First China, Now Mexico - June 3, 2019

While investors try price in the impact of U.S.-China trade frictions, President Trump unexpectedly announced new tariffs on Mexico. Late Thursday, the president said he will levy a 5% duty on all goods coming from Mexico, potentially rising to 25% by October.

The president said tariffs will be removed if Mexico takes “effective action” to deal with “the illegal migration crisis.” Not surprisingly, the sudden move sent stocks lower on Friday amid anxieties the new barriers will impede U.S. commerce.

The economic uncertainty has been a boon to long-term U.S. Treasuries. Earlier in the year, a shift at the Fed brought yields down. Lately, China (and now Mexico) fears have encouraged additional cash inflows into the safety of government bonds – see Figure 1 (bond prices and bond yields move in opposite directions).

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Housing Activity Grinds to a Halt - May 29, 2019

Housing is in a mild recession.

The data—

  • Existing home sales: down 14-straight months vs a year ago.
  • New home sales: up over the last 4 months vs a year ago– it’s the one relatively bright spot.
  • Single-family housing starts: down 6 of the last 7 months vs a year ago.
  • Single-family building permits: down 7-straight months vs a year ago.
  • Residential construction, measured in the quarterly GDP report: down 5-straight quarters.

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Another Earnings Win - May 28, 2019

Q1 earnings season is wrapping up, and most S&P 500 companies managed to top a very low hurdle. With all but 4% of S&P 500 companies having reported, profits are up 1.5% versus a year ago (Refinitiv).

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Memorial Day Office Closure - May 24, 2019

Please be advised that our office will be closed on Monday, May 27th, in observance of Memorial Day. We will resume our regular hours of operation on Tuesday the 28th.

We wish all of our clients a happy and safe Memorial Day weekend!

An Earnings Wins, Relatively Speaking - May 22, 2019

Q1 earnings for S&P 5001 companies are projected to rise 1.4% versus a year ago (with 93% reported as of May 21 – Refinitiv).

  • 75% of companies topped analyst forecasts.
  • On average, they beat by a wide margin.

A relative win? Yes. As the season got underway, profits were forecast to fall 2.5%.

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