Category Archives: Monday Morning Kickoff

To help investors get ready for the trading days ahead, the Monday Morning Kickoff traces the key happenings of the previous week and looks ahead to the coming economic and earnings calendars for the new week.


Did Last Week’s Turmoil Light the Flames of Volatility?

Did Last Week’s Turmoil Light the Flames of Volatility?

As Tematica’s Chief Macro Strategist Lenore Hawkins discussed last Friday on Fox Business’s Varney & Co., who would have thought that in just one week we could experience talk of a nuclear showdown with North Korea, chaos in Charlottesville leading to a brutal murder, an administration becoming increasingly isolated both inside and outside the beltway and yet another terror act in Europe?

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Was last week the perfect storm that finally opened investor eyes?

Was last week the perfect storm that finally opened investor eyes?

Given the run the market has had thus far despite the mounting concerns, we’re not surprised by the market action last week. Candidly, we suspect prudent investors are using the current US-North Korea standoff to book gains and build cash ahead of September. Why September? Not only is September historically speaking one of the most challenging months for the stock market, it’s also when we are now expected to get the Trump Administration’s initial tax reform plan at the same time Congress is forced to deal with the debt ceiling and perhaps we see the Fed charter a path it has never been on before as it starts to reduce its balance sheet. 

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An Earnings Deluge Coming At Us This Week

An Earnings Deluge Coming At Us This Week

At the close of last week, 57 percent of the S&P 500 companies reported quarterly earnings. That means we still have more than 40 percent to go, with 1,200 companies reporting this week, making it the high water mark for such activity this time around. All of which comes amid the recent bout of uncertainty as to where the GOP will turn next after its failure to repeal and replace Obamacare last week, the reshuffling of personnel in the Trump Administration, and the initial reading for 2Q 2017 GDP missing expectations.

In this Week’s Monday Morning Kickoff:

Looking into the 2nd Quarter GDP Numbers — it’s all about maintaining perspective and looking at the vector and velocity of that 2.6 number, which we dig into and look ahead to the third quarter and beyond.
Corporate executives have already started to temper expectations for the coming months amid quotes from Kimberly Clark, Manpower and Ford. What it means and why we’re looking at the month of September with particular interest as investors.
The Fed is going where no-man has gone before — the unraveling from QE and the impact the Fed shedding its balance sheet could have on rates and the market.

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Another Week, Another Move Higher in the Market

Another Week, Another Move Higher in the Market

Well, the continued melt-up in the markets can only be met by the melt up coming out of Washington DC this week — we’re talking the temperatures here in DC, not the White House. The current record highs for the market means the multiple is being stretched even further — 18.5x earnings today versus 16.2x expected 2017 earnings in early November. The same earnings that have not been materially trimmed despite evidence of a slowing economy and the push out in the Trump agenda. Things are getting hot everywhere it seems.

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Wall Street & Yellen Finally Coming Around to Our Way of Thinking

Wall Street & Yellen Finally Coming Around to Our Way of Thinking

Janet Yellen finally copped to the fact that the domestic economy is indeed moderating, and Wall St quickly followed with the same assessment. But as a regular reader, you know, it’s been a drum we’ve been banging for quite some time. The scary thing is it comes at a time when the S&P 500 closed Friday at 18.7x times 2017 earnings per share. This week we break it all down and what it means for investors as we head into what will no doubt be some serious readjustments in expectations.

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We Are Seeing Classic Late-Cycle Signs Everywhere

We Are Seeing Classic Late-Cycle Signs Everywhere

So, Magic 8 Ball, Are We Heading into a Recession? We must remind investors that we are more than eight years into the second-longest bull market in history. On top of that, we’re seeing classic late-cycle signs everywhere — from elevated stock valuations, a flattening yield curve, levered balance sheets and an increasingly hawkish Fed.

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On-Going Delays in Trump Agenda Forcing Downward GDP & Earnings Expectations

On-Going Delays in Trump Agenda Forcing Downward GDP & Earnings Expectations

Like any good circus, the multitude of events under the market’s big top kept us all sitting up at attention last week. It’s pretty clear that we’re seeing an awful lot of data points supporting the fact that we are entering into the later stages of the current business cycle — and the on-going stall to any type of progress in reforms to the ACA law and the tax code is only going to exasperate the situation when things really begin to turn. Hold on to your hats . . .

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No Matter How You Slice It, Nothing But Headwinds Ahead for the Stock Market

No Matter How You Slice It, Nothing But Headwinds Ahead for the Stock Market

The S&P 500 is on the cusp of overbought territory. When that’s happened in the recent past that index has either traded sideways for several weeks or it has soon peaked and traded off as evidenced by the move in late February and the first half of March. Now for the sobering thought . . . this continued move has come even though EPS expectations for the current quarter have been trimmed as have those for all of 2017.

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