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Pursuit of Truth in Finance & Economics
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Will Covenant Lite Loans Be An Issue?
Cov-lite loans might not be a problem. They had lower default rates and high recovery rates in the last recession. Also, German and US PMI.
This Doesn’t Happen During A Recession
The yield curve is at a crossroads. If it steepens soon, then it could be signaling a recession. If it doesn’t steepen in the next couple of months, there might not be a recession.
Can Stocks Fall Without A Recession?
Stocks don’t need a recession to fall into a bear market.
Forward Guidance Doesn’t Meet Reality
The Fed is cutting rates because of the trade war and global weakness. Housing starts and permits were amazing in August. There is little reason to expect a recession in 2019 based on this data.
Best Way To Use Price Earnings Ratio (PE Ratio) To Value Stocks
A stock’s earnings multiple depends on investors’ confidence in the company and its potential. It’s best to buy companies at a reasonable price that have a strong moat and room to grow.
Potential US GDP Contraction Predicted In Late 2019
Fund managers were right about treasuries and growth stocks being overcrowded as treasuries have sold off and value has outperformed growth recently.
Do Restaurant Sales Lead The Economy?
The retail sales report was amazing. The consumer is in solid shape. This report is partially why Oxford Economics is calling for 3.3% real PCE growth (the estimate was revised 0.2% higher).
Core CPI Hits Cycle High: An Explanation Of Why Fed Won’t Stop Cutting
The best way to get the Fed to stop cutting rates is for there to be a trade deal.
Why Investors Might Not Want Rate Cuts
Bullish investors shouldn’t want the curve to normalize as steepening after inversions have been correlated with recessions in past cycles.
Does Weakness In Job Openings Foreshadow Recession?
The tariffs haven’t hurt consumer spending yet. Small businesses are still optimistic although their excitement about the future economy has waned considerably because of the trade war.
This Usually Happens Right Before Recessions
Aggregate hours worked growth is mostly weak for manufacturing, production and nonsupervisory workers, and the entire private sector.
What The August BLS Headline Miss Didn’t Tell You
The August BLS report was a positive, all things considered. Headline job creation missed estimates and private sector job creation missed by even more.
Are These Indicators Forecasting An End To Economic Weakness?
There was a weak Job Cuts report, a strong jobless claims report, a strong ADP report, a strong ISM PMI, and a weak Markit PMI.
Fed Projects A Decline In GDP Growth With Its Rhetoric
Consumers aren’t reacting to tariffs just yet because retailers aren’t passing down the price increases fully. The Fed was dovish in its August Beige Book which makes sense because the economic data has been weak.
Is The Narrative On Worker Pay Accurate?
This is about to be the second manufacturing recession of this expansion. The difference is this one is broader and shallower.
Where Is The Economy Headed In The Next 6 Months?
The U.S. economy isn’t due for a recession based on the length of this expansion.
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