Freight Monthly Report, thoroughly understands economic history:

Quote of the Day: Should Sound Very Familiar

I swear, JP Morgan's Patrik Schowitz must be reading our stuff 😉!

Thursday, September 12, 2019

Can't Blame Them For Trying

Given the color of the latest release of the Eurozone's Industrial Production numbers, we certainly can't fault the ECB for announcing a rate cut and a new round of QE this morning:

Quotes of the Day: This Has Our Attention!

"When prices have been driven by a lot of leveraged buying and the market gets fully long, leveraged, and overpriced, it becomes ripe for a reversal. This reflects a general principle: When things are so good that they can’t get better—yet everyone believes that they will get better—tops of markets are being made."
Dalio, Ray. Big Debt Crises
Leveraged share buybacks (companies borrowing to buy back their own shares) are the first sentence above by definition. And this very much has our attention!

Here's Investopedia on the topic:

"Between 2008 and 2018, companies in the United States spent over $5 trillion buying back their own stock, or over half their profits. As a result, more than 40% of total EPS growth has been from share repurchases.
Leveraged buybacks have made a big comeback in the U.S., where share repurchases have exceeded free cash flow since 2014.

The buyback boom has increased the risk for both bondholders and shareholders. Even investment-grade companies have been willing to sacrifice their credit ratings in order to reduce the number of shares. For example, McDonald’s, whose executives depend on EPS metrics for 80% of their pay, has borrowed so heavily to fund buybacks that their credit rating fell from A to BBB between 2016 and 2018."

Commentary On The Latest Action And General Conditions (video)

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Wednesday, September 11, 2019

Getting Close (to new all time highs)!

Here's the 1-minute chart for the S&P 500 future contract as I type:

The Wisdom of T. Boone Pickens (40-second video clip)

Legendary oil man and trader T. Boone Pickens left the world today, at age 91.

Here's a bit of timeless (and timely!) wisdom from the great capitalist:

Charts of the Day

The first chart below speaks to what we've been preaching herein since our proprietary macro index peaked back in January 2018:

Current Market Sentiment

Here's an internal memo (me to staff) that'll give you the flavor of current (i.e., only for this very moment) market sentiment:
"So last night China exempted a bunch of U.S. products from tariffs... Today Li Keqiang (Chinese Premier) tells U.S. business delegation that "we share wide interests & I believe we have the wisdom to find a solution acceptable to both"... Also this morning, Trump is looking to ease sanctions on Iran... and all we have is a 14-pt move in SPX... and bonds and Gold are still up on the day... That's bearish!   M"


Early-Market Update (video)

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Tuesday, September 10, 2019

Quote of the Day

Bloomberg's Benjamin Dow, in his blog post this morning, speaks to our message in today's video commentary:

Headline of the Day

The Dow went from notably in the red to slightly in the green on this headline this morning:

Pre-Market Update and A Look At the Consumer and Corporate Debt Picture (video)

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Monday, September 9, 2019

Chart of the Day

In Friday's video I offered up my thoughts on the jobs report: Among other (positive and negative) things, I referenced the jump in the number of folks who have taken on more than one job as a sign that there may be some stress building in the lives of consumers.

Here's the chart (grey areas highlight past recessions):



Not a good look...

Last Night's Log Entry: Treading Uncharted Flood Waters

9/8/19 Sunday

Weighing the present bull case against the bear case, while perhaps not (yet) overwhelming, clearly, the bears have the edge.

Nevertheless, and paradoxically, I now place odds that the S&P notches yet another all-time high in the very near future – before a notable correction (if not a full-on bear market) sets in – at better than 50/50.

Pre-Market Update (video)

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Friday, September 6, 2019

This Week's Message: The Good and The Not-So-Good

The good news this week is that our proprietary macro index broke a 5-week string of negative (heightened recession risk) readings, coming in at +4.65.

Pre-Market Update (video)

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Thursday, September 5, 2019

Pre-Market Update And A Look At General Conditions (video)

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Wednesday, September 4, 2019

Finally Breaking Out of This Trading Range?? May Very Well Be!

In my earlier blog post I said:
"While setting a date for September talks would no doubt be good for a couple-hundred+ Dow points, the chasm separating the two sides is wider today than it’s been throughout the entire process."
Well, talks in Washington were just confirmed a few minutes ago, and I got one thing wrong, they'll take place in "early October", as opposed to September. 

Today's Log Entry

9/4/19 Wednesday

Stocks, at least in the pre-market, look to be essentially re-setting the start to September; recouping all of yesterday’s decline.

Pre-Market Update (video)

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Tuesday, September 3, 2019

Not Good News

This morning's release of the all-important (i.e., closely followed by economists and market players) Institute for Supply Management Manufacturing Survey for August came in below 50 (49.1); denoting contraction (or recessionary conditions).

Pre-Market Update (video)

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Monday, September 2, 2019

What Has Investors So Sanguine? And Good Luck If You're Trying To Trade This Thing!

In yesterday's internal log entry, which I shared herein, I made mention of China's better than expected manufacturing purchasing managers survey results. This morning we got the Euro Zone's reports, which, save for France's weren't so good.

Sunday, September 1, 2019

Today's Log Entry: Little Optimism Reflected In Futures Traders' Positioning

Note to readers; here are definitions to terms featured in the notes below:

This Week's Message: Typical This Ain't!

Typically, whenever someone says to me how crazy, volatile, unpredictable, etc., the market is, I'll tell them that on a day-to-day basis it's pretty much always been that way.