This “single biggest predictor of future stock market returns” has fallen sharply – that’s a bullish sign

Chapel Hill, North Carolina – Much of the bull market’s excess has been addressed, according to the “Single Greatest Predictor of Future Stock Market Returns.” This is good news. I’m pointing to the pointer, It was first suggested by the Philosophical Economics blog in 2013, based on the average allocation of a family’s portfolio to … Read more

The rise of the dollar causes problems for global economies

The US dollar is experiencing a one-time high in a generation, a rise that threatens to get worse slowdown in growth The inflation problems of global central banks are amplified. The dollar’s role as the primary currency in global trade and finance means that its fluctuations have wide-ranging effects. Currency strength is felt in Fuel … Read more

Energy and mining make the stock market look so good

High profits for oil companies and miners make earnings look better than the reality of the rest of the stock market, and distort Wall Street’s favorite valuation tool, the expected price-earnings ratio. Exclude the energy sector and projected earnings for the S&P 500 this year will fall from 8% to just over 1%, according to … Read more

Can the Fed Tame Inflation Without Further Crushing The Stock Market? What’s next for investors?

The Federal Reserve isn’t trying to criticize the stock market for quickly raising interest rates in an attempt to slow still-hot inflation — but investors need to be prepared for more pain and volatility because policymakers won’t be scared, investors and strategists said of a deep selloff. “I don’t think they’re necessarily trying to drive … Read more

The next financial crisis may already be ripe, but not as many expect

A growing number of traders, academics and bond market experts are concerned that the $24 trillion US Treasury debt market could head into crisis as the Federal Reserve began its “quantitative tightening” on high alert this month. With the Fed doubling the pace that its bond holdings will “roll” its balance sheet in September, some … Read more

Why this Fed move could be the ‘wild card’ flooding the stock market

Quantitative easing is credited with generating stock returns and boosting other speculative assets by flooding markets with liquidity as the Federal Reserve raised trillions of dollars in bonds after the financial crisis and amid the coronavirus pandemic. Investors and policy makers may underestimate what happens when the tide recedes. “I don’t know if the Fed … Read more