Tematica Chief Macro Strategist Lenore Hawkins provides regular insights and musings into today’s markets, economics and politics, while fighting for liberty with great wine & music, scores of stilettos and an excessive love of dogs
Tematica’s investing strategy focuses not only on those long-term forces that generate formidable tailwinds or headwinds but also on major pain points, as solutions can generate serious value to entrepreneurs and investors alike. The problem of Social Security numbers for definitive identification is one such pain point.
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We continue to have a market priced at levels that are in the upper atmosphere of historical norms in an economy that continues to be “meh,” with income levels rising about as fast as a tortoise through molasses. We know full well that stock prices can get even headier from here, but beware of “reversion to the mean” for volatility and the reality of upside potential versus downside risk from such heights.
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Upside potential continues to shrink in the market, while downside risks rise. This is making for a market that requires emphasis on those areas that are benefiting from headwinds that can withstand, over the long-term, ebbs and flows of the economic cycle all that much more important.
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Fewer people are moving today than at any point in recent history and while inventories are tight, sellers are having to cut asking prices…
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The economy is a mixed bag right now, with manufacturing showing some strength, (which has been helped by a weak dollar trend that may be reversing) and the weakness in the consumer side is what we’d expect at this late stage in the business cycle. That said, the market fundamentals such as breadth, as well as index and sector movement trends show no signs of an imminent market pullback. These pricey stocks are likely to get even more expensive.
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As we discussed earlier, heading into the third quarter earnings season, we have above average level of positive guidance in terms of both top line sales and earnings as well as lower-than-average negative earnings guidance. We pointed out yesterday, however, that an uncomfortable portion of that guidance is driven by gains from a weak dollar […]
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If forward guidance is any indicator, the third quarter earnings season, (How can it be the third quarter already!?) will deliver solid results. So far 54 companies in the S&P 500 have issued positive revenue guidance, which is more than double the 5-year average of 25, while 43 companies have issued positive […]
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Consumer Confidence for September declined a bit more than expected, falling to 119.8 from 120.4, versus expectations for a decline to 120. While that doesn’t sound all that meaningful as it is still well above the long-term average of 93.9, we see something occurring beneath the headlines that warrants further attention and is particularly concerning […]
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While the president and “Rocket Man” trade barbs, Iranian President Said stated that Iran would continue with its missile program in defiance of U.S. sanctions, unveiling its latest long-rage ballistic missile at a parade in Tehran. In response, the CBOE S&P 500 Volatility Index (VIX) briefly rose all the way to the veritable nosebleed territory of nearly 10.20 during Friday’s trading.
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The market reaction to the FOMC statement is that it was more hawkish than what had already been priced in. While the market was priced at a 50/50 chance for a rate hike before the end of the year, the now infamous dot-plot shows that 12 of the 16 members expect one more hike this year, with one expecting two.
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