This Week's Message: The Good, The Bad, And The Probabilities...

You'd think investors would be feeling pretty good right about now.

After all, the earnings season thus far has been all (actually, more than) it was billed to be; 73% of reporting companies have beaten expectations on the bottom line, with growth rates at multi-year highs. As, if not more, importantly, top line beats are coming in at a remarkable 71% clip. 

Not to mention the fact that the economy (the U.S. economy in particular) continues to expand at a healthy pace; our PWA Macro Index has increased in 3 of the past 4 weeks, with this morning's reading coming in at an historically healthy +61. 

Yet the market hasn’t been able to make any real headway, despite having set the stage with a double-digit correction heading in.

So What Gives?

If you're wondering why, amid exceptional earnings reports and on balance strong economic data, the market remains in a technical downtrend from the January 26 high:

Wow! And Dang It!!

The first chart below jibes perfectly with our reporting herein on general conditions for stocks:

Weaning Ain't Fun!

Well, dang! 

Thanks – more than anything else -- to threats of a global trade war, stocks essentially missed out on (unless of course we see a big advance as we close out April) what was a really nice setup going into the seasonally-special March/April period. I.e., having just suffered through the first 10+% correction since early 2016, the market was ripe for a rally as it entered the historically two best months of the year. 

This Week's Message: Should We Fret The Yield Curve?

As we've been reporting, our analysis of current conditions suggests very low risk of recession on the near-term horizon. However, to some, one popular economic indicator -- one that happens to be an important input to our weekly analysis -- is flashing red! That would be what's called the treasury yield curve. 

Quote of the Day: The Post Office Needs A Large Dose of the Free Market

Ironic how the U.S. Postal Service remains mired in government bureaucracy while Germany and Britain turned theirs over to the private sector, and they're fixed.

One Example of Why Tariffs Really Bug Me!

A friend, and BTL reader, told me recently that in reading the blog he senses that talk of tariffs for me is akin to someone scraping their fingernails on a chalk board.

I must confess, he was spot on!

This morning's Empire State Manufacturing Survey release gives you one reason (among multiple) why:  emphasis mine...

note: Paragraph 3 supports our bullish view of current conditions; paragraph 1 explains why we stressed at the beginning of the year that protectionism poses the greatest threat to our thesis...