Signs of a market bottom have been building over the last week with today serving as no exception. Today, we received the Markit Economics flash composite purchasing managers’ index for May, which hit a 4-year high of 58.6, up from 55.6 in April and up from last May’s 54.5 reading.
Recent improvements with the NASDAQ reclaiming its 50-day moving average, a decline in credit default swaps on junk bonds, and new highs in the S&P 500 suggest risk appetites may be growing again.
There seems to be a prevailing consensus in the market analysis I’ve been reading, that head and shoulders patterns are always reversal patterns and their completion is inevitable. Not True. Often, they can form, what we call, continuation patterns – i.e. consolidations.
We recently interviewed the esteemed economist and financial strategist Michael Pettis out of Beijing regarding the ongoing debate of whether China will see a massive credit crunch or growth collapse.
The U.S. shale oil “miracle” has about as much believability left as Jimmy Swaggart. Just today, we learned that the EIA has placed a hefty downward revision on its estimate of the amount of recoverable oil in the #1 shale reserve in the US, the Monterey in California.
Corporate profits are now higher than they’ve ever been before! At first glance, this might seem like a good thing; except, here’s the problem: whenever profit margins reach a high, they often peak and then dramatically crash before the stock market and economy follow in like manner.
How do these metropolitan area real estate costs stack up against each other and the US median household income? Here is a column chart to which I've added the latest Sentier Research data for the US median household income as of March 2014.
By drawing from an extensive list of interviews from authors, economists, and guest experts, Jim Puplava, host of Financial Sense Newshour, tackles this question in his most recent Big Picture broadcast by compiling a list of the following seven “megatrends,” many of which are concentrated in the U.S.
It’s important to understand what is driving U.S. Treasury rates down as the reason will shape your outlook for the market. If you believe that yields are lower as investors price in greater geopolitical risk and/or a worsening US economic growth forecast, then you would expect the stock market has it wrong and shouldn’t be near its highs and will recouple with bond yields and sell off.
The always popular and controversial Martin Armstrong, creator of the widely cited Economic Confidence Model, gave some interesting predictions for the market along with his thoughts on Putin and Russia in a recent interview with Financial Sense Newshour.