- Inflation Measures Surge Above Federal Reserve Target
- Leading Indicators Rebound off of Recent Lows
- Stocks Attempt to Break Out
- Excessive Debt and Its Impact on Structural Growth
- The Challenge of a Secular Bear Market
- Stocks Begin Test of Congestion Resistance at Previous Cyclical Highs
- Housing Market Exhibits Early Signs of Bottoming Behavior
- Money Velocity Continues to Plunge
- Leading Indicator Revisions Reflect Tepid Recovery
- Stock Market Rally Attempts to Resume
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Inflation Measures Surge Above Federal Reserve Target
Last week, the Bureau of Labor Statistics (BLS) and the Cleveland Federal Reserve reported that consumer inflation measures continued to move higher in January. As shown on the following graph from Calculated Risk, all of the metrics except the core PCE have moved well above the Federal Reserve target of 2 percent after rebounding sharply off of their long-term lows in late 2010. It i...
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Leading Indicators Rebound off of Recent Lows
The Conference Board reported that its Leading Economic Index (LEI) increased 0.4 percent in January, moving up to a new high for the uptrend from 2009. Said Ataman Ozyildirim, economist at The Conference Board: “This fourth consecutive gain in the LEI reflected fairly widespread strength among its components, pointing to somewhat more positive economic conditions in early 2012. The...
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Stocks Attempt to Break Out
The S&P 500 index closed sharply higher today, moving above congestion resistance on the weekly chart in the 1,350 area and approaching the previous high of the cyclical bull market from March 2009 near 1,365. Technical indicators are moderately bullish overall on the daily chart, favoring a continuation of the rally. However, the advance from December is extremely overextended on...
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Excessive Debt and Its Impact on Structural Growth
During the last several years, we have spent a great deal of time discussing excessive debt and its impact on economic growth. We believe that the foundation for the next structural growth cycle cannot be created until the debt issue is addressed in a meaningful way. In a recent interview with Kate Welling of Weeden & Co., economist Lacy Hunt of Hoisington Management discussed the problem in g...
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The Challenge of a Secular Bear Market
Most stock market participants fail to consider the big picture. They are either unaware of secular cycles or they discount their existence. Instead, they view cyclical bull and bear markets as the driving forces behind long-term price movements, basing their investment decisions on the perceived direction of the current cyclical trend. Unfortunately, the accurate evaluation of the investment meri...
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Stocks Begin Test of Congestion Resistance at Previous Cyclical H ...
The S&P 500 index closed slightly higher again today, moving up to another marginal new high for the uptrend from early October. Technical indicators remain moderately bullish overall on the daily chart, favoring a continuation of the advance. However, the rally from mid-December is extremely overextended on a short-term basis and it will almost certainly be followed by a violent overbought co...
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Housing Market Exhibits Early Signs of Bottoming Behavior
During the summer of 2006, our analysis indicated that the top of the housing market was likely in place and we predicted several years of financial market turmoil as the most speculative real estate bubble in US history imploded. The initial phase of the secular decline in housing prices has proceeded exactly as expected since then and it has now been more than five years since the market turned ...
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Money Velocity Continues to Plunge
The US Federal Reserve is engaged in an historic liquidity operation intended to support economic recovery. Since the recession in 2008, M1 money supply has surged an astonishing 60 percent, topping the $2.2 trillion level in January with no end in sight to the extreme move higher. However, during that time, the velocity of M1 money has plunged from a high of 10.37 in late 2007 to 7...
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Leading Indicator Revisions Reflect Tepid Recovery
The Conference Board recently performed a major revision to the formulation used to calculate its Leading Economic Index (LEI). The following graph from the latest weekly commentary at Hussman Funds displays the long-term view of the LEI before and after the revision process. As expected, the new methodology had a meaningful impact on the trajectory of the LEI during the last four y...
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Stock Market Rally Attempts to Resume
The S&P 500 index closed moderately higher today, approaching recent highs of the rally from October. A subsequent close well above 1,326 would reconfirm the uptrend and favor additional gains. However, the advance remains extremely overextended on a short-term basis and it will almost certainly be followed by a potentially violent overbought correction. Additionally, the negati...
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