The increase in June non-farm payroll employment came in at a blow out 287,000 following May's big miss. The data dependent Fed predictably panicked after last month's report (see chart for summary of their views). The folly of a data dependent approach should now be crystal clear. … [Read more...]
No Way Stocks Are Cheap
This chart is from John Hussman's latest comment. It shows the price-to-sales ratio of the typical S&P 500 stock. The typical stock is now trading near a historic peak in relation to sales. With valuations so high, if you are still counting on double-digit returns to fund your retirement, this chart should give you pause. … [Read more...]
These are the Guys in Charge of the Economy?
Jim Bullard, the President of the St. Louis Federal Reserve Bank, and one of the Fed members calling for rate hikes as recently as March (and just last month said he was considering one in June) has moved from hawk to uber-dove. Mr. Bullard now thinks the Fed should stay on hold for two and a half years. It would seem that a single weak employment report was the catalyst to drive Mr. Bullard to change his outlook and model for the U.S. economy. He now says the economy is in a new regime. It is more than a little concerning that the guys in charge of the economy are basing their decisions … [Read more...]
An Investment Risk That Can do Real Damage to Your Portfolio
We write a lot about monetary policy on this site, not because we enjoy the parlor game of trying to predict what the world’s central bankers are going to do next, but because over recent years, monetary policy has become the king-maker in financial markets. Those ignoring the actions, reactions, and mostly overreactions of the global central banking cabal may be unwittingly taking risks that have emerged as a result of the unprecedented scale of central bank intervention. First it was zero rates, then it was quantitative easing, then it was zero rates for longer. When these unconventional … [Read more...]
U.S. Debt to GDP Hits Record
Non-financial U.S. Debt to GDP is now at its highest level on record. … [Read more...]
Why a Million Bucks ain’t what it Used to Be
U.S. savers and retired investors who planned to fund their retirement with their life’s savings have been savaged by the Fed’s ultra-low interest rate policy. Yellen & Co., insist on subsidizing big banks and other borrowers with ultra-low rates in an effort to stimulate growth. That effort has clearly fallen flat by any reasonable measure of success. The Fed’s policies have helped knock the yield on 10-year Treasury securities down to a mere 1.70%. You have to save a lot more or plan to spend a lot less if you are going to fund your retirement with a 1.70% yield. But as bad as a 1.70% … [Read more...]
Are International Stocks Headed Higher?
Has the long cycle of lagging performance for international shares finally run its course? … [Read more...]
These Stocks are Crushing the Competition
For dividend focused investors, the last three years have been a tough row to hoe. From year-end 2012 through year-end 2015, the speculative NASDAQ took a big lead over the more conservative and more Prudent-Man-centric Dividend Achievers Index. This seemingly long run (3yrs does not make an investment cycle) for speculative shares encouraged many to jump ship for what were believed to be greener pastures. Investors who had neither the ability nor willingness to ride out the wicked downturns that accompany such speculative portfolios allowed greed and relative performance comparisons to drive … [Read more...]
What is the Stock Market Saying about Consumers?
Is the stock market trying to tell us something about the health of the consumer? Retail shares are plunging vs. the market. … [Read more...]
Worthy Reads: This is Squeezing the Middle Class
This is Squeezing the Middle Class Steel Markets Are Stabilizing so Says Steel Producer The High Price for Low Volatility Dollar Anxiety Stuck at Zero … [Read more...]
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