With lumber prices plunging to fresh 3 year lows, the divergence between homebuilders and the most economically-sensitive commodity is starting to suggest a rather scary case of deja vu all over again.
"Service has been fully restored. We experienced a combination of hardware and software failures in the network, which caused an excessive volume of network traffic. This led to customer disconnections as a result of the machines being overwhelmed. We discovered the root cause quickly, isolated the faulty hardware, and restarted the software. We are reviewing our multiple redundant systems, which failed to prevent this disruption."
The past six years have transformed my disposition toward the markets from excitement to frustration to despair to disillusionment to sheer tedium.
If Intel had used its tax rate and share count from last quarter, it would have missed Wall Street consensus. Instead it beat by 1 cent. This is how it did it.
In just six short months, expectations for US economic growth in Q1 2015 has been slashed by more than half (from 'trend' 3% to a mere 1.4% growth this week). While consensus is still well above the Atlanta Fed's 0.1% forecast, the sell-side is rapidly being forced to admit it's not just the weather...
“What the Great Recession has shown is that things have fundamentally changed,” The White House warned this week and, as Bloomberg reports, states would have to cut spending or raise revenue by a combined $21 billion in the event of a recession, further exacerbating economic weakness, Moody’s Analytics found in a stress test of state finances. While investors are willingly buying bonds with both hands and feet, The White House warns, states "need to be much more prepared for very volatile fiscal conditions than they had been in the past."
Historically, both times stocks registered similar readings, the markets plunged 50%-90% in the next two years.
Following the surprise dovish FOMC dot-downgrade to counter hawkish 'patience removal', and this morning's admission by Dudley that The Fed is Dow-Data-Dependent; expectations for the FOMC Minutes offering any insights were low...
- *FED OFFICIALS FAVORING LIFTOFF LATER IN 2015 CITED DOLLAR, OIL, CHINA, GREECE
- *FED OFFICIALS WERE SPLIT ON JUNE RATE RISE, FOMC MINUTES SHOW
- *MOST OFFICIALS SAW RISKS TO OUTLOOK, JOB MKT NEARLY BALANCED
So "worried" about the world, "downside" risk to growth but reasons to be cheerful, unpatient and data-dependent liftoff... something for everyone.
Ben Bernanke can now add another headline to his impressive resume... Fed Chair... Blogger... and writer of fiction. As AP reports, Blogger Ben's memoir will be released in October, and the title will be "The Courage To Act," apparently inspired by the Fed's "moral courage" in the face of "bitter criticism and condemnation." While we thought perhaps "The Courage To Print" was more appropriate, it appears the book is non-fiction and thus, we suggest, the title needs an additional word of clarification: "The Courage To Act ........."
And against this disatsrous backdrop… investors are completely bullish!
Barron’s should have published its gushing cover story on Jamie Dimon’s stewardship of JPMorgan today – as an April Fool’s joke.
US Manufacturing PMI beat expectations, printing 55.7 up from 55.3 prior to its highest since Oct 2014, once again flying in the face of the collapse in US hard-data-base macro. More in line with the underlying reality, Feb Construction Spending dropped for the 3rd month of the last 4 and March ISM Manufacturing tumbled to 51.5, missing expectations of 52.5, to its lowest since May 2013. Under the covers, it is even uglier with the lowest New Orders since Jan 2014 as US Manufacturing data has missed 5 of the last 7 months and dropped for 5 months in a row - which hasn't happened since 2008.