Only minutes ago, an absolutely horrific Chicago PMI number came out, and the market, ever so briefly, reacted as it should have: it went down swiftly. But, in the New Normal in which we live, it certainly didn’t take long to shake off reality. After all, only the Fed matters. The actual “markets” were killed off in early 2009.
This segment is excerpted from this week’s Notes From the Rabbit Hole, NFTRH 329, and was originally titled…
Does the US Economy and Stock Market Need Manufacturing?
The ISM PMI reports for December and January showed deceleration in line with our view that a persistently strong US dollar would begin to eat away at US manufacturing, exporters and other companies that depend on significant foreign business. But in an age where investors will bid up Twitter* (with its forward P/E of 141 and 30B market cap to 1.2B revenue) by 16% in a day, are we returning to the old days of ‘PE’s don’t matter’ with the hook or tout being ‘it’s all about ad revenue’?
The current hot button issue lately has been the “Great Wealth Divide.” Pundits across the world have given their two cents about how to fix the ever growing wealth divide. Ideas range from tax reform to tax increases; giving more power to the workers or further encouraging the rights of corporations; education reform in low income areas and making community college free. The big bright headline of “in the next year the top 1% of the world’s population will control over 50% of global wealth” has sent the globe, and the mouth breathing media, into a complete and total frenzy. Yet with all the hot air being spewed from the mouths of Democrats, Republicans, Communists, Libertarians, MSNBC, Fox News, and just about every other dope with access to a microphone and camera I still have yet to hear a single person address the actual reason behind this ever growing wealth divide. The reason for the ever growing wealth divide is quite simple but we, in our Politically Correct Society, are too cowardly to actually mention the true reason for the wealth divide in polite company.
Excerpted from this week’s Notes From the Rabbit Hole (NFTRH 327), a 35 page report covering economic data and indicators, US and global stock markets, commodities and clear technical and macro fundamental parameters on gold, silver and the miners…
Canary’s Alive & Well
This week we will cover the ECB QE action, Euro, USD and their implications for global trade. We’ll also update a still-intact rally in gold, silver and the miners along with some (NFTRH+) trade opportunities. But first let’s review December’s Semiconductor Equipment sector Book-to-Bill ratio, just out on Friday evening and discuss some of the dynamics in play with respect to the ‘b2b’ and the US economy.
It was interesting to hear, in the midst of the Davos love-fest where the world’s elite get together each year and pat each other on the back for a job well done, that Oxfam released their study stating that by next year the top 1% of humanity would own more than the remaining 99%. (Incidentally, for those interested in the topic of wealth distribution, check out the interesting SocialTrade stack.)
NFTRH 322 covered the usual range of markets, from US to global stocks to precious metals and commodities to currencies and indicators. It also included an extended economic discussion about the realities of the strong US economy and its dangerous underpinnings.
The economic segment began with this look at the Semiconductor Equipment sector, which was our first indicator on economic strength exactly 2 years ago and will be an initial indicator on economic deceleration when the time is right. (more…)
Excerpted from the December 7 edition of Notes From the Rabbit Hole (with minor edits):
Now it gets interesting because early in the bailout process the Fed talked about achieving certain employment milestones before hiking interest rates. Here we are at the 10th consecutive month with 200,000+ job gains (321,000 in November) and the jobless rate down to 5.8% and still there is a question on when or whether ZIRP will be withdrawn?
Well I am a visual learner so I for one can never get enough pictures to inform my thinking. Pardon the redundancy in this chart’s frequent appearances in NFTRH…