corporate profit margins

“Nothing so undermines your financial judgment as the sight of your neighbor getting rich.”

Newsletter /

The extreme performance divergence between sectors on the receiving side of the stimulus is stunning. The businesses best positioned to benefit from spending by the upper and upper-middle class are thriving — just look at the share prices of your favorite credit card company; they are at all-time highs. Those most sensitive to interest rates and, thereby, the worst positioned for tight monetary policy are or soon will be flirting with bankruptcy. If you look at commercial real estate owners and their lending banks, you’ll see that their share prices are at all-time lows.

“Nothing so undermines your financial judgment as the sight of your neighbor getting rich.” Read More »

“The health of nations is more important than the wealth of nations.”

Newsletter /

The U.S. Stock market reached an all-time high!
On the week: The Dow rose 1.5%. It is up 2.56% in 2024 to 38,654. The S&P 500 closed- up 1.4%. It is up 3.96% for 2024 to 4,958.The Nasdaq gained 1.7%. to 15,628. It is up 2.56% for 2024 to 15,628.
Last week marked the 4th week in a row of gains for the major benchmarks. Stocks have rallied 13 out of 14 weeks. The only down week was the first week of January. This is a serious Bull-snorting rally.
The catalyst for the gains were Big Cap Tech earnings, stronger employment growth, and rising optimism for growth even with a steady Fed, which left rates unchanged (5.50%) at its first meeting of the year. Traders have already taken the March Rate cut off the table.

“The health of nations is more important than the wealth of nations.” Read More »

Fed Watch is on. No rate cut this week — for sure — and traders are not betting on one in March either…

Bulletin /

Fed Watch is on. No rate cut this week — for sure — and traders are not betting on one in March either, but Powell will probably keep the door open so that stocks and bonds do not face a drawdown.
• That means the first possibility of a cut will not present itself until May 1st.
• The Employment report comes out Friday, and earnings reports from some of the most important companies will filter in all week.
• Considering where we are with respect to valuations, the slightest negative surprise in any of the data could have outsized effects on markets.

Fed Watch is on. No rate cut this week — for sure — and traders are not betting on one in March either… Read More »

The “peak Fed funds narrative” is all the rage… risks have not disappeared, just conveniently ignored.

Bulletin /

The “peak Fed funds narrative” is all the rage. The risk rally off the October 27th lows completely overwhelmed the negative market inputs of persistent inflation, excessive indebtedness, deficit spending, weak political leadership, and increased fiscal and monetary stimulus.

The “peak Fed funds narrative” is all the rage… risks have not disappeared, just conveniently ignored. Read More »

“Just close the f**king door!” said Fed Chairman Powell after being interrupted…

Bulletin /

“Just close the f**king door!” said Fed Chairman Powell after being interrupted by a protestor as he was delivering his latest Policy speech. That line attracted more attention than his comments, which suggested that more hiking may be needed to bring down inflation. Stocks ignored the restrictive bits and determined Powell was cool. The S&P 500 closed at its highest level since September 20th!

“Just close the f**king door!” said Fed Chairman Powell after being interrupted… Read More »