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Pursuit of Truth in Finance & Economics
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Largest Decline In Consumer Comfort Index Since 2008
What is cause for alarm is the major drop in the consumer comfort index, the biggest in more than 10 years.
Have Inflation And Growth Peaked?
Central banks have done coordinated rate cuts that have gotten investors excited about a potential 2020 synchronized expansion. We might already be seeing the beginning signs of this occurring.
Will Stocks Underperform In 2020?
Fund managers have reversed course as they have become more bullish after being pretty bearish earlier in the year. On the one hand, there are fewer bears to convert to bulls.
Is Consumer Confidence For Personal Finances A Contrarian Indicator?
Given the rise in stocks, the steepening of the yield curve, and the rise in long term treasury yields, it’s no surprise fund managers see less of a threat of the US entering a recession in the next year.
Is The Cyclical Recovery Already Priced In By Stock Market?
Judging based on the U.S. stock market (small & large caps), the European stock market, the U.S. treasury market, and semiconductor stocks, investors see a global cyclical expansion coming in 2020.
Is The Entire Yield Curve Wrong?
The yield curve is now normal again across all maturities. If it wasn’t for the way the curve inverted, this would be a recessionary warning.
Are US Stock Market Investors Exhibiting Extreme Greed?
By some measures, the market is in a euphoric state and by others, it is mildly overbought.
Service Sector PMIs Diverge
The JOLTS report was strong because hirings growth was up. Openings are falling because they got way too high in 2018. The Markit and ISM manufacturing PMIs were in line, but their service sector PMIs diverged.
Consumers Plan For Record Holiday Spending
Consumers are planning to spend $942 on Christmas which is a 6.4% increase from last year. Furthermore, 37% of respondents plan to spend over $1,000 which is up from 33% last year. The expected spending is the highest since at least 2002.
Was This A Positive October Jobs Report?
The October jobs report was really good because of the positive revisions and the estimate beat. Job growth would have been even better without the GM strike.
Big Difference In 2 Inflation Metrics
The September PCE report was very good because yearly real consumer spending growth improved, real income growth improved, and the core inflation rate fell.
0.92% Q4 GDP Growth?
The ADP private-sector jobs report was a mixed bag. On the negative side, the September report was revised from showing 135,000 jobs created to 93,000.
Biggest Improvement In Homeownership Rate Since 1998
Home price growth was weak again even though the national home price growth rate improved slightly. The top 10 cities only had 1.5% growth. The homeownership rate spiked the most since Q3 1998.
1.2% GDP Growth Coming
More money managers are bearish than bullish. 39% even see a recession starting in the next 14 months. They’re probably negative because of the weak Q3.
Secular Stagnation In Housing Market?
The fiscal deficit is absurdly high when you adjust for the business cycle. The new home sales report was solid. There was a big decline in homes sold between the price of $400,000 and $499,999.
Durable Goods Orders Growth Could Get Worse In Q4 2019
The Fed is going to cut rates for the third straight time on October 30th. What makes this cut unique compared to the prior two is that the Fed should be done with cuts for the intermediate term.
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