Collateral Damage

Maybe Warren Buffett can get through to Congress. In a CNBC interview aired this morning: “It’s so important that small businesses, which have become collateral damage in a war that our country needed to fight, but we, in effect, voluntarily had an induced shut down of parts of the economy, and it hit many types … continue reading →

The Yield Curve Model: Dec 8, 2020

One of my favorite market indicators is our yield curve model. It has warned us several times in advance of significant correctionsthis year. Warnings over the past few years have included: July 16, 2018: The Yield Curve Update – We were a little early. SPX closed at 2798 that day, rose to 2940 before crashing … continue reading →

CPI: MIA

Futures remained slightly lower following lower than expected initial claims (709K vs 740K consensus) and CPI – which came in at 1.2% annual and 0.0% for October.  Note that it took a plug number outlier +1.2% pop in electricity to keep CPI from going negative. One would think if the economy were really all that … continue reading →

There Will be Typos

It’s a little known fact that if you’re trying to get over the pain of back-to-back knee replacements, you should have rotator cuff surgery. At least that’s what my horoscope said. As a result, my typing skills will be a little off this morning, which means my market insight might also be a bit off.  … continue reading →

Election Aftermath

Futures were all over the map last night, with ES’ 113-pt range dictated almost entirely by factors as opposed to election results – which, contrary to Trump’s declaration, are still AWOL. Note that ES tagged our IH&S neckline (also the former H&S neckline) target where it is currently running out of gas. As expected, the … continue reading →

Rally Faces Another Test

Futures have given up all of Friday’s rebound gains and then some, again testing the IH&S neckline and the bottom of the rising white channel from last March. At the risk of sounding dramatic, a failure of the channel would mark the end of the current rally and usher in the correction suggested by our … continue reading →

The Pandemic’s Stark Reminder

Futures tagged our initial downside target overnight as markets are once again reminded that the pandemic is far from over. The shutdown headlines out of Europe won’t surprise anyone who has been watching the COVID-19 numbers. The US, which was considerably less successful in suppressing cases following the initial or second surge, is on the … continue reading →

CPI: Putting the Brakes On

CPI rose 0.2% MoM in September, half the August rate. It rose 1.4% YoY, slightly higher than September’s 1.3%. Without the outsized gains in used cars and the minor gains in energy (conflicting with the official EIA data), MoM CPI would likely have been negative. This is hardly supportive of the reflation narrative driving equity … continue reading →