Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Bull vs. Bear Death Match: Why Q1 Operating Earnings are “Make or Break”

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Contributed by Hedge Fund Tips: In the past 30 years, we have had 7 instances of sequential S&P operating earnings drops of 6% or greater (data table below highlights sequential drops in yellow/red). In each case, it was not a positive – and a stock market correction reflected the downturn in economic activity.

There is a KEY distinction when referring to sequential operating earnings declines:

In 5 out of the 7 times, the sequential drop was limited to 1 quarter (SEE Blue Vertical Lines Above) – meaning the following quarter came in above the previous quarter where there was a precipitous operating earnings drop of more than 6% sequentially.

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Fed Doves Take Flight

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A ‘wild card’ segment has been added to NFTRH reports because I wanted the freedom to go out of bounds in any direction, beyond our usual areas of disciplined coverage. Last week it was a look at the Semiconductor sector.

This week it is Fed policy with a side trip down memory lane, trying once again to illustrate why today is not at all like the ZIRP era and why the post-2015 re-connect between the Fed Funds rate and the stock market does not bode well for stocks, assuming the Fed really is going soft.

Excerpted from tomorrow’s edition of Notes From the Rabbit Hole, which will also include loads of actionable analysis along with the more theoretical stuff below…

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FOMC at Center Stage

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Below are the Opening Notes and Bond Market segments from last Sunday’s edition of Notes From the Rabbit Hole, NFTRH 530. Jerome Powell was actually more firm than I expected. Atta boy Jay! Aside from my prognostication the more important stuff (IMO) begins at the 4th paragraph. That is where I put on my tin foil hat and tell what I think. It does seem to dovetail with what we saw today out of the Fed chief.

Opening Notes: FOMC at Center Stage

It is likely that the Fed is going to raise the Funds rate on Wednesday because this is a confidence game and a Fed suddenly showing weakness and doubt could exacerbate the market’s already frayed nerves. As a side note the 76% reading of CME futures traders expecting the hike to happen has not changed in the last few weeks.

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