We remain focused on the economy’s progression through the traditional start-of-cycle sequence, that is: a catalyst – in this case, the broad distribution of the vaccine and the re-opening of the economy – leads, in succession, to an increase in activity, demand, output, revenue, investment, and profits. By our lights, the durability of the expansion is largely defined by the self-reinforcing increase in corporate investment fueled by the post-contraction repair of the revenue stack. The s… View More
It’s been more than a year since the Technology sector has made any relative progress vs. the S&P, it’s the longest stretch of indifference since roughly 2013. Granted the bar has been high given the broader market’s run, but nevertheless, it continues to mark a noted shift in tone, made all the more significant given a static Fed and some great earnings last week. Last May over 70% of Technology stocks were in a relative uptrend vs. the S&P (easy to find a leader), while today’s… View More
In a gallop poll out today: Current Economy Evaluations Improved, but Have Been Better During Pandemic In the new survey, 28% describe current economic conditions as either excellent or good, while 26% say they are poor. Last month, 23% rated current conditions as excellent or good and 31% as poor. The April ratings are not the best they have been for this aspect of the index during the pandemic. In November, positive evaluations of current economic conditions exceeded negative ones by 13 per… View More
Parts of the global economy continue to face new lockdowns because the pandemic is not over. But the endgame still appears to be the availability of effective medical vaccines, which will allow economic re-openings. The U.S. is providing further evidence. Recent U.S. economic data has been strong overall. Retail sales surged +9.8% m/m in March, initial jobless claims plunged to 576,000 last week (the lowest since the pandemic hit last year). The NY Fed manufacturing index rose to 26.3 in April a… View More
One of our research providers developed their “L-E-S” model about 20 years ago to keep track of what we believe are the most basic building blocks of market health – Liquidity, Earnings, and Sentiment. There is currently a yawning gap between the recent performance of the market and what their model suggests its performance will be over the next two years. Naturally, it is extremely risky to be short risk assets at all when M2 is growing at 27%. Still, one could argue that it will be diffi… View More