Corporate America

Carrier & The Slippery Slope

Time will tell whether this Carrier deal was just a symbolic line in the sand, or whether it is a sign of future government interventionist policies which will ultimately backfire. In the long run, the less government, the better.

The Political Triumph Of The Empty Gesture

Politics is the art of the symbolic gesture. The successful symbolic gesture gains gravitas by crystallizing a narrative that attracts a consensus that then powers policies of substance. The politics-as-usual gesture is empty of substance, serving only to mask collusion and failure.

Death Threats & Other Market Signals

Prior to the election, investors didn’t believe there was much operating leverage available in corporate America.  Slow revenue growth, slow inflation, slow wage growth, slow earnings growth.  That was the recipe for next year. Now, expectations for better economic growth have markets scrambling to find companies with the operating leverage (read high fixed costs and high incremental margins) to show outsized earnings growth as a result.

 

Surging Bond Yields Signalling Pain Not Growth Ahead For US Economy

Government bond yields are surging not because growth will skyrocket in the US, but because they know that US debt under Trump will rise even faster than under Obama, reflecting the higher perceived risk of a potential default from considerably higher debt levels.

US Economy Continues to Weaken As Warning Signs Flash Recession Ahead

The US economy continues to show weakening conditions as new warning signs are flashing recession ahead. This is despite the best efforts of the FED and the US Government to assure the public that there are plenty of measures in place to continue to stimulate the economy.

Earnings 'Magic' Exposed

At best one can accuse Wall Street analysts and the companies that feed them information of incompetence. At worst this is another pure and simple case of institutions gaming the system through a fraud designed to prop up stock prices.

US Futures, Global Stocks, Metals Rise On Economic Confidence, Upbeat Earnings

European, Asian stocks and S&P futures are all up again in early trading, a repeat of the Monday session, buoyed by a generally upbeat corporate earnings season, rising economic confidence and signs of improvement in the world’s biggest economies. After Charles Evans' hawkish comments on Monday, the market is now pricing in a 71% chance of a rate increase this year, up from 68% last week.

"The Outcome Is Undeniable" - Global Debt Investors Face Reality Of A World Devoid Of Options

A recent, reluctant re-viewing of the film, 'Silence of the Lambs', fed fresh food for thought. The image of captives rejecting their freedom brought to mind another flock of corralled and stunned lambs - bond market investors. They too have been given the opportunity to escape their fate. But so many choose instead to stay. Such is the reality of a world devoid of options, with time ticking ruthlessly by.

Global Stocks Rebound As Fed Fears Ease, Dollar Falls From 7 Month High

If yesterday's session was marked by concerns about Fed tightening and rising long-end rates, today concerns about a hawkish Fed have subsided, with European, Asian stocks and S&P futures all rising amid speculation Federal Reserve policy will remain accommodative after yesterday's dovish comments by Fed vice-Chair Stan Fischer, as well as weak economic data helped push the US Dollar off its 7 month highs.