The stock market began this holiday-shortened week on a bad note. The major blue chip indices S&P 500 and the Dow Jones Industrial Averages each declined by more than 1 percent. Good economic data reinforced the view that the Federal Reserve will act by September to increase the federal funds rate, which has sat its current rock-bottom level since late 2008 and greatly helped financial markets. Read more about Market Begins Week in Bad Mood 05-26-15
This morning, the Commerce Department reported that housing starts surged in April to an annualized pace of 1.14 million, the fastest rate since 2007, a welcome acceleration of construction activity after the frigid winter, and a signal that homebuilders expect strong future demand. Compared to March, April housing starts were up an impressive 20.2 percent. The number of permit approvals—an indicator of future activity—also went up 10.1 percent from March. Read more about Taking Housing's Pulse 05-19-15
Late last week, the Labor Department’s Bureau of Labor Statistics reported its latest monthly labor market assessment. After a very poor set of labor gains in March, the U.S. economy added 223,000 non-farm jobs in April. This fell slightly below economists’ median expectation, but proved a large improvement over the previous month’s gain of 85,000 (downwardly revised by more than 30 percent). Read more about The IMF Pays Itself 05-12-15
Drilling activity continues to sharply decline as exploration & production companies continue to idle the least economical units. According to Baker Hughes, as of the week ended May 1, the number of North American rigs (on-land and in the Gulf of Mexico) fell for the 21st consecutive week, down to 904, a stunning 53 percent drop from mid-December 2014, less than 5 months ago, when the streak began. The drop in oil rigs is especially steep, from 1575 to 679 over the same period. Read more about Oil Production Plateaus 05-05-15
We will publish the May issue of The Cash Cow later this week. In it we will review the Fed’s latest policy decision—officials are meeting this week—and its likely impact on markets. We will as usual update our rankings for the indicator-related ETFs for the short term.
For your information, our stock indicator has turned neutral with a slight bullish inclination. Meanwhile, our bond indicator remains decidedly bearish while the precious metals indicator continues to be bullish. Read more about Look Forward to the May Issue 04-28-15
About 90 members of the S&P 500 Index having reported so far; the first-quarter earnings season is heating up. The vast majority of the S&P 500 constituents have beaten analysts’ (lowered) earnings estimates, but only half have managed to beat revenue estimates. The strong dollar and slower global economic growth continue to represent key points of concern for discussion for company execs in the conference calls. Read more about Straddling the Fence 04-21-15
The Commerce Department reported today that retail sales climbed in March, gaining 0.9 percent and ending a three-month streak of declines. The 0.9 percent figure is below expectations, but is also the best print in a year. Nice gains in sales of autos and building materials suggest that the frigid weather indeed played a large role in the weakness in the preceding months.
As consumer spending accounts for roughly two-thirds of U.S. GDP, the solid March numbers suggest that the economic slowdown in the first quarter may prove temporary. Read more about What the Ruble's Comeback Says 04-14-15