Posts filed under “Economy”

Is the Bull Dead?

Is the bull market, which started after the lows of early 2009, coming to an end? Let’s have a look at some data, as well as the arguments pro and con, to see if we can find any insight. In particular, I want to look at the latest economic, corporate and market issues to see what we might learn.

First, the U.S. economy. As we have observed, it has been a long slog out of the depths of the financial crisis. Gross domestic product growth has never really taken off; wage growth is weak; and retail sales, except where cheap credit flows freely, have disappointed. Many people have little or negative equity in their homes. I have explained — or if you prefer, rationalized — that this is typical of other post-credit-crisis recoveries.

The primary upside to the U.S. economy has been job creation, housing and demand for capital.

Start with the recovery in the labor market. Unemployment now is 5.3 percent, almost half of what it was in the aftermath of the crisis; 11 million jobs have been created since the Great Recession ended. Job openings continue to increase, and there are signs that wages may finally begin to move higher. This is significantly better than it has been at any time since 2007.

Second, housing has improved. It is still below where it should be under normal circumstances, but as we have noted, these are not normal circumstances. Aided by low inventory (courtesy of the aforementioned equity issues) and cheap mortgage rates (courtesy of the Federal Reserve), prices are rebounding. We are also seeing building permits rise, and bidding wars for both buyers and renters are not uncommon. In select coastal and urban areas, there are definite supply shortages. Despite this lumpy and unevenly distributed improvement, the housing recovery is occurring.

Last, and perhaps most meaningful . . .


Continues here: Is the Bull Market Over?





Category: Asset Allocation, Commodities, Cycles, Economy, Markets

Motorists Are Shelling Out More on Vehicle Repairs

Source: WSJ

Category: Digital Media, Economy, Politics, Really, really bad calls

As Goes Apple, So Goes the Market?

With the stock markets down almost (OMG!) 5 percent from their all-time highs, lots of folks are looking for signs that the bull is dying, if not dead. One of the more portentous omens is the recent decline and volatility of Apple’s stock. Or so it seems. For reasons too numerous to list here, Apple…Read More

Category: Corporate Management, Earnings, Economy, Psychology, Really, really bad calls

Yellen’s Labor Market Dashboard

Source: Bloomberg

Category: Digital Media, Economy, Employment, Federal Reserve

World Population Over 65 in 2050

By 2050 China’s seniors (65+) percentage will increase from 9% to 24%; Japan from 26% to 37%; Brazil from 8% to 23%. Source: BAML

Category: Data Analysis, Economy

Worst Expansion Ever!?

Calling this the “worst economic expansion since World War II” is like saying the ebola virus is the worst cold you ever had. At some level you might be technically correct, but you end up communicating confusing, even misleading, information. This keeps coming up, despite a wealth of evidence that provides more appropriate context about…Read More

Category: Data Analysis, Economy

Six-Year Checkup

Source: WSJ

Category: Economy

To Figure Out What the Fed is Going to Do, Just Ignore the Fed

After almost seven years, the beginning of the end of ultralow rates is here. What’s that you say? The Fed is going to raise rates? Remember the so-called taper tantrum in 2013, when some traders dumped Treasuries to express their ire at the Federal Reserve for having the temerity to suggest that rates can’t stay at zero forever? Today…Read More

Category: Data Analysis, Economy, Federal Reserve

Where the Commodities Meltdown Will Hurt the Most

Source: Bloomberg

Category: Commodities, Digital Media, Economy

Apartment-Led Housing Recovery May Pack Smaller Punch

Friday’s U.S. housing starts data showed new-home construction last month rose to its second-highest level since 2007, with much of that gain being driven by apartment projects. While that’s good news for the growing number of Americans eschewing homeownership, it could also mean the housing market improvement packs a slightly smaller economic punch, according to…Read More

Category: Economy, Real Estate