Wednesday, March 31, 2021

This Week's Message: The All-Critical Dollar -- And -- Key Highlights From Our Latest Messaging

For this week's main message I'll touch on the all-important (critical even) dynamics around the dollar, then I'll cut and paste some key highlights from our latest messaging...

Fiscal spending at historic levels... Fed balance sheet bloated beyond recognition... Running interest rates at zero ("for the next 3 years", despite the promise of a growing economy)... Fed to allow the economy to "run hot" (read inflation) going forward ... $3 trillion++ of additional stimulus coming... $2 trillion savings overhang... Reopening... yada yada... 

Morning Note: "What I believe in is compounding and not losing money"

There's the anticipation of big news today from Washington on big infrastructure. While it would be the definition of ridiculous, and utterly reckless, to suggest that a massive amount of deficit spending is long overdue, one could argue that a significant infrastructure spend has indeed been a long time coming -- or, let's say, it's been a long time anticipating...

Tuesday, March 30, 2021

Morning Note: Words Worth Heeding!

Pretty much the same junky look for equities this morning that characterized yesterday' session: ~60% of the SP500's members are in the red, Nasdaq comp's losers are besting gainers 2 to 1, and so on. 

Monday, March 29, 2021

Charts of the Day: Pricey and "Junky"

In Saturday's note I wrote:

Morning Note: The Danger of "Resulting"

Last Friday Goldman Sachs, Credit Suisse and Nomura found themselves in the unenviable position of having to dump some $20 billion worth of a handful of Chinese tech stocks and U.S. media firms as their hedge fund client Archegos Capital Management got way over its skis. And there's no way to know at this juncture if the mess is yet over...

Sunday, March 28, 2021

Just a small piece of a ginormous jigsaw puzzle...

We've been drawing comparisons here and there between the present setup and the 1930s since late 2019. Typically we'll reference similarities in the overall debt setup. Less so in an equity market context. Nevertheless, while a great depression is highly unlikely to occur anytime soon, there are some similarities worth paying attention to.

Saturday, March 27, 2021

It's Never All Said and Done

It's interesting... Listening to "Wall Street"... Looking at retail investor sentiment surveys.... Tracking the bull/bear sentiment spread emerging from investment advisor surveys... Measuring the cash (lack thereof) held by mutual funds... And, per today's Bloomberg article titled Bubble Deniers Abound to Dismiss Valuation Metrics One by One, considering the number of perhaps legitimate gurus who are capitulating (like it's 1999) to the notion that traditional valuation metrics simply don't matter, as, "it's different this time" -- well, I for one, would offer up zero argument if you were to suggest to me that sentiment is, at present, dangerously optimistic.

Friday, March 26, 2021

Macro Update: Not What You'd Expect

While the graph of our PWA Macro Index is starting to look concerning (declining again this week, by 4 points to 10.20), the fact that what's ultimately driving much of the data -- as artificial (non-organic) as it is -- is nowhere near due to subside, has us anything but reactive right here.

Morning Note: System-driven

In this week's main message we pointed to things that just don't make sense during recessions, and that have occurred this go-round nonetheless.

One of those things was rising personal income.

Here's that section:

Technical Setups (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:

Thursday, March 25, 2021

Morning Note: Optimism Reigns

You sure wouldn't expect equity markets to be struggling right here (as they have this week) if all you did was check the sentiment data from around the world.

Wednesday, March 24, 2021

This Week's Message: Huge Caveats Needed!

Being on vacation the past few days and, therefore, limited in terms of my ability to stay intimate with the pulse of world goings on, I had to choose carefully what I took in, when I had the opportunity to take something in. 

So I decided I'd here and there skim through the latest work of other macro actors whom I respect. 

In this week's main message I'll reflect on the very odd circumstances, and the overall investment setup, we're having to traverse.

Thursday, March 18, 2021

Macro Update: Slight Pullback

Keeping this week's macro update short and sweet...

Our proprietary macro index gave back a smidge this week, dropping 2.04 points to 14.29:

Morning Note: After Sleeping On It

In yesterday's morning note I suggested that if Fed Chair Powell didn't express a willingness to get in front of rising interest rates in yesterday's presser (via unconventional means [ycc] that didn't constitute a tightening) that we'd "see interest rates spike and stocks (tech especially) tank."

