Archive for the ‘Market Update’ Category

Durable Goods Orders Leap

  • New orders for key U.S.-made capital goods rebounded more than expected in February after two straight monthly declines.
  • Shipments surged, pointing to strong growth in business spending on equipment in the first quarter.
  • Overall orders for durable goods vaulted 3.1 percent last month as demand for transportation equipment soared 7.1 percent.

Some color:   The surge in core capital goods orders in February suggests further gains. There had been concerns spending could slow sharply after double-digit growth in the past quarters. Investment in equipment is likely to be bolstered by robust business confidence, strengthening global economic growth and a weakening dollar, which is boosting demand for U.S. exports.

That is helping to support manufacturing, which accounts for about 12 percent of U.S. economic activity.

The strength in core capital goods shipments, together with a surge in industrial production in February, could help offset the impact of soft consumer spending on first-quarter growth.

Read the whole thing:

Hat tip

It’s Going To Be A Volatile Year

Why?  Check out this stat, courtesy of Ryan Detrick:

The S&P 500 was up over 5% in January but could finish the first quarter in the red.

That only happened one time in history, in 1980.

S&P 500 was up 25.8% in 1980.


Leading Indicators Post 5th Straight Advance

The lede from 

What happened: The index rose for the fifth straight month, and eight of the 10 indicators that make up the leading index advanced. The biggest help came from average weekly manufacturing hours. Building permits and stock prices were the only drags.

In the six months ending February, the leading index has climbed 4%, faster than the 2.4% growth during the prior six months.

The big picture: The gains suggest an economy with real momentum. Job market data continue to be strong, and consumer and business confidence are, for the most part, robust.

What they’re saying: “The LEI points to robust economic growth throughout 2018. Its six-month growth rate has not been this high since the first quarter of 2011,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board.

Fed Raises Rates, More Hikes To Come

The Federal Reserve voted unanimously to raise interest rates during new chairman Jerome Powell’s first meeting.  The lede from 

The Federal Reserve said it would raise short-term interest rates a quarter-percentage point and signaled it could lift them at a slightly more aggressive pace in coming years to keep the strengthening economy on an even keel.

Fed officials said they would increase their benchmark federal-funds rate to a range between 1.5% and 1.75% and penciled in a total of three rate increases for this year.

But compared with December, more officials think they will need to raise interest rates at least four times this year if the economy performs in line with their expectations. Seven of 15 participants now expect at least four rate increases this year, an increase from four of 16 participants at the December meeting.

Most Fed officials also expect the Fed would need to raise rates at least another three times next year. At the December meeting, officials projected around two increases would be needed in 2019.
Read the whole thing:




Leaving Illinois, in Droves

The lede:   At Wirepoints, we’ve covered the impact that Illinois’ punishing property taxes are having on South Cook families. Their home values are being destroyed and their disposable incomes consumed. Effective tax rates of 3 to 5 percent or higher are chasing people, many of them with limited means, out of their homes. The Chicago Tribune and others have reported on the exodus of blacks from the Chicago area as fewer jobs, more crime, a failing education and higher taxes make Illinois unlivable.

Somebody did the math, and its not pretty.  Stay and pay more and more for a government he trusts less and less, or leave and save $1 million dollars.


Others have done the math as well:   Residents have been leaving Illinois at an alarming rate to find better opportunities elsewhere. From 2000 to 2017, Illinois lost a net of more than 1.3 million people to other states. That’s the equivalent of wiping Aurora, Rockford, Joliet, Naperville, Springfield, Peoria, Elgin, Waukegan, Cicero, Champaign and Bloomington off the map.


More:   In 2017 alone, Illinois lost over 114,000 people. That net loss of people to other states now outpaces international immigration and net births in Illinois. As a result, Illinois is shrinking.

Illinois has now lost population four years in a row. Only West Virginia has that same distinction.

Read the whole thing:

Hat tip Jeffrey Carter of Points and Figures

FOMC Meeting This Week

And it’s almost a lock that they will raise rates again.  Some color from Brian Wesbury:   “When the Federal Reserve finishes its regularly scheduled meeting on Wednesday, based on the federal funds futures market, there is a 100% chance that the Fed will boost the federal funds rate by 25 basis points, to a new range of 1.5% to 1.75%.”

This should not come as a surprise, rates have been moving steadily higher since the election.  As this week begins US Treasury Yield (1 Month to 3 years) enter the week at 9-year highs.


More from Brian Wesbury at

Hat tip Charlie Bilello


Earnings Drive Stocks

From Ryan Detrick:   Going back to 1991, what happened the past 12 times S&P 500 earnings were more that 10% for the yr?

The S&P 500 was higher all 12 times on a total return basis with a avg return of nearly 17%.

We are looking for mid-teen earnings growth this year, which should be a good sign for bulls.


Hat tip Ryan Detrick of LPL Research


February Jobs Blowout

Nonfarm payrolls rose by 313,000 in February while the unemployment rate remained at 4.1 percent, the lowest since December 2000.

Wage growth was muted, however, with average hourly earnings up 2.6 percent on an annualized basis, 0.2 percentage points below expectations.

Stock market futures surged following the Bureau of Labor Statistics report.

The economy added 313,000 jobs in February, crushing expectations, while the unemployment rate remained at 4.1 percent, according to a Labor Department report Friday that could help quell inflation fears.

Economists surveyed by Reuters had been expecting nonfarm payroll growth of 200,000 and the unemployment rate to decline one-tenth of a percent to 4 percent.

An increase in the labor force participation rate to its highest level since September 2017 helped keep the headline unemployment number steady, as the number of those counted as not in the workforce tumbled by 653,000 to just over 95 million.

The total counted as “employed” in the household survey surged by 785,000 to a record 155.2 million.
Rollbacks Matter.
Hat tip

More On Fear

Bullish sentiment just saw its largest two-week decline since June 2013:


Here’s our post, on the same subject, from earlier this week:  You Can Almost Smell The Fear

Hat tip Bespoke Research

Unemployment Numbers Tomorrow

Here’s a preview, courtesy of Brian Gilmartin of

      The most important economic indicator of each month is the nonfarm payroll report usually released the first Friday of the month, and tomorrow’s February ’18 jobs report is expected to see 195,000 – 200,000 “net new jobs” created within the US economy, in line with the 170,000 to 210,000 that were seen in the last 4 years of the Obama Administration.

      Watch the unemployment rate – it hasn’t been since the late 1960’s that we’ve seen a year where the US unemployment rate has stayed below 4%. I have to think the unemployment rate drops under 4% in 2018.

     Jobless claims last week were at a 42-year low, at 210,000 and while they rose a little this morning, the fact is – as one commentator just noted – “the US job market is as tight as a drum”.


Return top

* * * *

Welcome fellow traders and investors!

As Money Managers and Traders, the mission of our Blog and Radio Show is to go on record and further educate our readers and listeners in technical analysis and proper money management across all asset classes.

Our methods are not the traditional advice you hear repeated and repackaged over and over again, but that’s exactly the point and the reason why we know how to advance and prosper in every kind of market.

To Your Success,

Doug & Gary