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Jun 07

Inflation everywhere you look

Economist Milton Friedman and I have many things in common,. We both believe that inflation is driven by the excess supply of money. More dollars chasing the same amount of units. After that, our similarities sort of fall off a cliff. Like him winning the Nobel Prize and, well, me... read more →
Jun 03

Wage pressures easing at the margin

A few takeaways from this morning’s payroll report: Payroll employment with revisions increased +368k……still hotHousehold employment increased +320k……still hotUnemployment rate held at 3.6%…..near generational lows Nothing in this data is going to change the Fed from hiking rates 50bps 2x-3x over the course of the summer. 2x feels too little,... read more →
Jun 01

A look at what corporate insiders are doing

Corporates insiders have an unusually good track record of timing their personal buys/sells. There’s a process around their trades and they do have to jump thru regulatory hoops and various disclosures then they trade their own shares, but looking at what they do with their own money is an interesting... read more →
May 25

Has wage growth peaked?

Over the past several months we have talked often about the root cause of the current inflationary environment. We can argue at the fringe about supply constraints etc. but at the end of the day inflation is driven by excess levels of money supply and liquidity. M2 money supply soared in 2020... read more →
May 23

The great valuation re-set

Stocks may not be cheap but they are definitely not expensive anymore. Great companies are still growing earnings; in fact, S&P 500 earnings are UP 6.5% year to date! But investors were willing to pay significantly more for those earnings last year than right now. Price multiples (commonly referred to... read more →
May 19

Extreme bearishness precedes extreme gains

Over the last few turbulent months, we have highlighted a few individual sentiment indicators as they reached extreme bearish levels at one point or another. However, what was exceptional about last week is that a large number of these sentiment indicators all reached extreme bearish levels at the same time.... read more →
May 17

Elevated but likely peaking

Last week’s Consumer Price Index inflation data noted elevated levels of inflation but also some signs that inflation may be near to peaking.  Financial conditions (stock market selloff, higher mortgage rates, higher inflation rates) are likely causing demand to soften. The bad news is that both Core CPI and PPI... read more →
May 10
May 05

Curve steepening is a good thing

Yesterday afternoon big risk rally was a pleasant break. The market came into Powell’s press conference oversold, looking for a reason to go higher. Powell’s somewhat dovish comments just enough to perk up oversold conditions and weak sentiment and off to the races we went. But inflation is still high and until the... read more →
May 04