The strong jobs report confirms that the U.S. economy’s fundamentals are strong enough to sustain its positive momentum despite the sub-par outlook for its trading partners in Europe, Japan and China. This report also shows that the soft reading for the preceding month was an outlier.
Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly averages of daily closes for the past month...
This seems to be the first time in several months that ECB President Draghi has been rather anti-climactic. The disappointment or the "sell the rumor, buy the fact" scenario we suggested is, in fact, unfolding, and the euro is correcting higher.
Two years ago, the new seven-member Standing Committee of the Chinese Communist Party Politburo — the most powerful political entity in the country — was introduced to great fanfare. All seven men walked on stage wearing a dark suit and a red tie, but to me the most striking aspect of their appearance was their hair.
One of the 2014 predictions that I made back in January was “The crude oil export ban will not be lifted in 2014.” The present ban on U.S. crude oil exports dates to the The Energy Policy and Conservation Act (EPCA) of 1975.
According to the Bureau of Economic Analysis, Personal Income (PI) in August rose 0.3%. Transfer Payments (TP), which includes Social Security, Medicare, Medicaid, government & private pensions and miscellaneous welfare programs) rose 0.7%.
Today’s data from China and Japan provides further evidence that the emerging signs of a growth spurt at home will remain unsupported by weakness abroad. This may not be a big deal for U.S. economic growth, but it could become a challenge for the corporate earnings picture.
My last blog entry inspired an old Brazilian friend of mine, with whom I hadn’t had any contact for years, to comment on this section of the interview...
In past missives I have discussed why I do not believe the Cyclical Adjusted Price Earnings Ratio (CAPE) is a good measure of valuations. The problem is that the CAPE uses a 10-year backward looking average of earnings.
While Bill Gross is capturing headlines today, what carries far greater significance to the market is the action in the junk bond markets. Someone in the space yelled fire at the start of the year and investors have been heading for the exits.