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Markets: Housing Reality vs. Pivot Fantasy

Good morning!! We hosted a webinar last week to outline our bearish views on equities. All of our tools argue that the move we are seeing in equities is a lower-rates temporary relief rally. Why has it been such a monster bear market rally? Probably because of how...

The Three Cycles: PMIs, CPI and Claims

I am running out but wanted to send this chart your way – I wanted to address, again, the narrative that peak CPI will be the end of the bear market. In the past, market bottoms have only occurred at a peak in CPI when PMIs and Claims simultaneously began to improve...

What’s Next After The Lower-Rates Relief Rally?

Happy Friday Daniel, We have high conviction in our views and have held off on the “get very defensive” phase of our market-cycle call. For the past few months, we’ve recommended growth stocks > cyclicals as our #1 recommendation. That’s playing out very nicely,...

Your Local Bank Is Now Joining The Tightening Party

Good evening!!! While everybody is focused on the END of Fed tightening, your local bank is just beginning to tighten lending standards. We have central banks because banks tighten lending standards as the economy weakens. In the first chart below, we’ve plotted the...

Consensus: It’s A New Bull Market?

Had to share this chart with you ..."new bull market" news has skyrocketed. We would be thinking about trimming rather than adding here. Bear market rallies are violent, and kill bulls and bears alike as we all know. We continue to prefer quality growth stocks if you...

ISM Preview; Growth Leadership Continues; July Skies

Happy Sunday!! We’re expecting the “is it the bottom?” debate to only heat up for the rest of 2022. To reiterate our view – we do not think we’ll see the bottom in the broader indices until we’re closer to leading economic indicators bottom sometime next year. For the...

This Isn’t 1982

I've received 3 emails from clients this morning, and a handful of tweets directed towards me that there is another bullish strategist talking about how this is a repeat of 1982 and that the market is going to skyrocket from here, recouping the entire bear market in a...

Is This The Bottom?

The debate about the future direction of the market is heating up. We've now seen 4 bear market rallies. One of the observations that we've made in recent months is that bear market rallies grow larger as the bear market grows older. Whether the Fed is close to being...

So You’re Telling Me There Is A Chance?!

This is the first chart I’ve seen this year that shows that the data can improve from here, at least relative to expectations. Some of you may remember this chart when we’ve published in years past. Will economic surprises begin to rebound? Will markets react...

Fed: Here’s What We’ll Be Watching Today …

Today is Fed day – as a reminder Roberto & Benson will be hosting a webinar TODAY at 2:15pm ET to discuss the Fed LIVE! Click Here to Register. In today’s morning meeting, macro salesperson Jay Glickson asked us how the Fed’s decision will impact our outlook –...

Time For A “Fav 5” Update

It’s nearly the end of the month, a good time to take a look at our “Fav 5” LEI index and it’s relationship to other cyclical areas of the market. As we’ve laid out in detail this year, we expect leading economic indicators (PMIs, NAHB, NFIB, Confidence, Housing Starts, etc.) to continue...

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EPS Season Not Off To A Great Start …

Q2 EPS Season Has Been Disappointing So Far … We’ve seen a lot of earnings misses so far in Q2. Unfortunately, we don’t expect the earnings backdrop to improve again until the next PMI recovery (likely a 2023 story). As the economic landscape deteriorates, NTM earnings of the most...

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HOPE Update: Forget The Fed … Don’t Bet Against The House!

Quick HOPE Update! We continue to see the HOPE cycle play out in this downturn at a rapid pace. Today’s COLLAPSE in the NAHB home builder index only further reassures us that the economy is heading into a long and challenging recession. We are now at the Profits stage of the HOPE cycle where we...

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What If?

As this downturn unfolds, I can’t help but keep being reminded of how much of a mirror image the backdrop is today as compared to 2020 and 2021. Why didn’t we hear investors scream “it’s all priced in” when Pfizer announced vaccine news in Nov 2020 when: 1) the market was already at a new all-time...

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“Junk” Growth Rally – It Won’t Last

Any time a “problem” (in this case high inflation) begins to improve, a “junk” rally in the area that was most negatively impacted by the problem is likely. We are used to “junk” value rallies at the bottom of the bear market as leading indicators of the economy turn up (PMIs) and junk value...

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This Happened In The Early 80s And Stocks Fell

The last time small businesses saw inflation as this much of a problem (NFIB Survey) was back in 1979/1980. As inflation fell for small businesses, slower sales growth took over as the biggest problem in the early 80s as the economy fell into a recession. During that transition of peak inflation...

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Bear Market Rallies: 2000 Comparison

We’re in the midst of the 4th bear market rally of this bear market – we are likely to many more before we find THE bottom in 2023. We’re expecting bear market rallies to be fast and furious, rather than long and steady. This is because we’re in a tug-o-war between inflation and growth. And until...

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EPS: It’s About To Hit The Fan

It’s safe to say that both the “H” (housing) and “O” (orders) segments of our HOPE framework are getting ugly. One client said our call, for fears to migrate from inflation to PMI/EPS/GDP, is now consensus. He asked, “so, what’s next?” The answer is profits decline and then employment (claims)...

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