Archive for the ‘Market Update’ Category

Looking Ahead To Tomorrow’s Jobs Report

From the desk of Brian Gilmartin:   The March ’18 jobs number is reported Friday morning before the bell and expectations of 170,000 to 180,000 of “net new jobs” created by the US economy is subdued since March job creation has historically been below-average.

February ‘18’s job creation was 313,000 which was quite sizable, relative to the 200,000 expected.

The key metrics to the jobs report are “net new jobs created” and “average hourly earnings”.

The ADP report yesterday showed stronger-than-expected job growth, this morning’s jobless claims showed weaker-than-expected claims data (more people filing for unemployment).

Let’s see what tomorrow holds. Watch the 10-year Treasury yield.

Hat tip

The First Quarter Comes To An End

U.S. stocks began 2018 with a powerful rally but by early February it was becoming clear a healthy pullback was developing.  At the February 9th lows the S&P 500 Index had dropped 12% from the January highs.  After an impressive rebound the major indexes began to fade again and will likely end the quarter near the lows.  As March comes to a close stocks are headed for their first negative quarter since Q3 of 2015.  The streak of nine straight quarterly gains has ended. 

More from Ryan Detrick:

Q1 will likely be down for the S&P 500 in ’18.

The good news? Going back to 1980, when Q1 is lower and the economy isn’t in a recession?   The final 9 months have been lower only once.

The S&P 500 had been higher in Q1 for a record 8 years in a row.

Assuming there isn’t a huge move higher tomorrow, this streak will end.  Had to end eventually …

Hat tip LPL Research

Volatility Is On The Rise

Doug Kass points out:   Bloomberg points out that there have already been 22 days in which the S&P 500 moved more than 1% in the first three months of the year, triple the total for all of 2017.

This should come as no surprise considering the overall calm during last year’s incredible run and January’s strong showing.  We covered the subject in late January.

Hat tip Doug Kass of

Monday’s Gain: Third Best One Day Performance, Ever


What’s Next?

From the desk of Ryan Detrick:  Since 1950, the S&P 500 has been down 2% or more on a Thursday and Friday only 6 times … today was number 7.

One of those times was the ’87 crash, but the other 5 times saw the S&P 500 closed higher the next week.

Most recentlyAugust ’15. The next day (Monday) was down 3.9%.

The good news? Still finished up 1% on the 

Hat tip

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

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