Are you worried about a recession? I’m guessing that you are – but probably not so much as to affect your spending (yet, anyway). On average, the American consumer is feeling just fine. Actually, more than “just fine,” as we learned after the Commerce Department issued its monthly retail sales update. Sales at the U.S. shops, restaurants and online retailers rose 0.7% in July from the previous month — the highest monthly increase since March — and were higher than a year earlier by 3.4%. While spending in some categories, including furniture retailers and automotive purchases, was weak, spending in… Read More

Are you worried about a recession? I’m guessing that you are – but probably not so much as to affect your spending (yet, anyway). On average, the American consumer is feeling just fine. Actually, more than “just fine,” as we learned after the Commerce Department issued its monthly retail sales update. Sales at the U.S. shops, restaurants and online retailers rose 0.7% in July from the previous month — the highest monthly increase since March — and were higher than a year earlier by 3.4%. While spending in some categories, including furniture retailers and automotive purchases, was weak, spending in others surged. Consumers spent more than $137.7 billion online — a record amount. And our appetite for dining out and eating takeout drove U.S. restaurant spending higher by 1.3%, to $61.6 billion, in July. Taken alone, this number might not look all that impressive. But the increase means that restaurants as a group have been doing better than the average retailer. Moreover, this also means that the annualized rate of growth in the money spent at restaurants over the past three months stands at a massive 25.3% — the fastest pace on record (with numbers going back to 1992). The… Read More

The oft-quoted law of unintended consequences is an intriguing concept. Let’s say you join a gym to lose weight — and you meet the love of your life there. That’s an unintended consequence. #-ad_banner-#It works the other way, too. Let’s say you join a gym to lose weight — and you slip in the shower and break a leg. Both outcomes were unintended consequences. In pursuing your goal to get in shape, you didn’t necessarily go to the gym to meet a potential spouse, and you certainly didn’t join to end up in a cast. Most of the time, though,… Read More

The oft-quoted law of unintended consequences is an intriguing concept. Let’s say you join a gym to lose weight — and you meet the love of your life there. That’s an unintended consequence. #-ad_banner-#It works the other way, too. Let’s say you join a gym to lose weight — and you slip in the shower and break a leg. Both outcomes were unintended consequences. In pursuing your goal to get in shape, you didn’t necessarily go to the gym to meet a potential spouse, and you certainly didn’t join to end up in a cast. Most of the time, though, we refer to the law of unintended consequences in terms of macro-economic policies and events. Because of the complexities of any large social system, a policy — be it of a monetary nature or a fiscal one — can sometimes lead to an unintended result. In a 1936 article, sociologist Robert K. Merton identified five reasons a well-intended policy could go wrong — with ignorance and error being the most common ones. In line with his original approach, the law of unintended consequences has come to symbolize almost anything that goes wrong with any policy. There are too many examples… Read More

Market volatility is back. And it didn’t take long. From the low of the year set on July 24, the CBOE Volatility Index — also known as the Fear Index or simply the VIX — doubled less than two weeks later, rallying on August 5 to levels not seen since early January. Of course, by the end of the week, stocks recovered about half of their Monday losses (and ended the week 2.8% down). The volatility, accordingly, let up a little. Still, at about 66.5 on Friday, the VIX stood about 40% higher than the July lows, and it has… Read More

Market volatility is back. And it didn’t take long. From the low of the year set on July 24, the CBOE Volatility Index — also known as the Fear Index or simply the VIX — doubled less than two weeks later, rallying on August 5 to levels not seen since early January. Of course, by the end of the week, stocks recovered about half of their Monday losses (and ended the week 2.8% down). The volatility, accordingly, let up a little. Still, at about 66.5 on Friday, the VIX stood about 40% higher than the July lows, and it has continued to move higher again early this week. Here’s another way of looking at volatility: over the past two weeks, major indices such as the S&P 500 were posting relatively large moves — up or down 1% or more — every day. This is the longest such streak in years and, by some calculations, since the Great Recession. This looks like a great time to look for some defense. And coincidentally, I think investors may find it in the defense sector. While stocks officially classified as Aerospace and Defense might not be immune from the market’s volatility, these companies are… Read More

Yes, it’s a race to the bottom. I’m not talking about the market. I’m referring to interest rates. After a couple of wild weeks, stocks — as measured by the S&P 500 – are trading by only about 3% below their recent highs and are up 16.7% for the year. Interest rates, meanwhile, have continued to rush lower. #-ad_banner-#Just a week after the U.S. Federal Reserve executed its first interest rate cut since the Great Recession, three Asia-Pacific central banks surprised the market with an aggressive rate-cut move of their own. On Wednesday, August 7, Thailand, New Zealand and India… Read More

Yes, it’s a race to the bottom. I’m not talking about the market. I’m referring to interest rates. After a couple of wild weeks, stocks — as measured by the S&P 500 – are trading by only about 3% below their recent highs and are up 16.7% for the year. Interest rates, meanwhile, have continued to rush lower. #-ad_banner-#Just a week after the U.S. Federal Reserve executed its first interest rate cut since the Great Recession, three Asia-Pacific central banks surprised the market with an aggressive rate-cut move of their own. On Wednesday, August 7, Thailand, New Zealand and India all acted to lower their countries’ respective rates. On the very next day, the Philippines joined them. The developing countries now join the developed world in the rate-cutting process. Central banks in developed countries have already largely lowered rates to record levels, resulting in negative-rate policies in Europe. The ECB first ventured into the negative-rate territory five years ago, and the deposit rate now sits at a negative 0.4%.  Just a year ago, the 10-year U.S. Treasury yield was approaching 3% (2.92% on August 8, 2018) and investors were talking about selling bonds due to the inevitability of rates rising… Read More

By the time you read this, you must be well aware that something went wrong with the stock market rally.  Over the last week, the trade war escalated, with the slapping of new tariffs on Chinese goods and reports of China asking state-owned companies to suspend imports of U.S. agricultural products. China’s weakening of the yuan (below the closely watched 7 yuan-1 dollar exchange rate) to the lowest level in more than a decade has reignited currency-war fears as well. August 5 was the worst day of the year for the stock market, with the S&P 500 ending the day… Read More

By the time you read this, you must be well aware that something went wrong with the stock market rally.  Over the last week, the trade war escalated, with the slapping of new tariffs on Chinese goods and reports of China asking state-owned companies to suspend imports of U.S. agricultural products. China’s weakening of the yuan (below the closely watched 7 yuan-1 dollar exchange rate) to the lowest level in more than a decade has reignited currency-war fears as well. August 5 was the worst day of the year for the stock market, with the S&P 500 ending the day 5% lower than its July 12 peak, and the tech-heavy Nasdaq 100 dropping almost 3.5% in just a day. —Recommended Link— Finally Released: The Strategy Behind Jim Fink’s $5 Million Fortune Master Trader Jim Fink has finally released the details on the system he personally used to walk away from Wall Street with a $5 million personal fortune. The first time we opened this system to the public, spots filled as fast as our team could process the requests. Don’t miss out on your chance to turn $5k into $125k in the next 12 months. Read More