Wednesday, March 17, 2021

Quick Thoughts On This Week's Fed Meeting, And On Precious Metals

Here's from Bloomberg's follow-up to Powell's press conference:

This Week's Message: Thinking Out Loud and A Few Highlights From Our Latest Messaging -- Or -- The Tail Be Wagging the Dog

For this week's main message I'll simply think out loud (well on my keyboard) for a minute then cut and paste a few highlights from our most important recent messaging.

Morning Note: Beware the "Seemingly Superior Financial Opinion"

Federal Reserve chief Jerome Powell has quite the task ahead of him today, as this week's rate policy meeting concludes and he has to report what's what to the world -- well, to the markets!

Tuesday, March 16, 2021

Monday, March 15, 2021

Quote of the Day: Even Shaq's Getting In On the Action!

Economist Dave Rosenberg has ridden several market rodeos in his day, and, thus, like yours truly, has his concerns about what's presently occurring beneath our very noses.

Morning Note: "Mass Escape from Reality"???

Interesting that the stimulus checks have started rolling and stocks are more or less stuck in the mud to start the session. And this is despite good news on bookings from Southwest Airlines and JetBlue. Hmm...

Saturday, March 13, 2021

Quote of the Day: Beware the Media, and the CEO, Narrative

Back in the day, when I made myself available for one-off television spots, I would often find myself frustrated when, in a recorded interview, on, say, a topic like minimum wage, I felt that I made some very important points that were counterintuitive for most folks and, therefore, important for them to hear. My frustration would come when watching the edited version on the evening news: So often my (to me) pithy points were completely cut out, as it was clear that the producer had his/her own message in mind and, therefore, would include only my words that seemed to support that narrative.

Friday, March 12, 2021

Macro Update: Rising Expectations

The steady ascent of late of our proprietary macro index took a pause this week, with our overall score remaining at +16.33:

Morning Note: If This Keeps Up

So, possibly as early as this weekend a lot of folks are going to receive a very nice injection of cash into their bank accounts. While we can get into the whys and the wherefores and pontificate on need, inflation, distortion, yada yada, we'll just for now acknowledge that such government largesse to this point has been very bullish for the stock market.

Thursday, March 11, 2021

Quote of the Day: Beware "The Dreamland of Past and Future"

In last Thursday's Separating Signals from Noise I closed with:

Morning Note: "Eventually" is the Least of the Central Banker's Concerns -- And -- Confusing Technology With Intelligence

We've been spending a lot of time herein of late on interest rates, their recent rise, the monster financial market risks should they continue to rise, and, thus, the assuredness that central bankers will do everything within their legal capacity (and more) to stem that tide before (or immediately after) it crashes into the stock market's shore.

Wednesday, March 10, 2021

This Week's Message: The Setup, Debt, Some History, Inflation, Opportunities, etc. (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:

Morning Note: Beneath the Numbers

Well, thank heavens that scare's over. I mean, recent action -- not to mention the chart I featured yesterday morning -- was beginning to spell trouble. But now Tesla's back above $700 (from the $500's two days ago), GameStop's back to nearly $300/share, the S&P 500 roared 1.4% yesterday and the Nasdaq 100 staged a rip-your-face-off 4%+ rally.  Whew!!!

Monday, March 8, 2021

Morning Note: Arresting the Flow

Hedge fund manager David Tepper, in a CNBC interview this morning, rescued the market from a notably, and surprisingly (given the weekend stimulus news), down open.

Friday, March 5, 2021

Macro Update: The Balance of Risks Has Shifted!

I'll be out of town this weekend, so I'm crunching the essential weekend tasks into today's things to do. Thus, I'll keep this week's macro note brief and to the point.

Morning Note: Read Carefully

This morning's jobs number surprised bigly to the upside. Uh oh!!

I'll explain "Uh oh!!" in a sec...

Wednesday, March 3, 2021

This Week's Message: What's Up With Gold? -- And -- Highlights From the Week Past

If you've been watching the price of gold lately, you might be wondering what's up, or why it’s down?

Allow me to answer with one simple 5-year chart.

Morning Note: We Can Only Hope "This Time is Different"

You gotta love Wall Street! BofA analyst Stephen Suttmeier is out with a note stating that the buying of stocks with borrowed money (margin debt), while it's at an all time nominal high, is not excessive -- when you look at it compared to the total nominal value of the stock market.

Tuesday, March 2, 2021

Monday, March 1, 2021

Morning Note: Carts Before Horses -- And -- Chimps Before Traders

If this morning's bounce is any indication, there's yet more oomph to be had in the equity markets on news that simply confirms what we already know -- that fresh new money's to be delivered to the economy, by the proverbial truckload.