In his usual colorful style, CNBC commentator Rick Santelli joins Jim on the Financial Sense Newshour to clear up the confusion on a number of hot-button issues. First, he explains why austerity—without applying all the necessary ingredients, like reform—hasn't worked in Europe or elsewhere.
The April jobs report on May 3rd sparked a renewal of something I’m calling the "Taper Trade." As I mentioned last week, the effect of renewed faith in U.S. cyclical stocks post-Q2 earnings, along with a rise in the ECRI’s leading economic indicator, better housing data, and this jobs data has been a shift in investor sentiment back towards growth, and away from defensive tactical weightings in Treasuries, the dollar, healthcare, and utilities.
In this special interview with Oxford’s Oliver Inderwildi airing Thursday, Jim and his guest discuss the numerous dynamics of oil and economic growth—what Jim defines as the Petro Business Cycle—and how this relates to riots in Syria, whether non-conventional sources of oil can solve our energy needs, and a number of other factors.
Leading indicators for the labor market suggest we get an acceleration in payroll gains heading into the fall, which is what the market may be discounting currently as it continues to hit new all-time highs. With the market’s long-term momentum continuing to improve and the outlook for employment encouraging, the risks of a recession and/or bear market appear remote with the market likely heading to new all-time highs into the fall.
The past few years we have seen the market roar higher out of the gate only to suffer a sharp pullback as we enter the spring. A spike in the price of oil has been a major cause of that each time. As the price of fuel has spiked in each of the past few years we have all in effect suffered a tax hike.
The market is perhaps in the best shape it has been in over a year when looking at its trend and momentum. Perhaps the biggest development in recent weeks is the clear rotation away from defensive sectors and into cyclical sectors. This development is likely to propel the market even higher given 70% of the S&P 500 is made up of cyclical sectors. There is no erosion in either the market’s trend or momentum, and until we see erosion in the markets breadth and momentum the path of least resistance is clearly higher.
In this recent hard-hitting interview with Financial Sense Newshour, successful entrepreneur and twice presidential candidate Steve Forbes likens Fed Chairman Ben Bernanke to a blind astronomer, says quantitative easings, or “QE’s”, should be called “Titanics,” while also warning listeners of impending wealth taxes now used in France and elsewhere.
After a brief consolidation in March and April, industrial stocks and the transports are headed back towards their highs or higher. 3M Co, Union Pacific, Honeywell Intl, Boeing Co, Deere & Co, GATX Corp, CSX Corp, Kansas City Southern, Alaska Air, Norfolk Southern, and many other mid- and small-cap companies within the sector are touching all-time highs or breaking out.
Jeffrey Saut, Chief Investment Strategist at Raymond James, tells investors on the Financial Sense Newshour that today’s market is “record setting,” experiencing what he says is the longest “buying stampede” in market history.
The S&P 500 rose by 0.41% and the Dow was higher by 0.32% today. It was another slow steady grind higher in the markets as rotation into more cyclically oriented names continued.
Sponsored
