Urban Carmel's Contributions

The balance of the macro data from the past month continues to be positive. To be sure, growth remains slow, but the balance of evidence suggests the imminent onset of a recession is unlikely. The main positives are in employment, consumption growth and housing: Employment growth is close to the best since the 1990s...

The balance of the macro data from the past month continues to be positive. There is little to suggest the imminent onset of a recession. The main positives are in employment, consumption growth and housing. Employment growth is close to the best since the 1990s, with an average monthly...

It's true that corporations buying their own shares (buybacks) represents a large source of demand for equities and have helped push asset prices higher. But much of what is believed about buybacks is a myth. There is much more to share appreciation than buybacks. EPS growth is overwhelmingly...

3Q financials have been predictably poor, with negative growth in both sales and EPS. Sales growth has been affected by a 50% fall in oil prices and 15% rise in the trade-weighted dollar. Both of those are likely to make upcoming 4Q financials look bad as well.

The balance of the macro data from the past month continues to be positive. There is little to suggest the imminent onset of a recession. The main positives are in employment, consumption growth and housing where we see multi-year highs in a broad range...

Blogging will be light for another few weeks. We should be back with regular posts in early November. In four different posts in August and September, we laid out how we expected this correction to evolve. You can read...

Overall, fund managers' asset allocations in September indicated the strongest bearishness since 2012. Despite a rally since then, bearishness remains pervasive. This is a bullish tailwind for equities, especially in the US.

This post reviews the main economic data from the past month. The balance of the data continues to be positive. There is little to suggest the imminent onset of a recession. Our key message over the past year has been that (a) growth is positive but...

Year 3 of the "Presidential Cycle" was expected to post a gain of over 20%. Instead, SPX is down 3% from a year ago. Why? The set up was all wrong, which brings up a basic principle in analyzing markets: patterns work...

The first drop in equities was more than a month ago, yet price has not come within even 2% of the original low since then. Despite this, bearish sentiment continues to rise as if new lows were being formed. The infamous month of October arrives this week...

Overall, fund managers' asset allocations in September indicates the strongest bearishness since 2012. This is bullish for equities, especially in the US. Fund managers' cash remains at the highest levels since the panic...

Our key message over the past year has been that (a) growth is positive but modest, in the range of ~3-4% (nominal), and; (b) current growth is lower than in prior periods of economic expansion and a return to 1980s or 1990s style growth does not appear likely.

How have different asset classes in the past responded when the FOMC has raised rates for the first time? Commodities were the best performing asset; they boomed. The dollar sold off. Equities usually rallied into the decision, then sold off, and then rallied again. Treasury yields rose. The total return for high yield bonds was usually positive.

The apparent divergence between credit-risk, as seen in rising high-yield bond spreads, and equities is due primarily to the 60% drop in oil prices over the past year. There's been no remarkable rise in spreads outside...

In February, we took a look at prior times over the past 30 years when the price of oil had fallen by more than half. Our conclusion was that oil had probably not bottomed. In the event, oil formed a low...

The major macro data for the US so far suggest positive, but modest, growth. This should not be a surprise given the classic pattern in the years following a financial crisis. As well, there has been a tendency for macro data to underperform expectations...

There's a tradable set up in gold. Sentiment, seasonality and the price pattern (especially the 2% intraday reversal on Friday) are all favorable. Importantly, there is a clear stop if price fails to rally. An even better set up...

The average monthly gain in employment during the past year was 245,000, the highest since the 1990s. Annual growth in employment is the best in 15 years. Hourly earnings growth in April and May was the highest since the recession; it fell to 2% in June...

Our key message has so far been that (a) growth is positive but modest, in the range of ~3-4% (nominal), and; (b) current growth is lower than in prior periods of economic expansion and a return to 1980s or 1990s...